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Chamber report issues energy wakeup call Business group calls for fiscal, energy strategies to meet short- and long-term needs of Alaska economy, beleaguered residents Rose Ragsdale For Petroleum News
Getting a grip on Alaska’s energy outlook and developing a successful strategy to meet the needs of Alaskans now and in the future is the subject of a new 11-page report published by the Anchorage Chamber of Commerce Nov. 19.
In plain concise language, “Hope is Not a Strategy: Findings and Conclusions about Alaska’s Energy Crisis,” enumerates the wide range of ills and issues facing the state and offers specific recommendations aimed at alleviating increasingly urgent energy-related problems.
Prepared by a special 12-member volunteer task force of Anchorage businesspeople, the report identified the state’s lack of a fiscal plan and a comprehensive energy policy as major concerns.
Moreover, the task force, which was co-chaired by consultant Tony Izzo, formerly of Enstar Natural Gas Co. and Joe Griffith, who formerly headed Chugach Electric Association, noted that energy is a statewide concern that should be approached from a statewide perspective.
“Current energy issues and the future of our state economy are linked. With increasing energy prices across the State of Alaska, the status quo is creating ‘energy refugees,’” the report said. Former Dillingham resident Nels Anderson used the term “energy refugees” in his presentation to the chamber task force in March.
Fiscal plan, energy policy tops priorities The report said Alaska needs a plan to address the huge disparities in the cost of energy and fuel throughout the state, rising costs that are sucking up all of the discretionary income of many Alaska.
“Alaska needs a fiscal plan that prepares us to get beyond the transfer economy — a plan that bridges the gap between present day spending, declining oil royalty revenue and expected surpluses from a gas pipeline. A budget is not a fiscal plan,” the report said.
It noted that the Alaska economy is linked to energy issues and is obligated under terms of the Alaska Constitution to make the most of the state’s energy resources to meet its citizens’ needs.
The task force also complained that Alaska’s regulatory environment is inconsistent and reactive, thus increasing business risks and reducing reliability and consistency.
The chamber report urged state leaders and policymakers to look to BC Hydro for an effective model of how to manage energy resources.
It asked policymakers to view the Cook Inlet natural gas situation without blinders, recognizing that prices are climbing while supply is dwindling and to ensure that the Railbelt grid has sufficient electricity generation and transmission capacity to meet the state’s needs.
“High energy prices and reduced supplies are likely to damage the economy of Southcentral Alaska and have already damaged rural economies. This directly impacts virtually every business in Alaska,” the report said.
In addition, industrial gas usage should be encouraged in Southcentral Alaska to broaden the region’s market for North Slope gas, the task force noted.
Energy czar needed The chamber report also outlined issues that need immediate attention. Among them:
• A Cabinet-level individual, charged with creating a statewide energy policy to manage in-state energy delivery assets, should be appointed and given rein to resolve the energy issues at hand.
• State government must understand the severity of the problem and take appropriate steps to respond to the compelling need for leadership.
• As a business community, the 1,300-company member chamber sees benefits in integrated solutions among the business entities that make up the current electrical power system.
• Engaging the business community in finding mitigating programs to deal with the energy challenge is needed and overdue.
• Consumer education programs explaining the benefits of energy conservation in reducing consumers’ energy bills and increasing the state’s energy efficiency need to be developed, and the public urged to participate.
• Develop regulatory guidance for rate-makers that will encourage energy conservation.
• Alaska possesses substantial renewable energy resources that could be developed using fairly mature technologies, e.g. wind, geothermal, hydro.
• Alternative and renewable energy sources should be studied and thoroughly evaluated both on an economic basis and with respect to the value of diversifying our energy portfolio.
• Power cost equalization should be continued until a better system of meeting the energy needs of rural Alaska is developed.
• The propriety of a statewide propane distribution system must be evaluated such as the demonstration project suggested by Alaska Natural Gas Development Authority.
• The possibility of cost-increasing monopolies that may exist in the supply or logistics of energy delivery in Alaska should be examined.
• Alaska’s university system should be encouraged to develop curricula to train more Alaskans in energy development, production, delivery and management.
• Energy research that will benefit Alaska in the 21st Century should be encouraged and supported.
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