FAIRBANKS — Amid legislative talks on a trucking plan to bring North Slope gas to the Interior, state officials stopped in the Fairbanks area Wednesday to offer details about the proposal.
The legislation, Senate Bill 23, was introduced by Gov. Sean Parnell to kick-start the process of trucking gas to the Interior, which still is reliant on expensive fuel oil. The legislation would allow the Alaska Industrial Development and Export Authority to provide financing and issue bonds for the $425 million gas delivery system.
State officials have been refining their plan and holding public meetings to tout the bill. Although the gas trucking concept is generally supported in the Interior, lawmakers from other regions are less convinced that it will provide a statewide benefit.
“We see momentum, but the urgency to get gas into the Interior is in the next few years, not in a decade,” said Commissioner Susan Bell of the Alaska Department of Commerce, Community and Economic Development.
The plan calls initially for delivery of 9 billion cubic feet of gas per year to the Interior, using a private fleet of trucks to move liquefied natural gas from the North Slope. Bell and Alaska Energy Authority Deputy Director Gene Therriault discussed the plan at a morning briefing at Fairbanks Economic Development Corp., followed by afternoon meetings in North Pole and Fairbanks.
Start-up costs would be roughly $425 million, including a $50 million contribution from the state that would go toward reducing gas prices. The plan also calls for another $275 million in state bonds and low-interest loans, along with contributions by private stakeholders in the plan.
Therriault said the result would roughly cut home heating prices in half for local residents, based on the most recent cost estimates for the project. The system could be ready as early as 2015.
He said a key challenge has been to convince legislators that the trucking plan will complement a pair of other potential energy projects, which are both at least a decade away from emerging.
The proposed Susitna hydroelectric dam, which has gained momentum in recent years, won’t be able to generate electricity at a cost that would make it economical for heating, he said. Therriault said even if free electricity were delivered to GVEA, its administrative and maintenance costs would make it uneconomical to heat with electric power.
Therriault said the trucking plan will boost the chances of a gas pipeline, since it will lead to an expansion of gas infrastructure in the Interior.
“Trucking gas actually allows this community to build that capacity for a pipeline,” he said.
Fairbanks North Star Borough Mayor Luke Hopkins said he doesn’t consider the gas trucking plan to be Fairbanks-centric, but said the borough provides an “anchor tenant” that the project needs to move forward.
Hopkins said the promise of gas to Fairbanks also likely would appease the Environmental Protection Agency, which has threatened to penalize the area for persistent air-quality violations.
He said it’s crucial lawmakers move ahead to fund the plan.
“It won’t happen without it, without the state moving forward to address our energy needs,” Hopkins said. “This is the project that gets here first.”
Contact staff writer Jeff Richardson at 459-7518. Follow him on Twitter: @FDNMbusiness.