Two major Southcentral Alaska utilities are expanding their natural gas storage, according to recent reporting by the Anchorage Daily News. This comes as the region faces an impending natural gas shortage and will need to import supplies in the coming years.
Anchorage Daily News reporter Alex DeMarban wrote the story and said, if completed – the expansion will buy breathing room for utilities.
This transcript has been lightly edited for clarity and length.
Alex DeMarban: Their contract with Hilcorp is supposed to end for gas supply in the coming years. As that date comes, the storage kind of gives them a little extra time – who knows how long, maybe a few months, maybe maybe a year here and there.
It will always come in handy, even after the gas supply gets really short. It will always provide some breathing room, meaning some extra months at least, of getting us the gas that we need to heat and power our homes.
But it doesn't solve or change the long term picture that we'll probably have to import liquefied natural gas starting next year.
Ava White: Entar said in its petition that they need this storage [expansion] to meet customer demand. But what happens if this project doesn't happen?
AD: It will just mean we'll have some increasingly tight times for gas. If you remember two years ago when we were getting near this point – where we were almost officially being asked to turn down our thermostats or reduce our power use in order to conserve gas, and unofficially, leaders were just kind of saying that Alaskans should be careful.
Something like that could happen. Increasingly, it would be more common.
AW: I really struggle to wrap my head around the natural gas situation, because we've been warned for so long that this was going to happen, and this is such a populous part of the state. So backing up a little bit, why do you think we ended up in the [overall shortage] situation?
AD: I think we did just because it's been decades that Cook Inlet has been producing gas, and it was once a big, dominant gas producer, but eventually the fields have just begun to run dry.
Maybe there could have been some kind of long term planning, and there was, in some sense, I believe, but that's generally not what happens in a capitalist society. I mean, oil companies are going to try to produce what they can as profitably as possible, which means sometimes using a lot of it.
ConocoPhillips even used to export gas. We had so much of it that they would export it overseas for decades as liquid gas to Japan.
We used up our gas over time without any real long term plan for what we would do today. And unfortunately, that's just kind of the way our capitalist society generally works, or the world works in general.
AW: What does it mean to store natural gas?
AD: It's kind of cool, in my opinion. So basically, Cook Inlet has basically underground reservoirs or caverns, right, that were once filled with gas that were producing gas for many decades, and some still are, of course, but then some of these have been depleted of their gas, and so they're just these empty caverns now in which utilities can inject gas in order to store it down there, some of them are under the city of Kenai. So it's a neat concept to think that, you know, some of the heat and power that we're making are coming from gas that's being stored in these caverns.
AW: As someone that reports on this and has a family here, you live here, you're invested in this place. How concerned are you about the natural gas situation?
AD: Not as concerned as I was a couple of years ago. I think that we can import gas, and it looks like the costs may not be devastating. They will certainly push up our bills – even this gas storage is going to push up our bills, maybe an extra $150 a year.
My last bill was $380 for the cold snap [in December]. So, $12 on top of that doesn't sound like a whole lot, but it's just another little piece of inflation that we have been experiencing for a long time.
So again, not crazy, not ideal, just another chunk of money we're gonna have to pay but, you know, I guess maybe we'll eat out a little less, or, who knows, maybe we'll make more money by then.
