Do we have a Natural Gas Surplus or a decline? Steve Pratt addresses RJR.

Steve Pratt was in the House to talk to the Members of Anchorage Russian Jack Rotary about Anchorages Natural Gas supply and what we can expect from our utility companies in the near future.  Steve Pratt serves on the Mayors Energy Task force along side of Bill Popp, Tony Izzo, Judy Brady and others that have expertise in planning, business and our Natural Gas fields. 

In 2009 Anchorage was very concerned with the decline of our Natural Gas Fields and a looming energy crisis for our residents. Cheveron had pulled out and the Mayor responded by creating an Energy Task Force to help maintain a dependable, sustainable energy force for the City of Anchorage.  The task force is charged with making both short term and Long term recommendations.

Historically, natural gas was a bi product of oil exploration, which was abundant and cheap.  The gas pressure from the Cook Inlet oil fields was impressive.  It was common to flare the gas and simply burn it off into the atmosphere.  With a ready made supply of energy an agreement ensued to use the gas to supply Anchorages energy needs (95%).  Enstar was born and soon our electricity was produced using Natural Gas.   To keep up with the high pressure a plant was opened on the Kenai Peninsula to manufacture fertilizer.  On a cold day if our utility companies were of need of a greater supply they would simply open the valve a little more to adjust to the demand.

The fields that once produced the high pressure Natural Gas were recently thought to be in decline.  Last winter Anchorage survived a harsh winter due to the forward thinking of a gas storage facility for times of high demand.  Hilcorp has purchased the oil fields of Chevron, which represents the majority of the gas, that fuel Anchorage. Hilcorp has utilized new technology that helps maintain pressure and for the next 3 to 5 years we look to have a short-term surplus.  Tax incentives were created for exploration and there have been some finds but will not come on line for some time. 

Steve brought forth the concern that we have contracts for gas that are good until 2018.   He is concerned with what our gas prices might be after 2018 if we can’t get another source to Anchorage.  He responded that he was in favor of a gas pipeline.