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Some short term solutions for Cook Inlet gas shortage
Kristen Nelson Petroleum News Editor-in-Chief
We’re starting to see “the first indications of a shortage of gas in Cook Inlet,” Alaska Division of Oil and Gas Director Mark Myers said Jan. 18. This is partly because more gas is needed in winter than in summer for power generation and home heating, he told the Alaska House Special Committee on Oil and Gas.
There used to be extra capacity in the reservoirs, he said, but “production rates have declined to the point we no longer have that luxury,” and some industrial users are short of gas in the winter months.
There are some things that can be done in the short term, he said. “And one is to have a more efficient pipeline infrastructure that can move the gas easily to users to get maximum value… We have a hodgepodge of regulated and unregulated pipeline infrastructure in the inlet,” he said. Pipelines were built for specific purposes and some now would be “better operated in terms of a regulated utility” while with other lines, there is no basis for such regulation, he said.
The inlet has “many of the components of a typical network for a pipeline hub and spoke kind of system,” with multiple users, multiple pipelines and multiple fields and “a fairly robust amount of pipe.
“But we don’t have that well integrated.” Gas storage also lacking The other thing that is lacking in Cook Inlet, he said, is gas storage. In other areas of the country, gas is stored in the summer and then sold in the winter when usage peaks.
“Our wells used to be that storage,” but the reservoirs will no longer support that.
“So we need to develop a more robust system of gas storage and then that could be a true hub-type system.”
Small independents are drilling for gas onshore, he said, mentioning Pelican Hill and Aurora Gas, along with Unocal and Marathon, “so we’re seeing sort of a mini version of the North Slope playing out here, with the smaller companies being aggressive in drilling and finding some gas, recompleting old wells. But that process needs to accelerate.”
Getting a jack-up rig into the inlet would allow offshore exploration, he said, but that would take “coordination among companies, because a single company isn’t going to risk the capital to bring a jack-up rig, you need two or three companies in a sustained multi-year drilling program to keep the rig up here” because of a cost estimated at $12 million to mobilize and demobilize a rig.
“So we need cooperation from the industry, and maybe, as the governor suggested, some incentive to try to move that rig up.”
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