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As regs stifle Healy coal plant, Fairbanks hammered by unaffordable energy

Doug Reynolds
Photo courtesy U.S. Department of Energy

The Healy Clean Coal Plant (HCCP) was a noble experiment.  It was bold in that it expanded our nation’s potential power technologies. The experiment was built, tests were run, and knowledge increased.  Good.  

The problem is that the experiment was shut down in 2000 because no one was willing to pay the high costs to operate the plant — not the Environmental Protection Agency (EPA); not the Department of Energy; not the Alaska Industrial Development and Export Authority (AIDEA), who owned it; and not the Golden Valley Electric Association (GVEA).  So at that point, the involved governments, agencies, and commercial players should have quickly resolved their differences to get the asset online again.  

Unfortunately, it took 12 years to reach an agreement.  If we’d had it 12 years ago, not considering the inevitable retrofitting costs that we would have anyway, the aggregate savings to GVEA members would now amount to roughly $400 million considering all the oil-fired power we paid for. So what did we get for our lost $400 million?  

Forced to wood boilers 

Well, the AIDEA board of directors, most of whom live in Anchorage (where heat and electricity are cheap), spent those years arguing they could save the world by running the Healy plant as originally intended with negligible pollution, even if it cost Interior Alaskans more money.  However, the 12 years of expensive electricity actually prompted many Interior residents to turn to wood boilers for heat and hot water — expelling more particulates than in prior years.      

Now we come to the EPA, made up of Lower 48ers with even cheaper space heat and electricity.  Why didn’t they come to agreement sooner?  Coal power plants are in decline nationwide, so why worry about a single, small, new, clean plant in Alaska? The amount of emissions in aggregate in Alaska with a small population and minimal manufacturing is truly miniscule. Nevertheless, the EPA wanted the old existing plant in Healy made cleaner -- even though it was already permitted -- and it wanted the revised Healy Clean Coal Plant to be made cleaner. The EPA dictates went overboard.  

What the EPA needs to do is analyze the unique energy and economic environment of the Interior and help work out plans appropriate here, instead of just hammering us with their Lower 48 cookie-cutter solutions.  Is it too much to ask that that their experts come visit us for a day and see people’s heating and electric bills?  

What energy crisis? 

If you live in Washington, D.C. and have a nice condo in Florida (which you can fly to for less than it costs for me and other Fairbanksans to fly to Anchorage), and have cheap electric power from natural gas, you might wonder why we are suffering up here. I talked to someone like that at a convention and he was remarkably insistent that you can't pollute Denali National Park. I didn’t bother to tell him how much I pay for electricity. You cannot convince a Lower 48er that we are in an energy crisis.  

Nevertheless, why all the fuss about this plant?

It could just be that all these government representatives are just doing their job.  Or it could be that since Fairbanks is in such an incredible energy crisis, and is such a small economy, that outsiders see us as a kind of easy line in the sand where they can run expensive experiments related to everyone else’s pollution and energy issues and where we won’t mind the costs since we already pay so much for energy anyway.  Fairbanks presents experimenters with high energy costs and severe pollution problems from which to try new, unproven energy solutions. The thing is, the Lower-48 and Anchorage types don’t seem to mind playing line-in-the-sand games with other people’s money.  

What really needs to happen is that those outside of the Interior who regulate our energy matters must be willing to comprehend our unique cost vs. pollution trade-offs, this time giving a little more emphasis to the economic side of things. Decision makers in Anchorage already cost us $400 million, why not pay us back by having Alaska’s many energy-related agencies fund clean-coal heating pilot projects for Fairbanks residences or help to quickly permit and provide state land and state royalty gas to develop a small, 10-inch natural gas pipeline to Fairbanks.  

I suppose the next thing you will be telling me is that we will be made hostage to an Anchorage natural gas bullet line rather than being allowed to use more coal or create a small-bore natural gas line to Fairbanks right now.  

Doug Reynolds is a professor of oil and energy economics at the University of Alaska-Fairbanks, and is the author of the book, “Energy Civilization: The Zenith of Man.”  Dr. Reynolds heats his home with a coal boiler and can be contacted at DBReynolds(at)alaska.edu. His commentary first appeared in the Fairbanks Daily News-Miner.

The views expressed here are the writer's own and are not necessarily endorsed by Alaska Dispatch. Alaska Dispatch welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary(at)alaskadispatch.com