Todd Lindley: Storage to shortage — The Cook Inlet natural gas crisis

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By TODD LINDLEY

The old adage that to create a hero, one needs a villain is a useful context. If one wants to “solve” a problem, one need only to create a crisis. Cynicism aside, the public is served by knowledge and transparency, and here Southcentral ratepayers have much to hope for.

Why create a crisis?

Energy generation numbers are huge. Alaskans are paying some of the highest rates for energy in the U.S., with southcentral ratepayers forking out  nearly one billion dollars annually.  Alaskans would love to see a gas line and for advocates of tapping the Permanent Fund to build it, an energy crisis could prove useful.

For a privately financed pipeline too, ratepayers might be more accepting of price increases to fund it if they think energy supplies are dwindling. If a crisis looms, consumers could benefit from the favorable economics of LNG imports that could compete with Alaska producers, but imagine the permitting hurdles in the absence of a bona fide crisis? And we all know there are large financial and environmental “anti-carbon” interests bent on eliminating carbon-based energy altogether. To move the needle in today’s investment climate, a crisis is required.

Déjà vu: We have all been here before.

Circa 2010, when Sen. Dan Sullivan was Department of Natural  Resources Commissioner, there were numerous columns written spreading fear of “brownouts” and low gas supplies.

This led to the creation of state-subsidized credits for drilling and production through HB280 (Cook Inlet Recovery Act),which proved disastrous for everyone as the State reneged on its tax credits. AIDEA lost millions when a company it backed, Buccaneer, went bankrupt. SEMCO energy, at the time a Warren Buffet owned company,  used the urgency of a crisis to obtain the legal right to “take” private property using the powers of eminent domain. CINGSA—a private gas storage facility—rose to the rescue. In retrospect, did ratepayers benefit? Was there a real crisis, or were circumstances manufactured to justify higher rates and concessions to businesses, like CINGSA’s certificate of need and public convenience? Is it coincidental that the same playbook is emerging yet again for carbon capture utilization and sequestration (CCUS)?

What’s going on now?

Last month, four seemingly random meetings occurred. First, the Regulatory Commission of Alaska met on Dec. 13 to discuss Renewable Portfolio Standards and tariff obligations like “forced” power outages.

Second, the DNR met that same day to announce the winners of the Cook Inlet lease sale.

Third, on Dec. 14, at an Alliance Breakfast, the deputy commissioner of the DNR discussed Cook Inlet lease incentives. Then, Anchorage Mayor Dave Bronson held a press conference highlighting his Coalition of Southcentral Mayors to address the looming energy crisis.

Carbon is what connects all these dots. But not just any carbon, only those that must be reduced in order to meet a so-called energy transition by 2030–oil and natural gas. What’s so special about 2030? Possibly the answer is that the World Economic Forum, the United Nations, and the World Health Organization all have stated they will implement their plans by 2030. However what concerns us most is Alaska and exactly how much pressure is being exerted here. The meetings above give the public a glimpse of what’s coming by 2030 and to what degree global initiatives impact Alaskans.

Gaslighting or gas producing?

Creating an energy crisis starts where it’s felt most acutely—in population centers. The Railbelt utilities produce well over 80% of the electricity in the state. Most of the natural gas for electricity comes from the Cook Inlet, where Hilcorp, the current major supplier, has said their contracts will begin to expire around 2028 (Pg 1 – Executive Summary). Logically, this would mean we need to open up new long-term leases. Under the DNR’s leasing program, the entire basin is up for grabs. The interested parties are selected by the state based on their profit share for a term of only five years (2028), paying of cash bonuses and annually increasing lease payments. 

As the DNR announces their lease winners, some will celebrate ‘resource development’ without asking the tough questions: what are the drilling commitments and assumptions for the Cook Inlet? Gov. Mike Dunleavy along with the Coalition of Southcentral Mayors want us to believe that Alaskans need to act to incentivize exploration to avoid forced outages before 2027. And yet, known reserves, which can be massive, are largely kept hidden and are simply estimated based on the best reservoir engineering analysis available to the public. (Presently, only “producible gas” is disclosed in plans of operation submitted to the DNR or contained in reports submitted to the Alaska Oil and Gas Conservation Commission.

