$15 gas could still be a possibility. With the announcement of plans to buy Fairbanks Natural Gas, Gov. Bill Walker has told Fairbanks-area utilities the $52.5 million purchase of the distributor’s parent company Pentex could deliver gas to the them at $10 per thousand cubic feet of natural gas. With distribution costs, that could put gas prices in the range community leaders say Fairbanks needs.
“In the roughest of estimates ($10) is a city gate goal; assuming a $5 storage and distribution cost, this number will result in a $15 burner-tip price to consumers,” said Grace Jang, the spokeswoman for Walker. “That is, and has been, the goal of the Interior Energy Project.”
Hitting $15 has been the goal since the inception of the gas trucking project, but it increased toward the $20 mark as the state explored getting gas from the North Slope. The public-private partnership to build the necessary infrastructure outpaced initial estimates and slipped past initial deadlines.
Natural gas at $15 per thousand cubic feet is roughly equivalent to heating oil at $2 per gallon. A Fairbanks North Star Borough study also found $15 gas compared favorably to heating with wood. “That’s a pretty darn good deal,” said borough Mayor Luke Hopkins, who said he hadn’t been told directly about the governor’s goals. “Great, this is a huge first step.”
In a news conference on Friday, House Majority members were critical of the deal, saying that using the Alaska Industrial Development and Export Authority as the vehicle to purchase the company was improper. “We always have to be cautious about state overreach,” said Anchorage Republican Rep. Mike Hawker. “We have to be very cautious of the state government getting in the way of the private sector with regards to the Fairbanks utilities. … This is not the role established for AIDEA.”
Walker responded to the accusation of state overreach in an Anchorage news conference later in the day. “We don’t believe we’re in any sort of overreach situation,” he said. “It’s time that somebody reaches out to Fairbanks, and that’s what we’re doing. Any reaching we’re doing is reaching out to the Interior energy consumers to bring some relief to them.”
Via newsminer.com
image credit interiorgas.com
