Alaska governor candidates split over who is to blame for Southcentral's gas shortfall

Four candidates for governor disagreed Wednesday over who is responsible for the natural gas shortfall Southcentral heating customers may face this winter, with Bernadette Wilson and Dave Bronson blaming state tax and permitting policy, Jonathan Kreiss-Tomkins crediting state pressure on producers, and Treg Taylor calling for new exploration incentives.

The forum was hosted in Anchorage by the Renewable Energy Alaska Project. Moderator Lori Townsend of Alaska Public Media told the candidates ENSTAR has said Southcentral customers may be 3 billion cubic feet short heading into winter, equal to 18 days of midwinter heat. ENSTAR serves 157,000 customers and delivers about 60 billion cubic feet a year, according to its August update to the Alaska State Legislature. Producers have told a joint legislative committee that Cook Inlet cannot cover Southcentral demand past 2029.

Wilson, a garbage company owner, blamed the state and said Alaska lacks a reliable permitting process. "We're talking about a shortage of natural gas and a high cost of energy. Yet as I look across the room tonight, I see several people that wanted to come after Hilcorp to increase their taxes. You don't exactly have a whole lot of people lining up to want to do business with you, Alaska. We've been a terrible business partner," Wilson said.

Bronson, the former Anchorage mayor, said a proposed change in Hilcorp's tax treatment, from an S corporation, which pays no corporate income tax, to a C corporation, would cost the company money it would otherwise spend drilling. "That's gonna cost them $80 or $100 million," Bronson said, describing a conversation with company leadership in Houston.

Kreiss-Tomkins, a former Sitka legislator, credited the state Department of Natural Resources with pushing Hex and BlueCrest forward on their development plans, calling recent DNR action "a kick in the rear end for Blue Crest." That action was an Aug. 14 letter from DNR Commissioner John Crowther requiring BlueCrest Energy to restart rig preparation at its Cosmopolitan unit and file a development plan setting a drilling date to begin gas production by March 31, 2027, or give up the lease. Kreiss-Tomkins said the state should conserve gas for heating and diversify electricity generation.

Taylor, the former attorney general, said the state should immediately incentivize Cook Inlet exploration. He warned that LNG imports, possible by 2027 or 2028, would "increase people's electric costs for probably 25% and people's gas costs up to, up to, 80%."

The four meet again October 8 in a debate hosted by Alaska Public Media and KTUU.