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Outside editorial: Skewed priorities

Posted: April 20, 2012 - 12:03am

This editorial first appeared in the Fairbanks Daily News-Miner:

The twists and turns of legislative attempts to address high energy costs last week probably left many Interior residents shaking their heads in wonder.

On the one hand, the state Senate approved a bill to spend hundreds of millions of dollars on energy cost vouchers across the state, including in many areas where those costs are not particularly high.

Yet the same body, at the time of this writing, had abandoned a proposal to spend $30 million on a natural gas storage system for Interior Alaska because of disagreement about how to deliver the money, whether through a direct appropriation or a tax measure that would amount to the same thing. And a much larger request of $100 million or more, which could have delivered dramatic and lasting energy savings across the region where it’s actually needed, also went nowhere.

These choices are hard to fathom.

Jump-starting a natural gas system would be a real step toward reducing the cost of heating and electricity in the Interior in the long term.

The benefits would begin within a few years, and they would compound indefinitely as more people and businesses switched to gas. It would prepare the community for natural gas if a pipeline is ever built.

The alternative — spending $330 million to $465 million on energy cost vouchers — is far less forward-thinking.

The money would be gone in a year, with nothing done to address the long-term problem of high energy costs. Vouchers perversely reduce the incentive people have to conserve through steps such as switching to cheaper fuels, insulating their homes, using less electricity or taking other steps to address the problem individually. Vouchers also do nothing to reduce business costs, a serious problem illustrated by the recently announced shutdown of a crude refining unit at the Flint Hills refinery in North Pole.

The voucher route is certainly easier. A statewide distribution has appeal for legislators everywhere, even in areas where heating costs are not stressing family and business budgets. Few of their constituents are going to complain too loudly about free money.

Yet putting the state’s money into infrastructure is clearly the better choice, even for Alaska residents who wouldn’t seem to benefit directly — residents of Southcentral Alaska, for example. There is much talk of building either a small-scale or large-scale natural gas pipeline from the North Slope to Southcentral Alaska. More flow will reduce the future cost of each cubic foot of gas delivered to Anchorage and any other community that buys from the line.

So building up the Fairbanks market by creating the infrastructure to use gas here could actually help the majority of state residents.

If there is still time, legislators should extend the horizons of their thinking and do something real to address high energy costs.

A voucher, like a flare on a natural gas well, helps relieve immediate pressure. The better solution is to get that gas to where it’s needed.

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