Southcentral Alaska faces a looming natural gas shortage, putting the future of how homes, businesses and governments keep themselves powered on and well heated at a crossroads.
For the past year, a coalition of regional mayors has met with various stakeholders and utilities about the best path to provide energy for Alaska’s Railbelt. Right now, the region largely relies on natural gas from Cook Inlet, but experts predict that the demand will outweigh the local supply by around 2027.
Anchorage Assembly members held a retreat Thursday to hear from the coalition about the state of the gas shortfall, and what the city can do to mitigate its own natural gas use. The main takeaway: There’s no plan finalized yet to deal with the shortfall, but there needs to be one soon because time is running out.
“Where we are today on the development of these projects and commitments going forward on these projects probably should have occurred three or four or five years ago,” Kenai Peninsula Borough Mayor Peter Micciche said to the Assembly. “And here we are today, worrying about what things look like in ‘27,’28 or a cold winter week today.”
Micciche said a fix for the looming natural gas shortfall won’t come from the Legislature or the governor or local mayors like himself. It has to come from utilities.
“Our most valuable mission here is advocating for someone willing to step up and make the right decisions for a comprehensive plan forward,” Micciche said. “There isn't one, and that's something that we have to demand going forward.”
Mayors like Micciche in the Southcentral Mayor’s Energy Coalition have invited the sponsors of various energy and infrastructure projects to pitch timelines, anticipated outputs and costs over the past year. Micciche laid out a number of projects ranging from renewables like solar and wind power to expansion of existing natural gas production. He said none of these projects have signed commitments to move forward.
Whatever solution comes forward, Micciche said it’ll likely be a mix of approaches.
“Natural gas is not always going to be the answer for everything, and I'm a gas guy,” he said. “I was in the industry for 35 years, but we do need to look at those other options.”
Another approach involves the somewhat controversial idea of utilities importing LNG from outside the state. While Micciche and others support Alaska providing its own energy, he sees imports as a potential near-future fix.
“Our group prefers local production. Cook Inlet today, North Slope down the line,” he said. “We're just more realistic about short-term issues and unless a strategy likely with multiple components is selected, a significant gas shortfall is all but guaranteed.”
Natural gas utility Enstar felt the squeeze of the shortfall in January, when a cold snap drastically increased demand and almost wiped out their supply of natural gas to their 150,000 customers. Gov. Mike Dunleavy even requested military bases lower their thermostats.
During a panel discussion, Enstar CEO John Sims noted that the company had issues with storage at the same time.
“There are five wells that we withdraw gas from, and in the middle of January, we lost two of those five wells because they sanded in,” Sims said. “That instantly reduced our withdrawal capacity from the facility by 30%. So right away, big gulp, right?”
Making sure existing storage facilities are operational is also important to electric co-ops that rely on natural gas, like Chugach Electric. However, co-op government affairs manager Trish Baker said the demand for storage will become greater if companies are expected to increase gas production.
“Even if we get, say, you know, North Slope gas or additional Cook Inlet gas fields, the need for more gas storage will not go away as long as we're using gas in any capacity,” Baker said. “So having additional gas storage is really, really critical.”
As utilities focus on making sure storage for natural gas is available, advocates like Chris Rose of the Renewable Energy Alaska Project say utilizing renewable energy will help to offset gas usage in less energy-dependent times, like the summer.
“Nobody is arguing that we're trying to heat homes with wind or solar,” Rose said. “Wind and solar's role is to generate electricity during the times they can generate electricity, conserve that gas, put it in the ground, make sure we have it for the coldest days of the year.”
As utilities weigh their options to address the looming gas shortfall, Micciche says governments need to be ready to both pressure utilities to come up with a plan soon, and support them by removing barriers to those plans.
Editor's note: This story has been updated to reflect that Southcentral Alaska relies on natural gas from Cook Inlet, not specifically liquified natural gas.
