Letter to the Editor
Why so high?
Published Tuesday, July 8, 2008
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To the editor:
Can someone help me understand why Alaskans are paying the most for a gallon of gas in the entire U.S.? I was reading an article today on CNN in which it states that we have even surpassed California for the price of a gallon of gas. I simply don’t understand how this can be, we have the oil and the refineries, is the state gouging us in a way we are unaware of?
Here’s the address of the CNN article: http://money.cnn.com/2008/07/01/news/economy/gas/index.htm
Reading it makes me want to go hit my head against a wall trying to understand all this! Something better be done and soon!
Community Discussion
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It is to my understand that a good portion of the gas pumped from Prudhoe goes overseas OR into our country's "reserves". I don't know that for a fact, but do know I worked up north this past winter and that is what I was told. Funny how our country is in the midst of an energy crisis, but the oil being placed in our cars and homes comes from overseas as well. Seems pointless if you ask me.
This is a great question that our state leaders should be asking. The US average today is $4.10. The cheapest gas in Fairbanks comes in 34 cents higher at $4.44 and Alaska has 16 cents less state tax than the US average!
As of today 19 states are still averaging less than $4 a gallon!!!
Flint Hills is looking to make up for lost margins on jet fuel by jacking up the rest of the products that are not purchased on long term contracts. This needs to be looked into and stopped immediately.
Addidional resources for gas price questions can be found at www.fairbanksgas.com
They need to quit talking about the oil that is here and start drilling it and take care of these high gas prices. It is unreal.
By the time they start digging for it the price will be so high no one will be able to afford it.
It like they say, it's what we are willing to pay. Has anyone heard if there has been any reduction of gas sales in Fairbanks at these prices? Every time I fill up people just seem to grin and bear it.
Free, you're right. It's what people are willing to pay. Gas here (6 miles from the Sinclair Refinery in WY) at the City Market (same as Fred Meyer there) is $4.05/gal ($3.95.gal with the value card hooey) and diesel's running at $4.65/gal ($4.55/gal yadda yadda). In Cheyenne at the truck stops, diesel's about $5/gal. We were confused about the sudden jump in the Spring of diesel, but I'm sure it's because it's all now low sulphur and the jump was caused by extra refining(don't forget that additive if you have an older (as in pre-2006) diesel truck, or it'll hurt your engine). We haven't really seen grocery prices rise here as a result, but I'm sure it's pretty horrific there. I know a guy who drove up from the Lower 48, and I think he said he paid $200 to fill up at Toad River, BC. Is life up there just going on, or are people cutting back on their driving?
I know I have had to radically cut back on my driving.
Sucks, 'cause my youngest was really looking forward to ( and needs) swimming lessons this summer.
Also, I can't give my kids a ride to town for work, so they can get a job, so they can work and buy a car, so they can have a ride to work, so they can buy gas for the car they can't buy, 'cause they can't get a ride to get a job and work to buy a car, so they can have a ride to work...
The state needs to quit taking their royalties from all the oil sold from Alaska in cash and take it in oil instead. Make that oil stay in state to be used for gasoline and heating fuel for its citizens. The oil is Alaska's let's use it for Alaskan's! Why should we have to pay the highest gas prices in the nation when the oil is right in our backyard, this doesn't happen with any other product. Go to Cali and the fruits and veggies are dirt cheap.....because they are grown there, why should it be any different for OUR oil! C'mon Governor Palin, love ya, but help us out!
alaska isn't a state, it is a colony. alaska's economy is a colonial economy.
Amen Polarmark,
With our strong mineral resources, low population and massive exploitation, we should really just nationalize the oil & mining industries, offer any military or national guard units in the state a new contract and just secceed from the union! We'll do much better on our own, specially when the US government colapses under the weight of a multi-trillion dollar debt.
/sarcasm... almost
I found "polarmarks" remark offensive at first then I understand what was being said once I re-read the statement. I know we can not have a good ole fashion "Boston Tea Party" because of the environmental inpact it would have on sea but in spirit and in action........
The price of oil has catapulted since 9-11, hard to imagine it but possibly could have been on some agenda, the Arabian nations sure are rich now, and we still have not found Osama, they might have wanted Saddam out at the same time also, Idk the mind is free to imagine any scenario.