Furthermore, until recently the USGS, the DNR, and the AK Division of Oil and Gas all advertised there are more than enough proven reserves to meet demand past 2030—not counting the “probable” or “possible” reserves. But, in a reversal, on Dec. 18, 2023 (Errata, Cover Page), the Department of Revenue issued a corrected production forecast for Cook Inlet. So, what changed?  

Cook Inlet energy context

In his State of the State in January of 2023, Gov. Dunleavy highlighted the CO2 storage potential of the Cook Inlet, but nothing was mentioned about the deficiency of Cook Inlet gas leasing or production. Beginning in 2022, presentations about an Alaska Gas line all show that the Cook Inlet must turn into a CO2 sequestration basin (Pg. 11) to unlock the ammonia, hydrogen, and LNG markets for our “Asian” allies. 

Reportedly, Alaskans will only obtain their small share of this market if the utilities decide to tie-in to the new gas line. Further eroding the interests of ratepayers is the view by the utilities that natural gas is a transitional fuel—essentially a bridging, too, before renewable portfolio standards are adopted.

These standards, which were voted down during the RCA public meeting, would drive your personal energy costs up tremendously by 2030, siphoning hard earned wages from average Alaskans and re-distributing them to inefficient utilities. 

This will happen if we lose natural gas as the primary fuel to generate electricity and mandate that gas be replaced by renewables like wind, solar, hydro, and thermal. All very costly and unreliable. Right now, there is talk of further utility rate increases, with decarbonization targets to meet 2030 goals through fuel savings and modified consumer behavior. In other words, if gas isn’t available, ratepayers are forced to adopt alternatives. 

Why is no one discussing the obvious and less costly option of importing LNG? When Henry Hub prices in the gulf hover about $3/Mcf, and transportation from there to Cook Inlet is roughly $2.50/ Mcf, gas can land here for under $6/Mcf. Long-term utility contracts, however, are closer to $12/Mcf. That’s quite a spread. Renewables will likely be even less “affordable.”

In the study done by Berkley Research Group, the imports discussion focused on options from repurposing the Marathon Refinery to a Floating LNG facility to make up supply gaps. Interestingly, in trying to secure electricity rates under $0.10/kWh, the Energy Security Task Force projected the cost of supply for the state-owned projects to be around the $10-12/Mcf marker.

To the State, the optics of an LNG import facility in Alaska is rife with conflict, but it would benefit ratepayers. And it could help propel support for the ultimate objective which is the AK LNG project, along with its decarbonization and Railbelt electrification components. Citizens should pay attention to 8 Star LLC (pg. 23 of presentation) which will be the entity toraise funds for an in-state gas line project as well as to negotiateutility supply contracts. 

As with many crises, it is not the headlines that deserve our attention. Behind the scenes, the laws we implement and the expanded powers we create for agencies tell the real story. Consider this proposed amendment to Alaska Statute 42.05.141(pg. 133, Action A-2.2), which will broaden the RCA’s powers. Specifically, it states that in creating electric service rates, “…the commission shall promote the conservation and diversification of resources used in the generation of electric energy.” As it did with CINGSA in 2013, RCA powers will be ready to deploy in response to yet another Cook Inlet gas supply crisis in 2023. 

Assumptions of grandeur

There are two facts buried in the DNR Cook Inlet Reserves Study and the Berkeley Research Group Report relating to Cook Inlet’s development plan, both of which support AK LNG’ goal to build a pipeline to monetize North Slope gas. First, Hilcorp just entered into a 20-year agreement to supply North Slope (Pg. 64) natural gas to the Interior Gas Utility which “…will drive future demand of Cook Inlet gas down in the future.” Thus, Hilcorp is betting on Gov. Dunleavy’s ability to deliver on AK LNG. This will help ‘transition’ their Middle Gas Shoal (MGS) platforms to CCUS. The second fact is that within the AK DNR Cook Inlet Reserves Study, no drilling is assumed to take place after 2030 (Pg 9).

