Diesel dilemma: remote fuel deliveries come at a price.

• Author: Hollander, Zaz
• Position: TRANSPORTATION

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A late September fuel delivery run flirted with disaster last year. A Crowley barge got stuck in the ice off Bethel waiting to make a final push up the Kugkaktlik River to Kipnuk and Chefornak.

Severe weather off the Arctic Coast had delayed the barge for three weeks, pushing its schedule dangerously deep into the brief, ice-bracketed shipping season of the far north.

The barge remained fast for a day in Bethel.

Finally, temperatures warmed enough that the vessel broke loose. The crew immediately made for points south--without making those last deliveries to the villages.

"During the winter we took it upon ourselves to fly fuel in," says Bob Cox, vice president for Crowley Petroleum Distribution in Alaska. "We honored our contract price. We absorbed all the added cost of flying it in. It was a little painful but it wasn't the community's fault. They ordered fuel on time."

Crowley's brief emergency certainly isn't the only example of the difficulties that can arise shipping fuel to the farflung reaches of Alaska.

Remember the winter of 20127 A Russian tanker complete with U.S. Coast Guard icebreaker escort delivered emergency heating oil and gasoline to Nome after heavy ice spawned by brutally cold temperatures blocked an earlier barge shipment.

Nobody said getting fuel to rural Alaska was easy. Or cheap.

Delivery Costs Drive Price Up

Transporting fuel to rural Alaska accounts for anywhere from 15 percent to 50 percent of its total cost, according to various estimates from Alaska energy experts and fuel providers.

Rural Alaska still basically runs on diesel and other fuels, though some places are moving to wind and other renewables for some of their power. All of Alaska's rural communities--many in the coastal hubs and upriver villages of western Alaska--depend on diesel fuel for some, if not all, of their primary energy needs.

The majority of Alaska's population is concentrated in more urban areas with ready access to the grid: Anchorage, Mat-Su, Fairbanks, and Juneau. The remaining 20 percent of the state's residents, however, live in nearly three hundred widely scattered, hard-to-reach communities spread across our massive state.

Generally, it takes a certain population density, an economy of scale, to justify the construction of large energy projects. Even large hub communities such as Bethel, Kotzebue, or Nome top out at 6,200 residents. Most rural villages, about 250 communities in all, have populations ranging from 50 to 1,100, according to the Institute for Social and Economic Research at the University of Alaska Anchorage.

Per capita income is low. The cost of goods and services is incredibly high.

The cost of diesel these days can range from $6.50 to $10.50 a gallon in a region like the Northwest Arctic Borough.

The expense of getting diesel and other fuels to a destination is a major cost driver, according to the Institute of Social and Economic Research.

Costs rise the farther a community is from a hub.

A six-month shipping season--most communities are icebound the rest of the year--means that fuel must be stored in tank farms. The construction and operation of tank...