Southcentral Utilities Plan to Bridge Natural Gas Supply Gap

Cook Inlet natural gas wells are depleting and southcentral utilities are seeking proposals to import natural gas to make up for the expected shortfall looming in the next 3-5 years.

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by Megan Mazurek

ANCHORAGE - Cook Inlet natural gas wells are depleting and southcentral utilities are seeking proposals to import natural gas to make up for the expected shortfall looming in the next 3-5 years.

During southcentral's energy watch test residents were asked to lower the thermostat, postpone laundry and dish washing and turn off all un-used lights and electronics.

"A bunch of pennies can make a lot of money when you put them altogether," said John Sims, Enstar Natural Gas Company. "That's what we're looking for here."

The result was a reduction of about 1.5 percent equating to about 1 billion cubic feet (BCF) of natural gas. Southcentral consumes 70 BCF every year.

The results may not sound like much now, but it could be enough to save the day when deliverability comes into question. "We're pleased that people do participate at that level," said Mayor Dan Sullivan, Anchorage. "We feel that if we were to call on them in a real situation you'd see a much higher participation rate."

Sullivan said he made it a priority when he entered office in 2009 to make sure contingency plans were in place and that all utilities were aligned. "Utilities and the big users like the military base the university and others all had contingency plans," said Sullivan. "So far, I think that coordination has really made a difference and if we ever do have a situation where it goes live people will be prepared."

Incentives from the state have brought new players to the market who have begun the lengthy process of exploration. Utilities are planning to bridge the gap between lagging cook inlet production with importing either liquified or compressed natural gas. "A pipeline from the north slope is not going to be in place in time to fill that gap," said Phil Steyer, relations director, Chugach Electric Association.

With Alaska being a resource rich state, some say it's been a difficult pill to swallow. "We've had a hard time stomaching it ourselves when we're talking about it around the table," Sims said.

"If you're us you look around and say what's our other option," Steyer said. The imported gas will likely be more expensive than Cook Inlet's and the decision of whether it will be compressed or liquified will be made by early next year. Officials say both would require new infrastructure to get the gas into the lines.

As for staying warm this winter, Alaskans need not fret. "You'll notice we've never had to go to that yellow stage," Sims said. "We've never had to go to rolling blackouts or any of those work case scenarios."

Chugach Eectric has gas under contract until 2015 and despite Enstar's shortfall in 2013, they can rely on a pseudo spot market to get gas when the temperatures drop and deliverability is at high demand.

"The local utilities have always had a communication relationship when we're in times of need," said Sims. In a poll conducted by utilities, more than 61 percent of southcentral residents said they were aware of a possible natural gas delivery problem.

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Realist said on Sunday, Nov 18 at 1:42 PM

If the legislature wouldd stop holding the gas line up as hostage to thwir private interests, ie.e. unions and special party interests we would not have a problem. For over 15 years they have been consistent in their road blocks. Report after report, study after study and it all is still years away from any movement. Its time the union backed le4gislatures and "green" outside interests just stop stone walling every attempt that is made to get this done. We have seen millions squandered on wind here and it has not dropped our dependazce. Fairbanks still has need of reliable and cost effective natural gas. How about just sitting down and try tk play nice and get the job done.

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