In the future, Anchorage, Alaska's largest city, faces the possibility of a gas shortage despite the state's abundant gas production.

Anchorage, Alaska - With the prospect of a gas shortage looming, Alaska's electric utilities find themselves in a precarious position. The region's reliance on oil and gas for its economy, coupled with the high cost of living, makes this potential crisis especially daunting.

Alaska has long been powered by natural gas from Cook Inlet, but most drilling companies have left the area, and the gas supplies are dwindling. Hilcorp Energy, which produces most of the Cook Inlet's gas, cannot guarantee future supplies at the same levels.

The utilities face a significant challenge as their contracts with the region's two largest electric cooperatives expire in March 2028. Enstar, for instance, has until 2033, but the utilities will need to secure energy elsewhere after their deals expire. Businesses may be forced to go without gas, leading to potential disruptions in the city's operations.

The proposed solution to this energy crisis is the Alaska LNG pipeline, a project that dates back to at least the 1970s. The pipeline, if built, would transport gas from the North Slope to Anchorage and then primarily export it to Japan, South Korea, and Taiwan. Glenfarne, the project's lead developer, aims to decide by early next year whether to move forward with the pipeline portion.

The hope is that Glenfarne can sell gas to customers in these countries, allowing them to deliver fuel to Anchorage for less than what utilities pay for Cook Inlet gas. However, the pipeline remains unbuilt, and its completion is a topic of debate. Wood Mackenzie, an energy consulting firm, previously suggested that 2031 would be more realistic for the pipeline's completion.

In the meantime, utilities are preparing to buy gas from other countries starting around 2028. This could lead to a rise in electricity and heating costs between 10% and 40%. Officials have been warning for more than 15 years that Cook Inlet's supplies were running low, and the projected energy shortfall just a few years away makes importing gas the most practical short-term solution, despite the federal law known as the Jones Act effectively blocking Alaska from buying gas from elsewhere in the United States.

The Alaska LNG pipeline project, if successful, could provide a much-needed lifeline for Anchorage. Brendan Duval, the company's CEO, stated that they have every star aligned from the federal government and expect gas to flow in 2029. However, the project's success is not guaranteed, and Anchorage residents may need to brace for temporary power shutoffs and requests to conserve energy during the cold winter months if a shortage occurs.

Tony Izzo, the Matanuska Electric Association's leader, expressed cautious optimism but noted that the project timeline cannot be definitively guaranteed. The pipeline remains a popular idea, and if built, it could revolutionise Alaska's energy landscape, ensuring a steady supply of gas for years to come.

In the future, Anchorage, Alaska's largest city, faces the possibility of a gas shortage despite the state's abundant gas production.