[Congressional Record Volume 153, Number 99 (Tuesday, June 19, 2007)]
[Extensions of Remarks]
[Pages E1336-E1338]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 $8 GASOLINE IN AMERICA'S SAUDI ARABIA

                                 ______
                                 

                             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

[[Page E1337]]

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.

              [From the Wall Street Journal, June 9, 2007]

                 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

[[Page E1338]]

     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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