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Senators Thomas and Paskvan propose gas line: Cook Inlet to FairbanksAccording to a legislative press release, Senators Joe Thomas and Joe Paskvan have introduced legislation that would instruct the Alaska Gasline Development Corporation (AGDC) to build a natural gas pipeline from Cook Inlet to Fairbanks, with enough capacity to serve unnamed other communities along the route. By placing the project under the auspices of AGDC, the release says Senate Bill 215 will allow the project to utilize right-of-way and permitting work already done for the Alaska Stand Alone Pipeline (ASAP) and the original Beluga-to-Fairbanks (B2F) line studied by the Alaska Natural Gasline Development Authority (ANGDA). The release predicts that a line north from Cook Inlet would offer advantages over the ASAP project, such as eliminating the need for a gas processing plant, lower construction costs, an overall shorter pipeline and shorter delivery timeline. “This gasline would be able to serve nearly as many Alaskans as a line from the North Slope to Southcentral, but at a much lower cost and within a faster time frame,” said Senator Paskvan. “Families and business owners (in the Fairbanks area) need to see a real project which will deliver lower energy costs, and SB 215 moves piped gas faster than any other option on the table.” According to the Fairbanks North Star Borough Gas Distribution Analysis: Preliminary Executive Summary Report, released Feb. 14, A pipeline delivering Cook Inlet natural gas to Alaska's Interior could save Fairbanks families and businesses more than $230 million. A 2009 ANGDA study of the B2F project predicted that the benefits wouldn't only flow north: “In addition, by enhancing the marketability of Cook Inlet gas, [a Cook Inlet to Fairbanks gasline] will improve the economics of expanded Cook Inlet gas development, thereby improving the reliability and security of natural gas supply in both the Interior and Southcentral regions of Alaska." Thank You Jim.......Well said. One thing the State could do immediately is suspend their practice of charging market price for Royalty in Kind oil that is sold to the refineries. This should be done now for any oil that is used for home heating and electrical generation. At $120 barrel (divide by 42) the state makes $2.86 off every gallon of fuel sold. When I purchase 250 gallons of fuel oil I am putting $715.00 into the State revenue stream. When GVEA burns 200,000 gallons per day to generate electricity, we the people not they the co-op are putting $572,000.00 per day into the state coffers. This totals out to almost $209 million per year. People in Anchorage, Wasilla, Palmer, Kenai, and Juneau are not paying this and they have not been for the last 40 years. This inequity needs to be corrected. PRONTO. Thanks! This is very interesting. I think we'd need more information about electricity-- much of it in the Railbelt region comes from coal or natural gas. But it is clear that folks who must use heating oil are at a huge disadvantage. Have you talked with your legislators about the royalty issues? What do they have to say? Our State probably had no idea how expensive petroleum products would become for its own residents, especially in some places, when royalty laws were written. Speaking of heating oil and diesel-- during one of my earlier Brooks Range trips, in the late 1980s, I was chatting with a guy at Arctic Village who was responsible for the village's diesel generator. At that time, about 25 years ago, village residents were paying 60 cents/ KWH for electricity. Electricity would have cost closer to a dollar/ KWH there if it hadn't been subsidized. Fairbanks is uniquely expensive among Alaska's largest towns and perhaps we may finally find a way to mitigate that, but I don't know what can be done for remote communities where energy costs really go through the roof. But I guess that would be another topic for another day . . . Right now Anchorage area natural gas customers are paying around 90 cents per 100,000 btu for natural gas. (1 btu heats 1 pound of water 1 degree fahrenheit). When it gets "cold" (below zero) in Anchorage, many homes consume more than a million btu/ day. I grew up in Fairbanks and my family's home there went through about 70,000 btu/ hour, or about 1.7 million btu/ day when it was 40 below-- Fairbanks gets a lot colder and heat is a lot more expensive. According to the Gas System Distribution Analysis that is linked in the article above, most Fairbanks customers now using heating oil would pay about 2.67/ 100,000 btu when heating oil costs 3.84/ gallon. At that price, 1 million btu of heat in Fairbanks would cost about 27 dollars, while in Anchorage the same amount of heat from natural gas would cost about 9 dollars. At current prices Fairbanks residents pay about 3 times as much as Anchorage residents do for the same amount of home heating energy. Fairbanks pays even more because it gets colder there. Electricity would be far more expensive in both places. At current rates electric heaters would cost nearly twice as much as heating oil and perhaps 5 times as much as current Anchorage natural gas rates (29.3 KWH equals 100,000 btu). In a nutshell, don't count on any Susitna hydroelectric project (or any other electric sources) for heat. I'm interested that Fairbanks State Senators figure Fairbanks would be better off with a shorter, (perhaps 350 miles or less), pipeline from Cook Inlet, as opposed to a longer nearly 500 mile pipeline from the North Slope. This is despite the fact that the North Slope has plenty of natural gas, while Cook Inlet prices and supplies are not guaranteed especially at low costs. The Gas System Distribution Analysis study looks good, and I wouldn't second guess it, but I'm surprised that, after tariffs, North Slope natural gas delivered to Fairbanks would not be as good an option as Cook Inlet-- this tells us something about the capital cost of building natural gas pipelines, and then operating them-- even small diameter ones. Being raised in Fairbanks I wish my home town the best-- it is high time and long overdue that our State supports our second largest city's efforts to reduce stratospheric energy costs. Ever since the late '70s I've heard the term "when the gas line (to the Lower 48) gets built." Well, maybe "the gas line" won't get built, and instead we should examine smaller ideas, like what the Fairbanks Senators have proposed, that would address our intrastate needs and reduce the cost of living in the Interior. Well said Jim. According to Fairbanks Natural Gas's website they charge $23.35 per million btu and their average customer uses 25 million per month. So about $584.00 per month. Add about $300.00 electric onto that. I think fuel oil is about 7.19 gallons for a million btu's. At $4.00 per gallon and using the same 25 million btu's per month a person is looking at about $720.00 per month. |
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