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Rep. Pruitt Comments on Cook Inlet Activity & Gas Supply

Wednesday, April 11, 2012, Juneau, Alaska – The House Special Committee on Energy held a hearing this morning to discuss the short and long term stability and reliability of natural gas from the Cook Inlet fields, which supply Southcentral Alaska with heat and power.

A consultant hired by Cook Inlet utilities told the committee that drilling and development costs in the coming years would have to average $1.9 to $2.8 billion to meet the forecast demand. Tom Walsh, Geophysicist and Managing Partner with Petrotechnical Resources Alaska, also presented a scenario that estimated 185 new wells must be drilled in order to meet utility needs between now and 2020.\

They also heard a Cook Inlet activity and natural gas resource update from DNR representatives Bob Swenson, State Geologist and Director of the Alaska Geological and Geophysical surveys, Jeff Dykstra, Division of Oil & Gas Commercial Analyst, and Paul Decker, Division of Oil & Gas Geologist. The DNR officials said that natural gas storage will play an increasing role in managing the supply and demand fluctuations for Southcentral Alaska.

“We heard that recoverable is a whole lot different than economical when talking about how much gas is in Cook Inlet. That makes a difference in terms of policy,” Rep. Lance Pruitt, R-Anchorage, said. “We might have 19 TCF [trillion cubic feet] of recoverable gas in Cook Inlet, but we don’t have 19 TCF that producers can feasibly bring to market. DNR gave us a small ray of hope for the future by showing us the sheer amount of drilling planned for this year, but it’s still a big jump to think it’ll be brought on line in time.”

Walsh testified that absent major new discoveries that can be brought online in 1-2 years, the current pace of development will mean a shortfall in Cook Inlet supply to meet Southcentral Alaska’s utility demand in 2014 or 2015.

“To live in a state with such rich energy resources and have the heat and power of 450,000 Alaskans in question is extremely concerning,” Pruitt said.  “I intend to follow this issue closely as it develops, and track the utilities progress in securing supply, most likely through LNG imports.”

Copies of the presentations delivered this morning are available at http://www.legis.state.ak.us/basis/get_documents.asp?chamber=HENE&session=27&bill=&date1=20120411&time2=0700.

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