High fuel prices devastate rural Alaska, leaders tell Senate committee

Alex DeMarban
alex@alaskanewspapers.com

August 29, 2008 at 8:13AM AKST

BETHEL – Sick people are delaying medical care, schools are slashing teaching money and residents are leaving Western Alaska. It’s all because crushing fuel prices have pushed the cost of living to unbearable levels, Alaska Native leaders testified at a U.S. Senate Committee on Indian Affairs field hearing on Thursday. 

In Southwest, people pay $7.25 a gallon for gas in the village of Emmonak, $6.50 a gallon in Chevak and $6.41 a gallon in Marshall, said Myron Naneng, president of the Association of Village Council Presidents, one of the region’s social service providers.

“The rise of oil prices enriches the Alaska treasury but it still cuts the throats of the people living in rural Alaska,” he said.

The committee’s vice chair, Sen. Lisa Murkowski, R-Alaska, organized the field hearing to show colleagues how the national energy crisis is crippling rural Alaska, where gas prices often double the national average.

Murkowski was the only senator on the 15-member committee to make the trip, but Chairman Byron Dorgan, D-N.D., sent staff. Others will get the chance to review testimony from the field hearing, she said.

It was the committee’s first-ever hearing in Bethel, a city of 6,000 that serves as a transportation and medical hub for dozens of smaller Yup’ik villages.

Diesel gasoline is the energy workhorse in the state’s off-road communities, speakers said. It heats homes, powers electric plants and moves planes and barges loaded with merchandise. When it gets more expensive, as it does with every shipment, prices can jump sharply.

Murkowski arrived in Bethel the day before the meeting. She wandered the aisles of high-priced grocery stores – $9.49 for a gallon of milk – stopped at fuel pumps – $5.98 a gallon for gas – and heard story after story from residents struggling to cope.

She learned that power costs in Bethel rose dramatically after the summer fuel shipment pushed diesel-gas prices higher. The electric bill for the main grocery store and its employee housing rose to $103,000 from $65,000 in one month, she said.

Things will get worse as temperatures fall.

“In rural Alaska this winter our families will have to decide between feeding family and keeping warm,” Ron Hoffman, head of a housing authority based in Bethel, said during the hearing.

Speakers said they were grateful for the $1,200 Alaskans will get this fall to help pay for energy, given in part because high oil prices have padded the state budget with billions of dollars. They’re also happy the Legislature offered other help, such as boosting money to weatherize homes and subsidize home electricity costs.

But it’s not enough, they said. 

At a small school district in the village of Akiachak, administrators gutted their educational budget by $800,000 to cover rising expenses, said Mike Williams, school board chair.

The tribally owned regional health care provider will see utility costs jump $1.4 million this year, a 22 percent increase from the previous year, said Gene Peltola, CEO for the Yukon-Kuskokwim Health Corp.

He added that people are putting off medical care because they can’t afford air fare to visit doctors in Bethel. They wait until they have to be flown in – at no cost to them – on an emergency medivac flight.

At a huge gold prospect along the Kuskokwim River, the number of people doing summer work plummeted this year because rising expenses are turning exploration companies away, said Matthew Nicolai, chief executive for the regional Native corporation. 

People are being forced to leave their rural communities for Anchorage where it’s cheaper, said Janie Leask, president and chief executive at First Alaskans Institute, a research group focused on Native issues.

Murkowski also called the meeting to hear solutions.

Leaders in the Southwest region are developing an energy plan, speakers said. As part of it, school districts, nonprofits, village corporations and other groups that buy large amounts of fuel are teaming up to buy fuel in bulk. That should help reduce prices. 

They made other requests, including:

* the state Legislature should expand the rural electricity subsidy to include businesses

* State and federal leaders should do more to jumpstart renewable energy projects

* Congress should increase the energy subsidy for low-income families

They also said the federal government needs to follow through on part of the 2005 energy act to help Natives and American Indians generate electricity on their land, including with wind mills, water turbines and other forms of renewable energy.

Congress authorized $2 billion to pay for that part of the act.

But it was never funded.    

The Bush administration hasn’t included the item in its budget, said Chuck Kleeschulte, Murkowski’s legislative assistant. And an effort to pay for it with a Congressional earmark never made it out of committee. 

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Alex DeMarban can be reached at (907) 348-2444 or (800) 770-9830, xtn. 444.