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“$8 GASOLINE IN AMERICA'S SAUDI ARABIA” mentioning the U.S. Dept. of Commerce was published in the Extensions of Remarks section on pages E1336-E1338 on June 19, 2007.
The publication is reproduced in full below:
$8 GASOLINE IN AMERICA'S SAUDI ARABIA
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HON. DON YOUNG
of alaska
in the house of representatives
Tuesday, June 19, 2007
Mr. YOUNG of Alaska. Alaska is America's Energy Ace in the Hole. If our Nation truly wanted to kick our OPEC habit, we would be using our own abundant resources of all kinds, including our conventional resources in Alaska. Not only is Alaska home to North America's largest producing oil field, it is also home to more clean coal than the entire lower 48 States. With modern technology, this resource could be used to produce clean energy and transportation fuels that would last for centuries. The people of the State of Alaska also claim the largest natural gas reserves and by far the largest unconventional natural gas reserves in a form of frozen natural gas known as methane hydrates. It is also home to that small part of ANWR that holds the promise as the largest energy complex yet discovered on our continent. Between its tens of billions of barrels of oil and untold amounts of clean burning natural gas, it could help Americans and generate revenues while providing high paying jobs here at home.
Unfortunately, there has been a decades-long campaign to deny America and Alaskans the benefits of this domestic energy. The consequence is that Alaska's pipeline that once sent over 2 million barrels each day of U.S. oil to American consumers now sends less than 800,000 barrels per day. America now imports the 1.2 million barrels per day that Alaska used to send to the West Coast. America now sends $84 million per day, over $30 billion per year, to foreign nations like Venezuela and nations in the Middle East who hate everything America stands for. The oil that isn't produced in Alaska also increases prices for all Americans, who can see it daily at the pump or monthly in their utility bills.
Recently a reporter for the Wall Street Journal, Mr. Russell Gold, traveled to the village of Shungnak, Alaska, to find out what impacts the increased cost of energy are having on the people who live there. It is rich irony, Madame Speaker, that in a State with huge energy resources people are suffering from high energy prices because their government has outlawed the production of this energy. It is reminiscent of Coleridge's lament in the Rime of the Ancient Mariner:
``Water, water, everywhere, nor any drop to drink.''
It is shameful that it is government policy that some people should suffer from higher costs of energy because others who do not suffer believe costs are not high enough and energy is too available for Americans. I hope Members will take the time to read what may be a story coming to their neighborhoods soon, if Alaska's energy resources continue to be locked away from the American people.
Running on Empty on a Road to Nowhere
(By Russell Gold)
Shungnak, Alaska--When Genevieve Norris was born 59 years ago in this remote Eskimo village, hunters used dog sleds to pursue caribou and moose. Wood stoves kept out the cold during the long, dark winters.
Then Shungnak entered the petroleum age, and fuel was barged up the Kobuk River every summer. Noisy electrical generators arrived, which allowed lights and indoor plumbing to be installed. Soon, nearly every home had snowmobiles, fourwheelers and heaters.
Now as crude-oil prices have doubled in the past couple of years, Ms. Norris and the rest of the village are being priced back out of the petroleum age. She heats her home with wood as much as possible and only occasionally buys gasoline for an outboard engine to go fishing. ``Fuel right now, I'm only purchasing if I have to,'' says Ms. Norris.
Even though Shungnak is in energy-rich Alaska, home to the largest U.S. oilfield discovered in the past half century, it is at the very end of the oil-distribution system. By the time gasoline makes it here from where it is refined, it costs $8.11 a gallon, more than twice the current U.S. average.
The U.S. has long enjoyed among the lowest oil prices in the industrialized world--and until recently, even in remote Alaska, fossil fuel was affordable to the majority of people. Decades of cheap energy prompted Americans to use more and more petroleum, lengthening their commutes in the lower 48 states and trading in dog sleds for snowmobiles in Alaskan villages.
Today, the price of oil and all the products made from it has surged and seem likely to remain high for some time. This has raised the unsettling question: What happens to a community accustomed to cheap energy when the energy is no longer cheap?
