The state of Alaska was granted statehood because we had resources and could take care of ourselves. We are now at a crucial time that demands we make decisions about state infrastructure so that we can continue to take care of ourselves. If we keep studying things instead of making decisions, we could wake up in the next five to six years and have spent all of the surplus money from oil revenue and have nothing to show for it. I’m not talking about the Alaska Permanent Fund; I’m talking about the money in other state budget savings — about $15 billion!
Consider these scenarios:
A state corporation, the Alaska Gasline Development Corp., is working on an in-state, 24-inch gas line from the North Slope through Fairbanks and down to Southcentral Alaska, ending on the Kenai, as a “fall-back” in case a big gas pipeline doesn’t go. Let’s not wait another 10 years for a big gas line, though. Let’s build an in-state pipeline and quit talking about it. The state should contract to have it built for the $7.5 billion to $8 billion and give it to the people of Alaska and not ask for the money back.
Lots of really positive economic things begin to happen once we just make the decision to go for this.
The project creates lots of new jobs to build the line and permanent jobs after it is operating. The 24-inch line is too large for us to use all the gas that the line can deliver for heating our homes and generating power — so we could sell some to Asia through the existing LNG plant in Kenai, as we have done for more than 50 years, and send gas to the planned Donlin Creek Mine that is struggling with an economic energy solution, to the proposed Pebble Mine and possibly even to Bethel. Flint Hills refinery in Fairbanks could go back to full operation and provide more jet fuel and even exports of refined products. (We are now importing jet fuel.) More than likely, the Agrium fertilizer plant would reopen on the Kenai with some 250 to 300 good-paying jobs.
When the state pays for the construction of the pipeline and doesn’t ask for repayment, the tariff is reduced to zero. So you have cheap gas for at least 550,000 Alaskans in the Interior and Southcentral.
What this does is help Alaskans. It provides good jobs. It lowers the cost of living, gives Fairbanks lower utility costs, provides Southcentral with reliable and abundant energy for the future and decisions made in tandem provide for Southeast and for rural villages. Whatever utilities cost in Anchorage, it costs 3 to 4 times that amount for utilities in Fairbanks and many more times that for the villages.
The state gets its money back over a long period of time when it invests in itself. With cheap gas, companies will invest and will use the gas to build all types of projects, thus diversifying our economy.
The governor will need to provide the leadership to make this happen, however. I would call this a victory for all Alaskans.
Bill Sheffield of Anchorage was Alaska’s governor from 1982 to 1986.