We need good alternatives to natural gas
August 15, 2010
Steve Cleary editorial in the Anchorage Daily News: The era of cheap and plentiful gas in Southcentral Alaska is over. There is more gas in Cook Inlet, as Petrochemical Resources of Alaska noted in their March 2010 report, but it will cost an estimated $1.9 billion to $2.8 billion to recover it. The report also states what should be obvious to us consumers in the region: “In the future, Cook Inlet utility customers should expect to pay more for the gas used by Cook Inlet Utilities to generate heat and electricity.”
Enstar’s parent company SEMCO is proposing a gas storage facility in Kenai at a cost of nearly $200 million. That’s just to store gas for a rainy day, or, more accurately, a freezing day of peak demand.
There’s also natural gas from the North Slope that may be available in as few as 10 years. With project costs for that pipeline estimated to be as high as $41 billion, North Slope gas may be plentiful but it isn’t likely to be cheap. According to a state report to the Legislature, the bullet line would have to charge between $7 and $14-plus per thousand cubic feet of gas to recover its costs — just for shipping the gas. That’s double what Southcentral customers currently pay for delivered gas.
Ninety percent of the Railbelt’s electricity comes from natural gas. That’s a lot of eggs in one basket and any way you slice it, those eggs are sure to get more expensive.
The most stably priced and cheapest power currently on the grid comes from the Bradley Lake hydro facility near Homer. But what is now praised as a great idea and a sound investment was derided back in 1990 when it was being built. Bradley Lake was too expensive, critics claimed: Cheap natural gas is all we need. Power from Bradley Lake has remained constant over the years, while the price of natural gas continues to rise. Read more