At a clean energy conference in Anchorage Thursday, Lt. Governor Mead Treadwell got a stern dose of skepticism about the fiscal promise implied by the state's big dreams for natural gas exports.
“Don't put all your money on a pipeline planning to depend on a big sucking sound from Asia,” warned Melanie Hart, Ph.D., an expert on Chinese energy policy who sat on a morning panel with Treadwell. “You don't want to be putting your money on the fossil fuels of the past.”
Treadwell had earlier spoken about the role of Alaska and the U.S. in the Arctic, an international region where communities depend heavily on fossil fuels. Arctic governments are looking to exploit new production as shipping lanes increasingly appear in the melting oceans of the high north. Peddling oil and gas to energy-hungry foreign markets has growing appeal, Treadwell said.
Asia turning from fossil fuel
To be fair, Hart's work calls for her to keep a critical eye on renewable energy solutions. She's a senior policy analyst for the Washington D.C.-based progressive think tank called Center for American Progress, where she serves as an expert on China energy and climate policy.
Hart and Treadwell were among a four-member panel that also included experts on Japan and Germany. The group was asked to talk about how Alaska can develop policies that will “catalyze” clean-energy development in light of market conditions that have driven such nations as China and Germany to become leaders in renewable-energy investments.
Hart says she's not as bullish on fossil fuel exports to Asia because Asia doesn't want to rely on imports long term. Better to have home-grown energy products than to rely on price-fluctuating imports that come with transportation costs, let alone gamble with political risks, knowing that soured foreign relations might cause a retaliatory cut off from needed energy imports.
Adding to the equation, China, Japan and South Korea have invested significantly in renewable energies. And, Alaska isn't alone in the rush to get its gas to these markets. Qatar, Australia and China are all emerging players in the gas production industry, with China taking a particular interest in developing its immense shale gas fields. That will take money and technology, both things that Beijing, which is leading the charge, is exceptionally good at leveraging, Hart said, explaining that a move is underway to get China natural gas into development by 2015.
For China, it's not a matter of environmental concerns but sheer political survival. Stable, low-cost energy sources keep the people happy. And if the people are happy, the regime is safe.
Last year, 94 percent of China's new power sources were renewables and nuclear energy, Hart said. It wasn't a typical year, but it shows that under the right conditions, governments can become highly motivated to aggressively pursue home-grown solutions.
For these reasons, combined with how long it can take to build major infrastructure investments like the natural gas pipeline Alaska is proposing, Hart thinks the state would be wise to be cautious about investments based on the assumption that Asia's immediate and growing appetite for gas will stay robust.
Other opportunities could prove enticing for Alaska, she said. The state has wind, solar and geothermal potential. Finding ways to effectively distribute those renewable energy sources into remote communities is of huge value to a country like China. China is good at making solar cells and blades for wind turbines, but has a deficit when it comes to systems design. It's still trying to bring power to underserved communities, trying to build grid infrastructure, and this is where Hart envisions Alaska has having potential to bring something new to the energy market.
'Research proving grounds'
If Alaska can develop sophisticated systems that deliver low-cost energy to remote communities, it could become a leader in the field, exporting its blueprints — both technology and intellectual property — as models for other governments and communities.
While Treadwell maintained oil and gas will continue to be a big part of Alaska's economic and energy future, he acknowledged Alaska does have a role to play on the world stage outside of oil and exports. The state is a good place for governments and private investors to test new technologies, where many tests can be performed on land in Alaska's Arctic that otherwise would have to be housed in more difficult conditions in other countries. Consequently, Alaska can supply “research proving grounds” for pilot projects in geothermal, ocean, river, wind-diesel and biomass energy generation. Designs for energy-efficient homes and businesses can be tried here. If they work in Alaska, they'll probably work elsewhere, he said.
Other renewable projects, like the proposed Susitna-Watana hydroelectric project, may not have export potential, but could serve as an economic engine in other ways: offering competitive, long-term power to military installations, or attracting such new industries as computer server farms or other renewable based energy projects.
“It's important for us to be competitive,” Treadwell said.
Thursday's panel discussion was part of Renewable Energy Alaska Project's two-day Business of Clean Energy in Alaska conference, which continues through Friday at the Dena'ina Civic and Convention Center in Anchorage.