Alaska Resource Review, Summer 2025

VOLUME 2 | ISSUE 3 | SUMMER 2025

PROGRESS BEING MADE ON ENERGY RELIABILITY

Southcentral, Interior regions continue to face fuel source uncertainty BY TIM BRADNER THE OUTLOOK FOR ENERGY, ITS AVAILABIL- ITY AND AFFORDABILITY, IS DECIDEDLY MIXED FOR SOUTHCENTRAL AND INTERIOR ALASKA, THE STATE’S MAJOR POPULATION CENTERS. In Southcentral, the pending declines in natural gas production in Cook Inlet have become worrisome for business and com- munity leaders. Imports of liquefied natural gas, or LNG, is the likely solution at least as a “bridge” until a better alternative is found. But importing gas will be expensive and the burden of that will fall heavily on home and building owners in the region who have few alternatives and must heat with gas. Electrical generation also depends on gas but the two large electric cooperatives in the area, Chugach Electric Association and Matanuska Electric Association, have access to alternatives like power from hydro and smaller amounts from wind and solar. In Fairbanks, the Interior Gas Utility (IGU), the community’s natural gas util- ity has diversified its gas supply sources away from Cook Inlet and is now receiving truckloads of LNG from the North Slope where a new Harvest Alaska LNG plant is now operating. Harvest is an affiliate of Hil- corp Energy, which produces the gas. This, in itself, is a notable achievement as first commercial use of the huge “strand- ed” reserves of natural gas from the North Slope, if only on a small scale. LNG to Fairbanks also won’t be cheap given the cost of trucking on the Dalton Highway, but the gas will at least be avail- able, and there’s a lot more where it comes from. Another advantage: The IGU and Hilcorp, the gas producer, can keep prices stable given the large gas resource on the Slope. This is in contrast with LNG im-

A helicopter flies near the site of Dixon Diversion.

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Photos Courtesy Alaska Energy Authority

The Bradley Lake hydroelectric project near Homer is to soon be expanded.

ported into Southcentral Alaska, which will have its price linked to international mar- kets. Before it started receiving LNG from the Slope, IGU trucked liquefied gas up the Parks Highway from a small gas liquefac- tion plant in the Matanuska-Susitna Bor- ough. But with Cook Inlet gas production set to decline, the Fairbanks-area utility decided to switch its source of gas to the North Slope, a wise choice. In Southcentral Alaska, home and busi- ness owners don’t have good choices. They are vulnerable to the Cook Inlet production decline because they depend on gas for

space heating and power generation. For years, the state Division of Oil and Gas in the state Department of Natural Resourc- es has been predicting a decline in annual gas production from Cook Inlet’s aging gas fields. State analysts say the reduction will begin in 2027. Although the division keeps close tabs on the Inlet’s gas wells and regularly up- dates its forecasts, the overall prediction hasn’t changed. In 2028, the shortfall will amount to about 15 billion cubic feet of the approximate 70 billion cubic feet needed.

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ALASKA RESOURCE REVIEW SUMMER 2025

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