As the light fades on a Friday night in October, one can peer from the comfort of Simon & Seafort's Saloon & Grill in downtown Anchorage to the freezing, glacier-ridden Tordrillo Mountains across the silty waters of Knik Arm and see the future of Alaska's largest city looming.
Seen from a distance, viewed from inside the cocoon of comfort that embodies the good life of Alaskans today, it is all very beautiful, a primordial world where snow, cold and dark still rule. Now imagine the scene transposed on the living rooms of Anchorage.
The city's mayor this week painted an apocalyptic vision for a community quickly running out of energy supplies to heat and light homes. It was bleak and a little scary. But even scarier is that after talking to dozens of people familiar with the natural gas pipeline system feeding the city and the region's main electrical powerplants, one can easily get the idea that Mayor Dan Sullivan might actually have understated the danger.
A big, winter earthquake could easily make Anchorage the first major city in America ever to go cold and dark in the style of the fabled nuclear winter, but it might not even need that. Disaster for Anchorage could come simply in gusts of Arctic air sent south from somewhere up near Point Hope or Nome. Residents likely wouldn't even notice the danger at first. What's a little subzero weather in Alaska, after all?
In the worst-case scenario, it's a disaster: An overtaxed supply of Cook Inlet gas declines to the point where residential furnaces start sputtering out, and the local electrical utilities - which are almost wholly dependent on natural gas for the generation of electricity - stop producing power. Some in Anchorage - maybe many - could then find themselves forced to live in the cold and dark the way the state's aboriginal inhabitants did.
Do you have enough seal oil on hand to fuel your winter lamps? Have you built a sod house in the yard that can be easily heated with a few sticks of wood?
Most readers will here, of course, think the author is joking. This is the 21st Century in the United States of America, and Anchorage is the largest city in the energy-richest state in the union. How the hell could Anchorage end up going cold and dark?
Pretty easily, really. The same way any place dependent on one, nonrenewable resource for its survival could go under. If you have doubts about the reality of the risk, consider this: Parts of Anchorage were on the verge of going cold and dark last winter.
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Depending on whom you talk to, you get various versions of how close the city was to disaster. Some say days; others say hours. Whichever was the case, it is clear the community was on the edge of a critical natural gas shortage just as a lengthy January cold snap finally broke and the threat of a system failure began to ease. The big problem last year, everyone agrees, began with the malfunction of one of three compressors that drive gas through lines feeding north from the Cook Inlet basin to Anchorage and the Susitna Valley.
When that compressor went down, pressure in the pipelines started to fall. Tony Izzo, the former head of Anchorage's Enstar gas, and now an energy consultant, contends the city was within two hours of a crisis. Once pressure starts falling, he said, it can drop very fast "and you can't get it back. There's just so much suction on it from (Anchorage) furnaces and water heaters in cold weather.''
Low pressure could force Enstar to shut one or both of the 85-mile-long pipelines that snake across the Kenai Peninsula and under Turnagain Arm to feed most of the city. There is a third pipeline that serves Chugach Electric's Beluga power plant and continues on into the valley, but the bulk of Anchorage's gas moves on the Kenai lines.
And in the winter, when gas demand is at its peak, the city needs both of them moving all the gas they can. Even in the best of times now, Anchorage is in a precarious position, as is most of Southcentral Alaska. The region has grown to include hundreds of thousands of homes sucking on the gas from the Cook Inlet basin.
There were about 1,000 gas consumers when the first pipeline started moving clean, convenient fuel north shortly before the Good Friday earthquake flattened Anchorage in 1964; electric power then came from diesel generators. All of that has changed radically in a generation.
There are now about 125,000 meters supplying about 350,000 Southcentral Alaskans with clean, warm gas heating, and 90 percent of the electricity comes from turbines spun by gas. More than half of the state's population is dependent on Cook Inlet gas for heat and light.
In summer when days are warm and long, it's no big deal. The demand for gas for electricity is half what it is in the winter; the demand for gas to heat homes a mere one-twelfth. But it all changes come winter. Gas demands skyrocket. It's not new.
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For years now, Enstar has been warning the Regulatory Commission of Alaska (RCA) that winter gas "demand is not being met on peak days." Over the course of the last couple winters, there have been record demands for gas, which in part reflects not only Anchorage's growth over the years but also other ways the city has changed. Anchorage residents lived in 1,500-square-foot homes on the flatlands in the 1960s. Now, many inhabit 3,000-square-foot homes in South Anchorage and 5,000- to 10,000-square-foot, gas-gobbling McMansions on the Anchorage Hillside.
All are at the end of a tenuous line of gas supply. Gas pipeline managers in the Lower 48, Izzo said, "would be somewhat appalled if they were in our situation. It would scare them."
