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Committee talks local energy

Posted: October 22, 2011 - 10:09pm

The state’s Senate Resources Committee met Thursday in Kenai to talk about resource development in Cook Inlet.

Kenai republican Tom Wagoner chaired the meeting. Wagoner is co-chair of that committee with Sen. Joe Paskvan, D-Fairbanks. The committee includes Sen. Hollis French, D-Anchorage, Sen. Lesil McGuire, R-Anchorage, Sen. Bert Stedman, R-Sitka and Sen. Gary Stevens, R-Kodiak.

Kenai Peninsula representatives Mike Chenault, R-Nikiski, Paul Seaton, R-Homer, and Kurt Olson, R-Soldotna, also attended the meeting.

Thursday’s meeting focused on Southcentral’s energy needs and the potential impact of a natural gas pipeline from the North Slope, with presentations from nine different entities.

Joe Griffin, from the Alaska Railbelt Cooperative Transmission and Electric Company, gave the legislators an overview of electricity needs in Southcentral and projects working to power the area. The cooperative has been working on upgrading interties between various railbelt communities in addition to its work generating power.

Griffin said a shortage in natural gas would create major problems for Southcentral. In the case of an energy shortage, the utilities would hold rolling blackouts, he said. In addition to looking for ways to get natural gas from the North Slope to the rest of the state, Griffin said the cooperative is looking at other alternatives, including hydropower and having power plants that can run on propane as backup and more natural gas from the inlet.

“If we could get a reliable Cook Inlet supply that would be wonderful,” Griffin said.

Bruce Tangeman, a deputy commissioner in the state’s tax division, explained the tax structure for oil and gas in the Cook Inlet and discussed various credits created to help spur development.

One of the major incentives is for a jack-up rig, an incentive that goes to the first three unrelated producers using a new rig to drill in the inlet.

Tangeman said there is currently a such a rig in the inlet, but the state hasn’t received paperwork to claim a credit for it yet.

Wagoner also noted the state receives royalties from some development, but those rates have to be revisited in the near future.

Representatives from ConocoPhillips, Marathon, Apache and Escopeta also talked about their efforts to develop natural gas and other products.

ConocoPhillip’s Darren Meznarich said he couldn’t speculate on how a natural gas pipeline could change the game for the company’s Cook Inlet operations. Meznarich said the company would not have purchased the Nikiski liquefied natural gas plant it jointly owned with Marathon if it didn’t see a future in the area. Any specific plans haven’t been made yet, and Meznarich said he couldn’t speculate without knowing the details of any proposals.

Two producers also talked about alternative energy sources.

Cook Inlet Region Inc.’s Ethan Shutt talked about that entity’s efforts toward coal gasification, which would create synthetic gas through a series of underground reactions.

The project is located on the west side of Cook Inlet near the Beluga River, in the Matanuska-Susitna Borough. The synthetic gas base product could be used to create fuels, fertilizer or other petrochemical products. The coal used during reactions would likely not be mined or developed for other uses afterward, Shutt said.

Before such a project comes online, further studies and site work would have to be done.

Shutt said the synthetic gas could produce electricity at a rate comparable or lower than the current cost of electricity in Southcentral.

Paul Thomsen updated the senators on ORMAT’s Mount Spurr Geothermal Project.

That project, which would develop up to 100 megawatts of geothermal power on Spurr, hit a setback this summer when the company wasn’t able to drill as deep as planned. The rock and temperatures reached were not as positive for geothermal development as hoped, Thomsen said. The company now plans to drill again to see what the temperatures are like farther down.

“This project is not dead,” Thomsen said.

Geothermal provides a steady baseload of power supply, Thomsen said, and could help bridge the region to a time when more natural gas could available from a line from the North Slope.

The committee met again Friday in Kenai’s City Hall to hear from Buccaneer, LNG Alaska and Cook Inlet Energy.


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spwright 10/23/11 - 09:34 am
Yet another Committee 10/23/11

Sun. 10/23/11
Yep, there ya have it ! Yet ANOTHER Committee to talk about development of Alaska's Natural Resources.

The Party of No has been in control of Our House of Representatives, 1/2 of Our State Senate & Our Governor
for decades now.
Talking about a Natural Gas PipeLine for over 30 years now.

Lets Talk & Talk then Talk some more then when thats done lets Talk some more. Assign yet another Task Force to Research the issue then form yet another Committee & talk some more.

Meanwhile Back at the Ranch the Residents of the Kenai Peninsula will be Paying for LNG to be imported into Nikiski.
Those HUGE LNG Tankers w/ the huge round storage bubbles
will be docking at Nikiski. What is Wrong with THAT picture ?

I don't know ? lets form a committee & talk about it.

Or we could pay Trans Canada another $500 Million Dollars
to research the issue, lets talk about that.

Still WAITING Here in Sloooooooowdotna

SPW "Airborne"

talkofthekenai16 10/23/11 - 10:35 am

What a joke. I agree with steve 100%, there is zero leaders for our state, this state has more natural resources available to solve this problem, but unforunately no leaders that are willing to put the residents first, and solve the problem. there is unlimited natural gas on the slope, which would last for hundreds of years, but no our elected officials sit on their rear ends and do nothing, just study it. we studied susitna hydro back in the late 70s, came back it would not work, but guess what our legislative leaders have poured more money into a new study for 2011. I have testified at public hearings, talked to my legislators, also other legislators, and the goverrnors staff, and you see what we have. Zero results. It is time to move our great state forward, but you will not do it with the current makeup of our legislators and governor. unless you get involved, and if they do not listen to the people, remember them all in November 2012

robert white
robert white 10/23/11 - 01:05 pm
local energy

It's pretty hard to argue with the two above comments, Wagoner is worthless....

spwright 10/23/11 - 08:29 pm
Say What ? 10/23/11

I don't believe it ! There is someone out there that AGREES with me in this Land of the Party of NO.
Who woulda Thunk It ?

My fellow Alaskans have also noticed that NOTHING, Zero,Zip
NaDa has happened w/ the building of a Natural Gas PipeLine.
Whole lots of Talk, 30 years of Talking, Lets Talk about That.

Thanks for Listening SPW "Airborne"

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