Alaska lawmakers juggle late-session bills addressing Southcentral natural gas crunch

Downtown Anchorage is seen on Wednesday. Anchorage and the rest of Southcentral Alaska face a looming natural gas shortage that state lawmakers are trying to address.

“I think there’s considerable alignment,” Giessel, who co-chairs the Senate Resources Committee, said at a news conference on Tuesday. “We see the urgent need.” One effort to stimulate more at-home production of natural gas focuses on slashing state royalty rates for Cook Inlet petroleum from the usual 12.5% to 5%. That is the approach taken in , legislation introduced in January by Gov. Mike Dunleavy that would improve companies’ rate of return and shorten their time for payback from development, thus enticing more investment, supporters argue.

If it works, he said, there would be enough Cook Inlet gas supply to last through the mid-2030s and, thanks to new production that would not otherwise have occurred, an extrain state revenues through the same period. If it fails, it will not provide sufficient new gas and will also cost the state $26 million in lost revenues, he said.

offshore from Anchor Point on the Kenai Peninsula. The measure, House Bill 388, would establish a system for Cook Inlet reserve-based lending, a practice used in the oil and gas industry that allows parties to take out loans by using petroleum reserves as collateral. The bill would create a Cook Inlet reserve-based lending fund to be administered by the Alaska Industrial Development and Export Authority, a state-owned economic development agency.

One idea with wide support would create some uniformity in the management of the power transmission system in the Railbelt.. It seeks to change the way the transmission system is managed from the current practice, which is segmented, to an . To do that, it would remove the “wheeling rates,” the charges that compound costs for energy shippers using different segments of the system.

Source: Energy Industry News (energyindustrynews.net)

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