In any other era, such a plan could be perceived as collusion as our elected officials appear to be taking Cook Inlet out of play as a potential energy supplier. Hilcorp is not the only player in this basin, so why should Alaskans not be alarmed at a policy of no drilling in the Cook Inlet after 2030? 

Alaskans deserve straight answers: Did Cook Inlet producers indicate a decline in production or an inability to meet future demand—thus leading to a perceived fuel shortage for southcentral utilities? Or, alternatively, did shortages suddenly appear because our utilities project reduced demand due to our forced “transition” to renewables? 

Unless Alaskans demand more transparency, the Cook Inlet basin will be the next casualty in a campaign to appease a climate change narrative and to implement Environmental, Social, and Governance policy. Who wins and who loses? You decide. 

Maybe, as the possessed Edward Wayne Brady said in the film Nefarious: “Probably just a coincidence.”  

Todd M Lindley, PE is an energy and engineering professional in Alaska and VP of Alaska Gold Communications, Inc. Contact him @TMLindley_AK on X (Formerly Twitter).

68 COMMENTS

  1. The AK LNG is a hoax, beginning with Walker and now that Dunleavy needs a distraction, the AK LNG is it. Would it ever run through the Cook Inlet to the Kenai? No!! Did the process for gas line ever come close to a fruitful venture with Walker and Dunleavy? No, and, it won’t. Is the state worried about climate change? No!! Climate change is just that. Climate change! Is it going to ruin the energy industries of drilling for oil and putting in a gas line? No!! Are we worried about the Dunleavy starting a project like a gas line? No…Lots of excuses but still No. Frankly, I breath a sigh of relief that Dunleavy has a short time in as governor. This state will eventually have a governor that is equal to the task of big business and get the issues taken care of but its not Dunleavy or any of his crew. Thank God for that!

    • So quick to throw Dunleavy under the bus when it’s possible we end up with a Democrat or a moderate Republican next term who’s all in on this renewable crusade? I’m not holding my breath right now for any big business Republicans winning the ticket next round. Remember, good times make weak men… Perhaps we need to look deeper into the fiscal incentives for the State to go down the path they’re walking given the current national environment? If sequestration now builds our fiscal position, and we’re able to afford new infrastructure to better transport our gas across our state, all while we maintain our energy reserves which are available for our future generations, maybe Dunleavy is on the right path.

  2. Well.. A State that does not follow the God of Israel, it has no future and eventually ceases to exist. Maybe Alaska will realize that fact before it just becomes a wasteland like the way Israel used to be before it became the State of Israel and the Jewish people returned.

    Learning how much corruption has been on Alaska, then in some ways it being locked up is good. Less money for the corrupt beggars to squander and fight over.

  3. Gas line from slope will never be built . Fifty years of nothing . Actually a group was bringing gas to Fbks from Umiat discovery in fifties . Headlines read “ natural gas in Fairbanks by next year “ ! That was seventy years ago ?

    Now the Ak Democrat platform is going to be no oil and gas development in Alaska . How’s that going to work for the villages?

    Cook Inlet has abundant oil and gas reserves . One of the largest single gas wells on planet blew out in 63 or 64 . Could be seen from space and burned uncontrolled for 18 months until they built a tool to extinguish .

    A two trillion cubic foot gas discovery was made 10 years ago on the west side of the Inlet . It’s plugged and abandoned . Trillions of cubic feet of gas remain in Cook Inlet to run the entire states needs for 100 years . Ask your officials govt why ? They are most the problem . The prices are too low to develop and produce .

    And by the way BlackRock , WellsFargo , VanGaurd and Carlyle group will not loan capital for oil and gas extraction in Alaska . This is a huge problem. They also manage most of the peoples permanent fund ? Does anyone care ?

