Letter to the Editor
Prices
Published Sunday, June 8, 2008
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Stumble It!June 5, 2008
To the editor:
As the price of gas and heating oil goes up, we are constantly informed by the media of the effects of high fuel prices on the economy, the household pocketbook, food prices, and of course future increases. We are bombarded with data on how it is forcing people to re-evaluate their lifestyle, mode of travel, and future living locations.
No one seems to have a solution. The government is willing to study the problem, have lots of meetings, spend money looking at local housing inefficiencies, but not one thin dime on an energy rebate check for last winters’ bills.
With billions of dollars in extra revenue going into state accounts, isn’t it amazing how the state is responding. With up to 20 percent of locals thinking of moving south by fall, due to high heating bills, how will the local economy fare in 2009?
The best solution I’ve heard of, is as follows: The state should sell our state royalty oil to our locally run in-state refineries at a set price, say $50 a barrel. This would give the state some profits (remember they were happy when the price went from $30 to $50). No products would be sold out of state. Refineries and retail outlets would still make their profits, as they have said profits don’t increase as oil prices increase. The consumer price would be set, never changing, and somewhere under $2 a gallon.
The local economy would spring to life, prices of retail goods would drop, residents would have more undeclared income to spend, home mortgage situations would improve, and the state and local governments wouldn’t have to have any more meetings. Even plane traffic and tourism would improve.
Since many oil producers around the world sell their products for less locally, this isn’t a new idea. It’s simple and easy and logical, and sure to draw major criticism, especially from those who don’t want to share state fortunes. Even so, it’s something to think about.
Community Discussion
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this is actually something that i was curious about. why is it that the price of a barrel is not different in different locations? how does sourdough justify charging as much as they do? do they not get their oil from in-state?
Gary: Right on target! Since the oil belongs to All Alaskans, as we are the Party of the First Part of the Constitution, and the State of Alaska is formed for our benefit. If we choose to make affordable heating oil, gasoline for ourselves, and utilize OUR resource to benefit ALASKANS...who is to say we shouldn't?
This state has got to exercise this right provided for us and further supported by the oil leases verbage. We can take our royalties in the form of resources and secure our state quite well and still have enough to sell for some profit to keep the coffers full.
Hea check out the UAE, they seam to know how to do it right. I just love the new AMERICAN WAY.. GIVE IT TO ME. What ever happened to EARNING it?? We are electing our KINGS by how much the will GIVE us, is that the "gage" we are now using to hire the ones we wont to govern our lives,,, guess we get what we pay for... SHAME
I like it. Not a bad idea. State royalty oil is our money in the bank and should be used to help avert a possible disaster this coming winter. On the surface at least, it seems it should prevent a mass exodus from Alaska while still avoiding the pratfalls of socialism. And preventing a mass exodus from the state is probably more important right now than building new schools or fixing roads.
I don't think that it will make things quite as rosey as Gary thinks, however. Commodity inflation is a global problem, the U.S. dollar continues to falter, and the credit crisis still has a long way to go. America is likely in for a barn-burner of a recession and given the federal economic/environmental paternalism of a possible McCain/Obama Administration; the national economy will likely sink to something even worse.
Same goes for supporting in-state farmers. Let's develop our own oil and products instate. Thus reducing shipping and fuel costs. It's time we supported ourselves first. We have enough of our own resources to eliminate alot of the middle man.
This is an excellent idea, but would require a co-op or state owned refinery to implement. Such a scenrio would enable the State of Alaska to fulfill its constitutional obligation to provide for the USE of our natural resources. At todays oil prices the Flint Hills refinery is writing a check to the State for almost $200,000,000.00 every month for the purchase of our royalty oil at West Coast price minus shipping costs.
Flint Hills then pulls the lighter gas and diesel out of the crude and sell it to us at the highest cost in the nation. The price at the pump may be close to the US average at times, but most people forget that Alaska has the lowest fuel tax in the US, .13 cents less than the US average.
We are going to need to start thinking outside the box to find energy solutions if we are going to maintain modern communities in Alaska. Last week the average price for heating oil was $4.55 a gallon. Since then the price of crude has jumped up almost another 10%!
