Third refinery may be built in North Pole

Arctic Energy plant would employ 18 people

Posted: Monday, August 07, 2000

FAIRBANKS -- North Pole, near Fairbanks, may get a third refinery.

Arctic Energy is proposing construction of an oil refinery adjacent to the existing Williams Alaska Petroleum refinery.

Jim Dieringer, who owns Arctic Energy, received a conditional use permit from the Fairbanks North Star Borough's Department of Community Planning to locate the refinery on a 33-acre lot.

``The time frame always changes,'' Dieringer said, ``but we plan to do some preliminary site work this month with the foundation going in this fall and erection (of the facility) in March.''

Dieringer has no prior refinery experience, though he did try to open a refinery in Fox in the mid-1980s. That effort was stymied by a litany of problems he is confident will not dog his latest attempt.

``We just had a number of obstacles,'' he said. ``This time all the pieces are together to make it happen.''

Dieringer expects his refinery will employ 18 people. He plans to sell the oil and fuel they produce to the wholesale market.

Dieringer declined to disclose details of financing for the project due to ongoing negotiations.

The plan has the blessing of North Pole Mayor Jeff Jacobso.

``It will provide for more jobs, a tax revenue base, and it will continue to establish North Pole as the Interior's oil refinery center,'' he said.

Doug Sims, a planner with the borough department, said the area is zoned heavy industrial. He said there was no public testimony opposing the request.

``Given that two existing refineries are already there, a third one was acceptable for that area,'' he said.

Arctic Energy will get its oil supply via the Golden Valley Electric Association's pipeline feed from the trans-Alaska oil pipeline, Dieringer said.

Curtis Thomas, Fairbanks spokesman for Alyeska Pipeline Service Co., said Alyeska was not aware of Arctic Energy's plans. Despite that, he said the oil consortium would not deny Arctic Energy's request to tap into the line.

Officials with two neighboring oil refineries have taken a wait-and-see approach to their potential neighbor.

Mark Reischke, refinery manager with Petro Star Inc., said he was aware of Arctic Energy's plan. But he said the conditional user permit was just the first in a long and difficult process of permits and state approvals Dieringer must obtain before any product hits the market.

``It's going to be an uphill battle for them,'' he said. ``But we wish them luck.''

Petro Star, the region's second-largest refinery, has been refining oil in North Pole since 1985. The company produces 1.3 million barrels of refined product a year, half of it heating oil and half of it jet fuel.

Jeff Cook, spokesman for Williams Alaska Petroleum, echoed Reischke's sentiments. He welcomed the possibility of a new neighbor. ``They've been around for a long time, and we are watching the process,'' he said.

Williams Alaska North Pole refinery has been in operation since 1977 and produces about 63,000 barrels daily of jet, gasoline and diesel fuels in addition to asphalt and specialty turbine fuels.

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