"Why, in the midst of plenty, do Alaska's rural communities pay the highest energy prices in the nation?" This is the question asked by the Commonwealth North coalition established to identify solutions to the challenge of energy in remote Alaskan communities.
Today the economies of urban Alaska are in great peril while rural Alaskans face truly daunting obstacles. Small communities with minimal infrastructure rely on petroleum fuels for electricity, heat and transportation. Rural residents spend as much as half of their annual income on energy.
Ironically, Alaska's wealth emanates almost exclusively from rural Alaska -- crude oil, mining and commercial fisheries being the mainstays. Trillions of cubic feet of natural gas lie untapped in the north, yet extracting and processing our natural resources is severely hampered by the lack of affordable energy. Our resources are sent elsewhere for processing and refining, which could be done here in Alaska, creating thousands of well-compensated jobs.
Nowhere else in the country must small communities generate their own electricity. A population of 700,000 should require one or two power plants to supply all its energy needs -- both electricity and heat. Yet in Alaska we have more than 200 power plants. And rural Alaskans are paying, on average, 50 cents a kilowatt-hour and $6 per gallon for diesel fuel.
It's time we put our own resources to use for all Alaskans. We must develop power plants on the North Slope, where there is plenty of gas to meet Alaskans' needs and for future export. We must build high voltage transmission to deliver that power to the Fairbanks area, to Southcentral and to Northern, Western and Interior Alaska. Electricity from clean-burning natural gas can provide reasonably priced energy for lights, heat, resource extraction, value-added processing and everything else needed to restore our state's wealth and vibrancy.
Affordable energy will break the stranglehold of petroleum fuels in rural Alaska and eliminate the cost of importing gas for urban Alaska. We could save billions being spent on energy today and reduce Alaska's greenhouse gas emissions more than any mega renewable energy project could.
The All Alaska Energy Project team proposes to build large-scale, gas-fired generation on the North Slope and High Voltage Direct Current transmission lines spanning key areas of the state, bringing low-cost electricity to community and industrial hubs.
Simultaneously, regional grids will be developed to aggregate community electrical loads for connection to the larger grid as it is built. The projected cost of the electricity delivered is expected to be significantly lower (less than half) the equivalent cost of diesel fuel or imported LNG, even given the high efficiency of today's smaller-scale generation and heating systems.
The cost of energy for large industrial projects such as the Ambler mining district, the proposed Livengood mines, Fort Knox, Nome, Donlin Creek and others is currently the "make or break" cost issue. Electricity could be delivered to most of these locations for around ten cents a kilowatt-hour.
Alaska's energy costs make us uncompetitive in resource extraction, refining and in processing products such as fish. Those costs also contribute to crippling social issues as families and businesses struggle to survive in areas denuded of economic opportunity because of unaffordable energy.
None of the major proposed energy projects or programs currently being reviewed by the state address the cost and availability of energy statewide. This project does. It proposes a cost-competitive system and well-tested technology. The All Alaska Energy Project would deliver more energy to more Alaskans in less time and at a lower cost than any proposal to date. And it does not hinge on the state spending billions to build the project. It makes such good economic and practical sense that private financing is available to underwrite most of the costs. But it does require the state to embrace this project as a significant component of Alaska's energy future.
It's time to free Alaskans from the tyranny of expensive energy. In conjunction with utility upgrades already under way or proposed, this project would catapult Alaska into a sustainable, prosperous future.
Meera Kohler is president and CEO of the Alaska Village Electric Cooperative.