Cook Inlet natural gas is the most valuable resource we have right now in Alaska, second only to the people. It is a strategic asset needed by the Railbelt to heat our homes and businesses. It generates the majority of our electricity and supplies our military at Joint Base Elmendorf-Richardson (JBER). The boom and bust in the last few years left many of the developers with whiplash trying to keep up with the uncertainty. One minute there is no gas, the next there is no storage, and then it is uneconomical. The importance of the basin is clear, and practical solutions are needed to address the problems of today if the gas situation is that dire.
HB 271 is a practical solution to address the near-term gas supply in the Cook Inlet. The bill aims to modify the state’s royalty on just seven offshore leases in the Kitchen Lights Unit at the center of Cook Inlet to prolong the economic life of a gas field. Through the Department of Natural Resources (DNR) Division of Oil & Gas Commercial Section’s extensive modeling efforts, the royalty modification would extend the life of the field over ten years! DNR concluded with clear and convincing evidence that continued production would otherwise become uneconomical and that the modification serves the public interest by extending local supply, preserving jobs, and maximizing economic benefits compared with early shutdown.
While the conversation continues to develop with LNG imports and the Gasline, seeing a bipartisan solution come together to solve a problem for Alaskans should be celebrated. Considering the fact that most of the fuel prices are expected to rise in the near term with imported LNG, protecting a strategic resource necessary for JBER and all the Railbelt is a good hedge against project and regulatory delays of those other projects.
All Alaskans should support HB 271 and tell the legislature to keep the Kitchen Lights on!
