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Report: Natural gas would save Fairbanks millions

Posted: June 24, 2012 - 11:00pm

FAIRBANKS — A state-funded study presented to the Fairbanks North Star Borough assembly says building a natural gas distribution system would save residents and businesses millions of dollars.

The study from Anchorage-based Northern Economics shows natural gas piped to the borough’s densely and moderately populated areas could sharply reduce air pollution and cut home heating bills by as much as $6,300 per year over heating oil, the Fairbanks Daily News-Miner (http://is.gd/5q9EUF ) reported.

The distribution system used in the study would put down pipes directly to 80 percent of the borough’s homes and businesses, from Chena Ridge to Eielson Air Force Base, as well as Fox and parts of Goldstream Valley.

The projected cost of the project is $400 million but could range anywhere from $260 million to $600 million

The study mostly looked ahead to 2021, when the system is expected to be completely built out and 97 percent of homes switched, as well as 100 percent of businesses. Community-wide savings would top $315 million, based on the assumption that heating oil will reach $5.75 per gallon.

Without factoring in the cost for conversions, which average roughly $8,000, the savings compared to heating oil range from $4,500 to $6,300 per year.

But the assumptions used for the report can — and probably will — change, said Patrick Burden, who headed up the study. Natural gas prices might soar, oil could plummet or a wide range of other factors could alter the landscape.

“There will be changes, we know that, but we’ve modeled what we believe is a reasonable project,” he said. “You can modify and adapt the system and the program to meet the challenges in the future.”

A liquefied natural gas trucking project, jointly developed by Golden Valley Electric Association and Flint Hills Inc., is expected to have gas trucked in from the North Slope by 2015, the same year the proposed distribution would be completed in the most densely populated areas. Less densely populated areas would have service by 2017.

Borough Mayor Luke Hopkins said Fairbanks is in dire need of natural gas to improve its economy, and solve heating and air quality problems.

“The only thing that’s going to get here soon enough is trucked gas,” he said. “Trucking gas is the fastest solution. For us here, in our community we need to build out a gas distribution system and get LNG here.”

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