Alaska running on empty

Wednesday, February 27, 2013 - 19:00
Enstar’s Sims warns of coming shortage
Enstar Natural Gas director of corporate communications John Sims points to a chart showing declining natural gas supplies during a presentation to the Chugiak-Eagle River Chamber of Commerce on Wednesday, Feb. 20 at the Eagle River Ale House. Sims said Alaska will likely be forced to import natural gas from Outside — possibly as soon as next year.

Anyone doubting Alaska faces a looming energy crisis hasn’t been attending Chugiak-Eagle River Chamber of Commerce meetings.

For the second time in as many weeks, the chamber’s biweekly lunch forum at the Eagle River Ale House was the scene of a dire prediction delivered by a high-ranking energy utility executive.

“It gets pretty serious and it gets serious in a hurry,” said John Sims, director of corporate communications for Enstar Natural Gas.

Sims was referring to an expected natural gas shortfall that’s likely to send electricity and heating costs skyward in as little as 18 months. His remarks came Feb. 20 — just two weeks after Matanuska Electric Association general manager Joe Griffith warned the chamber the expected natural gas shortages were likely to result in higher electricity costs in Southcentral Alaska in the near future.

Sims said dwindling gas supplies in Cook Inlet are to blame. He noted there has been some exploration, but warned that any new finds won’t deliver gas into the system soon enough to prevent a shortfall.

“A lot of good things are going on, we’re just not sure if they’re in time,” he said.

For decades, Cook Inlet has supplied the region with cheap natural gas — so much that the gas was both exported as liquid natural gas (LNG) and used to manufacture fertilizer in North Kenai. But that’s no longer the case, and Sims said he expects to see a shortfall of roughly 5 billion cubic feet, possibly as soon as next year.

“We’ve got some challenges ahead,” he said.

Most of Southcentral’s heat and electricity comes from natural gas, meaning the state will soon be forced to import natural gas from Outside, Sims said. Where that gas will come from — and in what form — is unclear.

“At this point, it’s looking like it’s going to be some kind of LNG,” he said.

Although a gas pipeline from the North Slope has long been touted as a solution to Alaska’s long-term energy needs, Sims said any such project is much too far away to stave off the impending crisis.

“We as utilities can’t wait for a pipeline project,” he said.

Sims said Enstar remains confident that Cook Inlet can eventually return to its position as the primary provider of natural gas.

“We believe there’s a lot of gas in Cook Inlet,” he said.

Unfortunately, Alaska’s market is relatively tiny, meaning independent companies don’t have much incentive to drill new holes.

“We’re really quite small,” compared to Oustide markets, he said.

Neither Sims or Griffith could say for sure when the gas shortage would hit, as energy use fluctuates drastically with Alaska’s changing weather. But even if all Alaskans could turn down their thermostats, it wouldn’t generate enough savings to keep power costs down for long.

“We can’t conserve our way out of this problem,” he said.


Contact Matt Tunseth at 694-2727 or [email protected].

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