GVEA announces natural gas contract with BP
GVEA is excited to announce that it has entered into a natural gas supply contract with BP Exploration (Alaska) Inc. Under the contract, the cooperative may purchase up to 23 billion cubic feet (Bcf) of natural gas each year for 20 years. This positions GVEA as the aggregator, which is kind of like a wholesaler. All fuel purchases will flow through Golden Valley.
This contract benefits the Interior in many ways, including:
- It meets GVEA’s needs for electrical generation. GVEA can convert the North Pole Expansion Power Plant to burn natural gas, displacing expensive oil-fired generation.
- It allows for the expansion of a natural gas distribution infrastructure in the Interior. The high cost of space heating is crushing Interior Alaska. GVEA will be able to supply the natural gas, opening up opportunities for distribution system expansion.
“Beyond satisfying our own electrical generation needs, we recognized an opportunity to address the energy crisis facing Interior Alaska’s residents and businesses, in particular, the high cost of space heating,” said Cory Borgeson, GVEA Interim President & CEO. “BP’s willingness to work with our cooperative to address Interior Alaska’s energy crisis is appreciated and is crucial to the long-term success of our communities.”
It is difficult to determine the precise impact this natural gas contract will have on the average Interior resident’s electric bill. Savings are contingent on the price of other fuel sources, including oil. Adding natural gas to our fuel mix will help GVEA stabilize rates and provides an opportunity for decreased fuel costs.
Providing the project stays on track, natural gas is expected in the Interior by 2015.
GVEA announces natural gas contract with BP,
I have the same question: how will the gas be delivered to Fairbanks? Considering the close estimated delivery date, it sounds like it would have to be trucked. That brings up the question of the cost of diesel to fuel the trucks. How does this project fit in with the proposal supported by (I believe) Hank Bartos to truck gas to Fairbanks? Finally, I wonder if turning the gas into electricity a very efficient way to heat homes?
Although the important details are not contained here, I cautiously applaud GVEA for moving forward with a cleaner, less expensive fuel source. I look forward to learning more.
The gas would be trucked to Fairbanks under current project plans. Having an available gas supply would allow for the expansion of natural gas distribution infrastructure here in the Interior. Golden Valley would use the gas to displace expensive oil to generate electricity at our North Pole Expansion Power Plant. The remainder would be available for home heating. Thanks for the comment.
how will the gas get to Faribanks?