Another flat, cold place. Nuiqsut is a new village, formed on April 13, 1973, when a number of families moved from Barrow to the Colville River delta. They lived in tents for 18 months while they selected the village site location, laid out the community, and constructed homes. A festival to celebrate the dedication of the village was held in August 1974 and the community was incorporated as a second-class city in 1975. Kuukpik Corporation is the local village corporation. The Native Village of Nuiqsut is a federally recognized tribe.
Nuiqsut is approximately 30 miles from the Beaufort Sea on the Nechelik channel of the Colville River delta. This area has been used for centuries for subsistence activities, including hunting, fishing, gathering, and traditional celebrations. The growth and development of the village has been influenced by oil and gas development. Nuiqsut is located in the northeast section of the National Petroleum Reserve – Alaska (NPRA). For about 30 years, oil field installations have been expanding westward from Prudhoe Bay. Oil activity is now occurring on most sides of Nuiqsut: Alpine is northeast of Nuiqsut; Meltwater is southeast of the village and additional proposed development is slated for northwest of Nuiqsut.
This is the road from the village landfill back to Nuiqsut. You can almost see the Alpine development in the distance to the right of the village. As part of the agreement with the North Slope Borough to develop Alpine, BP agreed to provide free natural gas to Nuiqsut. The catch is that while the gas is free at Alpine, the North Slope Borough was responsible for transporting the gas to Nuiqsut.
So the North Slope Borough built several mile of gas pipeline and related infrastructure to provide cheap power to Nuiqsut. This is a photo of two brand-new natural gas powered electric generators in Nuiqsut. They’ve been installed for almost two years and have never been run. The Nuiqsut Village Board says free means free – they should get the natural gas from Alpine for free and the resulting electricity for the same price. The North Slop Borough says the natural gas is free but it cost millions of dollars to build the pipeline, the gas conditioning facility, buy and install new generators, etc., and that Nuiqsut should pay part of the operation and maintenance costs. While they argue, the new, more efficient natural gas generators sit idle and the old diesel generators continue to run.
All the villages in the borough receive subsidized electricity. Electric rates are a flat $0.15/kWh no matter what the cost to generate the electricity. The real cost is more on the order of $0.40 – .85/kWh. The result is that the villages have no incentive to be energy efficient.
Updated 12 September 2008:
Petroleum News reports that Nuiqsut is finally switching to gas.
Villagers in the North Slope community of Nuiqsut could heat their homes with natural gas this winter, more than a decade after securing a supply from a nearby oil field.
The North Slope Borough recently completed testing the Nuiqsut Natural Gas Pipeline and expects to bring the 14-mile line into operation soon. Area power generation facilities could start burning natural gas by Sept. 17, and contractors hope to begin converting boilers for the community of about 375 as soon as Oct. 13, although villagers can pay to switch over sooner.
The project dates back to early development work at the Alpine oil field in the Colville River unit. The facilities for Alpine sit on part of the 140,000 acres of land owned by Kuukpik Corp., the Native village corporation for Nuiqsut.
In the mid to late 1990s, Kuukpik signed a deal with ARCO Alaska, then the operator of Alpine, allowing the company to use Native-owned lands in return for some of the gas produced during oil development. Alpine went into production in November 2000.
The move turned out to be one of great foresight for Nuiqsut. At the time, oil prices were only $20 a barrel. Today, prices have been well above $100 a barrel for months.
However, while ARCO, now ConocoPhillips, agreed to provide the gas, the village was required to build the facilities to condition and distribute the gas to homes and buildings.
The North Slope Borough agreed to finance the $10 million pipeline project, raising money for the transportation system through bonds and for the distribution system through a grant from the National Petroleum Reserve-Alaska impact fund.
The borough planned to start construction toward the end of the 1990s. But the project moved slowly as the borough worked to get permits, grants and right-of-way leases.
The borough received a certificate to operate as a public utility in 2001.
By late 2004, officials with the Nuiqsut Natural Gas Pipeline said it had finished building the conditioning plant and some of the distribution facilities, but still faced “delays in its gas supply contract negotiations.” Those delays, in part, forced the company to reapply for state regulatory permission to operate the pipeline.