Reference News, July 31 report - According to Japan's Asahi Shimbun on July 29, with the agreement reached in the Japan-US tariff negotiations, the Trump administration hopes that Japan will participate in the Alaska liquefied natural gas (LNG) development project. Locals are eagerly expecting this concept, which has been under consideration for half a century, to be implemented. However, some "uncertainties" still lie ahead.
In early June, even though it was early summer, the Nikiski area in southern Alaska was still chilly, with ships loaded with natural gas moored at the dock. This is the endpoint of a pipeline designed to be 1,300 kilometers long. The vast amount of natural gas lying in the northern end of the Alaska Peninsula may be transported via this pipeline to Asia.
The new Alaska liquefied natural gas project plans to export liquefied natural gas to Asia starting in the 2030s. President Trump previously called on countries such as South Korea to join the project. It also became a focus of the Japan-US tariff negotiations. The US aims to narrow its trade deficit with Japan through tariffs, and in the agreement reached on July 22, Japan agreed to study the signing of a new liquefied natural gas procurement agreement.
April Wade, who runs a cafe near the dock, welcomed the project, saying, "It would be very valuable for the local community." According to statistics from the state of Alaska, the state's main industries include oil, natural gas, mining, fishing, and tourism, but oil and natural gas taxes and related income account for 20% to 30% of the state's revenue.
Peter Mitchel, the county mayor of the Kenai Peninsula, where Nikiski is located, said, "Oil and natural gas are important economic pillars of Alaska. They not only create jobs but also increase tax revenues, enabling us to build schools and hospitals."
The US government has also invested a lot of effort in the project, with Trump even boasting that the project "will definitely be completed." But behind this effort is the trade deficit and stagnant demand. Although it is said that Alaska has enough natural gas reserves to supply Asia for over 40 years, according to the International Energy Agency, global natural gas demand is expected to peak by 2030 due to the popularity of decarbonization concepts.
Considering the increase in supply, if the International Energy Agency is correct, a decline in natural gas prices is inevitable. Selling natural gas before prices drop significantly would meet the US's desire to reduce the trade deficit.
However, since the 1970s, Alaska has been debating how to export the natural gas produced in its north. About ten years ago, energy giants such as ExxonMobil and British Petroleum exited the project due to high costs. Whether from the perspective of profitability or the environment, there have been continuous doubts about the feasibility of the project. The project is estimated to cost up to $44 billion, and it will not be operational until as early as 2031.
Although the current US government is trying to lift restrictions on land development in Alaska and provide financial support, it remains uncertain whether these measures will continue under the next government. The New York Times reported: "Many people remain concerned about the economic viability of the project."
Although Japan can benefit from diversifying its sources of liquefied natural gas and avoid supply disruption risks caused by the unstable situations in regions such as Russia and the Strait of Hormuz, Japanese companies cannot easily decide to participate in the project due to concerns about profitability. Takashi Ueno, a senior researcher at the Central Research Institute of Electric Power Industry in Japan, believes that without the support of the Japanese government, private enterprises would find it difficult to participate in the development.
Translation/ Liu Lin
Original: https://www.toutiao.com/article/7533165792226001423/
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