Oct. 7, 2010–Gasline Development President Talks of Whales and Pipeline Routes–Dan Fauske

Dan Fauske, President of the newly formed Alaska Gasline Development Corporation (AGDC), was the featured speaker during the October 7 meeting of the Alaska Professional Communicators, held at Kinley’s Restaurant. AGDC is a subsidiary of Alaska Housing Finance Corp., of which Fauske is CEO/Executive Director. The AGDC was mandated by the state legislature in the spring of 2010 to take over planning for an in-state gas pipeline. The goal is to determine the most economically feasible plan to deliver North Slope natural gas to Alaskans; deadline for the plan is July 1, 2011.

Speaking informally and affably, Fauske shared stories with the communicators about when he lived in Barrow in 1988, the time when three California gray whales were trapped in the Arctic ice. The local whalers normally hunt bowhead whales for food, but they took pity on these gray whales. The community worked tirelessly chopping ice blocks, jumping on them until they sank low enough to push under the edge of the surrounding ice. The point was to keep a channel clear so that the whales could breathe and eventually find open water. Community elders knew where the water was more shallow and warmer and also knew that the whales would not go there for fear of getting further stuck. A Soviet icebreaker joined the effort which became a five million dollar international media event.

Fauske’s remarks were relevant in that Hollywood film crews have been in Anchorage this past month making a movie of the story, “Everybody Loves Whales,” with Ted Danson and Drew Barrymore. Fauske said he’s curious how Hollywood will handle the role the native elders’ traditional knowledge played in the rescue effort. Plus, the Barrow area would be the starting point for the natural gas line.

Turning to his work with the AGDC, Fauske addressed several issues which have emerged during his team’s early months of study, including both the route of the proposed 24-inch bullet pipeline and the funding. The project is estimated to cost between $6 billion and $12 billion.

The proposed route will supply Fairbanks through a proposed pipeline route which would run west of the city, requiring a 43.7-mile 12-inch spur line to supply gas to the Interior city. The spur would cost about $235 million.

A question was asked about the probability of having the gasline follow the route to Valdez? A bullet line from the North Slope using the Glennallen route is longer, a significant consideration with pipeline construction costs of about $5 million per mile, Fauske says.

Furthermore, Fauske says the gas is needed where the population is – Southcentral Alaska and Fairbanks.

With regard to a state subsidy for the project, Fauske indicated that a subsidy of some sort seems likely.

“Without an anchor tenant, we will not make the project pencil out,” he explained. For the project to be feasible a couple of large industrial buyers and a possible one-time infusion of state investment so the tariff, or the transportation charge, for moving North Slope gas would be affordable by both consumers and industrial customers. Without some form of state contribution, gas moved 800 miles through the pipeline would cost about twice what consumers and industries now pay for Cook Inlet natural gas just forty miles away. With gas supply dwindling, this is an important issue.

Fauske also indicated that his team will present a range of options for meeting Southcentral and Interior energy needs in its report to the legislature and will primarily focus on the pipeline.

More about Dan Fauske

Dan Fauske has been the CEO/Executive Director of the Alaska Housing Finance Corporation since March 1, 1995. He directs the management of the self-supporting, public corporation with assets of $4.8 billion.

AHFC has 360 employees in 16 communities and owns 1,700 public housing units. The Corporation has returned $1.9 billion in annual transfer payments to the State of Alaska through cash transfers, capital projects and debt service payments.

Mr. Fauske serves on the governor’s gas line team and was appointed by the current Legislature to manage the In-State Natural Gas Pipeline Development Team.

Dan chairs the Alaska Council on Homelessness and has serves on the boards of directors of the Federal Home Loan Bank of Seattle and the National Housing Development Corporation. In 2002 he was appointed by Congress to serve on the Bipartisan Millennial Housing Commission.

Prior to his career at AHFC, he served as chief financial officer and chief administrative officer for Alaska’s North Slope Borough.

Dan holds a master’s degree in business administration from Gonzaga University.

Dan Fauske

Dan Fauske