What others say: Staying focused on natural gas

  • Sunday, January 25, 2015 8:04pm
  • Opinion

Interior power co-op Golden Valley Electric Association announced this week that starting in March, local power customers will pay close to 3 cents less per kilowatt hour on their energy bill. That’s unequivocally good news for residents who have been hampered by high local energy costs. The sizable drop in heating fuel prices this winter, coupled with warmer-than-usual weather, also has been a boon for those shelling out to have their home fuel tanks filled.

But this respite from the pain of energy costs in years past shouldn’t dampen our resolve to find long-term solutions to the Interior energy crisis.

Like the direct benefit of lower heating fuel costs, the coming drop in GVEA’s rates is a result of the same phenomenon hamstringing the state government’s budget: the sustained decline in the global cost of oil (and, by extension, its derivatives). Although GVEA produces the vast majority of its energy through lower-cost coal and the Eva Creek Wind Project near Healy, about a quarter of the power the co-op produces is generated by oil. And as the cost of fuel drops for the co-op, GVEA passes that savings on to its members. GVEA officials estimate the rate drop will result in a $17 savings per month for the average local power customer — not a fortune, but $17 per month adds up quickly. During the course of a year, it would result in more than $200 in savings if the new rate held steady.

Lower costs for oil — and therefore heating fuel — have helped residents who in prior winters have seen their budgets crippled by the cost of heating their homes. And warmer temperatures have meant community members are filling their tanks less often.

But we shouldn’t let this temporary period of relief from the high prices that have been the norm in recent years distract us from the community goal of securing low-cost energy in the form of natural gas. Contrary to what the global market price for oil indicates today, it is a scarce commodity, and growing scarcer every day. It’s only a matter of time before prices return to significantly higher levels, and we shouldn’t sit on our hands until then. Rather, we should treat the recent price drop for oil as what it is — a period of breathing room that came at an opportune time for Interior interests. The Interior Energy Project is in a delicate place with the expiration of contractor MWH’s participation in the construction of a North Slope liquefaction plant, and diligent work must be done by project stakeholders to make sure the Interior keeps moving toward gas delivery.

From a statewide perspective, the massive decline in revenue resulting from the oil price slump underscores more than ever the necessity of transitioning to new economic drivers for Alaska. Among these, the most obvious and significant is the construction of a natural gas pipeline that can provide a substantial replacement for at least a substantial fraction of the lost revenue as oil production declines. Such a pipeline will require a financial commitment by the state at a time when finding funds is difficult, but things in Alaska are rarely easy.

Though we are experiencing a respite from the historic high energy prices of the past several years, we must acknowledge those high costs will return, so we must work swiftly to make sure we can transition to other fuels. Now is no time to get distracted from our goal of long-term affordable heat and power for the Interior.

— Fairbanks Daily News-Miner,

Jan. 14

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