will be merged and that an organizational structure will develop among the utilities to allow decisions to be made and costs allocated. This has to happen quickly, though, because of the lead times needed for the utilities to negotiate LNG supply contracts to procure and construct equipment. There are other views, however. One is that an aggressive plan for expanded renewable energy might yet be possible if not by 2027 and 2030 but in years following. The U.S. Department of Energy’s National Renewable Energy Laboratory, or NREL, has a plan for as much as 80% of rail belt’s electricity needs to be met with renewable energy projects. The NREL is building on a conceptual plan done last December, but the new one is focused more closely on the economics. One worry Cook Inlet gas producers have is that LNG imports could discourage new regional gas exploration. Although security of supply and the need for decisions are immediate concerns for the utilities, some also worry that once LNG import supply and procurement contracts are locked in it will take the utility markets away from producers. Since Southcentral Alaska is a closed market with just a few customers, mostly utilities, an explorer will have no place to sell any newly discovered gas once the utility market is met by imported LNG. However, if gas prices do rise, it may also encourage development of known gas discoveries. BlueCrest Energy, for example, has an undeveloped gas reservoir overlaying its Cosmopolitan offshore oil field near Anchor Point, but developing this will require two new platforms and pipelines to shore. The project economics may not work so well at $8 per mcf, but they might at $15. Utilities will have to weigh this as they look at options. There is assured supply with LNG imports, but new gas developed in the Cook Inlet basin will bring new royalties and taxes paid to the state, property taxes paid to the Kenai Peninsula Borough, and local jobs as well. — Tim Bradner THE LINK: OCTOBER 2023 37 Photo Courtesy Hilcorp Energy A drilling platform in the Cook Inlet. A decline in gas production from existing Inlet Basin gas fields is expected to begin in 2027, according to Alaska’s Division of Oil and Gas in a report issued in early 2023.
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