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Momentum builds for Fairbanks natural gas trucking plan

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Posted: Wednesday, February 20, 2013 12:03 am

JUNEAU — After sitting in committees for most of the session, momentum is building in Juneau for Fairbanks’ natural gas trucking plan, legislation critical to lowering the Interior’s heating and electricity bills.

The Senate Labor and Commerce Committee held its most thorough hearing on the bill Tuesday, where it took public testimony on the proposed $355 million mostly loan funding plan. Another meeting is planned for Thursday.

The bill is the top priority for the Interior delegation, as well as many community leaders and local elected officials. Gov. Sean Parnell has his name on the legislation and referenced it during his annual State of the State address.

The bill has been met with some skepticism from rural and Southeast lawmakers who have yet to be convinced the spending offers their districts any benefit.

Part of that case was made Tuesday, through testimony offered by Fairbanks leaders and business people.

North Pole Mayor Bryce Ward said the project not only helps rural areas but will aid in building the Interior’s demand for natural gas, critical if a pipeline is ever to be built.

“When you bring down the cost of energy to Fairbanks, it will have trickle down effect to other communities,” he said. “As this project gets more momentum and as time passes and comes to fruition. I think it’s a smart move and it also helps build up our need for that gas, and we have that distribution network.”

Businessman Mike Young, a member of the community-driven Lowell Group, explained that by lowering the cost of energy to rural communities, one of the longterm goals of the project, the state can save big on appropriations to the Power Cost Equalization Program.

“Every dollar of savings in rural Alaska by gas will an annual offset of savings not having to be paid by the Power Cost Equalization Program,” he said. “The more gas that’s distributed on the Yukon is a net savings to the treasury. ... I think you’ll see that this thing pencils out a lot faster to the community and the state treasury much faster.”

What had been more gruff questioning from non-Fairbanks lawmakers seemed to soften during the meeting as the inner-workings of the plan were explained.

Sen. Bert Stedman, R-Sitka, spent much of the meeting discussing how the goal of cutting energy costs to the equivalent of a half gallon of oil could be applied to the rest of the state.

“I think it would be a great target. ... If, as a policy, we get down to $2.50 oil equivalent around the state, we would make great strides to solve our energy challenges regardless of what the energy source is,” he said. “It’d basically be cutting your heating bill in half, for everybody.”

Contact staff writer Matt Buxton at 459-7544 and follow him on Twitter:

@FDNMpolitics.

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