Energy policy in Alaska

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Energy policy in Alaska
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Quick facts
Major industry:
Oil and gas exports
Energy department:
Alaska Department of Natural Resources
State population:
Per capita income:
Energy consumption
Total energy consumption:
638 trillion BTU
Per capita energy consumption:
881 million BTU
Energy spending
Total state energy spending:
$7.739 million
Per capita energy spending:
Residential natural gas price:
$8.79 per thousand cubic feet
Residential electricity price:
18.33 cents per kWh
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Energy PolicyEnergy policy in the United StatesFracking in AlaskaEnergy and environmental news

Energy policy in Alaska depends on geography, natural energy resources, how electricity is generated, how much energy consumers use, politics and the influence of groups such as environmental and industry organizations. Decisions by policymakers, such as state and local governments, utilities and regulatory agencies, affect all citizens economically and environmentally, and are generally geared toward providing reliable, affordable energy. The cost of energy affects not only home heating and electricity bills, and thus disposable income, but also economic growth, including jobs, investment and the cost of doing business in the state.

How energy is produced and consumed also has an impact on the environment and pollution. Energy policy in Alaska attempts to balance economic efficiency with energy conservation and opportunities for renewable energy growth. As the infrastructure for producing and delivering renewable energy sources is not as advanced as it is for energy generation from traditional sources, these policies often require subsidies to make the produced energy affordable, and their effects are difficult to measure.

Energy policy involves trade-offs between providing an affordable, consistent energy supply on the one hand, and limiting pollution and protecting the environment, on the other. How states attempt to balance these two differs between states, and often boils down to costs to consumers versus costs to the environment. This article provides general energy information about the state as the context within which energy policy is made, as well as information about major legislation and public and private groups that play a role in setting energy policy in the state.

See also: Energy policy in the United States for more information on energy policy.
See also: Fracking in Alaska

Energy overview

State facts

Below are quick facts about Alaska's energy climate.


In Alaska

  • households consume almost three times more energy than the U.S. average and spend about 280 percent more on energy than the U.S. average.
  • over half of all energy consumption comes from natural gas.
  • rural communities rely heavily on diesel for electricity generators.
  • hydropower accounts for about 20 percent of net energy generation.
  • industry is the largest energy-consuming sector in the state[2]

Available energy resources

Alaska has an abundance of traditional energy resources including oil, coal and natural gas. Most of its oil and natural gas is found on the North Slope and in the Cook Inlet basins. About 61 percent of the land in Alaska is owned by the U.S. government, which has strict resource extraction regulations. However, the largest oil fields like Prudhoe Bay are owned by the state. Production in environmentally sensitive areas is prohibited. Alaska contains more recoverable coal than any of the lower 48 states.[2][3][4]

Nearly all of the renewable energy in Alaska is produced from hydroelectric or geothermal sources. A long coastline, abundant rivers and a large geothermal plant at Chena Hot Springs provide Alaska with ample resources for renewable energy growth. A few rural communities have small wind energy projects. Biofuels are available, but rarely used. Alaska's biofuel sources include wood, sawmill wastes, fish byproducts, and municipal waste.[2]

Consumption and prices

In 2011, the industrial sector consumed almost half of Alaska's total energy consumption. Meanwhile, 31.5 percent of energy consumption was used for transportation, which is due to the high jet fuel demands of military and commercial air traffic to Asia. Residential and commercial demand accounts for the other 19 percent. Most of that demand is for heating and lighting during winter months.[2]

Energy consumption in Alaska
AK energy consumption chart.png

     Transportation       Residential     Industrial       Commercial
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Gas prices in Alaska have been consistently higher than the national average.[6] According to the U.S. Energy Information Administration's (EIA) February 2014 report, the federal excise tax is 18.40 cents per gallon of gasoline and 24.40 cents per gallon of diesel fuel. In addition to that, Alabama collects a total tax of 8 cents on every gallon of gasoline, which ranks it at the 50th, or the lowest state gas tax.[7][8]

