Robert Seitz: Let’s keep Cook Inlet gas flowing

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By ROBERT SEITZ

I continue my effort to encourage all Alaska government personnel, legislative personnel and business leaders and private citizens to support whatever actions are needed to, ensure continued and increased production of Cook Inlet natural gas for distribution to the Railbelt power system and local distribution of natural gas.   

It is imperative that we do what is necessary, to allow the continued flow of natural gas until a dependable, long term base energy source is established that can adequately replace Cook Inlet natural gas.  This commentary will contain a lot of what I have recently written on this topic, as this is one of the most serious problems we have to solve immediately.  

I have been assured that if the tax and royalty burden for all the Cook Inlet gas producers is equalized, that would go a long way to encouraging the drilling of new wells in yet untapped gas reservoirs of Cook Inlet.  So I support HB 276, SB 194 and possibly HB 223 and other related bills that encourage and enhance the increased production of new Cook Inlet Gas.  

Some innovation to control or isolate the value of Cook Inlet natural gas, to ensure the world commodity market does not drive our fuel prices to unacceptable levels would be of great help.  There must be some way to establish a rate that is fair to all producers that will provide a reasonable rate for heat and electric energy fueled by Cook Inlet natural gas.  The future of Anchorage and of all Alaska depends on this energy.  

Once we have secured the continued flow of Cook Inlet natural gas we have a good start for our long term energy plan, as we will have a good starting point.   This will give us time to work out (plan) renewable and whatever (yet not selected) alternate energy source might become the replacement base energy source that will replace natural gas.  We do have an energy storage mechanism that can be charged with excess wind and solar energy, which is Cook Inlet Natural Gas Storage Alaska (CINGSA) on the Kenai Peninsula. (SB 220 is related to natural gas storage, and it encourages continued Cook Inlet gas, I can support this effort.)   

Even though the wind and solar are not considered as dispatchable energy sources the compressors for the gas storage can be operated while there is excess energy from the wind and solar resources.

I have read HB 368 and have made negative comments about this bill.  I find the bill to be premature in that it is an attempt to force utilities to accept the connection of renewable resources to the utility whether or not they are beneficial to the rate payers.  

We do not need to implement RPS (Renewable Portfolio Standards) and that  the IPP developers should be encouraged to offer a design that will provide power at a reasonably low rate, not complicate or disrupt the control and stability of the Electric Power System, and that they be free to negotiate agreements with the Utilities concerned.   

I think the free market system should be allowed to function without compromise in the development of our power system.  If HB 349 (“An act relating to leases of public land for renewable energy projects”) offers benefit to Alaska, and encourages the development of energy resources for connection to the utility without unnecessary burden to Alaska then I might be supportive of this bill.  The free market has already been compromised where Cook Inlet Gas is concerned by ESG and other actions designed to increase cost of hydrocarbon fuels.

Since Alaska does not have a pumped hydro storage facility that can accept any and all wind and solar power produced, we must next focus on developing sufficient Long Duration Energy Storage (LDES), to permit IPP (independent power producers) to allow beneficial and profitable connection to the railbelt system. With sufficient LDES it would then be relatively easy, as all excessive production of variable energy sources be diverted to pushing excess energy into the storage mechanism.    

A new Long Duration Energy Storage (LDES) means by Cache Energy has been recently introduced and could be an affordable mechanism for installation on the Railbelt or in remote communities.  We will remain alert for other LDES which can store energy in June for use in January.

 In the meantime those who desire to install utility grade wind and solar projects that are to be connected to the Railbelt electrical system, should be encourage to do so, as long as the projects are financially attractive and compliant with appropriate codes, regulations and standards.  Without a stable base energy source to depend on when the wind doesn’t blow and the sun does not shine we must depend on Cook Inlet Natural Gas.  

A Cook Inlet Tidal Energy project has been funded, but we will not know for a while when and what the Tidal Energy contribution could be.  We cannot afford to be restrictive in our energy sources to only allow “Clean Energy” to be added.  We can encourage alternate energy sources and other modifications to our power and energy systems 

I began writing about the need for a long term energy plan and long term energy storage for Alaska in January of 2016.  There is still no plan (I have just seen bullet list of possible solutions, but without implementation) and now that we are running out of natural gas, there still is no reliable long term energy storage.  Now is the time for action on Cook Inlet Natural Gas.  It will take a paradigm shift to get it worked out, but this time we need to get a plan developed so that we have guidance on what and how to add energy sources to the system to ensure cheap energy, that encourages economic growth, industrial progress, and a very positive future.     