    Don’t worry Anchorage , you folks will be paying huge heating bills and electric costs soon . Then maybe folks will figure it out ?

  4. Great piece! And depressing. I said it in 2018 and I’ll say it again . . . if Alaska were a stock I’d short it.

  5. The AK LNG line has ALWAYS been a BS story. The Hilcorp contract is probably based on trucking LNG to Fairbanks from Prudhoe. If the LNG line was economically viable, the oil companies would build it. Unril then the state would be well served to stop blowing through every nickel it receives from oil sales and start running the government in a responsible way instead of using the money like a lotery winner on crack. 265000 people on medicaid in the state, ridiculous energy policy for bush communities, incredible amount of people on state and federal public support. Juneau has made Alaska into a welfare state, instead of an owner state. If you own something, you take care of it. Look at what happpens to rental properties. People don’t take care of things if they have no cost to them when it fails. The natural gas chicken little repeats are no longer working.

    • What are you talking about? LNG isn’t shipped by pipeline because it needs to be maintained at -162C to keep it liquified. Natural gas is routinely shipped by pipeline, but LNG is not.

    • The oil companies WON’T build AK LNG because it would COMPETE with their existing LNG supplies. Do not confuse “economically viable” with profits, they are not the same thing. 😉

  6. The world is being flooded with natural gas that is easy to transport. It is common knowledge that Hilcorp is a producer, not a developer. Hopefully the legislature will cut the funding for an Alaska LNG pipeline and let the market decide that importing LNG while transforming to renewables is the most economical option

    • There is no such thing as “renewable energy.” The first law says “energy cannot be created or destroyed.” Energy is only transferred or dissipated in entropy. The term “renewable” is mistakenly used to describe the relatively infinite supply of solar, wind (also solar), tidal, geothermal or hydroelectric sources. Nuclear competes as a relatively efficient non-renewable. A clear study of the arthmetic of so-called “renewables” other than hydro reveals them to be unfeasiible in northern latitudes.

  7. It would be nice if people did their homework. Where is the reference to Hilcorp’s partnership with the Carlyle Group?

    • The Carlyle group infiltrated Alaska politics fifteen or twenty years ago the estranged wife of Carlyle founder , Alice Rogoff purchased that worthless rag the ADN . This was the voice of every problem in los Anchorage . Still spewing garbage news like a firehose . It’s all connected to the demise of Alaska resource extraction and misinformation . I am embarrassed every time I see an article from ADN . It does not represent the values of most Alaskans living outside of the fifty mile ring around Anchorage . The challenges with living in the 49th state . Grocery prices doubling in the last 36 months , taking gas stoves away from villagers .

      And now these huge banks that our permanent fund is invested in won’t loan money for oil and gas extraction in our state . Life is not sustainable in Alaska with out oil and gas .

      Our AvGas is I believe coming from Texas now and it’s almost doubled in price . Why don’t we make our own AvGas in Alaska , we use over 25% of the AvGas in the US ? That crappy AvGas they are formulating in the lower 48 is not the quality it was even a few years ago .

      Alaskans need to wake up to the fact that most of the issues we face as challenges are caused and effects from poor policies from elected officials . That I am not sure we’ve even elected these folks and let alone for the benefit of the challenges of life in our great state .

      Their is enough natural gas in and around CookInlet to sustain gas supplies for 100 years and were talking importing LNG from Canada ? Pretty soon we will be importing water if folks don’t wake up .

      Maybe the the reporter that wrote this article ought to look into these facts for the benefit of folks living in Alaska ?.

      • Excellent points and noted! Would it be of interest to discuss the Carbon and ESG policies causing these issues and who is advocating for them?

  8. It is unspoken public policy as approved by the feds to only develop and grow Anchorage Alaska, partially. The rest of Alaska is held in abeyance until the pillagers are formally announced by your vaunted idyll dwellers in Juneau.