Remote villages like Shungnak have long been fragile economies with little to offer residents by way of jobs and opportunity. High fuel prices have made a bad situation worse, threatening the survival of Shungnak as well as more than a hundred other remote villages. Some of the estimated 101,000 people living in these villages have left for Alaska's large cities, creating what one former state elected official has called ``energy refugees.''
These native-Alaskan villages are among countless poorer communities across the world that have been hammered by the new century's energy-price boom. Over all, strong economies such as China and most of the U.S. have held up well despite the sting of higher fuel prices. But in poor regions, the price shock has hit hard. Thousands of Nepalese took to the streets of Katmandu last year, resulting in bloody clashes with police, to protest a 25% rise in gasoline prices. In July 2005, under pressure from the International Monetary Fund, the Yemeni government lifted gasoline subsidies and the resulting riots left 22 people dead. The government buckled and restored subsidies. In Africa, Guinea's decision to reduce gasoline subsidies over the past two years helped spark general strikes and riots that claimed at least 11 lives.
The village of Shungnak was officially founded in 1899, but Eskimos have lived in the region for thousands of years traveling between summer camps and winter camps. Today, the village is a collection of 75 homes, a store, a school, a community health clinic and a city office building along a half dozen dirt streets. The foothills of the Brooks Range rise in the distance over the tundra.
Petroleum didn't arrive here until the middle of the 1960s. As the crow flies, Shungnak is only 310 miles northwest from the Flint Hills Resources refinery outside of Fairbanks, Alaska. But since there are no roads to Shungnak, the journey is a complex route that stretches more than 2,000 miles, passing mountain meadows where grizzly bears graze, caribou herds sipping from glacier-fed streams and mile after mile of rugged, unpopulated coastline.
Tanker Cars
First, fuel from the Fairbanks refinery is loaded onto rolling tanker cars and taken south through Denali National Park, past Mount McKinley and into the Port of Anchorage. Then it's loaded onto a barge and towed through the Unimak Pass, a navigable break in the Aleutian Islands, before it heads north for Kotzebue on the coast.
From there, the fuel is loaded once a year on a shallow-draft barge and pushed up the Kobuk River during a brief period when the snow melt engorges the river and makes it navigable. By the time it gets to Shungnak, it has traveled a distance equivalent to the drive from New York to Las Vegas.
Last year, one of the barge companies made it up the river and delivered distillate--a blend of heating oil and diesel that powers nearly everything from generators to furnaces--to the school and electric company. The other barge company, less experienced in the region's serpentine rivers, couldn't make it up to Shungnak during the brief window of time that the river thawed. Fuel had to be flown in from Fairbanks on propeller cargo planes, raising the cost to $8.11 for a gallon of gasoline and $6.50 for a gallon of heating oil. In February, heat in the town's only two-story building, which holds the city offices, post office and tribal-council office, went out for three days because the tank ran out and no one was willing to pay to fill it up again. The temperature inside dropped to 30 degrees below zero.
Many Jobless
Half of Shungnak village is jobless, according to the state. Commerce Department data suggest that Alaskans living in remote villages like Shungnak already receive about 50% of their income from government programs, two and halftimes the average in the U.S. Now the situation is exacerbated because it is difficult to attract economic activity because of the high energy costs. Village leaders say their only choice is even more government aid.
``Half the village doesn't know how to go out and do a subsistence way of life . . . their lifestyle is living off the store, even though you hear them say `We're natives, we can survive,' '' says Raymond Woods, a member of the Shungnak tribal government.
Some residents are leaving town. Ms. Norris's daughter moved to South Dakota and her high-school-aged son talks about leaving after he graduates.
Those that remain behind are scraping along. Henry Douglas, 48, says he eats less meat and fish than he used to. Like most people here, he receives state energy assistance--credit at the tribal store. He got $1,500 in January to pay for heating oil. It lasted him through March. Afterward, he used a wood stove in the main room of the log cabin where he lives with his sister and his nephew.
His younger brother, George Douglas, 39, says he's fortunate to have a job as a school-maintenance worker. The paycheck gives him the $100 required to fuel up his Polaris snowmobile. He uses it to hunt caribou and distributes the meat to three households of relatives, including his brothers. Few of his relatives can afford to hunt much anymore because of the high cost of fuel.
