Natural gas prices are too good to last.

• Author: Tyson, Ray
• Position: Prices of natural gas in Alaska

Natural Gas Prices Are Too Good To Last

Aside from a spike caused by the Persian Gulf War, plentiful supply and long-term contracts have kept Southcentral consumers' rates low. Later this decade, though, market forces will drive natural gas prices up.

Although jolted this year by hefty rate increases spurred by high oil prices during the Persian Gulf crisis, residential and commercial consumers from the Matanuska-Susitna Valley to the Kenai Peninsula can expect to pay less for natural gas in 1992. Price prospects will dim within a half-decade, however: Rates are bound to increase by the mid-1990s because of agreements between gas producers and utilities.

With an estimated 3.4 trillion cubic feet of proven natural gas reserves in the Cook Inlet basin, consumers also need not worry about running out of the inexpensive and clean-burning fuel anytime soon. There's at least a 15-year to 20-year supply, and it's believed there's plenty left to be discovered.

Says Richard Barnes, president of Enstar Natural Gas Co., "Let me answer it this way: We probably will put about $10 million in the ground this year for distribution, transmission, facilities; and we'll recover that through depreciation over 33 years. So we expect to be in business for 33 years, at the minimum."

Even if Cook Inlet should run short of gas, Barnes explains, there's always the North Slope, which contains not only North America's largest oil field but the continent's biggest natural gas reserve at Prudhoe Bay.

Whether the bulk of that gas eventually is shipped to the Pacific Rim or to Lower 48 markets, some will have to be made available for local consumption, he adds. "Let's say that it's going to be a dead certainty that if they want permits to cross Alaska lands -- unless they change the law of the land -- the pipeline has to be operated for the benefit of local furnishings of gas as well as for its export," says Barnes.

Chugach Electric Association, which mostly depends on natural gas to fire turbines that produce electricity, also isn't worried about the gas supply. Chugach and Enstar are among the biggest users of natural gas in Southcentral Alaska.

Says David Highers, manager of Chugach, "I suppose it's like anything else; it's not endless. But the different producers have adequate supplies for us and Enstar, at least well into the next century."

Adds Barnes of Enstar, "I believe there is plenty of gas, but I don't want to give you the impression that it doesn't cross my...