  9. “Vaunt! My idyll! ” shout the mysterious servant revellers from their insulated glacial high places.

  10. Author stated hydro is not dependable. It is. The Susitna hydro project would power most of Alaska for years and far cheaper than natural gas. Vote for 5 to 10 billion from the pfd which would be paid back in decreased electric and also recreational opportunities of the new lake created.

    • One problem, hydro projects are tied to an expected precipitation level and other factors. If these levels are not met, no energy. LNG is always there, doesn’t need light, wind, or precipitation. A dependable alternate source. Something to consider when temps dip below O.

  11. American business is too concentrated, companies absorbing companies decreases competition. gas and oil has been on a binge cycle for 50 years. its obvious the cost of capital was cheap for decade since 2008 and SB 21 didn’t nudge increased production as claimed, yet the state clings to hope and cliches.

    “moat businesses” which buffet loves so much, doesn’t increase innovation or increase competition. instead, it locks in pricing for dividends and stifles startups, rather, buying out its competitors and removing products from the marketplace. look at any consumer product you bought from 2008, where is it now?

    SOA is not increasing but losing population on a long term trend, births slightly outpacing deaths but lacking inbound potential citizens. it’s a slow leaking tire no one replaces, just patching and reusing.

    something drastic has to happen, platitudes and political rhetoric will not increase production. unfortunately for a myriad of reasons, Alaska will be withering and not prospering as it should be. when my generation dies out the next will not have enough asset base to continue living here. I bank three of my retirement checks out of five for lack of consumption.

    long winded and rambling I know. my point is, the system has become the financial puzzle place, where dividends are rewarded, innovation and price discovery thwarted. consumes pay above market prices that are protected by their dark money government officials

    my instructions to the grandkids, take the money and strike out like I did, just not to Alaska

  12. So the gas is there. Enough for 200 years?

    If they won’t produce it, maybe the State of Alaska should.

    • 50 or 80 or 100 years ago, society’s movers and shakers almost looked for excuses to build civilizationally-necessary infrastructure. Today, they look for any and every excuse NOT to build.

  13. “……..SEMCO energy, at the time a Warren Buffet owned company, used the urgency of a crisis to obtain the legal right to “take” private property using the powers of eminent domain. CINGSA—a private gas storage facility—rose to the rescue……..”
    My memory differs. Wasn’t it true that the gas storage issue was because of the growing number of customers and the pressure falling problem during the coldest part of the winter when demand was the highest?

  14. “……..the optics of an LNG import facility in Alaska is rife with conflict, but it would benefit ratepayers……..”
    ???!!! Never mind the optics. The stench is overwhelming. After listening to to get-rich-quick operators for the past half century trying to export LNG, now you slither forward with the promise of saving money by importing it?!
    I’m almost daily astounded by what I hear and read. Recently, the “I ‘identify’ as a male/female” line of crap appeared to bring insanity to its utmost height.
    Sir (I’ll venture a guess), you’ve topped the gender confused with me.

    • What’s worse, suggesting a low cost option to benefit rate payers or the state doing business with itself to sell off the gas resource to our ‘Asian’ allies?

      • Depends on the details of this supposed low cost option, who is going to profit, and the true reasons why we can’t simply utilize the gas at our doorstep. How about a few more details from the guy who is suggesting this option?:
        Where is this LNG going to come from?
        Why is Alaska LNG export so objectionable, especially since such export can easily also support our own needs?

        • The true reasons are Cook Inlet reservoirs are more useful as a CO2 Sequestration basin. Our Governor and AGDC indicate this in the plans for AK LNG. Not my preferred option. What does Furie think of this?

          Where it comes from, no way to tell but the Alaska Central Planning Committee aka Energy Security Task Force is analyzing this. Even Mead Treadwells affiliation with Quilak and Middle Eastern LNG and the Treaty of the Seas should be of concern here too. No coincidences. Would a hub solve this?

          Have you seen a long term first take contract between AGDC and the utilities?

