Concerns About LNG Exports

By Dave Donaldson

Legislators today encouraged South Central residents to have in say in their future energy needs.   Seven members of the state House and Senate said Conoco-Phillips needs to assure a local supply of natural gas for the region before getting an extension of its export license.   Conoco Phillips and Marathon Oil have applied for a new permit to extend the time allowed to ship ninety-eight Billion cubic feet of gas under a permit granted in 2008 – about forty Billion cubic feet remain.

While not opposing the export permit – pointing to its value to the state and region — Anchorage Democrat Bill Wielechowski said Alaska needs to make certain it takes care of its own before shipping more gas to Japan.

Without more gas,  Enstar could be forced to terminate services of some of its customers.  Enstar has been trying to secure gas contracts for the next three years.  They have not, however, been fully successful.  Requests for bids have been sent out.  Requests were sent to Conoco Phillips.  Requests were declined on multiple occasions to sell gas to Enstar.

Enstar is Anchorage’s local natural gas utility.

Under federal law,  local needs must be met before export is allowed, and while Marathon has contracts in South Central energy plans,  Wielechowski says that after shortages in 2011 and 2012,  more than a third of the region’s needs will be unmet in 2013.

Natalie Lowman with Conoco-Phillips says as long as the LNG plan is in operation,  the company will continue to meet local needs.

Last year we signed a seven year supply contract with Chugach Electric.  And we have an existing contract with Enstar.   So we are continuing to deliver on our commitments and are working with Enstar now on options to address any additional unmet gas needs.

The permit application that Conoco Phillips has filed with the U-S Department of Energy says the new permit will not provide more gas for export than was allowed under the current permit.  The company also promises to provide a back up supply for local needs.  Without the permit, there is a risk that year-round production would be uneconimc – making the export permit the key to actual expansion of supply and future energy security.

Anchorage Republican Mike Hawker sponsored the Cook Inlet Recovery Act that was signed into law following this year’s session.  He says he recognizes the potential supply problem,  but says the export license is critical to avoiding a region-wide failure.   Hawker says gas wells are not adjustable.

You can’t just turn the production up and down.  At all times you have to be producing at a level to meet your peak demand.   There’s a very big difference in the amount of gas demanded on a cold winter day than on a hot summer day.  So, what do you do with that excess on those hot summer days?   The choice is either to flare it off in the Inlet and waste it,  put it into some kind of storage capacity for winter, which we don’t have at this time,  or export it.  So for the last sixty years the exporting of gas has been the activity that has kept gas affordable and available in this community.

The U-S Energy Department will accept public comments on the export permit until August First.


Comments Off on Concerns About LNG Exports

Filed under News Scripts

Comments are closed.