Study sheds light on differences in village fuel prices
Published Saturday, June 7, 2008
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Stumble It!A new University of Alaska Anchorage study helps explain why households in some rural Alaska villages pay up to 100 percent more than others for home heating oil.
The study by the university’s Institute of Social and Economic Research was conducted for the Alaska Energy Authority, which is charged with reducing the costs of energy in the state. The energy authority wants the research to help identify ways to hold down future energy prices, according to an ISER news release.
Researchers identified 10 communities that are geographically diverse, vary in population and get and store fuel in different ways. Factors such as transportation, competition, storage capacity and even the condition of docks and fuel-handling equipment have more influence on consumer costs than oil prices at any given time, researchers found.
Although the analysis began in November, the figures are already out-of-date as energy costs have continued to rise. Crude oil in November cost about $80 per barrel, compared to a mid-May price of $120.
“Everything has completely changed,” ISER research associate Meghan Wilson said, adding that the situation has become even more “dire” in a number of the communities studied.
Interior villages selected for analysis were Fort Yukon, Alatna and Allakaket, with the latter two studied together because they are neighboring villages on opposite sides of the Koyukuk River.
Alatna and Allakaket, about two hours northwest of Fairbanks by air, registered the second-highest prices for fuel oil at $5.50 per gallon. Costs to fly fuel from Fairbanks, coupled with low storage capacity, keep the prices high, researchers said.
Fuel oil is delivered on barges 400 miles from Nenana to Fort Yukon and stored for distribution throughout the Upper Yukon, research associate Nick Szymoniak said. The good storage capacity — about 660,000 gallons — helps make fuel oil more affordable and offsets the high cost of barge transportation, he said.
Szymoniak spoke to retailers and others in Fort Yukon and said people were feeling “pretty helpless.” In particular, people who sell fuel to others in their communities seemed to be in a rough spot.
Until recently, Fort Yukon retailers were selling stock acquired last summer, Szymoniak pointed out. New shipments will cost at least $1 more per gallon in refined fuel costs — and that doesn’t include transportation increases, he said. Alatna and Allakaket, which receive fuel via plane, will probably see even greater increases.
In addition to evaluating the costs of transportation and storage, researchers broke down fuel prices into components that indicate how significant variable costs can be. Prices per gallon start with a common base for buying and refining crude oil. That figure was $2.31 per gallon when the study started in November. Added to that are the variables of transportation, storage and competition, which represents as little as 20 to as much as 63 percent of the total per-gallon cost for fuel in the 10 villages.
Lowest prices were found in False Pass in the Aleutians, where fuel is transported once a year on barges from Anchorage. The highest costs were found in Lime Village, a tiny community on the Stony River in Southwest Alaska. Fuel travels by barge from Anchorage to Bethel, where it is transferred to another barge and, ultimately, to planes. The multiple transfers and a small storage capacity contribute to the high price, researchers said.
Community Discussion
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I'm certainly glad we have a university to figure all of this out.
And who said the University wasn't a world-class institution
With research such as this, future students will be beating down the doors to participate
Should have had the kids at Denali Middle do this study instead - I'll bet the results would have been similar.
However, the study fails to point out that the village "people" actually pay nothing for the fuel. It is paid for by taxpayers. So, what does it matter.
At some time in the future I have heard teat the UAA is considering an expansion into the field of education ...lol.
Oh please O wise one, tell us how taxpaeyers are footing this bill and not the people that actually live and work in the villages.
I too would like to know how the village people were getting free fuel? Maybe they should move somewhere fuel is more affordable. Last time I checked, we are free to move anywhere we wish.
I think it goes like this. Alot of us go to work, are productive and in return earn dollars. The federal and to some extent local government then extracts dollars from that which you earned and increases the dollars they extract based on your productivity.
The Government redistributes the money over to those who are least productive, some purposely so either caused by the location to which they reside, family up bringing or by just plain lack of motivation.
