Wednesday, November 30, 2011

Why Gas Could Top $9 Per Gallon In Nome, Alaska, And Why Lt. Gov. Mead Treadwell Is Hollering For More Icebreakers

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Even though Nome, Alaska is not on the road system, the price of gas is not that much higher than in Anchorage. Presently, gas sells for up to $5.98 per gallon. Part of the reason is that a population of 3,500 is sufficient to keep prices from jumping off the chart. But the price of gas could end up topping $9.00 per gallon as the winter wears on. That's because the only way gas can be delivered to Nome right now is by air -- a much more expensive form of transport.

How did this happen? Not because of lack of preparation. Back in May 2011, Sitnasuak Native Corporation, which provides services to the area, arranged with petroleum distributor Delta Western Inc. to have three barges deliver fuel to Nome. But only one barge arrived early in the summer, and it carried home heating fuel. So Nome can heat their homes all winter. But the huge extratropical storm that hammered western Alaska in mid-November prevented the arrival of a second barge carrying 1.6-million gallons of gasoline and diesel. And now the waters surrounding Nome are iced up, preventing any barge traffic.

Delta Western hasn't washed their hands of Nome, though. They've canvassed the nation looking for ice breakers and ice-class tugs and barges to get fuel to Nome, but so far have had no success. Failing that, the plan is to have fuel delivered 4,000 to 6,000 gallons at a time by prop plane or jet, beginning before the end of the year, for an overall total of perhaps a half-million gallons before spring breakup permits the resumption of barge traffic.

There is one other way increased fuel costs might not be passed on to consumers in Nome. It's possible that costs related to the canceled barge shipment could be rolled into a state disaster declaration, according to Scott Ruby, director of the state Division of Community and Regional Affairs. Gov. Sean Parnell's Disaster Policy Cabinet will meet to consider whether damage from the mid-November storm across a wide swath of western Alaska warrants a disaster declaration from the state. The cabinet will advise the governor, who makes the final call, according to Ruby.

But this is why Lt. Gov. Mead Treadwell is now hollering for more icebreakers. On December 1st, Treadwell is scheduled to testify at a hearing of the House Subcommittee on Coast Guard and Maritime Transportation chaired by Rep. Frank LoBiondo (R-NJ). Read the 10-page background memo HERE. Treadwell will testify as to how climate change is opening up Arctic waters to more surface transportation, creating a greater need for the country to maintain its presence in the region with polar icebreakers. The Coast Guard currently has one functioning icebreaker, the Healy, which is a medium-duty vessel. The country's two heavy icebreakers, the Polar Star and the Polar Sea, remain docked in their homeport of Seattle; the Polar Star is going through $57 million in upgrades and won't be ready for duty in 2013. In contrast, Russia has announced it will build nine new icebreakers, and even China is planning to get in on the act. At least 18 vessels made trans-Arctic voyages last year, and the United States is not prepared if there's a wreck. It is anticipated that a new icebreaker could cost up to $750 million, but Treadwell envisions that shippers could help pay for the cost of icebreaking operations.

Update December 1st: Lt. Gov Treadwell did testify before the committee today, and the 11-page written transcript of his testimony is available HERE.

Of course, with such a lengthy Arctic coastline, Russia needs more icebreakers than we do. But if we're to compete effectively for our share of the Arctic pie, we need at least three icebreakers, so if necessary, one can be detached to support our stations in the Antarctic as well (McMurdo Station, for example). An icebreaker assigned full time to Alaska could break a path through the ice to allow a barge to land fuel in Nome, and could allow LNG to be shipped directly from the North Slope by tanker rather than a pipeline.

You can take a virtual tour of the Coast Guard's heavy icebreaker for the Great Lakes, the USCGC Mackinaw, HERE.

Mead Treadwell's Putin-style ethics have come under question at times. He not only misled the Conservative Patriots Group into temporarily awarding him their endorsement in 2010, but has been chastised by Gov. Sean Parnell for overstepping his bounds, and is currently battling an APOC complaint. But Lt. Gov. Treadwell seems to have a broader, more expansive economic vision than most people in Alaska state government. Treadwell believes our state should be more than a Fortress Alaska where we spend all our time dancing with wolves and teddy bears. Icebreakers aren't merely economic stimulus; they're important to national security as well. Those who believe government shouldn't compromise on infrastructure should be supporting the icebreaker issue as well.

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