As was reported a few years ago as to why we pay a higher fuel price than the lower 48 the cost of doing business in fairbanks is more expensive. They claim that labor cost is higher and the viscious cycle of energy. We are paying .22 per kwh for electricity because oil is costing more. Oil is costing more because we pay .22 per kwh. The reason our oil is exported is the oil companies can get more for Alaska sweet crude overseas than they can sell it for in the U.S. Its all about proft don't you know. To heck with what the people need. But then how many U.S. oil companys are pumping oil from our wells in Prudhoe?
As long as they can get away with it the price will continue to rise, until the people finally put their foot down then they will set the price there. The real question is: When are we as a country going to put our foot down and say enough?
Why is it that the oil companies can get away with such high profits? If we are so low on fuel or there isn't enough being made how come the oil companies are still making profits? What I am really trying to ask is shouldn't the oil companies really be suffering if the price is so high because we don't have enough fuel to go around? They shouldn't be making record profits while we suffer. Also, don't we all feel so sorry for the oil companies over seas that let their people drive around in under a dollar a gallon for gas.
It appears that our comments to the FDNM Editorials and letters to the editor concerning the high cost of energy fall on our Congressional delegations DEAF EARS! Sadly our own State legislators fall into this same bag of do nothings. Each and everyone of us needs to inundate both the State and Fed legislators telling them we can't wait 3 to 5 years for promised help for high fuel costs. For many of them it's an election year. Just remember the Burger King commercial from a few years ago - "Where's the Beef".
"LET THEM FREEZE TO DEATH IN THE DARK" was an old saying back when TAPS was built in the 1970's. Maybe BIG OIL and Flint Hills took that to mean the people of Interior and Rural Alaska?
Come on Governor and Legislature, there is no justifiable reason that Fairbanks is paying outrageous prices for gasoline and heating oil. Especially since this is the first stop from the North Slope with an oil refinery and 800,000 barrels of oil going through the town daily.
Maybe the Attorney General should be looking into "price gouging"? Or maybe the FNSB should be allowed to "tax" the oil pipeline sufficiently enough to eliminate any personal property taxes on residential property in FNSB, as well as, the any sales tax on the books?
HUM-M-M, wonder what else along that line we can come up with to mitigate the 35 years of "impact" to keep the lights on in America?
You have to realize that not only is cost of oil influensed by supply and demand, cost of oil is also influensed by the stock market. Look at the drop in cost of oil by $8 today. Does anyone see the price drop at the pump? NO So, while the oil consumer is forced to pay exorbitant prices at the pump, oil investors are profiting because they have the cash to invest.
So, when do we receive that $1200 energy relief check? After we Interior oil consumers are forced into bankruptsy?
The price of oil dropped $10 a barrel this week. Now back to $135. The traders are selling off in order to the make their profits off of $145. Wait till they go back in and drive the price up again for more profits. This looks like it will be a trader's game at the expense of the average Joe. I wonder what their profits are looking like. This is a game that could last for years.
If I did my research correctly oil is pricing is based on futures? Any money people lurking please explain this better. From what I understand oil is bought and sold in futures and the rate of day is the price we pay. IN the past when oil was bought it was done in 3 month cycles. So Oil purchased 3 months ago has a price tag of 90.00 a barrell is sold based upon that price the moment it is delievered to the stations. It seems this old method has gone out the window due to political rhetoric and b.s., the wind blows the wrong directions or the Big Oil companies have there tidy whities in a knot, the price changes because of, well, I am not sure why, but they do. Or could it be that our President is knee deep in the oil company, owner, stock holder, so is his father, and so is all his friends to include the Vice President. Need I say more?
I have to laugh, however. The Simpson movie featuring Alaska is nearly right on the money. Every year the oil companies take Alaska oil, pay Alaskans off with hush money (PFD), and rake in billions. With 42 billion and another 10 billion in 2008 added to the pfd principal, we still have to beg the SOA to give us what technically belongs to the Alaska residents.
Food or gas, food or gas, food or gas?
Get the picture?
principle,...oops
Most folks seem to have no problem paying high prices for the fuel here. I think about 75% or better drive something 4 wheel drive. Unless living in the hills, I find it senseless. Our roads are maintained well enough for 2 wheel drive. That's what I've been driving here for the past 35 years. And I really scratch my head when I see an all wheel drive one ton dually with matching camper shell, and no trailer hitch. What do they haul that is so heavy that can be loaded under that shell?
