Purpose
- Investigates the causes of economic imbalances.
Summary
The Donlin Gold mine would be a massive open-pit complex next to the Kuskokwim River in southwest Alaska, and the natural gas pipeline needed to fuel the mine would cut a swath from Cook Inlet, over the Alaska Range, to the mine site 315 miles away. In 2022, the dominant gas supplier in Cook Inlet, Hilcorp, announced that it no longer has confidence that it will be able to continue to meet Cook Inlet energy demand as current utility contracts expire; meanwhile, Donlin Gold is banking on getting its power from Cook Inlet. Inletkeeper worked with an Alaskan economist to analyze the impact Donlin will have on gas prices for Cook Inlet residents and to highlight the economic imbalances of corporate energy demands on residential and local business users.
Description
In July 2023, Inletkeeper contracted Mark Foster: a long-time Alaska energy sector consultant who has advised local utilities on resource planning, consulted on gas supply for Nikiski's Agrium fertilizer plant, and served as a state utility regulator; to analyze the impact of Donlin’s energy needs on Cook Inlet gas prices. In October, Inletkeeper received the draft report and, over the next three months, worked with the contractor to refine and focus the analysis and report.
In March 2024, the report: Cook Inlet Natural Gas Market Outlook with Incremental Demand from Donlin Mine, was finalized. The report paints a grim picture, forecasting a $265 annual increase per household in utility bills for electric utility customers in the affected regions. This anticipated surge in costs is expected to materialize before any competition from liquified natural gas (LNG) imports or the implementation of renewable energy alternatives to offset declining local natural gas reserves.
Purpose
This project satisfies the Foundation’s purpose by addressing the cause of economic imbalances by researching how a massive mining project might alter the demand for dwindling Cook Inlet gas, which supplies 85 percent of the Cook Inlet region’s electricity. This significant corporate demand for gas would propel the region to import expensive LNG much faster and lock Cook Inlet into continued reliance on fossil fuels for decades before the many renewable energy projects being explored in the region can come online to supply cheaper electricity for residents and local businesses.
Scope
The primary scope of this project is Southcentral Alaska, although the cost of energy in Cook Inlet reverberates throughout the State of Alaska. Cook Inlet energy costs drive business and investment trajectories as nearly 2/3 of Alaska’s population lives in the Cook Inlet watershed. In addition, the Railbelt electrical grid stretches from the Kenai Peninsula through Anchorage to Fairbanks and provides roughly 79 percent of the state’s electrical energy.
Information Dissemination
Inletkeeper hired Creative Motion Graphics to create two explainer videos (40 seconds and 3 minute versions) for social media and Inletkeeper's YouTube channel. Inletkeeper did a press release, with a link to the videos and report, in late March. Additionally, Inletkeeper's Energy Policy Analyst traveled to Juneau, Alaska to meet with legislators on key committees to push for legislative hearings about corporate demand on Cook Inlet gas supplies.
Project Link https://inletkeeper.org/donlin/
Amount Approved$30,000.00
on 6/8/2023
(Check sent: 6/21/2023)
