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Natural gas utility plan offers hope to kick costly fuel-oil habit

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Posted: Wednesday, October 10, 2012 11:55 pm | Updated: 11:36 am, Mon Jan 21, 2013.

FAIRBANKS — Fairbanks won’t solve its community energy crisis without a coherent effort to shift to a lower-price fuel.

There has been a good and lively discussion about the proposed natural gas utility to be considered by the Borough Assembly tonight.

I think the assembly should approve the plan and move forward with this concept, as it is the best chance we have for expanding natural gas infrastructure and service in Fairbanks.

We need to get a structure in place to focus on this issue immediately.

I support the actions of the North Pole City Council and the Fairbanks City Council and urge the assembly to take the next step.

Critics of the plan keep mentioning all the bad things that might happen if no one pays attention to the utility. They say they are worried about the economic fallout.

They need to worry instead about the economic fallout from the bad things that have happened already.

World events and missed opportunities have left Fairbanks dependent on high-priced fuel linked to the world market.

This is happening at a time when natural gas in the Lower 48 is dirt cheap and natural gas in Anchorage is a bargain.

That a small amount of natural gas is trucked to Fairbanks and sold at twice as much as it costs in Anchorage is not the miracle cure that some people make it out to be.

There are about 463 residential customers on the Fairbanks Natural Gas system, paying what would be the equivalent of a little more than $3 per gallon for heat. The company has a total of about 1,100 customers.

In the meantime, tens of thousands of Fairbanks households are paying more than $4 per gallon for heat, while in Anchorage, where the winter is shorter and the weather is warmer, people are paying the equivalent of about $1.40 per gallon.

One of these two communities will prosper under the status quo and one will not.

Our leaders need to consider whether Fairbanks is on a path to a sustainable future.

An Associated Press story Wednesday referred to the contrast between the 6 percent of American households using oil and the 50 percent using natural gas.

“It’s two different worlds. For most families, this is still going to be an affordable year, except for those who use oil heat. For them it’s going to be very difficult,” Mark Wolfe, the leader of the National Energy Assistance Director’s Association, was quoted as saying.

Fairbanks, with its dependence on heating oil, is in a tough spot. If oil prices go up, it will only get worse.

Our local governments, our state government and private industry have not agreed on a fuel-changing strategy to end this crisis.

So we’ve had a finger-pointing extravaganza punctuated by moments when dreams of perfect solutions stop the progress of half-decent alternatives. That’s the energy story of modern Fairbanks.

The natural gas boom in the Lower 48 is lowering the cost of living in many parts of our country. In Fairbanks, our cost of living is going up because we are unable to get access to natural gas.

The trucking option, from either the North Slope or Cook Inlet, along with an expanded distribution system, should be the first step.

This proposed utility offers a chance to take competing ideas, modify them and get something done, ending the stalemate of recent years in which conflicting notions cancel each other out.

The incredible rise in crude oil prices during the past seven years has swollen the state treasury and made it much harder for many people to survive in Fairbanks. The situation is urgent.

This municipal utility plan is not perfect and it is not a cure-all for Fairbanks. 

But it is not a crackpot scheme designed to separate people from their money or create a ruinous energy picture for Fairbanks.

We already have that.

Dermot Cole can be reached at cole@newsminer.com or 459-7530.

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