Crises Alaska Can't Afford to Ignore - Natural Gas

Southcentral Alaska is running out of natural gas. It’s not news; studies published in 2004, 2005 and 2006 all pointed to the problem. Depending on how long urea is produced in Kenai by Agrium and how much LNG is shipped to the Far East, supplies could slip behind demand as early as 2012. Seasonal load could exceed capacity earlier than that. As early as 2010 – next year – a prolonged cold snap could lead to interruptions in service.

The State has shot itself in the foot by setting the price point for future natural gas discoveries in Cook Inlet too low, in response to public complaints about energy prices. As a result, the possible unextracted Cook Inlet natural gas isn’t being sought, let alone developed. So southcentral Alaska is quickly running out of cheap natural gas. Even if the Regulatory Commission of Alaska – the folks who help set natural gas prices – were to see their mistake and set a higher price point, there’s probably not time to find new reserves, develop them and pipe them to existing distribution systems by 2012.

So Anchorage runs out of cheap energy in three years or so. Natural gas can be shipped in by LNG tanker. But it would be both ironic and spendy, especially in comparison to the low prices Anchorage pays now.

In this environment, the “bullet line” from the North Slope to Anchorage looks like a great idea. If it can be done and delivering natural gas by, say, 2013. There are articles suggesting the permitting process alone takes five years.

So why isn’t there a sense of urgency? The Governor proposed a bill, but now can’t find time to exercise her considerable political capital to press the Legislature to action. Instead, she’s off to SarahPAC activities; i.e., running for President. Anyone care to bet on whether she continues to draw a paycheck – let alone per diem – the while?

The Legislature, if anything, is worse. They complain that the Governor got them the bill too late for action this session. The house is on fire and Legislature is complaining the fire exitinguishers are too small.

There’s no sense of urgency. I sure don’t understand why. The Governor and a majority of the Legislature come from Southcentral Alaska. As we used to say in a different context, Let the bastards freeze in the dark. We continue down the path of economic suicide for Anchorage and likely hardship across the State. At a time when the rest of the country is already on the economic rocks. Hard to figure.

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