What Alaska needs to make natural gas work for the state

Alaska has relied on Cook Inlet gas for decades, but that source is running out fast. Production has dropped from over 300 billion cubic feet per year in the past to barely 60 billion today. The two biggest local suppliers—Chugach and ENSTAR—have contracts that expire soon, one in 2028 and the other in 2033. If those contracts aren’t replaced, Southcentral Alaska could face much higher heating costs. World market prices swing wildly, from as low as $9 to over $20 per thousand cubic feet. That kind of uncertainty hurts families and businesses alike. Building a pipeline from Prudhoe Bay could stabilize prices. An economist who studied the idea said a first-phase pipeline would cap costs at $16 per thousand cubic feet, with a second phase driving it down to just $5. That’s cheaper than what people pay now under current contracts. The state has looked at this for years—way back in 1979, leaders already urged action. Back then, they were willing to take financial risks to make it happen. Today, the approach is different. One big challenge is Alaska’s property tax rules. Big investors want certainty before spending billions upfront. Unclear or high taxes make them hesitate. Other places trying to attract similar projects often adjust their taxes to stay competitive. The real question is whether the numbers add up. If Alaska can produce, process, ship, and sell its gas for less than global prices, the whole state benefits—not just through extra revenue, but through lower energy costs for everyone.There’s also an indirect benefit. Alaska helps rural areas pay for electricity through a program called Power Cost Equalization. If North Slope gas brings down energy prices in the Railbelt, that program costs more because the subsidy has to cover the difference. But if gas prices drop overall, the state might end up spending less in the long run. Rural residents would pay less too, thanks to that link. Local leaders like the Kenai Peninsula Borough mayor argue that communities shouldn’t have to carry the full financial burden. The state legislature has debated ideas like price caps, impact funds, and limits on cost overruns. These aren’t just ideas—they’re tools to protect both investors and regular Alaskans. But protection shouldn’t turn into gridlock. The company planning this project has to make a decision this fall. Every extra rule or delay makes them more hesitant. Momentum matters more than ever. Right now, Alaska stands at a crossroads. A pipeline could lock in lower prices, reduce risk for residents, and keep energy affordable. But time is running out. If the project stalls now, Alaska might miss its chance for another 47 years.