News-Miner Editorial
Energy message
Borough mayor is right: Anchorage doesn’t get it
Published Tuesday, July 8, 2008
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Stumble It!It’s an unorthodox approach and one that will not immediately win plaudits from Southcentral Alaska, but Fairbanks North Star Borough Mayor Jim Whitaker has a good point about the political response to Alaska’s energy crisis.
In short, it’s this: Residents of the most populous region of the state are not in the same bind as people elsewhere in Alaska who depend on heating fuel for energy and electricity, and they are apathetic about the problem in other regions of Alaska.
In Anchorage and its environs, low-priced natural gas is helping hold down the cost of energy and limiting the economic damage of record oil prices.
The Fairbanks area does not have that luxury. The combination of sudden increases in gasoline, heating fuel and electricity is putting families in a pinch — or worse — and is costing our economy hundreds of millions of dollars.
It’s true that Mayor Whitaker sometimes comes across as a musk ox in a gift shop, as demonstrated by his move to challenge the constitutionality of state support for low-priced natural gas in Southcentral. But he’s not doing this to deny anything to that region, but to raise the point that the rest of the state could use help from the state as well.
We hope that our fellow Alaskans in Anchorage will recognize the economic damage being done by skyrocketing fuel costs, particularly in areas without inexpensive hydroelectric power or natural gas.
In Gov. Sarah Palin’s agenda for the special session that begins Wednesday, we see elements that may come together to form a compromise on energy issues.
Our governor has issued a call that features both short-term aid and a proposal for a longer-term renewable energy grant fund.
The former includes proposals for direct aid to Alaskans and an expansion of the power cost equalization program. For the longer term, there is a proposal for a $20 billion alternative energy grant fund that could be a key to creating the right conditions for expansion of new energy sources.
House Speaker John Harris of Valdez and Mayor Whitaker envision a grant program that could be funded by the temporary surpluses our state is enjoying from record world oil prices.
These surpluses will not last and it’s vital to take steps today that can allow us to transform the one-time-only oil dollars into alternative projects, ranging from hydroelectric power to synthetic fuels.
We agree with the mayor that the long-term economic viability of Fairbanks is at stake. It’s not hard to imagine how energy prices could lead to a renewed effort to close Eielson Air Force Base.
It’s urgent for our governor and Legislature to help deal with this situation now.
Community Discussion
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A great, forward thinking, editorial.
And darn tootin' that Mayor Whitaker has identified a real inequity. The good folks of Anchorage get their fuel subsidized, so why not us?
Some good investigative journalism is in order for the News-Miner. Do an in-depth story about how it is possible for DNR to sell Alaska's royalty oil for heating at a reduced price so that the Interior does not dry up and blow away before we get natural gas.
And then ride the local politicians about where they are on this issue. It seems to us that more of our leaders should be providing leadership on this problem- like Whitaker is.
I've heard from some folks in the natural gas industry in Anchorage who are hopping mad that Mayor Whitaker would stick his nose in their business. This can only mean that his message is getting through. Go get 'em, Mr. Mayor!
How about some numbers.
July 2nd Henry Hub Natural Gas - $13.31 per Mbtu.
Anchorage Natural Gas price - $6.87 per MCF.
http://www.enstarnaturalgas.com/CompanyI......
I don't know the exact BTU's for Cook Inlet gas, but it puts Anchorage prices at less than half of the US price. This would be like the state selling crude to the North Pole refinery at $70 a barrel.
The equivelent cost for heating your house in Anchorage would be the same as having $1.05 a gallon heating oil. It is no wonder that Anchorage does not see an energy crisis. I know several people with large homes in Southcentral that have monthly gas bills in the winter of $100-$150.
I wonder with the Governor's announcement of a bullet line and cheap gas for Fairbanks and Anchorage,if the other communities in Alaska will take the step that the Mayor threaten and sue the state for unfair pricing for Fairbanks and Anchorage. That is if gas ever arrives.
Remember that the Mayor said the gas was being sold at a lower price value and needed to be sold at market price. He may just have shot Fairbanks in the foot with his threaten law suit. He has planted this law suit idea in the rest of the Alaskan communities, who will probably say the same thing about Fairbanks that everyone has been complaining about Anchorage. Why should they get cheap gas. What goes around eventually comes around. I wouldn't gloat about this, it just may come back and hit this community one day.
Spending $20 Billon of our money to study energy sources is not a good idea. Using my property tax dollars to litigate against the State is not a good idea. The burough fighting the U.S. Congress to save Eilson AFB is not a good idea. Editor, Mayor Whitaker's setting conditions to expand new energy sources should not cost Alaskans another $20 Billion. Actually developing new energy sources may cost that much, but wasting money is criminal.
The mayor appears to be a champion of local residents w/this position but as FD notes above this may not have been very well thought out.
I'm not sure what portion of the SC gas supplies (and we're talking MatSu/Kenai as well as Anch) comes from royalty gas, and that's the only supply over which the mayor could sue. Most of the gas is owned by the utility and one big reason it's cheap is the isolated market. Long time residents remember when they used to burn that stuff off, now they can sell it. These same small market forces would apply to any new discoveries and as FD notes above would result in lower costs for Fbks if/when a bullet line is built. Then Barrow could sue.
The state subsidizes energy costs in other ways. These include rural power cost equalization, AHFS's EEIRR program, the low income weatherization progrm, energy rebates, govt funded hydro projects and clean coal plants. The list goes on. Does a neglected part of the state or population sue over all these?
