1. Near-Term Energy Issues Crisis or Opportunity?
Law Seminars International
Energy in Alaska Conference
November 30, 2006
Presentation by:
Tony Izzo, Independent Consultant

2. Is there a Crisis? Industrial Plants curtailed
Agrium shut-in until March 2007 for lack of gas
Tesoro Refinery natural gas supply is down 50%
Utility bills increasing
Natural gas up 126% since 2004
Economy impacted
Cost to Residential and Business consumers expected to be $285 million in 2007
compared to $119 million in 2004

3. Is there a Crisis? Aurora Power Resources
November 2005: approx. 1,500 meters & sales of 32mmcfd
November 2006: approx. 685 meters & sales of 8mmcfd
Utility Supply Contract pending litigation
Fairbanks Natural Gas files emergency complaint with RCA for Service Denial
“Gas for Fairbanks utility could short Agrium” – Petroleum News, 10/01/06
“Availability of gas, not cost, the issue” – Petroleum News, 10/8/06

4. A mix of possible solutions are needed
Natural Gas Storage
Create incentives and design programs to target reductions in peak demand
Conservation
Redesign utility rates to promote conservation
Develop meaningful consumer incentives for reductions in all types of energy use

5. A mix of possible solutions are needed
Coordinated planning is critical
Establish a regional integrated resource plan for procurement and ownership of future power generation & transmission infrastructure
Healy Clean Coal
Pebble Mine
An Electrical Grid Authority should be explored to determine costs and benefits to rate payers

6. A mix of possible solutions are needed
Understand the “purchase power” of Aggregated natural gas demand
Power generation and home heating combined “might” justify a spur line
Industrial consumers must be supported in ways that keep all options open
LNG import and/or storage is a “tool in the toolbox” we don’t want to overlook
Important to understand regional, individual utility, & consumer needs

7. Crisis or Opportunity? Crisis:
an unstable or crucial time or state of affairs in which a decisive change is impending; especially : one with the distinct possibility of a highly undesirable outcome (Merriam-Webster)
“Luck is what happens when preparation meets opportunity.” - Seneca