Thomko Petro Chemical Blog

While Alaska has lots of oil money, residents of many remote villages are living with a cruel irony - they cannot afford to heat their homes because their fuel bills are 2 - 3 times the national average.

U.S. nationwide home heating fuel averages $3.30 a gallon, but averages $4.30 a gallon in Alaska - and in the remote villages the cost is $9 a gallon. Gasoline is now averaging just over $3 a gallon nationally, but averages $4.54 in Alaska, and jumps to $7 a gallon in the remote areas!

The cost of shipping oil to the remote areas of Alaska by plane or barge is steep - despite the state's vast oil wealth. Most of the oil must be shipped as crude to the West Coast to be refined, and then sent back to Alaska.

The state's lawmakers are looking at offering hundreds of dollars in rebates to help remote villages offset their home heating bills - but they only have a short time to address this issue before the legislative session ends - and Hugo Chavez steps in to embarrass them once again.  

It seems in the past Chavez has been far quicker to come to the aid of Alaska's remote village residents. Last year Venezuelan oil company Citgo donated $5 million of free heating oil to poor communities in Alaska.

Arctic Village is one such community where fuel has to be flown in because this remote community is hundreds of miles off the normal roadways, and this village cannot be reached by barge. The residents in these areas depend on fuel to travel by snowmobile, ATV or boat to hunt and fish.

Alaska's state revenue will benefit a surplus of $3 -$4 million this year because of high oil prices, along with a recent hike in oil taxes. But lawmakers are looking at a steady 6% drop in production at the North Slope oil fields.

So it's a choice between giving some of that money as rebates to the poor, or keeping some of the surplus which will help tide the state over until the North Slope project is finished - but that's at least 10 years away.

Tell that to Ed Littlefield, a Vietnam veteran who suffers from diabetes, lives on disability, and looks for wood to chop so he can heat his home. He's gone without fuel for days. He says, " Everybody hates Hugo Chavez, but we thank him for the fuel that lasted about 3-4 months last year".

Republican Bill Thomas represents nearly 50 small communities in the state's southeast panhandle, he suggests a $500 payout to state residents, at a cost of about $360 million that would be paid from the profits of the state's oil wealth savings account - a $38 billion Alaska Permanent Fund.

But fellow lawmakers do not want to touch the earnings fearing Alaskans would perceive it as a raid on the fund that pays them an annual dividend - $1,654 for nearly every man, woman and child last year.

Other lawmakers caution against putting money into assistance programs that will just have to be cut in the leaner years, along with giving the perception of Alaska as a free loader state with "cash giveaways" - especially after the infamous "bridge to nowhere" federal earmark.

So while the lawmakers quarrel about what to do, residents may still have to depend on Venezuela this year to help them heat their homes and provide fuel for transportation.

Source: AP