Plans to Import Gas to Alaska

02lngimport         9/2/09

Enstar Natural Gas is working on plans to import Liquefied Natural Gas to fill Anchorage’s anticipated fuel needs as fuel supplies in Cook Inlet become scarce.   Dave Donaldson reports.

Cook Inlet natural gas is getting harder and more expensive to find – causing concerns that an unusually cold winter or an equipment failure could lead to service disruptions to its users.   That’s a threat South Central utilities and governments are taking seriously.

Presenting short and long-term plans to avoid shortages in the Cook Inlet areas it services,  Enstar’s manager of gas supply Mark Slaughter told the House Energy Committee that contracts are in place to carry the municipality through the next two years.  That’s barring any unexpected weather events or equipment malfunction.  And he says the company is negotiating with Cook Inlet suppliers and building storage facilities that will provide sufficient gas for South Central’s needs through 2012.

However,  responding to questions from Fairbanks Republican Jay Ramras,  Slaughter gave Enstar’s longer range plans.

# 02lngimport1                   :29           Ramras: At what quarter, in which year, will you begin working on the contingency plan for the importation of foreign LNG into Alaska?    Slaughter:  We’re working on that currently.  Because it’s going to take a significant amount of time to negotiate that, to come up to speed on that, to educate the state, to educate R-C-A, to educate the entire community as to what that involves.

Slaughter said the outside sources it is looking at are in Canada, Russia, Australia and Indonesia.   He told the panel that his company is also looking at a mix of other options such as new contracts, curtailing delivery to some of its commercial customers and encouraging conservation by residential customers.

Slaughter said that with easy-to-find, less-expensive gas in short supply he doesn’t see many options – such as new instate exploration in Nenana or Goobik, near the Brooks range – and opportunities to link Alaska to national supplies are now off the table.  He told Ramras that the company is still following the Parnell administration’s work on developing a North Slope supply but has backed off from its previous role.

#02lngimport3                    :25           Slaughter — Quite frankly, I don’t care where the gas comes from.  I just want to make sure I have it contracted for and that producer’s going to produce the gas when I need it.   Ramras – Mme. Chair,  quite frankly I do care where the gas comes from. I have a hundred thousand people that I and some of my colleagues represent – and that we all represent as members of the state of Alaska.  And so it’s a big darn deal to me.

Ramras said the lack of natural gas is hurting the Interior’s economy,  it’s put Fairbanks under Environmental limitations,  the city has lost its principal natural gas contract and just recently lost an electrical utility supplying seventeen percent of its needs.

The idea of importing gas is totally unacceptable to supporters of an all-Alaska Natural Gas pipeline   They point out that voters in 2002 approved an in-state gasline from the North Slope to Valdez, where it would be available for  use within Alaska  and also converted to L-N-G for export.  Former Governor Wally Hickel led that issue.

#02lngimport4                    :17           It’s our gas.  If we bring it to Valdez we can ship it to the world, we can ship it to Hawaii, we can ship it to Japan we can ship it to Korea.  We ship it to the world markets…. It is criminal to bring it in from Australia or someplace.

He heatedly blames North Slope leaseholders for not making gas available years ago – and  state officials for not standing up to them.

imdd

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