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Southcentral Utility Companies Plan for Natural Gas Shortfall
A meeting at Alaska's Regulatory Commission Wednesday, (10/24) industry leaders reassured the panel there would be enough natural gas to meet demands through 2012, but say the problem will be fulfilling the demand for the next 3-5 years.
ANCHORAGE - As Alaska's daylight hours are dwindling and nights are becoming colder, most homeowners are bracing for larger utility bills. Meanwhile, southcentral utility companies are looking for ways to keep up with the demand.
Industry leaders reassured Alaska's Regulatory Commission Wednesday (10/24) there would be enough natural gas to meet demands through 2012, but say the problem will be fulfilling the demand for the next 3-5 years.
Enstar Natural Gas Company is short of about 5 billion cubic feet (BCF) of natural gas for 2013. The company receives 100 percent of it's supply from the Cook Inlet, while other companies like Chugach Electric and Matanuska Electric Association use about 88 percent and are utilizing alternative methods for power. With the help of conservation, retrofit projects by homeowners and the Fire Island Wind Project Chugach Electric has reduced natural gas usage by one third.
Enstar is a natural gas company and doesn't have any alternatives. "Enstar can't conserve their way out of a shortage," said Colleen Starring, President, Enstar Natural Gas. "There would be curtailments."
Anchorage is not likely going to feel the affect of Enstar's shortage. The company is prepared to cover this winter's shortfall with a plans to collaborate with other southcentral utilities.
Starring says producers have been reluctant to enter in any long-term contracts due to an FTC investigation reviewing Marathon's deal to sell it's Alaska oil and gas assets to Hilcorp. If the Marathon deal is closed and approved by the Federal Trade Commission, Hilcorp would control about 60% of the Alaskan natural gas market. "The gap continues to grow," said Starring. "As I said we have been in perpetual negotiations with any and all comers to replace that gas."
For the past 45 years southcentral residents haven't had to look further than their back door for natural gas to heat their homes, but now it's looking ever more likely utility companies may need to import natural gas to ensure there isn't a shortfall in the next 3-5 years.
"I don't think there are any other alternatives other than importing compressed natural gas (CNG) or liquified natural gas (LNG) in the near term," said Joe Griffith, CEO Matanuska Electric Company.
According to a 2010 study by Petrotechnical Resources of Alaska, in order to have avoided a shortfall in the next 5 years 13-14 new gas wells should have had to be completed. However, only 5-6 new wells were developed each year. Based on the data, officials are expecting a shortfall as early as 2014.
The state has made recent efforts to boost production. In 2010, the state legislature passed incentives for Cook Inlet natural gas to boost production. New companies like Buccaneer Energy and Apache Corporation have begun exploration but have not yet entered the production stage.
The Municipality of Anchorage is taking action asking its residents to once again conserve and curtail energy usage for the Energy Watch Campaign. "One of the things you don't want to do is go into rolling brown outs," said Anchorage Mayor Dan Sullivan. "If we use conservation measures it truly can help."
The test is Tuesday from 6-8 p.m.Oct.30, and will give utilities an idea of how much energy can be saved in the case of a shortfall. Results in the past have been relatively low.