By Yereth Rosen
The 1950s discovery of oil on the Kenai Peninsula is credited with helping secure Alaska’s statehood. By the 1960s, the Kenai Chamber of Commerce had adopted a catchy nickname for the city: “The Oil Capital of Alaska.” In 1969, Cook Inlet began supplying liquefied natural gas to Toyko-based utilities, making it the nation’s first source of LNG exports.
Half a century later, government officials and energy experts who spoke at the Alaska Sustainable Energy Conference delivered a contrasting message: Stop thinking of Cook Inlet as merely a source of petroleum to burn.
Gov. Mike Dunleavy, Alaska Republican and decidedly pro-oil governor, was one of those messengers. Cook Inlet “is the most phenomenal energy basin on the planet,” said the governor, who hosted the three-day Anchorage conference.
He cited the inlet’s tides, the second biggest in the world, its active volcanoes and other renewable energy sources that exist alongside the region’s fossil fuel deposits. “You name it, we’ve got everything here in Cook Inlet, on top of each other, not spread out 500 miles that way or 300 miles this way,” he said.
An unlikely messenger
Another seemingly unlikely messenger was Luke Saugier of Hilcorp Energy Co., the dominant producer of Cook Inlet natural gas, which powers Southcentral Alaska.
“You should buy less of my gas. We should have other supplies of energy in the Cook Inlet basin,” Saugier, Hilcorp’s senior vice president for Alaska, said in a presentation at the conference.
Part of the reason is the need to address climate change, he said, and part is simple reservoir reality. Cook Inlet has enough gas supply for about the next five years to avoid concerns about rolling brownouts, he said, but the future is less secure. “What we want to make sure of is that five, six years from now, there is no crisis of natural gas. And that means we need to move with some urgency as a community to diversify our sources of supply,” he said.
Suzanne Settle of Cook Inlet Region Inc., the regional Native corporation based in Anchorage, put renewables into two categories – those already being used, like wind and solar, and those with use expected to come in the future, including geothermal and tidal energy.
For CIRI, wind power has a special place, and the company’s 10-year-old 11-turbine farm on Fire Island just offshore of Anchorage is “near and dear to my heart,” said Settle, a vice president with the corporation.
“Every year the project has pretty much exactly what we thought it would, around 50,000 megawatt-hours of clean renewable energy,” she said.
A second phase would expand the project to double the number of turbines but, thanks to advances in turbine technology, would triple the production of energy, she said. CIRI could break ground on that expansion in 2023, she said.
What’s on the horizon
On the horizon, experts said, is the use of other renewable energy sources that are abundant in the region: tidal power and geothermal energy.
Levi Kilcher, an ocean energy expert with the National Renewable Energy Laboratory, said there is enough tidal power in Cook Inlet to meet double the energy needs of Southcentral Alaska.
There have been notable successes in developing tidal power elsewhere in the world, Kilcher said. “Cook inlet is an ideal location to build on that success and test it in one of the most harsh environments that you can put these things through,” he said
Complications that make Cook Inlet a challenging proving ground, he said, include seasonal ice, heavy sediments and potential conflicts with fishing activities and the endangered Cook Inlet beluga whale.
As for geothermal energy, Alaska is lagging behind other regions in its use of abundant resources, said Amanda Kolker, NREL’s geothermal laboratory program manager.
“Almost all of the other Ring of Fire countries have a lot of geothermal development, whether it is for power production or just for direct use of the heat,” Kolker said of the Pacific Rim. “So we have some work to do, Alaska”
The most geothermal potential, she said, is on the southernmost part of the Alaska Railbelt – the nickname for the communities from Fairbanks to the Kenai Peninsula. She cited Mount Spurr, 78 miles from Anchorage and a site where two companies currently have state licenses for exploration, and Mount Augustine, an island volcano near the southern end of Cook Inlet.
Old oil and gas wells can also be useful for geothermal energy production, Kolker said. Elsewhere in the world, there are projects to convert wells so they can produce geothermal energy instead of or possibly in addition to hydrocarbons, she said. She cited a successful conversion in Nevada that was announced last week.
Cook Inlet oil production down
Cook Inlet wells are not handling much oil anymore, despite the basin’s storied past.
Cook Inlet oil production peaked in 1971 at an average of 219,000 barrels per day. By 2021 it was down to 10,600 barrels per day, according to the state Department of Revenue.
Still, the idea of Cook Inlet as a major oil producer persists in some quarters.
Some politicians who spoke at the conference bashed the Biden administration for canceling a federal offshore Cook Inlet lease sale that had been scheduled for later this year. Interior cited a lack of industry interest when it announced the cancellation on May 11.
Former Texas Gov. and U.S. Energy Secretary Rick Perry, who delivered a prerecorded address to the conference, called that lease sale cancellation and the cancellation of a Gulf of Mexico lease sale “just the latest move the Biden administration has taken to undercut our energy producers.”
“In Alaska, the Cook Inlet lease sale would have provided 1 million acres for drilling, spanning at least 40 years of production,” Perry said in his address.
Also complaining about the sale cancellation was Anchorage Mayor Dave Bronson. “We thrive on the oil and gas produced here in Cook Inlet,” the mayor said in a brief address to the conference Wednesday. “And while gas prices continue to hit record highs, Joe Biden remains tone-deaf in his attack on Alaska’s economy and residents who are suffering under his policies, like the recent decision to cancel the lease sales in Cook Inlet.”
Prior to the conference, Alaska’s two U.S. senators made similar comments about the Cook Inlet lease sale cancellation. “As the former Natural Resources Commissioner for Alaska, I know there is no way they could have confirmed ‘no interest’ until they held the lease sale,” Sen. Dan Sullivan said in a May 12 statement.
Results of the just-concluded state oil and gas lease sale in the Cook Inlet basin demonstrated little industry interest in that acreage. Of the 833 tracts covering 3.3 million acres offered in the annual Cook Inlet areawide lease sale, there were only two bids received, according to results announced Wednesday by the Alaska Division of Oil and Gas.
Yereth Rosen came to Alaska in 1987 to work for the Anchorage Times. She has been reporting on Alaska news ever since, covering stories ranging from oil spills to sled-dog races. She has reported for Reuters, for the Alaska Dispatch News, for Arctic Today and for other organizations.
This article originally appeared online at alaskabeacon.com. Alaska Beacon, an affiliate of States Newsroom, is an independent, nonpartisan news organization focused on connecting Alaskans to their state government.
