Long cold snap puts a strain on Southcentral Alaska’s energy system

Southcentral Alaska is enduring a long cold-snap and the region’s natural gas production and storage system is struggling to keep up with gas demand for heating and power generation.

Now a mechanical problem has taken one of the five gas production wells out of service at the Cook Inlet Naturak Gas Storage Alaska, or CINGSA, gas storage facility near Kenai. That effectively reduces its ability to produce stored gas by about 19 percent, according to John Sims, president of Enstar Natural Gas Co., which manages the facility.

“Our system is definitely feeling a strain,” Sims said.

It’s not a critical problem yet but it could become one if other problems develop in gas production wells or pipelines. The cold snap is supposed to continue and could even deepen next week, although Sims said he hopes that won’t happen. Cold winters are not unknown, however. Sims recalls the winters of 2018 and 2019 were cold, too. But when the system is under strain even small problems can have out-sized effects, such as the one well in CINGSA going out service.

It also illustrates, however, the increasing fragility of a Southcentral Alaska energy supply system that keeps buildings warm and electricity flowing, and which is mostly dependent on natural gas. The larger problem is that total gas production from Cook Inlet’s gas fields will begin dropping in 2027 and will be in serious decline by 2030, state Division of Oil and Gas officials told state legislators in a briefing last week.

Utilities in the region are looking at an option of temporary imports of liquified natural gas, or LNG, to meet the shortfall. In the long term there are still hopes that a natural gas pipeline from the North Slope could make large gas resources discovered there available to consumers in the state.

For Cook Inlet, however, gas storage like CINGSA meet a critical need. It stores gas produced in summer, when regional demand is low, for use in winter during cold weather when demand for gas is high. Gas is injected in summer into a depleted underground gas reservoir and taken out in winter.

There are other gas storage facilities in region that are privately owned, mostly by Hilcorp Energy which stores its own gas for customers. Gas storage is needed because Cook Inlet’s gas wells can no longer produce enough to meet total demand during the winter. The ability to use depleted gas reservoirs to store gas produced in the summer has eased this problem.

CINGSA is owned 65 percent by Alaska Utility Holdings LLC, which is owned by TriSummit Utilities, Enstar’s parent company, with CINGSA’s remaining ownership held by Berkshire Hathaway Inc. and Cook Inlet Region, Inc. Utilities in the region like Enstar, Chugach Electric Association, Matanuska Electric Association and Homer Electric Association pay CINGSA to store gas for the winter.