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Fairbanks Daily-Miner - Parnell Says Gas is Interior Alaska's Future

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By Matt Buxton

Gov. Sean Parnell said the state is willing to put more money behind a liquid natural gas trucking project for Fairbanks if local utilities can come into agreement on a broad project.

During a speech at the Greater Fairbanks Chamber of Commerce's luncheon on Wednesday, Parnell said he sees promise in a private liquid natural gas trucking project being developed by Golden Valley Electric Association and Flint Hills Inc, but encouraged Fairbanks Natural Gas to join the project.

"Fairbanks' future involves natural gas, there's no question about it. The state has anted up close to $7 million to that solution." he said. "What needs to happen now is the companies here -- GVEA, Fairbanks Natural Gas -- need to come together on a plan to take advantage of what the state is willing to come forward with, because we are willing to step forward on infrastructure."

During the most recent legislative session, the state gave GVEA $3.5 million for part of its engineering costs and gave the Fairbanks North Star Borough $3 million to further pursue a natural gas distribution system for home heating.

In addition to the direct appropriations, the legislature also passed a bill that Parnell signed at the luncheon that authorizes tax credits for the above-ground natural gas storage facilities needed for the project.

Parnell said he's willing to support additional funding to push the project along, including a low-interest loan to help pay for the expensive liquefaction plant on the North Slope if the three companies can come into alignment on a single project. That single project, presumably, would offer the best benefit for Interior residents.

"I need you to contact these three companies to get together for a solution," he said. "I'm going to ask you to do that right now."

The three companies had been in talks during the legislative session, aiming for a large appropriation for the project, but that fell apart during the 90-day session.

Fairbanks Natural Gas CEO Dan Britton said conversations on alignment have been limited, but FNG is willing to work to find a solution that would deliver affordable energy for home heating. He said there are lingering concerns about the shape the project is taking and whether it will be able to deliver affordable gas for home heating.

"Fairbanks Natural Gas is willing to be a party to the project, and we have had limited conversations about it," he said. "But that project is designed to benefit GVEA and Flint Hills, not to provide savings to the space heating market."

He said he is willing to hold more talks this summer. GVEA CEO Brian Newton agreed that there's still work to be done on that front.

And while much of Parnell's speech and recent action in the legislature have given hope that longterm energy relief is in the works for the Interior, many people asked what is in the works for relief in what North Pole Mayor Doug Isaacson called the "now term."

On that, Parnell had less to say. Parnell suggested more people take advantage of the Alaska Housing Finance Corp.'s weatherization program, which offers reimbursement for home energy improvements. He said only about 20 percent of the eligible homes in the Interior have taken advantage of the program, which he said can save thousands on yearly bills.

However, he said more drastic changes, such as shifting the state's policy on the expensive royalty oil used by Flint Hills, are out of his reach, a statement that drew clear dissatisfaction from the audience. But despite that, Parnell said he will work with legislators this summer to come up with whatever assistance is within his power.

"I'll bring to bear whatever constitutional authority I have to lower energy costs," he said. "Am I authorized to write you a check in January? No, I'm not. But I'm authorized to make sure this money gets spent, that it gets spent well, and that these companies come together around providing affordable, trackable gas to this community."

Read more: Fairbanks Daily News-Miner - Parnell says gas is Interior Alaska's future


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