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Running on empty?

Posted: Thursday, April 12, 2001

ANCHORAGE (AP) -- Southcentral Alaska will face natural gas shortages by the middle of the decade unless new reserves are discovered, a new study says.

The report, commissioned by the Anchorage Economic Development Corporation, found the region's short-term energy needs are secure because of Cook Inlet reserves. Unless new fields are tapped within a few years, however, Southcentral will have problems during winter months when demand for energy peaks, the study says.

After 2009, a liquefied natural gas plant in Nikiski faces an uncertain future unless more gas is brought on line, according to the report. The plant operates under a federal export license that expires that year, and unless there's enough gas to keep the facility operating, the government may be unlikely to renew the permit, the study surmised.

A spokeswoman for Phillips Alaska Inc. disputed the report's findings as far as the LNG plant is concerned. Company executives told the Legislature this week that it's wrong to conclude that Cook Inlet natural gas is running out any time in the foreseeable future, said Phillips spokeswoman Dawn Patience.

Northern Economics Inc., an Anchorage research firm, prepared the report.

Even if Cook Inlet natural gas were to run out in the future, Southcentral has other options, the report said, including coal-bed methane, North Slope gas, diesel, fuel oil, coal, imported LNG, hydroelectric and tidal power. But most of these sources have environmental, economic and feasibility hurdles that would need to be overcome, the report found.

Conserving energy is another alternative, although ''without the impetus of market forces and higher prices, the level of conservation needed to significantly extend the gas supply is not likely to occur,'' the report said.

Beside the LNG plant, which employs 52 people, another industry that could be affected down the road is the Kenai fertilizer plant, which has a payroll of 416, according to the report.



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