Tuesday, September 1, 2009

Blackouts in South Central this winter!

It was very recently reported in the Frontiersman that Matanuska Electric Association is now warning of the high probability of rolling blackouts this winter.

With 35tcf of NG reserves, known and estimated, the most populous region in the State is now facing a third world power crisis in the dead of winter?


The primary issue is not so much a lack of natural gas in Cook Inlet, but the lack of infrastructure to deliver the gas in Cook Inlet to market and to store the excess for use during peak periods. Lacking is the storage infrastructure and the pipelines necessary to move the gas from the well to a storage facility. The storage facility may be above ground tanks or old gas wells. Lacking also are the needed storage facilities.

This lack of infrastructure is a travesty. This situation is the result of a serious lack of planning on the part of our leaders, and industry. However, industry cannot build the facilities needed without the permits to do so. The Regulatory Commission of Alaska (RCA) allegedly has been a major impediment to this process, not a facilitator.

Where was the leadership on the part of our government to prevent a crisis that has been building for many years, now?

For at least the last 10 years, this situation has been talked about, debated, pooh-poohed, and largely ignored. In the last gubernatorial election, it was a topic of concern, and a topic all admitted was serious, and if not addressed soon, would result in power interruptions at the very least.

Sarah gave lip service during the campaign, but did nothing to promote a solution. Knowles and Murkowski largely ignored the situation. Mark Begich and his predecessors complained of the looming situation, but did nothing other than the occasional public pronouncement..

The harbinger of this situation? The shutdown of Agrium’s ammonium nitrate plant at Nikkiski, resulting in the loss of over 60 jobs and the money they brought to businesses in the area.

Recently, the Regulatory Commission of Alaska held a public session in which the power utilities were castigated for not having any plans for such a contingency. Yet, this august body was the primary focus of a complaint by Marathon Oil regarding a lack of exploration and production permits during the last 10 years, having a great bearing on the short fall in available natural gas that will very likely result in your lights going out this winter.

The choice will be your lights or heat. Heat wins every time.

We voted to create the Alaska Natural Gas Development Authority to insure we had gas for use in Alaska and to get our North Slope gas to market. Yet, since its creation, ANGDA has been hindered, impeded, and stifled in effecting its voter created mandate. Both Sarah Palin and Frank Murkowski restricted ANGDA’s funding to the detriment of our natural gas development priorities.

An aloof Legislature has not aided in providing some modicum of a solution in the absence of the governors’ indifference, either through legislation making it easier for the oil companies to construct the needed infrastructure.

I just spent 5 months in Canada on an oil field services related project in British Columbia and Alberta. You can bet that what is going to happen this winter in Alaska cannot happen there. Socialist governments, with B.C. being the most restrictive, somehow manage comprehensive oil and gas development. Pipeline construction is ongoing.

Yet, south central Alaska is now facing the specter of rolling blackouts. Our North Slope natural gas still remains stranded. The Canadians rapidly move forward with a LNG port at Kittimat, B.C. to export natural gas to Asia. Meanwhile Alaska’s Rep. Jay Ramras says the coming Open Season will be a bust—meaning no forward progress on any pipeline proposal.

Alaska’s leadership has a terminal case of “can’t”.

There needs to be a serious shift in paradigms on the part of our Legislature, DNR and the Governor’s office regarding support for new oil and gas development here. Failing same, we need to replace one and all in the coming elections.

Keep sending the same tired faces back to do nothing, results in nothing being accomplished, except to spend money we no longer have.

Maybe, a few blackouts this winter will result in some needed change in Juneau?

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