Trump's Top Ally Peddles Controversial Energy Project Amidst US Anxiety

From his living room, Alaska Governor Mike Dunleavy watched President Trump’s address to Congress via television last month. When he heard certain statements, they instantly invigorated one of America’s biggest energy initiatives and set him on a series of trips throughout Asia.

Trump touted a “gigantic natural gas pipeline” in Alaska that “will be truly spectacular.” It had received its permits and was all ready to go, he said, adding that “Japan, South Korea and other nations” wanted to be major investment partners.

We were the sole ones," Dunleavy stated during an interview in Seoul, "the only state that received a mention.

Now Dunleavy needs to turn Trump’s statement into fact. The stakes involve one of America’s most expensive issues. energy projects investing $44 billion to construct a pipeline for transporting natural gas from Alaska’s northern region, then liquifying it for exports. Should the project be realized, this pipeline would provide significant support. U.S. exports To Asia, which accounts for approximately two-thirds of the global LNG supply.

The 63-year-old Republican Dunleavy, who maintains a strong relationship with Trump, has initiated an extensive tour encompassing Taiwan, Thailand, South Korea, and Japan for a duration of 12 days. These nations stand as key Asian allies alongside being major trading partners of the U.S., boasting significant trade surpluses with America.

As Trump aims to eliminate trade deficits, Dunleavy is providing anxious Asian allies with an opportunity to bridge the gap through significant investments in the Alaska project. These countries could choose to jointly invest, pledge substantial future gas acquisitions, or even combine both approaches. When addressing Asian officials and corporate representatives, his message is clear: "Importing gas from America consistently proves beneficial."

The initiative from his state, known as Alaska LNG, includes an approximately 800-mile-long pipeline designed to transport gas to a still-to-be-constructed liquefied natural gas facility. This undertaking has been under development for over ten years but hasn’t started construction yet. Deliveries to Asia aren't expected before at least four years from now.

Recently, Japan and South Korea, which rank second and third as global LNG importing nations following China, snubbed overtures From the Alaska project’s supporters, rather than signing agreements with Gulf Coast firms like Venture Global and Cheniere Energy.

Today presents a new narrative. When Dunleavy visited, a Taiwanese government-owned energy company inked an informal deal to invest in the pipeline project and purchase several million tons of liquefied natural gas (LNG). The South Korean trade minister expressed enthusiasm about "Alaska's vast potential for expansion" when he met with the governor, assuring full support from their nation. Last month, at the White House, Japan’s Prime Minister Shigeru Ishiba referred to importing Alaskan LNG as "truly fantastic news for our country."

“Now is our best opportunity to make this happen,” stated Dunleavy, standing at 6 feet 6 inches tall, who previously served as a school superintendent before entering politics.

On his return to office, Trump signed an executive order on his inaugural day that reversed numerous environmental limitations imposed by the Biden administration concerning Alaska. removing barriers At a White House dinner shortly before Trump’s address to Congress, Dunleavy and the president talked about "the biggest project globally," as the governor remembered. Trump said to him, "Let's make it happen. We shouldn’t just be discussing this."

This pipeline could handle up to 3.3 billion cubic feet of gas each day, which represents about one-third of Alaska’s total natural gas output. Meanwhile, the LNG facility would be capable of exporting 20 million tons of liquefied natural gas annually, placing it on par with some of the biggest facilities along the US Gulf Coast.

Developers will have to wrestle with Alaska’s extreme conditions. Buyers looking to please Trump with additional purchases of LNG have plenty of options elsewhere in the U.S. Trump lifted a Biden-era halt on new liquefied natural gas exports .

Even developers working in areas like the Gulf Coast, where they easily access ample natural gas, still face challenges such as increasing labor expenses and policies under the Trump administration. 25% duties on steel and aluminum Hardware and steel generally account for approximately one-third of the construction expenses of an LNG facility.

"You need to determine how to bring the project to market, secure funding for it, and ensure its construction, correct? Costs aren't going down," stated Jack Fusco, CEO of Cheniere, discussing LNG initiatives broadly.

A driving force behind the project is Alaska’s significant demand. The natural gas reserves that supply heating for residences around Anchorage are almost exhausted. Constructing a new pipeline would cater to the needs of the state’s residents and also provide gas for an export facility.

Securing federal loan guarantees for the project would be a big help to developers, who otherwise have to persuade lenders to take on significant financing risks. Alaska LNG is eligible for a roughly $30 billion federal guarantee. Earlier this month, Alaskan lawmakers urged Energy Secretary Chris Wright, a former oil chief and LNG booster, to help the project apply.

The Alaska LNG project first emerged in 2014, backed by heavyweights such as Exxon Mobil, BP and ConocoPhillips. Within years, they pulled out, leaving the project in state hands. A 2017 deal with Chinese backers later fell through.

In 2018, when Dunleavy campaigned for governor, he was "definitely skeptical." However, his perspective shifted as supply chains adjusted following the pandemic, conflicts erupted across Europe and the Middle East, and advancements in artificial intelligence increased the urgency of preventing power outages.

“It was merely a hope earlier,” Dunleavy stated. “The entire world transformed within just a few brief years.”

The governor, having served two terms and winning re-election in 2022, hails from Scranton, Pennsylvania. After completing his education, Dunleavy’s passion for nature led him to Alaska, where he began his career working at a logging camp store. He has resided in Alaska continuously since then.

Dunleavy’s Asian tour concludes this Sunday in Japan. While traveling, he deflected inquiries regarding the initiative's scale or expenses by stating that the natural gas shipments might reach their destination within a little more than seven days, navigating easily across the peaceful Pacific waters.

According to Dunleavy, what the U.S. desires is to secure lasting friendships in the Pacific region grounded in shared respect and comprehension.

“He stated that gas can help achieve this due to providing energy security for at least five decades.”

Send your correspondence to Timothy W. Martin. Timothy.Martin@wsj.com and Benoît Morenne at benoit.morenne@wsj.com