Eleven Southcentral Alaska mayors announced Tuesday that they’ve formed a coalition aimed at addressing residents’ needs for heating and powering homes in the region, amid warnings from utilities of a looming natural gas shortfall.
Hilcorp, the main producer of natural gas in Cook Inlet, has told the utilities that it might not be able to fulfill demand once its existing supply contracts wrap up over the next decade. In response, state officials and utilities have begun exploring the option of importing more costly liquefied natural gas from Canada and Mexico.
Anchorage Mayor Dave Bronson is joined in the coalition by Mat-Su Borough and Kenai Peninsula Borough mayors Edna DeVries and Peter Micciche, as well as local mayors Ken Castner of Homer, Carter Cole of Houston, Brian Gabriel of Kenai, Steve Carrington of Palmer, Sue McClure of Seward, Paul Whitney of Soldotna, Glenda Ledford of Wasilla and Dave Dickason of Whittier.
The goal is to be a voice for local governments, as state officials and utilities weigh potential solutions, Bronson said during a press conference Tuesday at Anchorage City Hall alongside five of the other mayors.
“If we don’t take action soon, energy prices in Southcentral Alaska could double,” Bronson said.
Importing liquefied natural gas could be a short-term solution, Micciche said.
“If mid-term or short-term needs to involve the importation of natural gas, we have that capacity,” Micciche said. “I know that, politically, people say, ‘How can Alaska possibly even consider importing natural gas with what we have available?’”
Micciche is optimistic that a long-term solution could be the long-sought Alaska LNG project, which would involve building an 800-mile pipeline from the gas-rich North Slope to transport it to Nikiski. Some would be used in Alaska, and some would be shipped to markets in Asia.
The proposal has gotten more attention from investors than ever before, Micciche said.
“It looks more attractive now than it has economically,” he said. “When you look at the price of LNG and the potential future price of LNG, it will probably remain attractive. At some point, Alaskans have to pull the trigger on a long-term solution.”
Micciche’s optimism seems to contradict reporting in July from the Wall Street Journal that there was little interest in the project from buyers in Asia.
While the new coalition doesn’t yet have any new recommendations in mind, Bronson expressed support for Gov. Mike Dunleavy’s proposal to reduce or waive royalties for gas production in Cook Inlet in order to foster more development.
Bronson said he expects the first meeting of the Southcentral Mayors’ Energy Coalition will be in mid-to-late January, after the Legislature begins its next session.