But I probably seem like I have no problem paying the high prices. I live in a poorly insulated 60 year old home that burns 300+ gallons of fuel per month in the coldest months. I will however be closing off all of it I can and tightening up as I can afford to.
And my idea for getting our fuel cheaper though may not be worth the paper it isn't printed on is... PFD. We have all that principle that everyone wants from us, couldn't we use it to start our own oil company, drilling company, refinery etc? Throw the others out and we could market our own, and get all the profit.. Perhaps the dividends would become big enough I could afford to take part of one and buy a 5 star rated home
I'd like to see the urban average vs. the state average. I bet rural alaska is really pushing the average up.
And yes, the State should consider Alaskans, not just big oil profits. We're getting scrooged by the State because it's more profitable.
Well the "CHEAPEST" gas here in Fairbanks is $4.44 a gallon, thats over $.30 a gallon above the national average and if you need gas in North Pole its closer to $4.60 a gallon. So I wouldn't even include the high prices of outlying areas on the road system or bush which are much higher and we're still really darn high.I guess the farther you live form the a refinery and the raw fuel the cheaper it gets!...grin
Doublet - with all due respect, some people who don't live in the hills might still have a use for a big 4x4. We don't live in the hills, but we DO have a small farm...we need a big truck to haul horses, hay, etc. And, frankly, it's none of your (or anyone else's) business what someone chooses to drive. I'm not trying to pick on you, but I hate seeing people complain about what others choose to drive. It's rude to make assumptions about others without knowing the facts.
As for the high cost of fuel, we have no one to blame but ourselves. We have allowed the environmental movement to dictate our energy policies for far too long; they don't support drilling, new refineries, clean-burning coal, nuclear...hell, they even protest wind farms. We have known since the 70s that we can't rely on foreign oil, yet here we are...that's not the fault of the oil companies or speculators. The blame sits squarely on the shoulders of the American citizens. Nothing will change unless we demand change.
The price of gas in Fairbanks is set by the State of Ak!
[This cut down to fit posting reg SEE sec(e)]
AS 38.183. Sale of Royalty.
(a) [DNR Commissioner] ..... determines that the best interest of the state does not require it or that no competition exists.
(b) When competitive bids are required, the commissioner, after prior written notice to the Alaska Royalty Oil and Gas Development Advisory Board, may reject all bids on a determination that because of the amount of the bids, the lack of responsibility on the part of the bidders, or for reasons consistent with the criteria set out in AS 38.06.070, the acceptance of the bids would not be in the best interest of the state.
(c) ......, the commissioner shall make public in writing the specific findings and conclusions upon which that determination is based.
(d) ..... its royalty share may not be sold or otherwise disposed of for export from the state until the commissioner determines that the royalty-in-kind oil or gas is surplus to the present and projected intrastate domestic and industrial needs. The commissioner shall make public, in writing, the specific findings and reasons on which the determination is based.
(e) When a sale, exchange, or other disposal of oil or gas taken in kind by the state as its royalty share, or a sale, exchange, or other disposal in whole or in part of a right to receive future royalty oil or gas, under a state lease under this chapter is made other than by competitive bid, the sale, exchange, or other disposal shall be awarded by the commissioner to the prospective buyer whose proposal offers the maximum benefits to citizens of the state. The commissioner shall consider
(1) the cash value offered;
(2) the projected effects of the sale, exchange, or other disposal on the economy of the state;
(3) the projected benefits of refining or processing the oil or gas in the state;
(4) the ability of the prospective buyer to provide refined products or by-products for distribution and sale in the state with price or supply benefits to the citizens of the state; and.....
1AkFox, Great post but to simplify it even more price fixing is legal in Alaska and has been for years. That's why we have always paid more.
I still say we should take 350 million out of the Permanent Fund and buy the North Pole oil refinery from Skinflinthills. That was their purchase price... and it's still a profitable refinery.
That complex is hooked directly to the pipeline. If the state owned the refinery, it could be operated for the benefit of the people of Alaska using state royalty oil that wouldn't require monetary expenditure for plant feed stock. There's plenty of royalty oil to supply all Alaska's daily energy needs and still make salable petroleum products to pay to run the refinery and pay back the permanent fund.
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