This Spring biomass experts from all over the world-including Alaska, will be congregating in Minneapolis for sharing knowledge about those things that were living which can yield BTU’s (‘Bio’ ‘Mass’). This may be wood, grasses, algae, etc… There are 4 tracks beginning with traditional wood in various forms (pellets, chips, torrified material, etc…) and ending with Track 4 on emerging technology types. The conference was where Extension personnel first saw the GEK which has been blogged about (Gasification Experimental Kit) and may have practical uses in Alaska for converting BTU’s to electricity. The conference always has a policy panel, and is sure to touch upon the latest EPA rulings based on the re-authorization of the clean air act. Take a look at the conference website for more information.
While the average price for a barrel of oil was $77.40 in November, after the first week of December it was spotted around $65 a barrel. There’s been about a 16% drop (though the December amount is one static price and not an average over 30 or so). For argument sake, taking the 16% at this point, will gas prices drop that much? No. Due to ‘game theory’, gas dealers are ready and willing to jump in and follow increases of crude with higher gas prices before their competitors – yet when oil drops, they tend to hold back and see what the other dealers will do. There are some other cost factors, but by and large it is the competitive nature of salesmen that are determining your short run gas prices!
In Alaska, our prices are not even comparable to other locations though gasoline and its production costs are pretty much the same from the $65 barrel of oil. (For instance, gas is $2.37 in the currently least expensive state of Missouri, while it is $3.40 in Alaska and $3.77 in the most expensive state of Hawaii). So what is the difference in price? Undoubtedly it is due to transportation costs. As ironic as that may sound, gas runs about 6 pounds per gallon. So when we ship processed gas into the state, it has taken a good deal of fuel to merely carry it from the refinery. There are also most likely price efficiencies lost from such a small scale of users compared to the lower 48. Consider it as part of the price to have large clear places and beauty daily which the tourists dish out thousands to travel and see!
You may have noticed that the fuel for your vehicle has gone down from around $4 a gallon earlier this year to about $3.50 a gallon recently (in the Fairbanks area). Depending where you shop for fuel in Alaska, you may have seen a 15% decrease at the pump during this past year. Yet on world trade, the price has dropped about 30% a barrel (as it was $100 a barrel and is now about $70 a barrel). You are getting some individual benefit at the pump, and if you use oil to heat your house you benefited the last time you filled up the fuel tank for the furnace,boiler or Toyo stove. But as a recipient of statewide benefits that are largely paid for by budget revenues fueled by oil production, how are you fairing from the drop in the price of crude oil? A lot of that answer is tied to the tax and credit system the State operates with oil producers. Alaska Dispatch News Reporter Dermot Cole has an interesting article to look at. It is a pertinent article, as having just gone through a referendum vote where every Alaskan got a say in whether to keep the legislatively crafted Senate Bill 21 or not, there is now a real life example to test some of recent assumptions that were made by experts. There are a lot of forecasts and accounting systems involved that make the economic impact to Alaskans (of crude oil price changes) complex, yet in simple terms this article is good to start thinking about several energy dynamics that are at work. See what you think after reading this article. Are you better off in whole with lower prices in this new context of dropping oil prices?