Heating oil and fuel for electric generation is less than 15% of Flint Hills production. A state owned refinery could sell these products at or below cost and still be profitable on jet fuel sales to the airports and military. Fairbanks is also centrally located as a hub to Alaska's bush communities. By shifting the State's current power cost equalization program from end user to supplier we could save hundreds of millions of dollars. This idea should be seriously considered by our governor and legislature.
TunraRebellion, commodity inflation is only a problem if you are a buyer. Alaska is a seller and we are in a better position than ever before in our history. The only problem is that we have a total disconnect between the peoples needs and the state government. The people of Alaska do not need zamboni sharpeners and astro-turf for high school football. The majority of people only want one thing, and that is affordable energy. With a per person budget surplus of over $45,000 this should be very easy to figure out. Hopefully our representatives can pull their heads out of their posterior region and give us some solutions.
TundraRebellion,
I agree we are looking at one heck of a recession (or worse), but you can hardly blame that on an administration that doesn't yet exist. I wonder if Dubbya's administration for the last 8 years had anything to do with our current economic problems? Hmmm....
Do any of you remember the Exxon Valdez oil spill? When that happened everyone was so busy pointing fingers at who was responsible the spill got a lot bigger than it should of. Instead of pointing fingers at whose job it is to do something let's all work together at conserving energy, coming up with alternatives (even if it's multiple solutions). Not one solution is the answer to help everyone. It's going to take a multiple amount of methods. Yes they can run a natural gas line, but it's not going to help everyone. You will still have to revamp your furnace to run off the natural gas. We could also put woodstoves in but it will still cost to buy the stove and have it installed. If we all do just one little thing to help ourselves it will help everyone in the end.
For my family, we have predicted that this coming winter will kill us financially. So, we are currently working overtime, and will install a woodstove in our house this summer. We have to for-go some fun like camping trips, some fishing trips. I have also rediscovered the clothesline, as stated in a different story in the news-miner today. Our fuel boiler is turned off. We have no hot water. We cant afford it.
We haven't had a cookstove in over 2 years now. Propane was costing too much and there is only the two of us anyway. We've gone to using a crockpot or hot plate. We all adjust to our own circumstances and do ok. I try to look at bright side as long as hubby and I have each other the rest of our life is an adventure.
The Wall Street Journal recently had an interesting article on the price of oil:
http://online.wsj.com/article/SB12115008...
The US administration's second Secretary of Treasury John Snow said that the devalued dollar was good as it made our deficits cheaper to pay. The deficit, of course, was created when taxes were cut but spending was increased by such things as Iraq; the administration started with a surplus. A devalued dollar makes exports cheaper in the short run, but always ends in inflation. We saw this in the 70's with Nixon and Fed chairman Arthur Burns; that inflation didn't end until Fed chairman Volker and Reagan.
The problem with using the royalty oil is that it won't solve the problem. Due to anti-trust laws, the refined royalty and non-royalty oil would have to be sold for the same price. The only one who would benefit would be the refinery.
AKhusky, As bad as "Dubya" has made it; I have complete confidence in the next administration as well as the 111th congress to make things even worse. I hope my prognostication will be proven wrong but I don't think it's going to be. Both Obama and McCain are Keynesian to the core.
Has anyone seen a state run veture not fail? As stated royalty oil falls under anti-trust laws, it sounds like a good ides. Communism sounded like a good idea on paper but it failed also.
Ah, but who said they care.The state will make more money without giving it you... by doing nothing.Im thinking "Nothing" is going to win.Its all about money,and these ideas mean less state money.Jeez.
I think you would find if gas sold for $2 per gallon here there would be a huge outcry across the country about how Alaskans were taking unfair advantage of a national resource. Forget about any more federal dollars coming here. Secondly, people would be moving here in droves.
I don't see how it will lower retail prices as we truck in everything we have from states that will have the higher oil prices, plus tourism? They have to drive here and planes have to fly here. Let's not even count those diesel guzzling ships. We still depend too much on lower 48 prices to even get a small break.
One last thought, do you people even read what you write before you send it? C'mon, learn to spell.
As a kid in Fairbanks in the 60's the smell of a wood fire was a familiar as bread may be to people from other places. I was shocked in a recent discussion when I was reminded that the city determined that burning wood in the city was no longer acceptable.
This is an example of a small percentage of the population making decisions that create undue hardship for a majority of the population. Look at any election and see how our futures are dictated by special interest groups that vote in force to change a way of life to conform to what they want.
