FAIRBANKS -- The wheels may have fallen off the plan to truck natural gas to Fairbanks from the North Slope, but proponents are hoping to build momentum for another try -- expanding the list of possible energy sources this time to include Cook Inlet.
The board of the Alaska Industrial Development and Export Authority approved plans Wednesday to spend up to $700,000 to evaluate alternative plans of getting energy to Interior Alaska from the North Slope, Cook Inlet "or other locations as well as the use of energy sources other than natural gas."
The board approved spending up to $500,000 for professional advice and up to $200,000 to cover the cost of AIDEA personnel in the effort. Including Cook Inlet in the discussion is a nod to the various ideas put forward as alternatives to the North Slope.
As originally envisioned, the project was aimed at developing a plant on the North Slope to produce liquefied natural gas that would be trucked to Fairbanks to generate electricity and heat homes. There is a consensus that the concession agreement that expired at the end of 2014 failed because construction and operation turned out to be too expensive and the utilities did not believe that the end cost to the consumer would be low enough to encourage people to switch fuels.
The agency failed to reach a financial closing for construction of an LNG plant on the North Slope with its private partner, MWH, and the two sides parted company Jan. 5.
In 2013, the Legislature and former Gov. Sean Parnell had approved a package of state assistance that included $57 million in state grant funds, the authorization of up to $150 million in bonds and the authorization of up to $125 million in low interest loans to boost natural gas utility service.
Since then, AIDEA has spent about $15 million of the grant and provided $8.1 million in loans. The balance of the money is still available.
Supporters of the switch to natural gas in Fairbanks have been meeting weekly to consider what approach might succeed where the first one failed. The brainstorming sessions, targeted at developing a new community action plan, have attracted business and government leaders as well as utility officials and others.
The goals include reducing air pollution from wood smoke and reducing the cost of living by switching more homes and businesses to natural gas. The resolution approved by the AIDEA board said it would review "methods of financing the infrastructure needed to supply energy to the Interior" and that it would try again.