Anchorage Daily News

Legislators in Juneau think an answer to our serious energy problems is to create a new agency, a state Department of Energy. Bills have been introduced in both the House and Senate.

I'm disappointed. Given the seriousness of our problems, particularly with natural gas in Southcentral Alaska, is this the best we can do?

This is just rearranging the office furniture, and maybe giving state energy director Steve Haagenson a promotion to commissioner. Haagenson would probably get a pay raise. He'd need a deputy commissioner, maybe two. He'll need a bigger desk, too.

The main argument for this is that it will be a central place to put all the state's energy functions and would thus be more efficient. However, almost all state energy programs are already in one agency, the Alaska Energy Authority, which is efficiently run because support functions like accounting, procurement, personnel and even the board of directors are shared with AEA's sister-agency, the Alaska Industrial Development and Export Authority. A new state department would need its own support functions.

NEED FOR ACTION

However, all this is unimportant when we cut to the bigger picture: All public officials, in the Legislature and the executive branch, are too slow in coming to grips with some pretty serious energy problems.

Take our natural gas situation in Southcentral for example. Jim Posey, general manager of Anchorage's city-owned Municipal Light and Power utility, gives anyone who will listen an earful on this. If we don't get cracking, and quickly, we'll have a real crisis on our hands in three or four years, Posey says.

That's because our 30- and 40-year-old gas wells are declining fast in their ability to produce. Being able to produce is pretty important, particularly in cold weather.

There's more: New wells being drilled aren't finding as much gas as they used to because reservoirs are being depleted. More disturbing is that producing companies like Marathon Oil are cutting back on drilling new wells. Meanwhile, Enstar Natural Gas Co., which supplies homes and businesses with gas for furnaces, is having trouble buying gas. The utility received no qualified offers in its most recent solicitation.

This ought to set off alarms: Our producing gas fields are running down, producing companies are cutting back on drilling, Enstar can't find a willing gas seller, and yet Cook Inlet still has a lot of gas waiting to be discovered, geologists say. Does all this make sense?

It's a messy and complicated situation, and for politicians it's easy to opt for simple solution like a Department of Energy, or even a "bullet line" to bring North Slope gas to Alaskans.

FLIRTING WITH FAILURE

Enstar is working on a bullet pipeline as a possible good investment, and that's appropriate. Its viability is uncertain, though. We may ultimately find the best option is to wait for the big gas pipeline to the Lower 48, and to then build a spur line to Southcentral.

These are midterm options, though. They won't get us gas next winter. We came near system failure during the cold snap last January. Is anyone thinking about this? How about a regional contingency plan? Does our state emergency response agency, the Department of Military and Veterans Affairs, have a contingency plan for a big freeze-up in Anchorage? We need to know.

There's surely more gas in Cook Inlet, and we need to look at how we get companies to drill. There's obviously a problem of some kind. Storing gas in old, depleted reservoirs is a practical option, and moves in this direction are under way, but are there enough depleted reservoirs? How much gas could they store, and at what cost? Do we import liquefied natural gas as a stopgap? Is that really practical?

We do have capable people working on these things. The Legislature is considering expanding the authority of the Alaska Natural Gas Development Authority, a state corporation that has good technical people led by Harold Heinze, an experienced industry manager, to tackle all in-state gas needs.

The governor has also appointed Harry Noah, who also has substantial experience in resource industries, to bring several of the midterm efforts, like the bullet and spur lines, into a coordinated plan, and to tackle Cook Inlet as well.

We haven't a lot of time. "Whatever they're doing, they'd better turbo-charge it," Posey says.

Ditto, I say. I want that pilot light on my furnace to stay on.

Tim Bradner writes for an Alaska economic reporting service. He also consults for private clients and writes for business publications. His opinion column appears every fourth Sunday.

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