Legislators Hold Hearing on Fuel Prices
Attempt to address causes of massive expense
ANCHORAGE - Gasoline refineries in Alaska need more competition in order to lower prices at the pump.
That was the overarching theme of a public hearing held Wednesday by the state Senate energy working group.
In past legislative sessions, Anchorage Senator Bill Wielechowski has unsuccessfully pursued price-gouging legislation that would cap gas prices at a set differential from Seattle.
But now he says that might not be the best solution.
Instead, there seems to be momentum toward encouraging construction of a gasoline storage facility that would allow outside refiners to sell to Alaskans.
Some Alaskans are angry about gas prices, as evidenced in public testimony.
"You're in the same rut you've been in for the last decade,” said Jerry McCutcheon. “It ain't going anywhere. It's just this simple: they screw you because they can."
"Do you think it's in my best interest to pay the highest gasoline and natural gas prices in the country considering that we the people are supposed to own the resource?" asked Javen Ose.
Mark Marion said the problem is high oil taxes. "ACES is the reason. And the Alaska senate bipartisan coalition is the reason. That is why our gas prices are the way they are."
Since 2008, Alaskans have been paying at a rate above Seattle that is higher than it was previously.
Wondered Representative Pete Petersen: "Do you think the refineries found out what the market would bear that year when the prices got higher and so they feel like they're more able to continue to charge higher prices than what they had charged prior?"
Assistant Attorney General Ed Sniffen says in addition to few refiners, one problem with the market is the absence of fuel storage capacity.
"In a lot of different areas, that seems to be one of the bottlenecks that prevents like a Costco or a Fred Meyer or a Safeway from trying to get some better deal on a long-term contract from the northwest refineries."
A state agency, the Alaska Industrial Development and Export Authority, is looking at options for a storage facility for which it could help a private developer with financing.
"I think people are finally starting to synthesize around this idea that you need more competition, that's the answer,” Wielechowski said. “A new refinery has not been built in the united states in I believe 30 years, so building a new refinery is probably not a realistic prospect. But building a gas storage facility -- whether it's through AIDEA or private industry -- where you can get more gasoline on the market, that's the answer, that's the solution I think."
After years of frustration, there might be momentum toward a solution.
The state's major refiner, Tesoro, was invited to the hearing, but declined.
Wielechowski said he had been told they intend to participate in the future.