Alaska Journal of Commerce

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Preparing for a winter fuel emergency

• Alaska Journal of Commerce
• Alaska State Chamber of Commerce

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The Challenge
The Response
Cook Inlet gas producing wells have declined
to the point that, in the event of an equipment
malfunction, there could be an emergency shortage
of natural gas during a cold snap.
The Municipality of Anchorage, Chugach
Electric Assoc., Municipal Light Power and
Enstar Natural Gas are working together on a
coordinated emergency response plan.
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The Longer-Term Challenge

• Annual production of gas may fall below
  requirements by 2013 to 2018
• The future of the Kenai LNG plant, which now
  serves as a gas supply backstop to regional
  utilities in winter, is uncertain after 2011
• Marathon Oil Co. and Chevron Corp. have
  installed gas storage facilities and Enstar is
  studying establishment of gas storage for its
  customers
• Geologists believe Cook Inlet is under-explored
  for oil and gas, but high costs and limits to the
  local market impede new exploration. Permit
  requirements on federal land are extensive.
• The state of Alaska and the Alaska Natural Gas
  Development Authority are studying a bullet
  pipeline from the North Slope or a spur pipeline
  off a larger gas pipeline, if it is built. These
  are long-term solutions.

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Cook Inlet Natural Gas Production 1958-2026
Current Actual
88 BCF/yr DNR est Utility Demand 2006
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Cook Inlet Peak Day Comparison
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Daily Gas Peak Requirements Potential
Curtailments
Daily Demand (mmcf/d)
Curtailment (mmcf/d)
Utility
Curtailment
MLP Chugach Enstar
38,000 95,000 270,000
75 75 10
28,000 70,000 27,000
Total
403,000
125,000
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Whats the Problem?

• Supply Gap in the Near Future
• Largely Under-explored Region
• Minimal Rig Count