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Cooperation necessary to attain natural gas goal

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Posted: Sunday, June 15, 2014 12:10 am

Fairbanks  Daily News-Miner community perspective:

If you are a small business owner, homeowner, renter or retiree in the Fairbanks North Star Borough, you are no doubt already aware the No. 1 issue impacting our community is energy costs. To address this problem, the Interior Energy Project is advancing to access North Slope natural gas, which will produce energy benefits for decades to come.

This enormous undertaking was initiated by Gov. Sean Parnell and the Legislature. Together, the Alaska Industrial Development and Export Authority (AIDEA), Alaska Energy Authority (AEA), MWH Global and three local utilities are working to reduce Interior energy costs and provide a long-term supply of natural gas.

As a life-long resident of the Fairbanks/North Pole area, I am excited the Interior will have greater access to natural gas, allowing residents to benefit from a lower-cost and cleaner-burning energy supply. I am eager to become a natural gas customer, knowing this will help bring the resource to my neighborhood. This requires our local utilities to negotiate liquefied natural gas (LNG) purchase agreements that will lower our yearly electric and heating costs.

AIDEA has approved low-cost financing for expanded natural gas storage in Fairbanks. This Fairbanks Natural Gas (FNG) facility will be able to receive LNG from the North Slope for the first time in Alaska’s history.

Once the expanded storage is put into use, FNG can apply for reimbursement of a significant portion of the construction cost. This combination of low-cost financing and state reimbursement will help consumers by lowering the cost of natural gas delivery.

AIDEA anticipates similar discussions with the Interior Gas Utility (IGU) and Golden Valley Electric Association (GVEA) on storage facilities in North Pole, once again marking a historic step toward delivering natural gas to Interior residents.

Two financing packages were recently approved by AIDEA: One is for FNG’s distribution expansion and the other for IGU’s design and engineering of its initial distribution system.

Right now, Fairbanks residents can see FNG extending pipe along Chena Small Tracts Rd. and other areas.

North Pole residents had a recent opportunity to attend an IGU open house to discuss the project, and may see surveying and right-of-way work in their neighborhoods this summer and fall.

This work is a tangible evidence of AIDEA’s efforts on behalf of Interior residents.

Those wanting to convert to natural gas may be able to use the Alaska Housing Finance Authority Home Energy Rebate to help with conversion costs. I understand conversion of my home will not be inexpensive. While the final cost of the gas is still being determined, initial estimates by AEA lead me to believe I will recapture my investment in about five years.

MWH Global is aggressively moving forward to refine project development costs for the North Slope LNG plant. This cost information will be available to IGU, FNG, and GVEA next month.

This will be a pivotal moment when the success of the Interior Energy Project will hinge on the utilities executing long-term gas purchase contracts. AIDEA has done all it can to keep the project on track; however, the North Slope LNG plant must have customers to be constructed.

By creating as much initial demand as possible, we can secure lower-cost, clean-burning natural gas for a larger number of Interior residents. Now is the time for the community to step forward. AIDEA’s work must be met by commitments from Interior utilities.

The Interior Energy Project will prepare our communities for a large-diameter natural gas pipeline, while creating a stronger economy today through more affordable energy.

Gene Therriault is the deputy director for policy and outreach at the Alaska Energy Authority. A lifelong Interior resident, he lives in Fairbanks.

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