THE LINK: JULY 2024 20 Production decline expected to start beginning in 2027 The Legislature passed a major power transmission regulation bill this session but what was done to encourage new natural gas production in Cook Inlet? Not much, in the end. All through the spring bills were pushed to reduce state royalties on new gas in the Inlet, to empower a state agency to help finance gas development and to extend tax credits to bring a second “jack-up” rig to the Inlet to supplement one already there. But not a lot happened as the session ended May 15. Two royalty reduction bills, one sponsored by Gov. Mike Dunleavy and the second by Rep. George Rauscher, R-Sutton, died in the Senate Finance Committee. The state financing authorization did pass but the Alaska Development and Export Authority, the state’s development finance corporation, has the ability to do this now and has done it, although AIDEA’s authority was clarified. The jack-up rig tax credit introduced by the House Resource Committee died in the House Finance Committee. Following the Legislature’s adjournment state officials are considering ways to boost gas development in the Inlet, but there aren’t a lot of options. Gas production in the Inlet is expected to begin declining in 2027 and to be in serious decline by 2030 and beyond, according to the state Division of Oil and Gas. Enstar Natural Gas Co., the natural gas distributor for Southcentral Alaska, says it is short of gas for 2026. Regulated utilities like Enstar are obligated by law to assure supplies of energy to consumers. Absent new gas production there may be no choice but to import liquefied natural gas, or LNG. Natural gas is important because it fuels space heating for homes and buildings. Gas supports most power generation in the region, too. All through the spring it looked as Legislators don’t help boost Cook Inlet gas Shutterstock Photo The Railbelt’s long reliance on Cook Inlet natural gas is waning with current supply and insufficient exploration to develop new options.
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