Alaska's Cook Inlet Faces Critical Natural Gas Shortage

Southcentral Alaska is facing a natural gas shortage, with demand expected to outpace supply as soon as this winter. Almost 60% of all energy consumed by Alaskans comes from natural gas, with the largest chunk used by utility companies like Chugach Electric and Homer Electric. Hilcorp Alaska has a near-monopoly in the region, but its announcement in 2022 that it didn't have enough gas to enter into new contracts set off alarm bells for companies like Enstar Natural Gas.

Enstar President John Sims said it's been challenging to replace the contracts Hilcorp won't renew. The utility was hopeful additional gas supplies would eventually come, but Sims said they're not receiving as much gas as they'd hoped for. He added that Cook Inlet is no longer a long-term option.

The shortage will likely lead to costlier heating bills for winters to come. Enstar adjusts rates each summer, and as long as Cook Inlet supplies decrease, the cost of natural gas is expected to continue rising. Sims said prices could go up, but not this winter.