In oil-rich Alaska, an energy crunch

A shortage of natural gas besets the state’s most populous area. In rural outposts, energy costs spike.

Kenai, Alaska – On the shore of Cook Inlet, site of Alaska’s oldest oil- and gas-producing basin, the Agrium Inc. fertilizer plant for four decades produced a steady supply of urea and ammonia for international agricultural and industrial clients. Agrium’s exports supported a prosperous petrochemical business, employing hundreds and bolstering local tax rolls.

But operations ceased in December. The reason? Lack of natural gas, the feedstock for Agrium’s products. Despite its perch atop a petroleum basin, Agrium couldn’t secure enough natural gas to stay in business.


Agrium’s woes symbolize a larger energy dilemma: Raw resources are in the ground, but lack of infrastructure and poor economies of scale hinder access to them, putting Alaska in an energy crunch.

Natural gas at the North Slope