Sorry to get off the track but the as a kid stocking the stove at night with a few pieces of wood with the help of a stack robber heated our home. Seems like we would be looking to all sources of heat to reduce costs instead of making the use of a readily available resource prohibitted.
"Due to anti-trust laws, the refined royalty and non-royalty oil would have to be sold for the same price."
Is it just me, or does it seem strange to anyone else that our state government is prevented from utilizing our common resource for the good of the people by "anti-trust"???
"...taking unfair advantage of a national resource"
The federal government has its own oil reserves held in the national interest; the only resources being discussed here are wholly owned by the people of Alaska, and as such we have legal control over them. Our problem is the fact that our laws have won a blue ribbon for red tape. Govenor Palin can cut through this with a declaration of an energy emergency; the question is, will she?
"Our fuel boiler is turned off. We have no hot water"
"We haven't had a cookstove in over 2 years now"
Is this what our lives are coming to? Peasants subservient to king oil? Does anyone besides me see a behind-the-scenes plot coming to fruitition?
I have posted the idea leading to $2/gallon fuel to at least 6 DNM articles, and am glad it is finally being recognized as a true solution; there are hurdles to overcome, sure, but the alternatives of economic disaster for the interior and a mass migration south are simply unacceptable.
ITS OUR OIL!
We try to save everyway we can...we have a woodstove for winter and cut our own wood, but we still use 60 to 65 gallons a month in oil. with prices now that is about 300.00 a month. that takes every penny we have to pay. there is no room for brake downs for us. the state needs to come up with a way to help all of us, long before winter!!
The sad truth is the government nor the politicians are gonna do anything about the high price of fuels they dont care it is making them way to much money to help the people. Yeah i hear its our oil but whos reaping the benefits of the money the state and big oil and who ever they buy and it sure aint me but for a price i will campaign for any one of the big oil companies. Fact is the price will not go down people will not be able to buy heating oil and freeze and the great politicians wont and will never care as long as they get to sit on all the money they will be happy. They wont do nothing but by god they keep telling us to use less i am useing as about as little as i can and it aint helping so stuff that idea. Why dont you sell us oil for fifty bucks a barrel how about that oh that wont work that would help alaksans and god knows our politicians wouldnt want to do that
Well, you all know that would not happen even all the politicans in the world will not stop shipping our oil out of the USA>>>>>> And while we are on subject we the USA still help all those countries that hate our guts because it is the AMERICAN WAY....... I do think that AMERICAN needs to WAKE UP.
Well, you all know that would not happen even all the politicans in the world will not stop shipping our oil out of the USA>>>>>> And while we are on subject we the USA still help all those countries that hate our guts because it is the AMERICAN WAY....... I do think that AMERICAs needs to WAKE UP.
1959jemsdad
Keep in mind that Fairbanks and North Pole were a wee bit smaller in the 60's than it is now (population wise). If everybody starts burning wood for heat city wide, it will look like a nuclear summer outside all winter. Its already going to be crazy with all the folks installing wood stoves this summmer in North Pole. The way we sit in this valley, air quality is gonna be pretty bad this coming winter as it is. But with the ridiculous price of heating oil as of now (and probably even worse come October) people have no choice, and will gladly compromise breathing somewhat clean air as opposed to paying $4.51 a gallon for delivered heating oil! On a side note I found out today that another friend was bailing out before winter hits, his comment to me verbatum was............"I cant afford another winter here!". That makes 3 friends and families in less than 6 months!
Everyone is already planning on burning wood and coal this winter. The poll results so far at fairbanksgas.com show over 80% are planning on burning wood next winter. I've got my 10 cords put away and don't have to worry that heating oil is now $4.62 a gallon. Luckily my wood boiler is wires as primary over my oil stove and the borough is not going to stop me from burning wood unless they pay my fuel bill.
Maybe someone who knows more can answer my question: How does Anchorage get the natural gas at such a low price and we can't get royalty oil at the same low price due to anti-trust laws? and how much natural gas out of the Cook Inlet area is being exported to Japan? Heard on Problem Corner that a new contract was just signed and the caller said Alaska receives no royalties on this exported gas. Why was the contract to export the gas renewed instead of liquefying the extra natural gas and sending it by rail to the Interior to alleviate our high heating costs?
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