Signs of the cost are everywhere in Shungnak. On a recent visit, there were photocopied fliers posted throughout the village with a stark reminder: May 29 is the day the Alaska Village Electric Cooperative bill collector was scheduled to be in Shungnak. The co-op, known as Avec, has seen past-due accounts soar in the past couple of years. Last year, it took out ads in local papers threatening to cut off paying customers if they allow delinquent customers to move in with them.
Researchers at the University of Alaska Anchorage estimated that one-quarter of household income in remote villages last year went to paying utility bills, double the percentage in 2000. The poorest residents in remote villages spent 61% of their income on utility bills, also double the level a few years ago.
Fuel bills are also swallowing the city's budget. Last November, the village's fuel and electrical bill accounted for 61% of total expenditures, according to town administrator Helen Mitchell. In response, it has cut costs. The hours for city workers were cut to six hours from eight hours a day last year. The part-time patrolman position was eliminated a couple of years ago.
The result of these crushing bills is that remote villages face a slow decline. Four schools in the last two years have shut their doors when they fell below 10 students and lost most state funding. In Shungnak, school enrollment is off 7% in the past decade. A few miles down the Kobuk River, the village of Ambler has lost 29% of its school-aged population.
Despite shrinking enrollment, the regional school district has been on a building boom in recent years, largely supported by state grants. That, in turn, has only increased its need for fuel. The new schools, despite better insulation, require more petroleum to operate.
New School
In nearby Noatak, an 18,000-square-foot school was torn down and replaced with one more than twice as large with a new air-circulating system and more lights.
``We have a very fragile economy in most of these villages already and then you add the jolt of high fuel-oil prices. It's my guess that many of these communities will not find themselves viable if fuel prices stay here,'' says Mike Black, director of community advocacy at Alaska's Department of Commerce, Community and Economic Development. The villages, he says, ``are begging, borrowing and stealing to get enough fuel.''
The extreme costs of fuel in rural Alaska have led to numerous energy experiments. But various efforts to reduce rural Alaska's dependence on petroleum-based energy have struggled. Petroleum is easy to store, handle and transport, says Brent Sheets, head of the federal government's Arctic Energy Office in Fairbanks. ``It is hard to beat diesel fuel,'' he says.
A proposal to build a small nuclear power plant for one small town was shelved when a study concluded that the federal security requirements made the project uneconomic. Solar isn't a good fit for Alaska, because fuel demand goes up in the winter when the state gets little sunlight. The Energy Department office even looked at turbines designed to harness river energy, dodging logs and car-sized icebergs, but plans never made it past the theoretical stage.
One alternative-energy success story is in Kotzebue, the hub community to the west of Shungnak on the Chukchi Sea. On the tundra outside of Kotzebue, where the only sign of life is paw prints from an Arctic fox, are 17 windmills capable of generating one megawatt of electricity. The windmills ``are a hedge against rising fuel costs,'' says Brad Reeve, a Minnesotan who came to the town 30 years ago to run the public-radio station and now heads up the electric cooperative.
As the cost of bringing in diesel has grown, electricity from the windmills has looked better and better. But the windmills have a high upfront cost--they sit on special pilings with chemicals that ensure the tundra remains frozen to hold the windmills steady. And on a recent morning, as a computer in the coop's offices showed 2.8 megawatts of demand, the wind wasn't blowing. All of the electricity came from distillate-burning generators, a reminder that Kotzebue needs to keep a steady supply of oil.
In Shungnak, Mr. Woods, the tribal-government official, says he expects the oil will keep on flowing. Eskimos are accustomed to adapting to extreme conditions, he says. But there is little effort being made to teach children how to hunt the old way. ``Their lifestyle now is so convenient,'' he says.
Hanging out on the steps of the village store after school with friends, 11th-grader Dion Tickett says he didn't grow up learning how to hunt or take care of a team of Alaskan huskies. He grew up watching television and riding snowmobiles, something he and his friends do to pass the time. ``There's nothing to do around here,'' he says.
After school let out on a recent afternoon, Mr. Woods spent
$90 to fill up his Arctic Cat snowmobile to take his son out hunting. But he doesn't expect his son to need these skills. In a couple of years, when his son enters high school, Mr. Woods plans to move his family to east Texas, where he was stationed in the military. Gasoline there costs just under
$3.00 a gallon.
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