As talk continues about gas lines, bullet lines and spurs, it's a 3,200-foot pipeline in Anchor Point that best symbolizes the strange state of Alaska natural gas in 2011.
The pipeline doesn't have a name and, right now, it doesn't do anything. Within the next few months, though, it will start delivering natural gas to Chapman Elementary School, and sometime next year, it could be the first step in delivering natural gas to Homer.
While the rest of Southcentral Alaska has enjoyed a cheap, abundant supply of gas of decades, Homer has relied on heating oil -- paying an economic and an environmental price that other communities don't pay.
That means Homer has paid millions more for heating than households and businesses from Wasilla to Soldotna. Since late 2007, Homer's dependence on heating oil has run against its Climate Action Plan.
Homer is closer than ever to getting natural gas, but the Cook Inlet market looks much different than it did a quarter century ago. If Homer gets natural gas, it will also get all the benefits and all the heartaches felt by the rest of Southcentral Alaska.
'Homer will get gas'
Why didn't Homer get natural gas sooner?
"The biggest overriding thing is, of course, economics," said John Sims, a spokesman for Enstar Natural Gas Co., the largest gas company in Alaska. "The second is gas supply."
Southcentral lucked into natural gas. While searching for oil in the late 1950s, companies stumbled upon huge natural gas reservoirs. Without an outside market, they signed long-term contracts locally, giving the Anchorage area decades of cheap fuel.
With the Prudhoe Bay discovery in 1968, those companies mostly stopped exploring the Cook Inlet. That chicken is just now coming home to roost for most of Southcentral, but Homer felt the impact much sooner. The oldest fields in the Cook Inlet -- like Kenai, Swanson River and Beluga River -- are located in the northern end of the basin. The few thousand customers in the Homer area didn't justify a 50-mile pipeline heading south.
So while Homer got natural gas-backed electricity, it continued to burn oil for heat.
That started to change in the late 1990s when a series of small explorers began poking around North Fork. Standard Oil Co. of California discovered the prospect 10 miles north of Homer in the 1960s, but never developed it. With renewed interest in the field, the southern Kenai saw the possibility of having a gas supply in its own back yard.
That optimism led Enstar to establish a service area for Homer. "Homer will get gas if Enstar gets a certificate," Enstar attorney Julian Mason said during regulatory hearings in 1997. "It's never failed to deliver and it doesn't plan to start with Homer."
The explorers didn't deliver, though. The North Fork field hopscotched from promising well results to regulatory proceedings to out-of-the box development plans until 2007, when Armstrong Oil and Gas -- a Denver independent responsible for jumpstarting North Slope exploration in the early 2000s, bought the prospect.
Armstrong found commercial amounts of gas the following year and eventually signed a contract with Enstar to move the gas north into the existing grid, bypassing Homer.
Armstrong and Enstar are just weeks away from finishing that new pipeline system.
Natural gas prospects, uncertain
That decision may actually work to Homer's advantage. Before Armstrong and Enstar started building their pipelines, Homer needed to find a gas supply it could call its own: a nearby field with enough natural gas to last for decades.
Candidates always existed, but momentum hasn't. For years, the southern Kenai seemed like a series of dominoes poised to fall: once one company developed a field, other leaseholders in the region would soon follow suit.
With North Fork almost online, though, the future of its neighbors is uncertain.
In 2004, the Union Oil Co. of California drilled wells north of North Fork, in the Nikolaevsk area, but never followed up on future drilling commitments. The company, through its affiliate Chevron, recently announced plans to sell its Cook Inlet holdings.
To the west, Pioneer Natural Resources spent several years testing the Cosmopolitan field, another southern Kenai prospect discovered during exploration work in the 1960s.
Although primarily an oil play, many believed Cosmopolitan also contained significant amounts of natural gas, perhaps even enough to fuel local communities. In January, though, Pioneer decided not to pursue development and put the field up for sale.
Also to the west, Apache, the large Houston-based independent, picked up leases near Anchor Point when it arrived in Alaska last year, but the company has yet to lay out any plans and is primarily focused on oil across its global portfolio, not natural gas.
To the east, the Australian independent Buccaneer Alaska LLC wants to eventually drill at its West Eagle prospect, but that project is far down on a long list of company priorities.
Looking for a pipeline
Now, though, Homer doesn't need any of those options to come through. Or, rather, it doesn't need them any more than anyone else in the Cook Inlet region needs them. When Enstar and Armstrong went north, Homer took matters into its own hands.
"What we're trying to do is get a main transmission line from Anchor Point to Homer," said Walt Wrede, city manager for the city of Homer. If Homer succeeds, the southern Kenai would be connected to the larger grid stretching east to Whittier and north to Willow. That means a discovery anywhere, not just nearby, would help Homer.
The Legislature gave Homer $4.8 million for the pipeline last year, but Gov. Sean Parnell vetoed all but $525,000 of the line item, asking Homer to resolve some issues first. The smaller appropriation paid for pressure reduction stations -- needed to convert gas from a high-pressure transmission line to a low-pressure distribution system -- in Anchor Point and Nikolaevsk, and the 3,200-foot pipeline heading south from Anchor Point. The remaining $4.3 million would pay for 14 miles of pipe, minus the 3,200 feet.
Homer set up a task force last year to address the outstanding issues, including how Homer would pay for a distribution grid to bring gas to homes and businesses, and what adding Homer to the grid would mean for all the customers already on it.
Homer plans to make another push for the remaining money this year.
'Everybody has to be treated equally'
Homer is trying to get a seat at the natural gas table as looming shortages have other Southcentral cities wondering why they haven't gotten up sooner.
Enstar doesn't expect a problem.
Although the possibility of liquefied natural gas imports has been floated recently, Enstar believes it will have enough gas to cover its existing customers as well as the 1,500 to 4,000 new customers it typically adds each year between now and 2013. Sims noted that while Homer might have 3,500 potential customers, they wouldn't all join the system at once.
The main concern right now is deliverability, or the amount of gas that can be called upon at any given time, particularly during winter cold stretches that strain the system.
With recent regulatory approval for a new storage facility, Enstar believes it can tuck away unused natural gas from the summer months to have on hand during the winter.
The larger issue is whether enough gas will be available after 2013. Sims said the concern is real, but that Homer isn't large enough to make that strain significantly worse.
Because the Enstar service area is a single unit, once Homer gets a pipeline, its claims to whatever gas exists are just as valid as anyone else's. Or, as Rep. Paul Seaton, R-Homer, put it: "Everybody has to be treated equally." But that also means Homer could soon have the dubious privilege of worrying about natural gas as much as everyone else.
"We just have to be optimistic that the state's going to get that issue resolved," Wrede said.