          • “The true reasons are Cook Inlet reservoirs are more useful as a CO2 Sequestration basin…….”
            A-ha! Cash or credit for gas not utilized. That’s the story to broadcast.
            “……..Have you seen a long term first take contract between AGDC and the utilities?”
            My understanding is that gas providers are unlikely to sign long term contracts. Fifty years is about as long as you’re going to get, and they’ll fight for less if they can get it.

  15. Yeah, that will work! Just refer to the history of the State’s involvement/funding fiascos: Delta I & II Barley Project, Seward Grain Elevator/Terminal, Point Mackenzie Agricultural Project, takeover of the Palmer McKee Slaughterhouse, Matanuska Maid Dairy, Seafood Manufacturing Facility sold to Grace Alaska now a ChangePoint church for less than half of what it cost to build. Add to the list of State failed expeditures: Susitna Dam, Rampart Dam, Watana Dam, Healy Clean Coal Project.

    Trust us, this time it will be different, we promise!

  16. The State of Alaska couldn’t even produce milk. They tried for 70 years and failed. I got a real fine fish plant to sell you. Or maybe a shiny new bridge. Buy both and I will give you a full PFD for life.

  17. what Lindly totally neglects in his gaslighting piece is the 100% absolute FACT that no finance companies or venture capitalist will finance any sort of energy project without some sort of Carbon Storage scheme. YES it sucks. NO there is no man-made climate crisis that sequestering carbon will solve. In fact carbon is good for plant growth. And climate change and carbon PPMs have fluctuated quite a bit in the last several million years. The fake climatologists had to shrink the study period to less than two centuries to get it to meet their narrative. But, be that as it may, they have SOLD this BS to the finance people and the banks (and some countries such as Japan). Why does Lindly think there is no more drilling in cook inlet. No new Coal Plant without carbon sequestration. Lindly was among the first to complain about the Carbon Bills in the House – and his lack of understanding and foresite continue to be evident in his piece. Alaska is NOT going to force the world to drop carbon sequestration. The best we can do is provide a mechanism for companies to do that the finance/banks/insureance companies want them to do.

    • And if it wasn’t McCabe who wrote this piece that I’m responding to, which it was, I might remind you it’s you who’s forgotten how to be a leader. It’s you who’s forgotten how to be a disruptor. It’s you who’s forgotten how to be an innovator. America is full of those things; the only followers in this country are politicians who are willfully destroying this country in an effort to stay in power. They care not for the constituents that elected them but are willing to follow those above them to stay in power. They are not true leaders in any way, shape, or form, as you can see by the end product they produce. Shame on you; you are the tip of the spear when it comes to the destruction of this country.

    • Why did the Alaska DNR assume in their 2018 and 2022 Cook Inlet Gas Forecast there would be no drilling past 2030? Who signed off on this as a valid assumption?

    • Since when do legislators subject their constituents to extortion?
      You must be Kevin McCabe’s cousin; he is the only legislator (if you could call him that) I know that has such little understanding of history, banking, and economics to believe that we here in Alaska are just lonely little victims of the bankers and their needs. He reminds me of those people who somehow were able to purchase property only to fill it with trash, which is his foundational policy in Juneau. There are two problems with your basic premise, McCabe: 1. You think monopolies are possible without government. In your mind, there must be no companies that have actual capital to spend or invest, were they provided a stable long-term environment to obtain an ROI. Instead of fixing this crucial uniquely Alaskan problem, you and your incompetent friends are too busy kicking around the entitlement/divided football in an effort to manipulate your own constituency to be anywhere near effective at your job. 2. Alaska does not need to force anything; we are the Saudi of America, the richest state in the union by minerals alone. We need to lead by example. We simply lack leadership that understands how to incentivize business for the next 50-100 years. We lack leadership to unite our people in common interest, which is to do the work of the people by building the economy, taking fewer federal dollars, creating more sovereignty and freedom for individual citizens through GDP growth via stability. But instead, we get false leaders and gatekeepers who are perfectly happy with the status quo, a sick economy that has cancer. Well, that ship is sinking, McCabe. We need to become disruptors, think outside the banker box, and provide for ourselves, which we wholeheartedly have the capability to do. But not with leaders like Will Wilachowski and McCabe and Dunlavy and so on. If any of these so-called leaders had any sand in their bags, they would resign today and leave the hard work to those who are willing to do it.

