Commentary: Now is not the time to leave Alaskans out in the cold

Gov. Mike Dunleavy, right, meets with Mayor Clay Koplin, left, and other community leaders at a public roundtable. (Oct. 25, 2021) Photo by Zachary Snowdon Smith/The Cordova Times

By Gov. Mike Dunleavy
For The Cordova Times

Rising oil prices may be good for the state budget, but they aren’t good for the household budgets of Alaskans who are facing skyrocketing increases in the cost of energy.

Whether filling up their vehicles at the gas pump or filling their heating oil tanks for the winter, costs are rising faster than any point in the past 13 years and that affects the price of everything transported by road, ship or plane.

Fortunately, we are not powerless in this situation and the legislators now convened in Juneau can help thanks to the unprecedented increase in the value of our Permanent Fund to more than $82.7 billion as of Oct. 22.

My job is to lobby for the most important special interest of all: the people of Alaska. The Permanent Fund dividend was created for the people and to restrain the government, but that intent has been upended for the past six years.

I’ve asked the Legislature to fully fund a PFD of $2,350 under my 50-50 fiscal plan, which would be a payment of $1,236 in addition to the $1,114 that most eligible Alaskans received earlier this month.


Taking this action would help many of our fellow Alaskans simply pay their bills, but we must remember that the PFD is not and has never been intended as a welfare payment. The PFD is by definition a dividend paid to state shareholders from our royalty wealth for each Alaskan to use as they see fit.

With the current special session scheduled to end on Nov. 2, now is the perfect time for legislators to get in touch with their constituents and to act in their best interests.

According to the AAA, the average statewide price for gasoline is up 49 % in the last year, from $2.51 per gallon to $3.72. Diesel prices are up a nearly identical 48 percent. We all know these prices are much higher in rural Alaska.

On Oct. 13, the U.S. Energy Information Administration released its forecast for winter energy prices that estimates the 31% of Alaskan households that use heating oil are in for some sticker shock.

The EIA forecast is for heating oil prices to increase 43 percent compared to last winter. In a colder than average winter, the increase leaps by 59 percent.

This hits rural Alaska especially hard, where residents rely on heating oil for warmth, diesel generation for power, and planes that use jet fuel subject to price surcharges for essential groceries, goods and travel.

The EIA forecast increase is based on the average heating oil price per gallon for the U.S., which was $2.72 in the first quarter of 2021.      

According to the Alaska Department of Commerce, Community and Economic Development the average price for heating oil last February across 100 communities was $4.15 per gallon, or 52 percent higher than the national average. 

For Alaskans, a 43% increase comes out to nearly $6 per gallon versus last winter. A 59 percent increase would be $6.60 per gallon.

The increases have already started. In McGrath, a gallon of heating oil is up almost a dollar at $6.66 compared to $5.69 last winter, or a 17 % hike. In Dillingham, the increase is already 30 % at $4.59 per gallon compared to $3.52 in February. The Fairbanks price has also gone up 30% at $3.58 per gallon compared to $2.74 last winter.

Given the inverse relationship between high oil prices helping the state budget but hurting Alaskans’ wallets, we would ideally like to produce more oil at lower prices to achieve a sustainable balance.

Instead, we have runaway federal deficit spending driving inflation combined with the Biden administration’s nonstop attacks on domestic energy production that started on Day One of his term with the killing of the Keystone pipeline and the “pause”/cancelation of federal lease sales and permitting.

Now as oil and gas prices predictably have surged, President Biden has gone to the recalcitrant OPEC+ cartel begging for more production and asking for a break from the U.S. industry he’s been attempting to cripple since Jan. 20.

My administration will continue to fight the Biden administration on every front possible to protect Alaska’s right to self-determination and access to our resources. But those fights will take time, and that’s something Alaskans preparing for winter don’t have.

Not only can we afford to pay a PFD in line with my 50-50 formula, but it is also the right thing to do and now is the time to do it.

Now is not the time to leave Juneau while leaving Alaskans out in the cold.

Mike Dunleavy is the 12th governor of Alaska.