Southcentral Alaska Braces for Costly Natural Gas Shortage

In Southcentral Alaska, a natural gas shortage is looming as demand could outpace supply by this winter. The region relies heavily on Cook Inlet for its energy needs, with nearly 60% of all energy consumed in the state coming from natural gas.

Hilcorp Alaska holds a near-monopoly in the region and announced last year that it didn't have enough gas to enter into new contracts with buyers. Enstar Natural Gas, which serves almost half of Alaska's population, gets nearly all its supply from Hilcorp.

Enstar President John Sims said it's been challenging to replace these contracts and the utility is not receiving as much gas as they'd hoped for. He warned that if deliveries continue at the same rate, Enstar won't be able to supply their customers for 18 days this winter.

The shortage could lead to costlier heating bills for Southcentral residents, with Sims saying it's going to go up, 'zero question'. The import facility will be subject to the global market, which comes with price volatility and can be impacted by geopolitical tensions.