Many people living in locations that lack jobs potential can sign up for low income assistance, Heating assistance etc.
For the other group living out in the villages that do wish to be productive and are lucky enough to get a job, that job 8 times of ten is a government related job. The government uses money that came from taxes to renumurate those who work for the government.
Having said the above, I would like to state that this is not always the case for everyone living out in the bush or in every place and yes, everybody lives under different circumstances that make it difficult to catergorize or put people in specific boxes..
The writer who stated that those in the village get fuel free has a hint of truth but not all inclusive as his comment suggested.
WoW did they use that new computer to figure all that out?? What a pile of pig poop. The sad part is they think they are doing good. Did you know that rocks form the moon cost more that rocks for Alaska? Yes the taxpayers of Alaska pay out a lot more that they realize to keep those "villages" alive, there is no way they would survive without it. And last but not least, YES you are free to move, at least for a while longer.
To think I thought all the villagers were living this so-called, eco-friendly/ green subsistence life-style... Maybe I need to move to a village.
Like Fairbanks your economy would be just be wonderful without government money. Saying the government is keeping villages alive, better take a look at your own community. Considering 54% of your economy is based on government money( State and Federal), where would you be without it. All those paved roads you have, I guess it was the road fairy not government that bought them. How about the schools, I hear that sit half empty who pays the majority of the education cost. At least in the villages we don't have government paying for a doggie park. Fairbanks would dry up and disappear if the federal and State money dries up. You better realize you are no different when it comes to government money supporting your economy. Like they say when you point a finger you have three more pointing at you.
Right on Suomi.
The smaller towns in Alaska support a good deal of our economy. Groceries, air taxis, and such all contribute to the regional centers such a Fairbanks, Anchorage, Juneau and Ketchikan. Our economies are interwoven.
Speaking of other clueless people read this and please comment:
http://www.adn.com/opinion/story/429285....
So let me get this straight. The Government redistributes money via spending tax revenue, presumably on various projects, entitlements, & earmarks. People that live in the villages in need can sign up for low income assistance, heating assistance, etc. People that live in the villages have a well paying job & work, which some of those work for the government (federal, state, municipal or tribal) which in exchange for that work, provides them a paycheck to pay for their utilities, food, fuel & consumer products.
How is that any different from living in urban areas?
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Another comment regarding rural first residents. It is their corporations who are investing in Alaska. Why is this? It's because this is home to them. When economic calamity hits, the only place to go home to is Alaska.
I'd love to see a study on which companies invest in Alaska. I'll guarantee you that it is Native Corporations. I realize these corporations are criticized by their shareholders, however, they do more than the permanent fund in terms of reinvesting in Alaska.
I'm going to love it when Alaskan's wake up and realize their Native Corporations have become the backbone of an Alaskan economy. Maybe the ignorant attitudes will change, I know that mine has.
Alaskan corporations are going to make energy investments which benefit us all. Big changes coming and we can thank this energy crisis for bringing it about.
Geez, maybe I should move back to the village. Sounds like I will get my way paid for me. Hmmm....some people should shut up about things that they do not understand. Hey James, why don't you call my dad and ask him how much he spends on gas to go hunting in the fall, fishing in the summer, to run his chainsaw, truck, snowmobile. Then ask him if he got some money from the government to pay for it all. More then likely he will laugh at you and hang up.
There are some people in the commment section that express views that are very insulting, ignorant, and totally out of touch with reality. I live in a village. I have all of my 68 years. I will continue to do so as long as I can. Move? Many people are energy stranded. They can't afford to move. Free energy? Where does that idiotic notion come from?
I pay for electricity (33 cents a khw plus a $33 fuel surcharge plus a 6% city sales tax), heating fuel ($5.40 a gallon), and gasoline ($5.969 a gallon). No one pays for any of those bills. We also pay $8 a gallon for milk. $5.00 a loaf of bread. $5.30 for 18 eggs.
