Southcentral Alaska cold snap and surging natural gas demand put supply in question

Cold weather has caused surging demand for natural gas in Southcentral recently and problems for the region’s gas utility, Enstar.

The Northern Journal reports that, as the cold in mid-January prompted gas-burning furnaces across the region to run more frequently, Enstar experienced an equipment failure that caused it to reduce output from a gas storage reservoir. And that created questions around whether Enstar would have to take special measures to meet the increased demand, including the possibility that customers would be asked to turn down their thermostats.

Temperatures in the region have dipped again, down to 15 below Thursday in parts of Anchorage and the Matanuska-Susitna Borough, and are expected to drop further.

Northern Journal reporter Nat Herz has been following the issue and explains that the focus continues to be on the availability of gas from a storage reservoir.

Listen:

[Sign up for Alaska Public Media’s daily newsletter to get our top stories delivered to your inbox.]

This interview has been lightly edited for length and clarity.

Nat Herz: So right now, to keep ourselves warm and to generate our electricity in Southcentral Alaska, we are relying on gas coming directly out of wells in Cook Inlet. And we are also significantly relying on gas coming out of this natural gas storage facility operated by Enstar. I think about roughly half of the gas that we’re using right now is supposed to be coming out of this storage facility. However, as this cold snap got underway and they started pumping the bejesus out of this reservoir, all of a sudden, they started experiencing some problems. And in fact, I think at least one, if not two, of the wells started producing, not just gas, but sand. And your boiler does not run on sand. So because of these technical problems, it’s making it hard to flow out all the gas from Cook Inlet that we need to heat our homes and our businesses and run our power plants.

Casey Grove: And I think you noted in the story that you had at Northern Journal that this is connected to that larger looming shortfall that we’ve been hearing about, that people are talking about importing liquefied natural gas to meet demand in the future.

But this is happening right now. And, you know, I think we heard in those discussions that the average homeowner doesn’t need to worry about their house running out of gas. But maybe we do now? I mean, is that something I should be concerned about, as an Anchorage resident or, you know, a resident of Southcentral, that my house is just gonna be cold one day?

NH: I think it’s pretty clear that no one is going to, like, have their gas all of a sudden abruptly shut off. And I don’t think that’s what anyone has to worry about. I think there’s the potential… like this Cook Inlet gas storage facility right now is only able to produce about two-thirds of the gas that it is supposed to be able to produce at one time, because of the problems with these wells.

If that gets worse, or if the demand increases, because of the really intense cold snap, that’s where you might start, I think, to hear from both policymakers and from electricity producers and from gas providers, “OK, now we need to start talking about demand, and can people please turn their thermostats down to 60 degrees from 65?” And, you know, who knows how far that might have to go. But I think like those are the next sort of steps and things you might be hearing about.

CG: And I guess, with electricity generation in particular, toO, there’s like this patchwork of different interties that either, we don’t feed as much electricity somewhere else, or we could potentially bring, you know, power generation from other places to us, right?

NH: Yeah, so, for example, in Southcentral Alaska we have a number of different utilities that have a number of different types of power plants. And the most efficient that we have, on a sort of fossil fuel basis is, is these natural gas plants. But in Fairbanks, they do have the option to, instead of buying cheaper power that’s produced at Southcentral natural gas plants, they can actually stop using that natural gas power and burn, I think it’s like naphtha, or they also even have the option to go to diesel in the Mat-Su Borough with their electric utility. So there are ways that we can adapt.

CG: Do they also burn coal up in Fairbanks, too, though?

NH: Yeah.

CG: You mentioned the conversation around renewables. And it sounds like some folks in the utilities don’t think that that is a viable option for dealing with potential shortages, right?

NH: It’s a tricky conversation. I mean, this conversation started because the president of Enstar, John Sims, went to a public meeting last week and, unsolicited, made this comment about how we’re, you know, struggling to meet demand. “And you know what, wind and solar aren’t coming to the rescue,” (he said). And it was a little bit of a head scratcher. Like, this actually isn’t really relevant. It’s not like we have that stuff and it’s not working. And in fact, you look out and you see it the wind turbines spinning at Fire Island. Like that helps the cause.

I talked to Sims about this afterwards, and what he was saying is basically like, “You can’t count on that stuff on a day like this, like you can on a, you know, fuel like natural gas or oil.” His argument is, “Maybe we need to be thinking about that sort of base load reliable power that we can layer these other forms of renewables on top of.

I ran these comments past some of the advocates that we’ve been hearing from about the need to transition to renewable power, and they really are basically saying, “Enstar is kind of trying to rally the troops here, because their business model — Enstar is a privately owned company — their business model depends on people continuing to buy natural gas.” There’s going to have to almost certainly be liquefied natural gas imported, because we’re not going to be able to meet demand with Cook Inlet gas. And when that happens, it’s going to cost a lot of money to build the infrastructure that we need and to bring the cargoes in.

And in fact, there was recently a study that came out — a major, like, $1 million study from the University of (Alaska) Fairbanks that actually said the cost of putting in all of these renewables and all the battery storage that you’d need to make the grid resilient enough, is pretty much on par with what it would cost us to continue buying fuel for these natural gas plants. And I think there is a pretty compelling argument that if the costs are the same, why wouldn’t we want to set ourselves up to kind of generate our power locally rather than be sort of subject to the whims of these like global markets for petroleum products?