Cook Inlet gas production drops 60% since 2010

Daily natural gas production in Cook Inlet has fallen from roughly 450 million cubic feet per day in 2010 to around 200 million cubic feet per day in 2026. Winter demand now exceeds what the basin produces. ENSTAR Natural Gas must be prepared to deliver up to 320 million cubic feet per day during winter months, but Cook Inlet no longer produces enough to meet that daily customer demand, according to an ENSTAR presentation from June 1.

The decline affects all major producing fields. Beluga River, McArthur River, Kenai, and North Cook Inlet units show downward production trends through 2026, according to Alaska Oil and Gas Conservation Commission data compiled by ENSTAR. Those legacy fields were discovered in the 1950s and 1960s.

A 2010 study by Petrotechnical Resources of Alaska projected Cook Inlet could face gas supply shortfalls to meet local demand as early as 2014 without major new discoveries. The study estimated $1.8 billion to $2.8 billion in capital expenditures would be needed to meet demand through 2020.

Production has dropped from about 350 million cubic feet per day to around 200 million, according to a January 28, 2026 Hilcorp presentation to the Alaska House Resources Committee. The second-largest Cook Inlet producer, HEX, doubled its production from 10 million to 25 million cubic feet per day, according to a May 13, 2026 presentation to the Alaska Industrial Development and Export Authority. That increase does not offset the basin-wide decline.

ENSTAR currently pays $10.80 per thousand cubic feet for Cook Inlet gas. In March 2026, Hilcorp charged ENSTAR $16 per thousand cubic feet. ENSTAR's last firm contract expires in the first quarter of 2033.

Governor Mike Dunleavy called the supply situation a crisis during the winter cold snap. "We are running out of gas right out the window here in Cook Inlet," Dunleavy said. "We've known this since at least the mid-2000s."

ENSTAR is planning for LNG imports, with an estimated all-in cost between $16 and $22 per thousand cubic feet. The Japan-Korea Marker price for LNG is currently $18 per thousand cubic feet. That becomes the new cost of gas for ENSTAR's customers and electric utilities in 2033, according to the presentation. The utility will file a Gas Supply Agreement with the Regulatory Commission of Alaska before proceeding with development.

Matanuska Electric Association produces 84 percent of its power with Cook Inlet natural gas. MEA's all-requirements contract with Hilcorp expires April 1, 2029. Based on current projections, beyond 2029 with LNG imports, total monthly bill increases of $21 to $31 are possible to average residential bills, according to a June 3 MEA presentation.