Granted SC AK could be more sympathetic to interior energy problems but an us against them strategy will not facilitate cooperation.
We need that gas from the North Slope as soon as possible, but we have a more critical problem in the immediate term. That is low cost fuel.
If we don't get our relief in the form of low cost fuel, we are in very deep trouble in the entire state of Alaska. Heating fuel, gasoline, diesel, aviation fuel, and propane are way beyond the means of most Alaskans for this year. When the next fuel barge arrives in our villages, prices will jump again.
We export over 700,000 barrels of oil a day. 12.5% of that oil is state Royalty Oil. We, citizens, can take a portion of that Royalty Oil and have it refined and distribured to all Alaskans at $2.00 a gallon for all fuels.
This can be done until oil hits $100 a barrel and be a bridge strategy until we can get renewable energy plans on line that are long term, affordable, and reliable.
Anything short of low cost fuel will destroy Alaska's economy.
Does the Mayor sound like a "paper tiger" all bluster and no teeth or the will to fight? Just an other stupid idea to create a job for himself after this term in office. Sounds like the Port Authority all over again Will he drop this when he realizes it won't work as he did with the Port Authority??
You can criticize Mayor Whittaker all you want and I know I have on various issues. The fact is that he is one of the only ones actively trying to make something happen. It appears that he is using the threat of a lawsuit as leverage to make something happen. I seriously doubt that this will ever see the inside of a courtroom.
Andora, your idea is right on the money. Flint Hills wants to sell the refinery and get out of some long-term fuel contracts that are costing them money. Lets have the state purchase the refinery and give it to the Alaska Energy Authority. The people who work there can all continue to do what they do best. I'm sure that they are all used to the name on the front door changing by now.
With a state owned refinery located at the middle of Alaska we could be the hub for Alaska's royalty gas and heating oil sales. At this point I would be happy to be paying the nation average of $4.10 instead of $4.47. In reality we should be way below the national average since we have the lowest state fuel tax in the US. If you factor in the taxes we are paying 50 cents more than the national average!!
I suspect big global conglomerate mining companies are lobbying Juneau to keep fuel costs outside Anchorage as high as possible..
..this will starve out the little miners off of their claims, then the big corporations can swoop in and buy them all out.
....someday their proctologist might find a golden fulgerite in their backside.
.....flash/rumble
So, Juneau has hydroelectric power, and South Central has natural gas. Is it possible that the leadership (including GVEA) in the Interior has relied too much on the oil going through our backyard and hasn't diversified our energy sources enough?
In hindsight, we wouldn't be in such a pinch now if we had developed redundant infrastructure for coal, natural gas, or other non-oil energy sources years ago.
Hey Distant Thunder!
Why wouldnt Alaska take more advantage of our temperature differences between very low ambients and the huge amount of low level waste heat here in the interior using the organic rankine cycle? A low level waste heat to power, not needing the high temps needed at Chena Hot Springs.
Im taking about much simpler and inexpensive systems than the Chena Hot Springs power project, that any refrigeration tech could service; and also use less of the generated power/energy to keep the system componets powered vs the Chena/United Technologies system.
Seems to me we could view our low ambients vs waste heat as quite an resource especially here in the interior. The colder it gets outside, the greater the potential output.
Maybe Im nuts.
I have been impressed by Mayor Whitaker’s stand on the energy issue for Fairbanks. He gave a good performance hosting the Energy Rally. Good for him, the musk ox in a gift shop. I hope it does not end in a law suit. One thing I can’t stand our government sueing our government using taxpayers. It seems so counter productive. But if we have to. So be it.
The State couldn’t run the Matanuska Maid Dairy. What makes anyone think they can run a refinery ? Even the pros at Flint Hills appear to be having a tough time.
Fairbanksgas points out the facts on Anchorage gas prices. If you read http://www.enstarnaturalgas.com/ you’ll see that gas prices are increasing nearly as fast as oil. They will continue to increase as our gas is integrated into the world market. There is little reason to believe that gas in Fairbanks will be a cheap energy source. We should be happy that it will be expensive. We should sell all we can to the lower 48 or overseas.
We have enormous hydroelectric potential in Alaska. We can build Susitna dam for a one-time cost and fuel it with water forever ! Susitna can produce enough electricity to heat every home in Fairbanks, Anchorage, Kenai and Homer, forever at just pennies per kilo-watt hour. Without the ice fog, Without the carbon dioxide. Eventually we can run our electrically powered cars from it.
We already run Fort Knox and Pogo mines on electricity. We are converting much of the oil pipeline to electricity. We can even run a refinery on electricity.
We don’t need gas anytime soon. Let’s not hurry into the gas line. The state has more money than they know what to do with now, What will they do with gas line money on top of that ?
First, as owners of the natural resources, we should each receive an additional dividend that can help offset the world market gasoline and oil prices.
Second, we need to insist that the nearly $300 million we have invested in the Healy Clean Coal Project is not wasted. Get it online now, whatever it takes.
Third, and finally complete the Sustina dam project which we have already spent $150 million studying.
Fairbanks don’t need no sitinkin’ gas.
Whitaker Comes across like a musk ox in a gift shop thats pretty funny almost as funny as alaska getting any kind of cheap gas of any kind.
Whats a fulgerite?
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