Alaska

Overview

Alaska’s energy demand per person is the third highest in the nation.

Alaska, the largest U.S. state by area, is one-fifth the size of the Lower 48 states and, with the Aleutian Island chain, as wide as the Lower 48 states from east to west. It is the only state with territory north of the Arctic Circle, and it has the highest mountains and longest coastline of any state. Alaska’s winters are frequently severe, but its climate varies significantly from north to south and from winter to summer, particularly in the interior where temperatures ranging from 100°F to minus 80°F have been recorded. Large areas of Alaska remain uninhabited. It has the fourth-smallest population and is the least densely populated of any state. More than two-fifths of Alaskans live in the Anchorage area, while the rest of the state averages less than one resident per square mile.

The oil and natural gas industry is a key part of Alaska’s economy. The North Slope contains half a dozen of the 100 largest oil fields in the United States and one of the 100 largest natural gas fields. Alaska’s Prudhoe Bay field remains among the 10 largest oil fields in the nation. However, production from the North Slope has fallen to less than 500,000 barrels per day from its peak of 2 million barrels per day in 1988.

In recent years, Alaska has experienced warmer temperatures for longer periods of time during the year. This temperature change reduces the amount of time energy companies can explore for onshore oil, because ice roads and drilling pads can be used only during the coldest months of the year, when the frozen land is less damaged by equipment. Conversely, the warmer temperatures reduce floating ice packs, potentially making offshore oil exploration easier.

Alaska has other substantial energy resources. The state’s coal resource is estimated to be larger than the combined resources of the Lower 48 states. Its many rivers offer some of the highest hydroelectric power potential in the nation. Large swaths of the Alaskan coastline offer significant wind energy potential, and the state’s many volcanic fields offer geothermal potential. Because of its small population, Alaska’s total energy demand is below the national median; however, harsh winters and energy-intensive industry make the state’s per capita energy consumption the fourth highest in the nation after Louisiana, Wyoming, and North Dakota.

Renewable Energy

Hydropower is Alaska’s largest source of renewable electricity. Utility-scale hydropower facilities are concentrated in the state’s south, in mountainous regions with high annual rainfalls. Smaller run-of-river projects, which do not employ dams, produce power in some rural communities. Alaska is also exploring tidal and ocean technologies that could supply renewable energy to coastal communities.

In 2015, wind supplied nearly three-fourths of Alaska’s nonhydroelectric renewable electricity.

Less than 4% of Alaska’s utility-scale net electricity generation comes from nonhydroelectric renewable sources, but small-scale wind, biomass, and solar generation are used in many of the state’s remote communities to reduce the need for petroleum fuels. Wind resources are abundant along Alaska’s coastline, and wind supplies nearly three-fourths of Alaska’s utility-scale nonhydroelectric renewable generation from more than 60 megawatts of wind turbines, located primarily along the southern and western coasts and on the Railbelt grid.Increasing numbers of small wind energy facilities, including some wind-diesel hybrid systems, are providing power to rural communities throughout the state.

Alaska’s biomass fuels are wood, sawmill wastes, fish byproducts, and municipal waste. The first large-scale biodiesel plant in the state opened in 2010 and can produce 250,000 gallons of biodiesel annually using waste vegetable oil gathered from local restaurants. Wood is an important renewable energy source for Alaskans, with more than 100,000 cords burned every year for residential space heating. The state has a growing number of wood pellet manufacturers. About 8 million gallons of fish oil are produced annually as a byproduct at Alaskan fish meal plants; some of the fish oil is used for boiler fuel.

Alaska was one of eight states in 2015 with power plants generating electricity from geothermal sources. The 400-kilowatt geothermal power plant at Chena Hot Springs, built in 2006, is the first geothermal project completed in Alaska. Its generating capacity has since been increased to 730 kilowatts. Several more geothermal projects are in development.

Despite Alaska’s high latitude, solar energy is playing a role in off-grid applications, especially in remote locations. Solar thermal technologies, primarily for hot water and building heat, and solar photovoltaic panels are all being used to tap solar energy when it is available, reducing the need for other fuels. Some Alaska communities are also adopting combined heat and power systems, using the waste heat from electricity generation to heat homes and other buildings

Electricity

The electricity infrastructure in Alaska differs from that in the Lower 48 states in that Alaskans are not linked to large, interconnected grids through transmission and distribution lines. Although an interconnected grid called the Railbelt serves the populated areas from Fairbanks to south of Anchorage, where three-fourths of the state’s population lives, even that grid is isolated from the electric grids in Canada and the Lower 48 states. Most of the state’s rural communities have no grid access and rely on consumer-owned electric cooperatives for their power, and many of those rural power providers use diesel electricity generators for some or all of their power.This diesel use contributes to Alaska’s ranking second only to Hawaii in the per capita generation of electric power from petroleum liquids.

Natural gas accounts for about half of Alaska’s utility-scale electricity generation, and hydroelectric power supplies one-fourth. Petroleum liquids and coal each account for about one-eighth of Alaska’s net electricity generation, and wind and biomass provide nearly all the rest.

Natural Gas

Most of Alaska’s natural gas production is reinjected into oil fields to maintain oil production rates.

Alaska ranks third in the nation in natural gas gross withdrawals, but most of the state’s production is not brought to market. Natural gas volumes from the North Slope far exceed local demand, and there is no pipeline to transport the natural gas south to markets. Large volumes of natural gas, extracted during oil production, are reinjected into oil fields to help maintain crude oil production rates. About three-fourths of Alaska’s natural gas withdrawals are consumed at the production site. Natural gas produced in the south is either consumed domestically or exported as liquefied natural gas (LNG).

The state government has long urged construction of a natural gas pipeline linking Alaska’s North Slope with markets in the Lower 48 states, but, to date, a pipeline has not been considered commercially feasible. Several major pipeline project applications have been filed with the state of Alaska, but none have yet gone forward. Until 2012, the Kenai LNG liquefaction and terminal complex on the Cook Inlet, which began operating in 1969, was the only facility in the United States authorized to export LNG produced from domestic natural gas. The terminal, which has capacity to liquefy up to 200 million cubic feet of natural gas per day, exports LNG to Japan. Four major oil companies have expressed interest in jointly building a new LNG export terminal in the Valdez area that could eventually ship up to 2.4 billion cubic feet of LNG per day. Such exports would require an 800-mile-long pipeline from the North Slope natural gas fields south to the Valdez region. One step forward was taken in 2016 when the first production well was drilled in the Point Thomson field, which contains much of the natural gas that would be exported. But the only marketed product from that well now is condensate, and low commodity prices continue to be a hurdle for the multi-billion-dollar project.

Source: U.S. Energy Information Administration (Oct 2016)