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, 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. If utilities in Cook Inlet are out of gas, they will be forced to import liquified natural gas (LNG) for electricity generation and home heating fuel. As a result, prices will escalate making Alaska less attractive to live and invest in. Meanwhile, Donlin Gold is banking on getting its power from Cook Inlet. Inletkeeper is working 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
6-Month Progress update:
• In July 2023, Inletkeeper contracted Mark Foster, an Alaskan economist, to analyze the impact of Donlin’s energy needs on Cook Inlet gas prices.
• In October 2023, Inletkeeper received the draft report: Cook Inlet Natural Gas Price Outlook with Incremental Demand from Donlin Mine Natural Gas Pipeline, which is currently under internal review.
• Preliminary findings include: The Donlin Mine’s projected demand for natural gas from the increasingly limited local supply available in Cook Inlet has the potential to increase local natural gas prices and associated local household heating and electrical bills on the order of +$600/year per household.
• Key Inletkeeper staff are meeting with the contractor biweekly to finalize the report by mid December.
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
The report will be shared broadly with the media, Alaska legislators, and utility co-op rate payers and Board of Directors.
Amount Approved
$30,000.00
on 6/8/2023
(Check sent: 6/21/2023)
