Demand for Natural Gas in Southcentral Alaska

Abstract

Households and businesses in Southcentral Alaska have relied on Cook Inlet natural gas as their primary energy source for decades, but as utilities face rising costs to secure that gas they are evaluating a portfolio of alternatives, including LNG imports, potential North Slope supplies, alternative fuels for electricity generation, and demand-side management, weighing each along dimensions of cost, timing, quantity, reliability, and long-term economic sustainability. Although technically recoverable gas remains in the Cook Inlet, it will likely be available only at increasingly higher prices, and the gap between lower-cost local supply and regional demand is expected to widen over time; currently identified alternative energy projects (particularly if limited to a narrower set of wind, solar, and geothermal developments) are insufficient on their own to close that deficit. Electrification of residential and commercial heating could reduce direct gas use but would raise electricity demand, potentially increasing gas consumption at gas-fired generators unless additional non-gas generation is developed, meaning the net gas savings are uncertain even though households and businesses may independently adopt such investments. Given these constraints, it is difficult to construct near-term scenarios that avoid LNG imports, while over the medium to long term a broader set of options, including expanded renewables and possible North Slope gas delivery, could partly or fully reduce reliance on imported LNG.