Comparisons tables

The table below compares Alaska's consumption and spending for energy, as well as prices for gas and electricity, and carbon emissions to those of North Dakota, which has similar population, resources and consumption needs. Also given are the U.S. averages and the state rankings. All rankings are from highest to lowest, so, for example:

  • Alaska ranked 39th in carbon emissions, which means that state has fewer carbon emissions in Alaska than in North Dakota
  • North Dakota and Alaska have high income per capita, but Alaska (11th) ranks below North Dakota (7th).
  • Alaska and North Dakota are similarly ranked near the bottom in population, total consumption and expenditures.
  • Both states rank near the top for both per capita consumption and expenditures with Alaska spending (1st) and consuming (3rd) more than North Dakota (4th in both categories). The extreme climate in these states creates the high per capita consumption.

North Dakota has significantly lower electricity prices, 8.85 cents per kWh (50th), than Alaska, 18.33 cents per kWh (3rd).The higher price of electricity in Alaska results from rural communities' reliance on diesel generators that use expensive petroleum liquids rather than electricity from coal, which is significantly cheaper. However, the natural gas needed to heat homes is cheap in both Alaska and North Dakota because both produce natural gas.[9][10]

Consumption and Expenditures Comparisons Summary
Type AlaskaNorth DakotaU.S. Figures
FigureU.S. Rank*FigureU.S. Rank*Totals
Population735,13247723,393[11]48313.9 million
Per Capita Income Average$46,77811$51,8937$42,693
Total Consumption638 trillion BTU38526 trillion BTU4197,301 quadrillion BTU
Per Capita Energy Consumption881 million BTU3768 million BTU4312 million BTU
Total Spending on Energy$7,739 million396,409 million43$1,394,088 million
Per Capita Spending on Energy$10,6921$9,3604$4,474
Price of Residential Natural Gas, dollar per thousand cubic feet$8.7942$8.3448$12.48
Price of Electricity, cents per kWh18.3339.725012.31
Total Carbon Dioxide Emissions, million metric tons (2010)38.73952.5365,631
*Rank is from highest to lowest.
See also: State Energy Rankings to compare all 50 states
Consumption of energy for heating homes in Alaska
Source Alaska 2011 U.S. average 2011
Natural gas 47.6% 49.5%
Fuel oil 31.8% 6.5%
Electricity 12% 35.4%
Liquid Petroleum Gases (LPG) 1.4% 5%
Other/none 7.1% 3.6%

Production and transmission

Alaska produced 1,641.9 trillion BTU of energy in 2011, the 12th most in the United States. Crude oil is the largest source of energy production in the state, accounting for 72 percent of total production. Natural gas accounted for much of the rest of the state's production, totaling 25 percent. Other sources, including coal and renewable resources were produced in negligible amounts.[12][13]

Energy production by type in Alaska, 2011
Type Amount Generated
(trillion BTU)
% of State % of USA
Crude oil 1,188.0 72.36% 9.93%
Natural gas 404.7 24.65% 1.53%
Coal 33.5 2.04% 0.15%
Other 15.7 0.96% 0.22%

A large majority of Alaska's energy production (72 percent) comes from oil. Alaska produces 293,187 barrels of oil per day, the fourth most in the United States. Production has been declining for several years because the current oil fields are producing less and oil exploration is limited. The Trans-Alaska Pipeline System (TAPS) moves oil over 800 miles from the Northern Slopes to the southern Port of Valdez. From there, the oil is shipped to refineries along the west coast. Alaska demands little finished petroleum products. The oil refineries in Kenai and near Fairbanks produce most of Alaska's motor gasoline demand.[14]