I wish that those with such foolish views of village Alaska would stop being such nattering nabobs of negativism. I invite you to come out to our villages. See what is going on. Then you can educate yourself to what is real and stop making comments that are divisive and insulting.
I believe that this Governor needs to make a decision about sharing the increase money received because of the increase price of oil. I for one am a believer that the PFD was developed to do this. Place a few extra billion into the fund and let it grow. The dividends will increase in value and the people whether you live in Anchorage or Eek will share equally.
Now the other issue is development of alternative energy sources in Alaska, gee we only had thirty years of thinking about it. Kotzebue in the 90's developed a wind farm which is a model for the US. It is plan that in the near future our town will use wind as the source of all electric power. Galena is looking at a nuclear battery system. The technology is out there. Even Fairbanks is looking a syn gas.What needs to be done is the development.
The hard part is that so much of this is tied to political game playing among the legislators. The good old boy's time has come and gone, however many of them are still there. This State needs new people in the legislative body who are looking north to the future. How much time did John Coghill spend on notification of parents regarding abortion, when your town was screaming that you were facing a energy crsis. One of his comments was he didn't realize the cost of fuel had risen .
The division of rural Alaskan needs to urban Alaskan needs is a conflict that the legislative body enjoys because it focus attention on blaming the citizens. Less time is then spent on looking at what they are up to. Alaska is a divided State and that needs to be corrected. North to the Future once had a meaning. Hopefully new leaders will emerge to make Alaska reach to the North Star.
Suomi,
Babies are more important than money.
The biggest problem with energy costs out there are the environmentalists who don't think rationally, and want to control everybody else.
Gas in the NorthWest Arctic Village of Noatak reached $9.25 a gallon a few weeks ago. Milk, $12/gallon. Having lived in a village most of my life, a lot of villagers who are on assistance do get a free drum of stove oil per month. Many of them have so many drums, they in turn sell it to others. Also, if you pull up to the gas pump in some villages, there is a sign that reads a lower gas price for shareholders and a higher gas price for non-shareholders.
Blue5011: It is not all Dances with Wolves in the villages. There are 4-wheelers, snow go's, boats (with Evenrudes), and cars/trucks. The homes are heated with stove oil or diesel. The villages that have trees can use wood stoves, but there are some villages that do not have trees. Stove oil is the only way to heat. The electricity is produced by generaters that run off of stove oil. For the people not on assistance, it is extremley expensive, like for andora and I agree with her, everyone should visit a remote village and spend some time there, you can't comment on village life unless you have lived it. There are very positive attributes to village life. However, the further away from Anchorage and Fairbanks, the more expensive it is. Airfare to a hub to buy groceries that are a little cheaper is horribly expensive.
It is very sad... One day, I hope, natural gas will be available to all of Alaska.
suomi...
The windfarm in Kotzebue is hopefully not a model for the US. Maybe once in a while there is 1 windmill turning. It does not decrease the cost of the electricity because KEA can not shut off the generator that uses diesel to operate. The windmills sound like a great idea, in theory, but it is not the energy source for Kotzebue. Too bad it is not working now, maybe someday it will work as it was theorized to.
The comments from a few on this space show how stupid some can be. comments like this shows why there is such a divide among those in town & those of us who choose to live in rural areas.
We do not get "free Fuel". My husband works , (not a gov. related job either). I am retired on a fixed income , after WORKING 30 + years. Yes the rising prices are putting the squeeze on us. But to come on here and say such negative things about us in the Bush is crap. There are plenty of people who live in towns who also get "free gov. handouts. People who abuse the system live everywhere, not just villages.