  18. Well, that needs to be at the top of the list for the politicians to argue over when we vote for the next governor.
    We need a governor that understands the need for gas and helps get it put in before it’s too late.
    As everybody knows, it takes years and years to get a gas line and gas supplies online so we need to start now.
    Those who were in are those who are for the climate change, can just turn their gas off and allow the rest of us to have it.
    The climate change group needs to lead by example and quit using fossil fuel products and fossil fuels. Otherwise sit down and shut up.

  19. There is plenty of gas out there in Cook Inlet. It’s just a question of whether the price to risk capital, develop, and profit is less than the real cost of importation. With the reduced number of oil capitalists and developers, Hilcorp seems to be in the catbird seat.
    If imported LNG is projected to cost 50% more than current contracts – that maybe leaves room for a risk-taking capitalist to explore in Cook Inlet. How about we simply begin offering future gas contracts with 30% rate increases? Is that enough? Bidenflation alone is at 20% in just the last 3 years

    • If you could dispose of drilling wastes at 10 cents a barrel down a disposal well would be a great start. When the two trillion cubic feet discovery was made in the west side of inlet , they were charging $150 per barrel to process the contaminated water . Most states allow disposal wells as a normal course of oil and gas extraction ? That’s a DEC problem , government infused problem .

  20. As far as North Slope gas goes – the highest and best use would be to use it internally: producing products such as energy transmitted through HVDC power lines or gas through small diameter pipes to the interior for industrial plastic manufacturing.
    Export, even if possible directly from the north slope, seems impossible based on the flooded marketplace and our inherent high transportation costs.
    Carbon sequestration would be great too if it can be done effectively.

      • It would be great if there was an economic method developed so that Alaska remained competitive in the demands of the world marketplace. If we could accomplish that by injecting it into the underground space emptied by gas extraction, we could be one of the first sources that was a carbon-“neutral” product. I’m just saying if the culture (financiers, shareholders, and customers) demand CO2 reductions, right or wrong, then we are forced to adapt to their requirements – we should not ignore it.

          • CO2 injection is a method employed in the L48 and elsewhere to pressurize oil wells to boost production. Unfortunately, the carbon sequestration industrial complex does not credit this production tactic as a “real carbon sequestration” process. And in remote oilfields such as those in Alaska, the cost of transporting CO2 from their capture sources to the injection well is prohibitive.

          • Do you think that’s economically possible? Is it politically possible? It’s a lot easier to dream up a political blockade than engineer a detour around it.

        • Enhanced oil recovery is tied to an oil price versus a federal tax credit. Economics will be driven by the creative drive of entrepreneurial advancements in drilling and production technology. If there’s enough CO2 available to spend US taxpayer money on permanent storage, then that same amount of CO2 should be available to produce a useful and valuable product to improve the quality of life of the citizens.

          If the purpose is to bring royalty and PFD bearing revenue wouldn’t this benefit the citizen better?

          Sequestration is one way and prevents those ‘voided reservoirs’ from never being used again.

  21. Great read. We are at a crossroads, desperate for honest data driven policy analysis and questioning of the power brokers whose goal is to run our society as a technocracy – control by energy. Full steam ahead, rebranded as “sustainability” and adopted by none other than our “conservative” governor.

  22. There are trillions of cubic feet of NG in the Cook Inlet basin, but the small disconnected market does not lend itself to robust competition. So, either the price is right for new production, i.e. much higher rates or there are incentives/subsidies from government. All the alternatives need to be considered. Susitna, imported LNG, nuclear. Wind and solar from Chinese sources – why? Susitna can be financed and like Bradley Lake and the Southeast dams, would provide reliable electrons for generations.

