Some good news, some bad news for Kenai Peninsula industry

  • Saturday, April 26, 2014 7:04pm
  • Opinion

We’ve had some good news and some disappointing news involving the industrial facilities in Nikisi over the past couple of weeks.

The good news first: on April 14, we learned that ConocoPhillips will resume shipments of liquified natural gas to Japan from its Nikiski plant. The Alaska Journal of Commerce reported that the U.S. Department of Energy issued its approval of exports, authorizing the shipment of 40 billion cubic feet of gas over two years.

The news is yet another sign that industry investment in Cook Inlet is paying dividends. Exports to Japan were halted due to shortages of natural gas in Cook Inlet fields. However, with new explorers and producers in the region, more gas is flowing and industry has said that local needs will be met for the near-term. The ability to export gas gives the industry an incentive to keep producing, and keeping ConocoPhillips’ LNG plant in operation keeps plenty of high-paying jobs in our community.

On the other side of the coin, we were disappointed to see the Legislature remove language that would have made the Agrium fertilizer plant, which uses natural gas, eligible for the same package of tax credits as in-state refiners. House Speaker Mike Chenault, R-Nikiski, had inserted that language, but it was removed before final passage.

The Clarion reported that Chenault will continue to work with Agrium to see what other options might be available to help restart the plant, which shut down in 2007 as Cook Inlet natural gas supplies dwindled. Steve Wendt, Agrium’s Nikiski facility manager, told the Clarion that the company will continue to explore options for restarting the plant, though the tax credit might have helped with both the external economics of the project, as well as the internal economics as the company weighs the investment here against other projects around the world.

We’re hopeful that despite the setback, there are factors that will attract the investment to the Kenai Peninsula. The oil and gas industry is an important part of the Kenai Peninsula economy. Agrium at one time was one of the largest private employers on the Peninsula, and we’re anxious to see those jobs return to the area.

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