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Search on for inlet energy

Posted: Thursday, November 18, 2004

Prospects for cheap energy in Southcentral Alaska aren't what they used to be, but there is some potential good news on the horizon.

That's the message being touted by industry and government representatives from around Alaska recently, and one that was reiterated Wednesday by the general manager of Anchorage Municipal Light and Power during the weekly meeting of the Kenai Chamber of Commerce.

Jim Posey told the chamber that his utility sees some room for optimism in the area of increasing the amount of energy generated in the Cook Inlet basin. That optimism is fueled by new projects, including a proposed wind-powered generation plant on Fire Island near Anchorage.

"It's a great prospect, and a great future for us," he said.

However, optimism about wind power is tempered by the fact that the bulk of electricity in Southcentral is fueled by natural gas a resource that's becoming a precious commodity.

"It doesn't solve our problem about gas," he said.

Posey said the situation with natural gas is that its estimated current supplies can only last at current usages through 2012 and only that long if industrial users such as Agrium and ConocoPhillips make significant cutbacks.

"A crisis is looming," he said. "And here on the peninsula, your concerns are even more immediate."

The options for getting gas to Southcentral, Posey said, include bringing gas down from the North Slope as well as increasing the amount of drilling done in the Cook Inlet basin. A 24-inch spur line off a main North Slope pipeline would bring the potential for 330 million cubic feet of gas per day, he said. That would enable the area to continue getting cheap energy and would enable the area to keep existing businesses while attracting new development.

"That would make Southcentral very attractive to new industries," he said.

Currently, the Cook Inlet area needs approximately 200 billion cubic feet of natural gas per year.

Posey said there also is the possibility that new development in the area could come on line to provide gas, as well. New developments on the south peninsula including the estimated 100-plus billion cubic feet Happy Valley field could help ease the gas crunch.

Posey pointed to a recent study that said 10 trillion cubic feet or more of gas could still exist in the basin. However, he noted that some of that gas is located onshore where drilling currently is not taking place.

"You have to open up new land that's accessible," he said.

Posey also echoed other industry representatives when he said one of the biggest hurdles to getting new oil and gas development done is Alaska's current shaky fiscal situation, which he said makes exploration companies leery of searching for new gas reserves.

"It fosters a climate of nervousness and uncertainty," he said.



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