The Nikiski LNG plant is a prime customer for Cook Inlet gas. And the prime customer for the LNG the plant produces is Japan. While Japanese demand has fallen, the plant still does enough business to operate -- and thus, keep Cook Inlet wells operating.
That's particularly important to Southcentral energy utilities, which haven't always been able to supply their business and residential customers with electricity and natural gas during peak demand in winter. So the gas producers have diverted gas from the LNG plant to the utilities.
That's kept lights on and homes heated.
Extension of the export license will keep the LNG plant up and running, maintain its contribution to the Kenai Peninsula economy, and provide enough of a customer base to keep Cook Inlet wells producing all year, even when there's little utility demand for the gas. Otherwise, the wells simply wouldn't pay and would be shut down. And then there wouldn't be a continuous local flow to backstop Southcentral needs during below-zero cold snaps.
The export license extension also keeps the Nikiski plant as a possible future customer for North Slope gas. The plant is the only licensed LNG exporter in the United States. The more markets available for North Slope gas -- or any other Alaska gas -- the better the production and financing prospects for Alaska's reserves.
As state Sen. Bill Wielechowski said, there should be no objection to a renewed export license, provided Alaska natural gas users aren't hurt by it. The opposite appears to be true: LNG exports help keep Cook Inlet gas in production. Continued exports look like good business for all hands.
BOTTOM LINE: Extend the LNG export permit to keep Cook Inlet wells producing.
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