By Dave Donaldson
A potential project that would determine the feasibility of putting gas into utilities, homes and businesses throughout rural Alaska is beginning to be circulated at the capitol this year. Bethel is looking for a pilot project to see if Liquefied Compressed Natural Gas will do the job.
The economic justification for using gas burners instead of oil in rural Alaska is easy to explain. The cost of a million BTU’s of oil in Bethel costs about thirty eight dollars. The cost of a million BTU’s of Liquefied Natural gas on world markets is between five and eight dollars. The two products can be delivered by barge, are readily available from outside suppliers and provide equal energy. It’s the cost that matters.
Bethel’s Vice Mayor Eric Middlebrook says the project being promoted would install the handling equipment for the gas – and would convert two public buildings and one electric generator to test the system. He says if that is successful, it will be a proven system that can save money for a long time to come.
There is a potential for a huge amount of savings. And looking at the world market for liquefied natural gas, with so much of if coming online, looking into the future it looks like the price of liquefied natural gas may be quite low for some time to come….If this project proves itself, then we will be hopefully in a position where we will have several suppliers competing with each other
Mike Moora, general manager of the P-D-C Harris Group in Anchorage, has done the preliminary engineering work on the plan. He says the fuel source is being used in Europe, South America and Asia – and the equipment is commercially available now.
It’s not going to be testing new technology. It’s scalable technology. And it’s also cleaner burning from the standpoint of carbon footprint. So there are advantages there. The unknown is that the supply chain is not proven for LNG.
The pilot project would help determine those unknown factors such as delivery, fuel sources, costs of conversion from oil to gas burners and –of importance to the residents — local distribution.
I don’t think it would be altogether impractical or excessively expensive to run gas distribution piping and systems to residents of Alaska villages. Nothing like putting in sewers or water systems that are sensitive to freeze up. These systems can be buried relatively shallow and using plastic materials that are easy to run.
The proposal originally was submitted by ONC, Bethel’s Native Corporation, for a grant through the Alaska Energy Authority. It was rejected because – under state requirements – Bethel was seen as having the potential for generating wind energy, not gas. The project is still in the works, however, because Moora says LNG would be a constant energy source, needing no backup like a windmill. The city of Bethel has requested ten million dollars for a wind energy farm. However, the LNG pilot would cost only seven hundred fifty thousand dollars.
Middlebrook says with shipping costs relatively low, Bethel could purchase fuel from anywhere in the world including possible sources of LNG in Alaska – in operation or being considered. He says he has looked at alternatives, and the LNG plan is all he’s found that has a chance of working.
My community is desperate, and we need to look at all options to see which one is the best for us. So, I’m guessing we’re going to continue to advocate for the Liquefied Natural Gas project.
The plan has been given to state Senator Lyman Hoffman and Representative Bob Herron for assistance in finding funding for the project.