The thing that I thought was weird about the info in the article is that no one at ISER bothered to update these figures to give parity with the current price of oil and related increases in costs. How difficult would that have been? Since they didn't, what will be cited are costs that reflect prices 50% lower than they really are. It wouldn't have been hard to update, and it wouldn't be hard to update now. The article says, "Everything has completely changed...the situation is even more dire now [ed. note: for everyone, everywhere]..." Come on, ISER! Give us, our policymakers, administrators and lawmakers something we can all use to move everyone forward developing new energy sources and policies.
If I lived in a off-highway village I would be moving, NOW. Your village fuel and food price will be double by next year.
Awww . . . a cup of coffee is always good, sip, sip. mmmm. Well, since the University done this study, why did they not include possible solutions, since they are in school studying this or should have at least provided some type of reliable reneweable energy either for the rural and urban areas. ???
The Politicians have succeeded once more along with the petroleum industry, having the less fortunate public remain to bicker amongst themselves and ignore possible solutions to this increasing cost for fuel. We are all spoiled over the years by using fuel exessively which led us to where we are now.
Comm all, you should know that by now, since you all were children, NOTHING LAST LONG, correct. Its funny. We knew this was coming yet we tend to neglect it or ignore the outcome of high fuel prices.
This study is another great example of just how completely unhinged the University has become. These findings are common sense stuff anyone with a clue already knows.
I hope the UAA guys didn't have to leave their Eagle River condos to come up with this garbage.
And while I'm on this rant, I agree with Morning Roar, where are the solutions? I'll propose one; let's not hire anymore "well qualified" lower 48 career educators to run our University. Let's get someone with some actual work experience outside the ivory towers of academia.
At what price would you want gas and oil to be?
The U does not have answers they only compile data.
And it appears to be quite useless.
I hope the Admin. staff is reading this.
The taxpayers are not paying for this service. If anyone besides the individual is paying it is the native corporations are to help their people.
It is true it costs more for their fuel. Call out to Everts and ask how much does it cost them to fly the fuel to the villages they are paying more for the planes to fly so yes they will pass on the costs. I don't think any of us would work for free.
Thanks for shedding some light on the ignorance we've read expressed here regarding rural communities.
Yeah the university needs to get its act together and become part of the solution. In Southeast we have a great amount of tidal, wave, hydro, biomass and even some geothermal. What kind of research is being done here - none that I can see. Everything is concentrated in Fairbanks and what is that institution producing to make our lives better through research?
I hope this changes. With what the Aleutians offer in terms of renewables, wind, wave, geothermal and tidal perhaps a U of A research facility in Unalaska would be appropriate. That areas of our state will be huge in the energy equation when it it can be developed. Can't think of a better place to put some study money.
user6244 ... very good post and there is more than just a little truth in what I said. There are certainly exceptions, but the overwhelming majority of the village folks fit into this package of receiving just about free everything. The cost is immaterial because they get the money to pay for it someplace other than by working like the ordinary taxpayer. There is also a fair share of this in Fairbanks and elsewhere in the USA but Alaska is pretty bad.
andora maybe you are one of those exceptions but where do you get all this money? What type of work do you do? Do you really pay for all of these things with earned income? That is really the root issue. Do you really pay $0.33 Kwh for electricity or is that what “it costs”. We know better.
Folks like suomi, who apparently think they pay a fare share or have an entitlement, unfortunately, are not in touch with the reality of the situation. The air carriers for example are highly subsidized so they can go to the villages. Without the subsidy it would be a long walk to town. Can you imagine what it costs to fly a Navaho full of potato chips to Fort Yuk …. Happens routinely and they “should” cost about $100 a bag! Health care, electricity, telephone, fuel, snow machines, 4-wheelers, boats, motors, TV, guns, education ... where does it all come from???? Who is really paying for it?? Right, taxpayers, not the village users.
However, and again, there certainly are exceptions and I know of some. But saying the taxpayers are not paying for this service. If anyone besides the individual is paying it is the native corporations are to help their people is plain silly.
Where do you think the corporation got their money, continue to get their money and will forevery get their money …. Lol. Look at BIA for example.
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