Izzo spent 17 years in New Jersey managing gas supplies. The situation was a lot different there. He monitored multiple lines bringing gas from multiple sites in Texas and Louisiana
"I could borrow and swap if something went wrong," he said. "Here we have no backup."
Only the reality is that the situation's worse than just no backup. Most communities Outside not only have gas available from various sources, they also have access to electricity independent of their gas supplies. In Anchorage, most electricity is generated by the same gas that heats homes, and most furnaces have electric-fired burners or blowers.
This leaves utilities in a big bind. Utility managers could save a lot of gas for home-heating by turning off electricity, given that the region uses more gas to turn electric turbines than it uses to heat homes. But if the electricity goes out, the furnaces in most homes won't work unless the homeowner has invested in some sort of personal backup generator. Izzo said he's seen a lot of oil industry executives shopping for generators. They understand the situation, and they should. The oil and gas industry has been talking about it for five years or more.
Three years ago, The Dunmire Consulting Team completed an exhaustive report for the Alaska Natural Gas Development Authority outlining the danger of Cook Inlet running out of gas and offered some possible solutions.
All of them were costly, and thus nothing happened. The political process plowed blindly and merrily forward. When the city came close to going cold and dark last winter, the danger was downplayed. But newly-elected Mayor Sullivan saw things clearly enough that one of his first acts in office was to convene a special committee on natural gas to develop a plan to protect Anchorage this winter if the worst happens.
"I do not want, under my watch, for half the population of the state to not have heat and not have lights," Sullivan said at a press conference where the city unveiled a plan to ask citizens to render themselves uncomfortable to avoid the possibility of freezing to death.
If gas supplies drop to a "caution" level, everyone in Anchorage is supposed to turn thermostats down to 65 degrees, dial the temperature in their heated garages down near freezing, put off doing the laundry and dishes, turn off as many lights as possible, and avoid the gas-burning range.
And if gas supplies continue to drop to an "alert" level, city residents will be expected to live in 60-degree houses (do you know how uncomfortable a 60-degree house is?), shut down the water heater except for the pilot light, do all their cooking in a microwave, continue to avoid the laundry and dishes, and move into as few rooms of the house as possible while dialing back the heating in the unused rooms to as close to freezing as possible.
Whether citizens in Alaska's largest city will be willing to go along with this is anyone's guess.
Officials with the municipality and the utilities point to a 30 percent reduction in energy consumption in Juneau when people there were forced to shift from cheap hydropower to expensive diesel after avalanches took out the Snettisham powerline last winter. Whether that drop in electric use came because of an appeal for conservation from city leaders or from market forces is, however, open to debate. Electric rates in Juneau about doubled when the city went from cheap hydro to expensive diesel. There was a strong financial incentive to turn off lights and dial down electric heaters.
No one has suggested imposing such an incentive in Anchorage. There are no plans to ask for a new gas rate structure that would discourage Anchorage residents from using gas, said Enstar president Colleen Starring. Nor are the electric utilities linked to Chugach's gas-fired Beluga power plant talking about any sort of rate increase to discourage electric use, said Chugach government relations director Phil Steyer.
Enstar and the various Southcentral electric utilities, combined, account for about 45 percent of the gas consumed from Cook Inlet fields. Much of the rest flows into a liquefied natural gas plant on the Kenai Peninsula owned jointly by Conoco-Phillips and Marathon Oil. Some have suggested closing that facility to gain more gas for Anchorage, but closing the LNG plant would actually have the opposite effect.
The plant ensures a steady flow of gas throughout the year. Enstar, Chugach, Municipal Light & Power in Anchorage, the Matanuska Electric Association and the Homer Electric Association get varying flows of gas that reach big peaks in winter. Were the LNG plant to go out of business, the utilities have noted, there would be no incentive for gas producers to keep gas flowing in Southcentral pipelines at a rate sufficient to meet peak winter demands.
Mark Slaughter, Enstar's gas supply manager, said the LNG plant now provides something of a backup. It keeps a steady supply of gas flowing year-round, and it can - and has - diverted gas headed for its facilities into Enstar's lines to help meet peak winter demands.
There have even been discussions of using the plant's LNG as a fuel storehouse for Anchorage, possibly even modifying the LNG plant to import gas instead of export gas if need be.
That is but one solution being offered to try to deal with what is really a twofold crisis for the region. The first and most immediate problem is that there is nowhere to store gas still flowing from six rapidly declining fields. Lacking storage capacity, there is no way to keep enough gas on hand to meet peak demands in winter when temperatures get cold.