Alaska does not need and RPS to encourage alternate energy sources to be developed and added to our system.   It would help if each source added was provided with a reasonable estimate of cost per kWh, whether from an IPP or utility.    If we have cheap energy it would allow consideration for a lot of new industries in Alaska.  

Efforts to upgrade our Railbelt Transmission system should not be done in any manner that would dismiss the natural gas fueled generators as the primary goals should be cheap electrical power and reliable power when conditions are worst (i.e. winter).

Robert Seitz is a PE Electrical Engineer and lifelong Alaskan.

14 COMMENTS

  1. OK. So truthfully. How much gas is there in the Cook Inlet? I thought I read 270 years….

  2. Will we be expected to freeze while alternative energy sources are developed to make them feasible? We all need affordable energy to heat our homes in the interim regardless of political climate. Even our electric transmission infrastructure is outdated and unreliable in foul weather. We need to learn to swim before being thrown into the water. Replace our natural gas with alternative energy before cutting off our present system. Theory doesn’t heat our homes.

    • Trig – you’re absolutely right, except….

      Most of the long term dispatchable generation takes a decade to build. So, the best time to have started seriously looking at new power generation sources was 10 years ago.

      Like my dad used to say, the second best time is right now.

      Given that the utility boards have not spent sufficient time and effort to build the next Bradley Lake hydro, we will need an interim solution. It’s unfortunate, but that’s the result of inaction in the past.

      I have worked in the power industry in Alaska my entire career, in the 80s as a Chugach employee, and later as the co-founder of the largest power systems engineering and construction company in the state. I am running for the Chugach Board simply because we have a problem, and it’s not being addressed.

      Vote for Dan Rogers and Todd Lindley for the Chugach Board. Ballots are mailed out April 17th and need to be back in by May 17th. Its your electric utility, and I don’t think anyone is wanting cold and dark, but we’re going to be there if we don’t come up with some real solutions.

      dan

  3. Let’s keep government out of all markets as much as possible! We already have a $1 billion unsustainable PCE for rural utilities, and we have a largely failing state loan to the Fairbanks North Star Borough to truck natural gas from Cook Inlet, and possibly from the North Slope, to Fairbanks at a cost of hundreds of millions of dollars in state subsidy. For Anchorage the equivalent to PCE and IGU state subsidies is the Cook Inlet tax credits, and those have worked well (expensive though they have been to the state GF). Enough subsidy! Let the free market find the price at which demand and supply meet. Do we Alaskans want the economics of Milton Friedman or Joe Biden’s Bidenomics?

    • It is interesting. Wind factors pretty heavily into all of their alternative to “business as usual” scenarios. One very important thing about the cost of wind power that I would like to point out, is that currently it seems that the cost of erecting the generating towers/capacity and that ROI is completely separated from the cost to build the necessary transmission facilities to tie those wind power sources to the grid. When ratepayers are shown the costs, it should be the all in cost and contribute to a transparent, predetermined all in rate increase. Anything less is chicanery on the breeze.

  4. The world is awash with natural gas, Henry Hub price for LNG is about $1.80 per MMBtu. There is no renewable energy source that can match that.

    • I’m afraid you’re right, but if you spread that around while the legislators are sequestered in Juneau they might not appropriate operating money for the state gas line development agency. That guy makes $500,000 a year, so if you don’t keep quiet about natural gas prices we could see restaurants in Juneau and Anchorage suffer, his airline travel will be curtailed, and his leased car will be turned back. So please be careful with this information until the legislative session ends!

  5. The RCA (Regulatory Commission of Alaska) should have been addressing these issues all along as well. The RCA has allowed DEI policies into our railbelt, the whole green new deal/climate cultist board members at CEA for an example. Every utility should be participating in the five nines of reliability (power is available and reliable 99.99999% of the time) keeping the lights on is what is important. Keep your climate cultist ideas away from our railbelt until you have a oroven solution and stay away from all other businesses and utilities.
    .
    Your green “ideas” need further exploration before being implemented (shoved down our throats). Put together a solid proposal with details of cost, schedule and budget. Make a real adult plan, draw it out, explain the details, propose what this does, how it helps, what it will replace, how long it will take, what the future costs are: include a cost to build evaluation which includes annual and future maintenepance costs, include a full life cycle replacement (how long will this solution last), scope out the entire project, how long will it take to build, how will it help the local community, how will it help Alaska overall, who is the end product good for?

  6. How come no one is talking about Cook Inlet Coalbed Methane gas. When the State awarded the lease to Alaska Natural Gas INC, they estimated 1.6 Tcf of Methane gas that was recoverable. ANG has a lot higher projection of the Methane gas but even the States smaller estimate would provide Lights and Heat for 22 years plus!!!

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