Alaska grapples with rural energy puzzle

By Rose Ragsdale

Alaska-Washington Connection

Alaska has enormous quantities of untapped or under-utilized energy resources, including some of the highest concentrations of fossil and renewable energy resources on earth. In addition to vast oil and natural gas resources, primarily located on the North Slope and in Cook Inlet, the state has proven coal reserves that rank as the fourth-largest fossil energy resource in the world. Nature also bestowed significant undeveloped geothermal resources in the volcanic art of the Aleutian Islands, abundant untapped hydropower, wind, and biomass resources, and the majority of the tidal and wave power potential in the United States.

Yet rural communities throughout Alaska are chronically burdened with economy-stifling high energy costs. When oil prices spiked to $144 per barrel in July 2008 before plummeting to under $50 per barrel by December 2008, many Alaska villages where winter fuel must be purchased before fall freeze-up suffered a severe shock and extraordinary economic hardship. For those communities, there was no potential relief until the following spring.

While no year since has been as bad, Rex Wilhelm, president and CEO of Alaska Commercial Co., said his company, which owns and operates grocery and general merchandise stores in at 27 rural Alaska communities, keeps a close watch on oil prices.

“We’re very conscious of the price of oil and the dependence on it in our markets,” Wilhelm said. “We purchase fuel from the local vendor like everyone else.”

Alaska Commercial Co. also pays fuel surcharge on the goods shipped to its stores when oil prices are high. “We’ve had some relief in recent weeks, but with oil at $90 per barrel, it’s still very high on the freight rates,” Wilhelm said. High energy prices affect everything in rural Alaska, he added.

Read the full story at Petroleum News