Cook Inlet Natural Gas Supply

Back to top

With hundreds of thousands of Railbelt Alaskans critically dependent upon natural gas, Chugach and other organizations funded an updated look at Cook Inlet production by a gas industry consultant. The recently released review of forecast supply and demand indicates that by about 2015 the flow of natural gas from Cook Inlet wells will begin to fall short of the combined demands of customers – including gas and electric utilities.

The study by Petrotechnical Resources Alaska was an update to a report initially commissioned by utilities after the Department of Natural Resources released its conclusion in 2009 that at least 10 years of gas remained in the Cook Inlet region.  Chugach has helped fund PRA’s analysis from the beginning.  With hundreds of thousands of Alaskans critically dependent upon a continued flow of natural gas from the Cook Inlet area, utilities wanted to understand the specifics of the production and demand curve.  It wasn’t enough to simply know there was a resource waiting to be found, utilities wanted an answer to the question, "Yes, but what will it take to produce it?"

The answer is sobering.  In order to simply meet existing demand from utilities and other known or anticipated loads, the 2010 study found that initially 13-14 successful new wells needed to be brought online each year to stave off the natural decline in the flow rate of existing wells.  The 2012 PRA update notes that in fact only 5-6 new wells have been added each year.  While these wells and compression added by producers have helped, if no new wells were to come into production demand would exceed supply as early as 2014.  Adding 6-8 new wells a year could push the shortfall off to 2015.

While recent exploration activity has increased in the Cook Inlet region, exploration does not equal production.  It can take years to move from an exploration well to a production well.  The study authors concluded it will take a sustained effort to add successful new production wells to ensure enough gas is available to meet the needs of customers across the region.

Absent sufficient production from the Cook Inlet, and with North Slope pipeline projects years away, the study concluded it may be necessary for Southcentral utilities to import either liquid or compressed natural gas to fill the gap that could be only 2-3 years away.

Since the first report was released in 2010, the results of it and periodic updates have been widely shared with legislators, members of the administration, regulators and the business community.  A copy of the report and slides from recent presentations can be found at www.chugachelectric.com.

Cook Inlet Gas Study

Cook Inlet Gas Supply and Demand Update