OPINION: New year brings energy opportunity for Alaska

2024 presents unprecedented opportunities for energy development in Alaska. Our job as state legislators is to seize that opportunity and work with business and electric cooperative leaders to realize the opportunities created by technological innovation, our congressional delegation and the Biden administration.

For the past 20 years, Alaska has gone through one natural gas supply crisis after another. Hilcorp’s decision to stop renewing gas supply contracts to Railbelt utilities creates the risk of sharp increases in electricity and home heating bills. If utilities simply transitioned to imported LNG to replace Cook Inlet gas, that would result in massive cost increases. Dumping money into gas incentives would be even more expensive, and the historic record suggests that gas tax incentives only work temporarily — if at all. Fortunately, help is on the way in the form of major federal infrastructure investments and tax incentives for energy development. These federal investments and policies will help our electric cooperatives reach their goals of diversifying fuel sources and attracting new private investments by independent power producers, which is consistent with the recently released goals of the governor’s energy task force.

Alaska’s electric utilities already are working on major investments that would produce more affordable domestic energy. These investments can move forward more quickly and affordably because our congressional delegation worked with the Biden administration to secure a $206.5 million federal investment in transmission and battery energy storage upgrades. Matching this project with state funds is our first task, and will build out transmission from the Kenai to the Mat-Su region. Our utilities are already working on the next round of federal funds to complete the northern rebuild from the Mat-Su to Fairbanks and the critical national defense infrastructure in the Interior. Golden Valley Electric Association is planning a 130MW wind farm in the Interior. Chugach Electric is planning the 120MW Mount Susitna wind project and a 120MW utility scale solar farm at Point Mackenzie. The Alaska Energy Authority and utilities have been working together on the Dixon Diversion project to expand hydro capacity at Bradley Lake.

Together, these investments will double the Railbelt’s installed capacity of affordable renewable energy. These projects are critical to reduce cost exposure to expensive imported LNG. I certainly hope private investors and the state are successful in developing the AKLNG natural gas export line, which could provide important gas supply for heating. But it’s important to understand that we should be developing a more robust grid with diversified electric generation regardless of whether AKLNG ends up getting built.

As we think about how to advance energy opportunities in Alaska, let’s be cognizant of how the global economy and rapid technological advances affect our state. Geopolitical instability means oil prices are relatively high, which is good for our state budget and jobs. Technological innovation means that solar and on-shore wind generation are the cheapest sources of electric generation. Recent innovation in carbon sequestration, along with important federal tax incentives, mean that some of Alaska’s largest companies are working to deploy large-scale carbon sequestration projects that are good for our economy and the environment. Rapid expansion of electric vehicles and solar photovoltaic, which includes massive amounts of critical minerals like silver, means our mining industry has unprecedented opportunity for growth. Since mining is energy-intensive, building out cheaper renewable electric generation is essential for us to make our mining sector more profitable and competitive. One of Alaska’s major mining executives recently told the Resource Development Council that Alaska’s pricey, fossil-fuel-based energy is an obstacle to investment and more development.

When you think about the convergence of these global economic and technological trends, it is all good news for Alaska. We will have a healthy oil industry and we can rapidly expand carbon sequestration that is essential to combat climate change. Renewable energy deployment is good for home and small-business owners, and can lower costs for mine operators who have huge growth opportunities thanks to the global energy transition.

Our congressional delegation has led the way in shaping federal policy to advance energy development on all these fronts, for the benefit of our economy and environment. As state policy makers, 2024 brings unprecedented opportunity to work in collaboration with our federal partners, electric cooperatives and energy industry to create long-term economic growth for Alaska.

Zack Fields is in his third term representing downtown Anchorage and nearby neighborhoods including South Addition, Forest Park, Fairview, Valley of the Moon, North Star, and Eastridge.

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