Business leaders and community members packed a room last Wednesday to hear takeaways about the looming natural gas shortfall in Cook Inlet from the chair of the Southcentral Mayors’ Energy Coalition.
“We are going to need an interim solution, and imported LNG at low volumes – likely temporary, and certainly my hope, because my priority is Alaska gas as well – is going to be a necessity,” said Kenai Peninsula Borough Mayor Peter Micciche.
Micciche led the 12-mayor coalition and spoke at a joint meeting of the Kenai and Soldotna chambers of commerce. It’s been a few years since the state’s oil and gas division first warned demand for Cook Inlet gas could outpace supply by 2027.
Micciche’s presentation came amid a flurry of recent energy project announcements. A trio of companies has announced plans to revive the long-dormant Kenai LNG Terminal for liquefied natural gas imports. Historically, that site was used for LNG exports. ENSTAR Natural Gas Company has plans for a separate LNG import project in Nikiski.
And President Donald Trump’s continued promotion of the $44 billion Alaska LNG pipeline project has revived optimism among developers and lawmakers. Micciche sees the solution as being a combination of those strategies.
He says the mayors’ goals were twofold: First, to understand the nature of and solutions to the projected energy shortfall. And second, to advocate for affordable solutions that would keep customers’ lights and heat on.
The coalition’s work was informed by a separate technical committee of industry experts that the group bounced project ideas off of.
Pointing to a chart, Micciche explained the different factors the coalition considered when reviewing potential energy projects.
“The type of project, the … 50% probability on what they can likely provide for energy – either in megawatts or billion cubic feet per year – the earliest startup dates and their costs,” he said.
The table plots new drilling by Hilcorp, wind projects in Fairbanks, tidal initiatives in Cook Inlet and expansion of hydroelectric resources near Homer. But, Micciche said some things have changed since mayors reviewed the projects.
The first entry on the table — a proposed solar farm in Nikiski – is indefinitely on hold. As proposed, the 30-megawatt solar farm would have been built near Puppy Dog Lake and provided power exclusively to Homer Electric Association. But last month, high construction bids and uncertainty around federal tax credits halted work.
“That number changes dramatically without the advantages of the renewable tax credits,” Micciche said of the project costs. “So that project is delayed. I think that’s the nicest way of saying that at this point.”
Micciche says he’s optimistic about an expansion project at Bradley Lake Hydroelectric Dam, near Homer. That project could increase Bradley Lake’s energy output by 50%.