    • Mr. Mayor, with trillions of cubic feet of gas quite literally at our doorstep, and after producing gas for this “small disconnected market” for the past 70 years, and with all the infrastructure still here and cheerfully producing gas, you folks have quite a task selling us the outrageous suggestion that importing LNG is our economic salvation. Let me guess; is this Gas of Salvation coming from Russia?

    • When the TigerEye well was drilled on the west side of CookInlet , the Arctic Fox rig was secured for drilling the well . In the eleventh hour during the permit process a young intern from the Alaska Dept of Fish and game thought that one of the fish streams was left out of the permit . It took another season to drill the well with the delay . Huge cost to the project .

      Also when Caelus discovered SmithBay several years ago , the state reneged on a $100 million dollar incentive for the discovery . It was a 2 billion barrel field that was noted as one of the largest discovery’s in North America in 30 years .

      When the State reneged on drilling incentive it left a billion dollar company unable to secure capital for development of the field . Huge oil discovery that’s still not in production because of malfeasance from the State .

      Folks need to know that most of the oil and gas resources are locked up in Alaska and most of the fault lays on the state and it’s agencies .

  23. To all the Susitna-Watana Hydro advocates, have you spent any time to review the proposed dam and powerhouse? The pool behind the dam and when the water will be available does not a panacea make. The project as proposed has made some people a lot of money and will continue to make some people a lot of money until it is put to bed or downsized to a reasonable level that the pool of water behind the damn can actually support. The water would be available during the summer months when demand is lowest and locked up as frozen water throughout the watershed during the winter months when demand is highest. A larger pool of water is needed, or a smaller and reasonably sized powerhouse is what is needed to make this project feasible, but then the price tag makes no sense…which is why this proposed project has not been developed.

    • Do you have a credible, documented study to back up that seasonal claim? Or is that just an opinion created in the local bar?

        • I’m already an accused racist, misogynist, traitor, and several other horrible entities which I’ve forgotten. I may as well be an antisemite, too, especially if I get a viable answer with the accusation. Trouble is that such accusations almost universally don’t come with an answer to the question.

      • I’ve read a lot about the proposed project, you can familiarize yourself with it here ‘https://www.susitna-watanahydro.org’ of course that is the site from those who support the project.

        • I’ve read every document I can find over the past half century on this proposed project. I’ve never heard or read of a design problem with potential winter shortage of water. Moreover, this will not be the first hydroelectric dam in the sub-arctic. When you mentioned it, my question was if there was a valid scientific discussion on any of the proposed designs regarding seasonal water flow. It looks like there isn’t, and this design flaw originated over beers in the local pub.

  24. Then you are aware that the amount of power generated is not in fact the 50% of the railbelt electric demand that proponents claim. The estimated annual 2,800,000 MWh of generation shows that as proposed the installed capacity is approximately overrated by 30% meaning as proposed the project will only deliver about 70% of its capacity. There are many reasons for this, one of which is the seasonal flow of water. The majority of the water inrush comes when frozen water melts, or as the site noted above says “The reservoir fills during the spring and fall months when rainfall and snow melt is the greatest.”

    Based upon the studies cited by dam proponents and given the amount of water required to maintain flow through the entire river system, the size of the reservoir, when water is available for use in generation, and when power is needed most on the railbelt; I find it hard to believe that someone who has spent a half century reading every document about this project does not understand that a larger pool of water is needed, or a smaller and reasonably sized powerhouse is what is needed for this proposed project.

  25. Great article Todd. Be interesting to see the future here in the next 20 years. I don’t see Alaska continuing without natural gas. It’s the only cost effective way to heat our homes and it’s a great one! Ran into a guy charging his Tesla at 3 bears in Sterling today, he said he’s just trying to do his part for the environment. Do people realize this is just a fancy way to use natural gas? 😂

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