Natural gas line from Nenana to Southcentral proposed
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ASSEMBLY MEETING: Anchorage, Mat-Su bodies heard from Enstar official.
By RINDI WHITE
Anchorage Daily News
Published: April 29th, 2005
Last Modified: April 29th, 2005 at 06:26 AM
CHUGIAK -- A pipeline from natural gas fields in the Nenana Basin could provide the gas needed to carry Southcentral Alaska through an impending shortage, the president of Enstar Natural Gas Co. told lawmakers Thursday.
Enstar's Tony Izzo and Municipal Light & Power general manager Jim Posey presented information about a natural-gas line to untapped fields near Fairbanks at a joint meeting of the Anchorage and Matanuska-Susitna Borough assemblies. The two elected bodies meet quarterly to discuss issues of import to Southcentral Alaska.
Natural gas is one of those issues. Anchorage and the Mat-Su are home to more than 473,000 customers of Municipal Light & Power, Chugach Electric Association and Enstar. The two utilities use Enstar natural gas to generate power for customers across the region.
Anchorage Mayor Mark Begich said Southcentral Alaska's economy could be in danger if inexpensive utilities are no longer available." If we don't move on this issue in some form, or have someone move on it, we're going to choke off economic development," he said. At best, Begich said, natural gas stores in Cook Inlet could hold out until 2012. But even that could dampen business opportunities, due to higher natural gas prices. Izzo told members of both assemblies that the price of Enstar gas jumped 14 percent in 2004 and another 17 percent in January.
Posey said two-thirds of the gas produced in Cook Inlet goes to two industrial users, a urea plant and a liquid natural gas plant, both on the Kenai Peninsula. The companies, in the next five years, will be deciding whether or not to continue operations in Cook Inlet.
But, Posey said, those two users pay two-thirds of the cost of gas production. If they're no longer using gas, he said, gas prices for general consumers could go through the roof. And gas shortages would still be felt in 2012 unless new gas is found.
If exploration and production by Cook Inlet gas producers succeed, Posey said, they could add about 10 years to the lifespan of the Cook Inlet field, at a cost of about $465 million. Changing to a different fuel source would take money too -- $300 million a year more to consumers to purchase fuel oil or nearly $600 million a year for propane, Izzo said. That's where Enstar, Chugach Electric and Municipal Light & Power's line to the Nenana Basin comes in.
"Heck, we could build a spur line somewhere between those numbers and get it to Fairbanks, and it's a one-time shot," Izzo said, referring to the estimated $500 million cost of building a northern pipeline route to Nenana.
Izzo said Usibelli, Doyon Industries and Andex Resources have all teamed up to explore natural gas stores in the Nenana Basin. They've estimated between five and 15 trillion cubic feet of gas are available in an area about 50 miles from Fairbanks. At today's usage rates, that could mean an additional 50 to 150 years of natural gas for Southcentral consumers.
ENSTAR, in cooperation with Cook Inlet Tribal Council, has received $2.5 million from the U.S. Department of Energy to study a route from Nenana to Southcentral Alaska. They'll start the 18-month study period in June, Izzo said.
According to Izzo, it's likely the gas spur-line, a 24-inch pipe, would follow the routes of the Alaska Railroad, the Parks Highway and electric lines that run from Mat-Su to Nenana. Studying the route, he said, could take as much as $6 million, and the company is looking for more funding. In a best-case scenario, he said, the line could be studied and built in four years.
Izzo said this line could move forward whether a gas line is built from Prudhoe Bay to Valdez or to Canada. If a line from Prudhoe Bay is built, he said, it would likely connect to that gas line near Fairbanks. But even if no line is built, this project can move forward.
Izzo said proponents of the Nenana Basin line are working with representatives from the Alaska Natural Gas Development Authority. The two groups share members, he said. However, the authority proposes a separate, competing line from Glennallen to Palmer.
"What we're working on is a private industry initiative. We have a different level of urgency," Izzo said. "Private industry, supported by the federal government, believes the impact on the majority of Alaskans is so great that it's imperative."
Representatives from both municipalities said they'd consider resolutions in favor of the proposed Enstar gas line at upcoming assembly meetings.
Daily News reporter Rindi White can be reached at rwhite@adn.com or 1-907-352-6709. |
