Alaska's failed leadership and the Southcentral gas crisis
Enstar, which is owned by TriSummit Utilities of Alberta, has opted to act like a political branch of the Dunleavy administration, focused on spreading political hysteria about the gas supply situation in Southcentral Alaska instead of a solution.
Nothing the Legislature could do this summer will change the energy picture for this winter and years to come, contrary to the claims by Dunleavy and many Republicans who have nothing to offer but “Build the Line!”
Enstar should have taken definite steps by now to import natural gas to secure a supply for its customers this winter.
But it hasn’t done that, preferring instead to keep talking about the Alaska LNG plan, which is more of a prayer than a project.
The Glenfarne project, at best, is years away from becoming a reality. It is possible that the entire enterprise is going nowhere and that Glenfarne will be looking for an exit.
In that context, Enstar stalling on an import plan does two things—it increases the political pressure on legislators based on a fallacy—and it puts its customers at risk.
The Alaska Beacon reports that Enstar President John Sims says that by the end of this year, someone is going to have to file with the Regulatory Commission of Alaska to import natural gas for Southcentral Utilities.
“That’s the first time I’m willing to acknowledge that. I’ve never made that statement before, but we need to pull the trigger no later than the end of this year,” Sims said.
“That could result in new gas by 2029, but ‘that is a very very challenging development schedule, and so that’s why I make that statement that we can’t wait any longer than that,’” Sims said.
“There is a sense of urgency that has to take place, not just for the utilities, but for the state to understand, recognize that we have to deal with this problem now,” Sims said, according to the Anchorage Daily News.
“There is only one (solution) that reduces the price of energy in the state of Alaska, and that is the AK LNG project,” he said.
It’s not a solution, if it’s not real.
In contrast to Enstar’s misplaced priorities, the Chugach Electric Association is taking what seems to me to be a far more sensible and less political approach. The utility says it has enough gas for this winter and is pursuing an import option and taking several other steps.
One of the biggest failures of the Dunleavy administration is that the Big Man from Wasilla failed to prepare for this moment. He failed to get legislators, utilities, state employees, local governments and industry representatives to come up with a workable plan.
Dunleavy and energy adviser Andrew Jensen set up an energy task force three years ago that was supposed to find some answers. It didn’t.
Dunleavy launched his task force with a fantasy that the group figure out a way to get electricity in Alaska down to 10 cents a kilowatt hour by 2030.
“Now some people will say that’s incredibly optimistic, we can’t do that, etc., etc., etc. But I’ve gotta remind you of a couple of things done in history here in the not-too-distant past. 1961, John F. Kennedy said we’re gonna go to the moon by the end of the decade,” Dunleavy told his task force on April 25, 2023.
“People laughed at him, nobody can go the moon. That’s impossible. It can’t be done.”
“We went to the moon,” said Dunleavy.
“Importing LNG into our resource rich state may be necessary in the short term but would be contrary to the goals of energy security over the long term,” the task force said in the draft Dunleavy Statewide Energy Master Plan on October 12, 2023.
“While imports of LNG may occur in the short term, doing so over the long term or long past 2030 would be regrettable, would do little to boost our local economy,” the draft Dunleavy master plan said.
“In the short term, in order to meet the expected supply gas shortfall in 2027-2028, a decision to pursue LNG imports will likely need to be made in late 2023. While importing energy does not provide as much local economic development or price and supply certainty, this option may be preferred due to its ability to meet the natural gas supply shortage in a short term execution window. In the mid-term an in-state natural gas supply is preferred as it shifts the economic development benefit to Alaska and provides an opportunity for reliable and stably priced natural gas supply for decades,” the draft said.
“Without taking action now to progress project concepts to a decision making point, there is a significant risk that near term importation of natural gas will become the long-term default solution,” said the task force, which included Sims as one of 15 voting members, along with Tony Izzo of the Matanuska Electric Association.
There was no message from Dunleavy for all of the utilities, local governments and state officials to get going on an import plan to keep the lights and heat on. By 2025, Dunleavy had signed onto the Glenfarne project as the state priority. He claimed it was solid and that pipe would be on this ground in August.
Alaskans are being misled by our politicians and many people in industry.
The big problem for Alaska LNG is not the state tax system—It is the $15 billion or $20 billion cost of the so-called Phase One, the pipeline. To make it more complicated, Phase One makes no sense without so-called Phase Two, which requires $40 billion or $50 billion more.
These are immense numbers.
The assumption that Trump would make tens of billions available, an assumption that appears to have been the foundation of the Glenfarne economic model, has faltered.
Now there is a collective refusal to admit any of this happened.
The propaganda message now, spread by Glenfarne, potential contractors with Glenfarne, and politicians who see a slogan as a solution, is that the only way to fix energy costs this winter is to demand the state cut property taxes without knowing if the project is real.
All signs point to a project that is not real. And it should be made clear in every written and spoken word that the Dunleavy bill that has not been introduced to the third special session has absolutely no bearing on costs of energy now or for many years to come, if ever.
Enstar is playing a leading role in this propaganda campaign when it should be admitting that no one knows if the $55 billion to ???? billion project will ever be started.
The focus should be on getting facilities in place now for importing natural gas, promoting conservation and analyzing the situation in light of reality.
Instead we are stuck in a dumb loop where caution about the Dunleavy plan equates to simple-minded campaign attacks.
People need to be told that the situation today and this winter and for many winters to come is far more complicated than “Build the Line!”
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