The second and larger problem is that the fields now pumping gas into local pipelines are running dry and could go empty within a decade. Many in the oil and gas business believe there is more gas waiting to be found in the Cook Inlet basin, but limited exploratory drilling in recent years has met with generally poor results, and low prices for natural gas in Anchorage have served to limit widespread exploration. Talk of a "bullet line'' to bring North Slope natural gas to Anchorage hasn't helped either. Companies appear reluctant to put major resources into searching for new Cook Inlet gas while the state is indicating it might decide to heavily subsidize the transport of North Slope gas to Anchorage.
The Cook Inlet Basin is about the same size (approximately 14,000 square miles) as the San Juan Basin in the American Southwest. There have been 28,000 wells punched into the San Juan. There are about 1,000 in Cook Inlet.
The difference is understandable. Costs of exploration in Alaska are up to 10 times those in the Lower 48, and the oil-rich North Slope for a long time stole the attention of almost everyone interested in oil and gas in the 49th state.
The result of all of this is that the largest city in the state richest in oil and gas is running out of energy to heat homes and turn on the lights. The only solution offered so far by local political leaders is the unprecedented call to prepare for draconian energy conservation efforts. There are plenty of people skeptical about the willingness of Anchorage residents to go endure life in 60-degree homes for days at a time.
"The viability of this, I wouldn't even try to guess," Izzo said, "but it's really one of the few options on the table."
About the only other thing the utilities can do is cut off gas to users who have access to backup systems, like the diesel generators that remain in Seward and at Municipal Light & Power in Anchorage; pull the plug on some heavier industrial users of gas and electricity; and implement so-called "rolling black outs" to reduce residential consumption of electricity whether people want to cut back or not.
Better to hope for a warm winter to solve the problem this year.
Starring, Slaughter and others at Enstar would like to see some more gas storage available by fall 2010, but Slaughter envisions a probable construction cost of $25 million to $100 million. Where the money would come from is unclear.
The Dunmire report contains a whole list of options for getting gas into the system, from gasifying local coal underground to importing LNG by various means, to building that dreamed-of bullet line. The costs are all high, however, from $20 million for such things as storage or coal gasification to as much as $4 billion for the bullet line.
So don't expect anything to fix the problem anytime soon. If you live in Southcentral Alaska, just consider yourself at the mercy of Slaughter and the crew monitoring the video display terminals that track the movement of gas north to Anchorage. When they see cold coming, they can to some extent increase the pressure in the gas lines feeding Anchorage and the Mat-Su Valley to effectively store some gas, and if things look really bad, they can ask Chugach to trim back its gas use, take ML&P and others off line, and ask the LNG plant to transfer its flow into Enstar lines.
Slaughter has done many of these things during cold snaps in both of the past winters, though he admits he doesn't like doing it.
"When we look at the forecast, we'll try to bring some gas in,'' he said. "But if we get it wrong, we'll get yelled at.''
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Nobody - not the electric utilities, not the LNG plant - has any surplus gas it wants to give away. It's a situation radically different from the way things were historically in Cook Inlet. Oil companies prospecting for crude here in the 1950s and 1960s stumbled into more gas than they knew what to do with.
They ended up building the country's first LNG plant to liquefy some of the gas and ship it to the Orient. Gas for Anchorage and the rest of Southcentral Alaska piggybacked onto that development. As a result, the region for decades enjoyed plentiful supplies of the cheapest natural gas in the nation.
There turned out to be only one small problem over the long term. Low prices for gas discouraged new exploration in the region and lulled many into believing cheap gas would last forever. The Regulatory Commission of Alaska was among the latter. Even as utility managers and producers began warning of gas shortages, the RCA dedicated itself to trying to hold down prices.
Commissioners remembered the days when there was so much gas that if Southcentral asked for more, producers could supply it almost as easily as turning up the burner on a gas range. Those were the good old days. The times ahead are the cold new days.
The gas fields these days simply can't push enough gas into the pipes when the weather gets bitterly cold. Thus the need for additional compression to keep gas moving. It all works fine when everything is fine. But it could all fail pretty easily.
The big scare came last winter when a compressor failed at the Beluga River Unit of the gasline complex on the north side of Cook Inlet near the small, Alaska Native village of Tyonek. ConocoPhillips, which runs that compressor, got it back online in time to avert an emergency, but everyone agrees it was close. With luck, the gas line managers say, Anchorage could get through this winter without a problem.
Luck, unfortunately, is not a good thing on which to entrust the future, especially when all the experts agree that unless something is done soon to increase gas storage or supply or both, the region's luck is destined to run out. The system is stressed now. It will fail if something isn't done. That would be a disaster for Alaska.
Back before the trans-Alaska oil pipeline got built, Alaska cars and trucks used to sport bumper stickers proclaiming, "Let the bastards freeze in the dark without Alaskan oil.'' How ironic it would be if Alaskans, or at least those people living in Alaska's largest city, turned out to be the ones freezing in the dark.
Contact Craig Medred at craig@alaskadispatch.com