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Senate In-State Energy Committee Moves Forward on Fairbanks Gas Project

JUNEAU – At an early morning hearing, the Alaska Senate Special Committee on In-State Energy today heard an overview from the Alaska Industrial Development and Export Authority, the state’s lead agency for a project to bring North Slope liquefied natural gas to Fairbanks. The state estimates that the $355 million project would reduce the cost of home heating and other energy uses in the Fairbanks area by about 40-percent.

The project would build an LNG plant on the North Slope, with storage tanks there and in the Fairbanks area. The LNG would be trucked south to Fairbanks and, later, to other communities and industrial or mining projects by private trucking companies. The build-out of a local distribution system would accelerate after the trucking project comes on-line.

Senator Click Bishop, R-Fairbanks, and co-chair of the special committee, said it is the committee’s intention to provide a thorough vetting of the project and move it through the legislative process as expeditiously as possible. “This is a crucial project to the people of Fairbanks, who are being eaten alive by the high cost of heating their homes,” Bishop said. “And, as we convert to gas, our air pollution problem will drop off.”

Bishop noted, as an example of the savings that can be achieved, that the Fairbanks School District currently spends $9 million annually to heat its buildings. “A 40-percent reduction could go into other operating costs, such as keeping teachers in classrooms,” Bishop said.

Part of the committee discussion touched on the potential impact of the Susitna-Watana Dam on Fairbanks energy costs. Senator John Coghill, R-North Pole noted, “The Susitna dam will be online by 2025 at the very soonest. Fairbanks needs relief long before that, and gas trucking is the best way to accomplish that.”

Senator Peter Micciche, R-Soldotna, a committee member with a lifetime in the LNG and natural gas industry, said that as the cost of getting energy resources to Alaskans goes down, everyone benefits, regardless of whether or not they actually receive gas at their residence. “The state helped finance natural gas to Homer, which will significantly reduce the cost there of heating public buildings by up to $2 million a year,” he said. “Therefore, every taxpayer in the Kenai Peninsula Borough will benefit.  Those on the electrical grid also benefit from reduced generation costs.  What’s important is identifying the most cost-effective option to distribute natural gas to interior communities that are struggling with the high cost of energy.”

Senator Bishop said the committee will resume discussion of the project in about three weeks.

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