Anchorage – The Alaska House Resources Committee, chaired by Rep. Tom McKay, convened this past Tuesday afternoon to address the critical issue of Cook Inlet’s declining natural gas supply. Joined by multiple House Republicans and several Representative-elect members in the audience, the committee heard three key presentations focused on solutions to the looming energy crisis.
The Alaska Department of Natural Resources outlined the stark reality of Cook Inlet’s diminishing natural gas production. Without significant intervention to supplement the supply, energy companies serving the Kenai Peninsula and Mat-Su Valley could face a fuel shortage as early as 2031. While multiple new exploratory wells were drilled this year, Cook Inlet is a closed gas market and the costs of producing new gas wells are high. Offering a royalty relief to developers could incentivize them to invest in additional drilling within the Cook Inlet region. Royalty relief, gas purchase price and production levels all work together to incentivize additional development. The House Republican caucus will be looking at ways to maximize opportunities in the 34th Legislature.
Later in the hearing, Wood Mackenzie and the Alaska Gasline Development Corporation (AGDC) presented a revised proposal to develop a natural gas pipeline from the North Slope to Southcentral Alaska. The ambitious plan includes the construction of a 765-mile, 42-inch pipeline and the development of gas wells on the North Slope. This project aims not only to address Southcentral’s energy needs but could also provide more affordable natural gas to Fairbanks. While the cost of the project (to be built in phases as financing and opportunities arise) is significant, at over 10 billion dollars, the realized gains translate over time to significantly reduced cost to consumers and businesses. The presentation also featured an independent economic analysis of the pipeline’s feasibility and its potential benefits to Alaska’s economy. Estimates of a fully implemented gasline could generate up $700 million annually to state government.
The Alaska House Republicans remain committed to tackling these pressing energy challenges head-on. “This issue affects every Alaskan—businesses, institutions, and families alike,” said House Speaker Cathy Tilton. (R-Wasilla) “We strongly oppose importing LNG as a permanent solution, as it would drive up energy costs on the Kenai Peninsula and in the Valley by over 100%. In addition, a gas pipeline would add over four times the number of full-time jobs to the Alaskan economy. While many are focused on incentivizing developers, and that certainly has its short-term place in an energy strategy, exploring sustainable projects like expanding North Slope gas wells and advancing a gas pipeline are keys to energy security for the Railbelt for decades to come.”
House Republicans are working diligently during the interim to ensure Alaska’s energy future is secure, sustainable, and beneficial to all Alaskans.