Archaic Federal Law Keeps Alaskans From Using Abundant Natural Gas Reserves
Alaska is an energy behemoth with massive reserves of oil, natural gas, and petroleum. It also, oddly, faces a looming natural gas shortage—not good for a state where half of electricity production depends on the stuff. The problem is that most natural gas deposits are far from population centers and pipelines to transport the gas don’t yet exist and may never be built. So, to get gas to Alaskans, you need to transport it by ship. But federal law requires that only U.S.-flagged liquid natural gas (LNG) carriers be used, and there aren’t any.
Vast Energy Reserves
Alaska really is a powerhouse. According to the U.S. Energy Information Administration, the state’s “proved crude oil reserves—about 3.2 billion barrels at the beginning of 2022—are the fourth-largest in the nation.” It’s “recoverable coal reserves are estimated at 2.8 billion tons, about 1% of the U.S. total.” And, most impressively, Alaska’s “proved natural gas reserves—about 100 trillion cubic feet—rank third among the states.”
With that much natural gas to draw on, it’s no wonder the state gets about half of its total electricity from generators powered by natural gas, with roughly three-quarters of power to the main Railbelt grid coming from gas. Nevertheless, the lights could soon flicker—and a lot of people’s furnaces and stoves sputter—because of lack of access to the vast natural gas reserves.
“Alaska lawmakers are searching for solutions to a looming shortage of natural gas that threatens power and heating for much of the state’s population,” Alaska Public Media reported in February. “The state’s largest gas utility is warning that shortfalls could come as soon as next year – and imports are years off.”
But Not Where It’s Needed
It turns out that the gas Alaskans use comes not from the vast North Slope reserves, but from wells in the Cook Inlet. Most companies say it’s not worth their time to drill there, and so sold their leases to Hilcorp over 10 years ago. Hilcorp is a Texas-based company that specializes in getting the most out of declining oil and gas wells—and the existing Cook Inlet wells are decades old and long past their peak. The company expects to produce about 55 billion cubic feet of gas this year but predicts production will fall to 32 billion cubic feet in 2029.
If few companies want to drill more wells in the Cook Inlet, it makes sense to draw on the natural gas in another part of Alaska, the North Slope. In 2020, federal and state officials approved a pipeline to transport gas from the North Slope to the Kenai Peninsula for local use as well as export. But building an
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