Natural gas accounts for 25 percent of Alaska's total energy production. In 2012, Alaska produced 351 billion cubic feet of natural gas. This estimate does not include the amount of gas pumped underground for re-pressurization or used as fuel for equipment in oil fields. Most natural gas is consumed at production sites. This is because natural gas consumption for home heating is low in Alaska due to a lack of infrastructure for transportation. Current production exceeds domestic needs, and plans for a pipeline to the lower 48 states aren't yet commercially feasible.[15]

Coal and renewable energy sources are minimal in total production. Alaska's only operating surface coal mine, the Usibelli Mine, produces around 2 million tons per year. Most coal is shipped to Asia or South America. Renewable resources are important for domestic consumption, but contribute little to Alaska's overall production.[16][17]

Alaska lacks any large, state-wide utility. Instead, many rural communities rely on small utilities or diesel fueled generators. The Alaska Railbelt Cooperative Transmission and Energy Company (ARCTEC) is the largest transmission utility, servicing 70 percent of Alaska's population. ARCTEC is an association of many smaller utilities stretching from Fairbanks to the Kenai Peninsula.[18]

Where electricity comes from in Alaska[19]
Type Amount generated (MWh) % of state** % of U.S.**
Petroleum-fired 62,000 12.11% 0.21%
Natural gas-fired 239,000 46.68% 0.02%
Coal-fired 54,000 10.55% 0%
Hydroelectric 147,000 28.71% 0.05%
Total net electricity generation 512,000 100% 0.01%
**Note: Because the U.S. Energy Information Administration (EIA) does not include all of a state's energy production in these figures, the EIA totals do not equal 100 percent. Instead, we have generated our own percentages.

Energy policy

Policy Issues
Historically, Alaska's energy policies have tried to share oil wealth, explore alternative energy solutions, and plan for the future needs of the state. Unlike other states, Alaska lacks infrastructure and connection to any large grid system. Distribution of resources and rural energy production have dominated energy policy in the state since the 1970s. Recently, the legislature has focused more on energy efficiency and renewable energy growth.[20]
See also: Fracking in Alaska

Energy policy is made, executed and influenced by many organizations, both public and private, and is codified in the laws and regulations of the state. Each state’s energy policy involves trade-offs in which energy production and prices are weighed against environmental concerns and efficiency. In 2008, the University of Alaska at Anchorage published a study that looked at Alaska's economy. The study showed that 29.8 percent of Alaska's jobs were attributed to petroleum production and another 15.5 percent to other traditional resource production such as mining, timber, seafood and agriculture. Natural gas production was included with the petroleum production. Energy resource production is a major input to Alaska's economy.[21] Alaskan citizens receive $1,000-$1,500 annually from the Alaska Permanent Fund, which is paid for through oil wealth.[22]

Alaska passed House Bill 306, "The State Energy Policy" in 2010, that created Alaska's Renewable Portfolio Standard (RPS). RPS are legislated as state energy policy. Usually, they establish a minimum renewable energy generation requirement for utilities in the state. In Alaska, the standard requires the state to receive 50 percent of its energy from renewable and alternative energy sources by 2025. The bill establishes the goal, but there are not yet any further plans to accomplish it. Senate Bill 220, "The Alaska Sustainable Energy Act", also passed in 2010, provided financial incentives to renewable energy producers, and established an emerging energy technology fund.[23][24][25]

Alaska holds about 58 million acres of federally designated wilderness land, which is strictly regulated by the federal government. There are differing opinions on whether these lands should be kept for wildlife conservation or for natural resource extraction.[26][27]

Alaska scored 8 out of 50 on the American Council for an Energy Efficient Economy (ACEEE) scorecard. The ACEEE is a non-profit organization dedicated to improving energy efficiency policy in the United States. They focus on energy policy, research and outreach. Each year, they rank each state by their energy efficiency policies. Alaska ranked 47th in the United States.[28]

Major legislation

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State energy policy

State fracking policy

Energy policy terms

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Energy use in the U.S.

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State environmental policy

Energy and Environmental News

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  • House Bill 306, The State Energy Policy, (2010) created Alaska's RPS. It requires a 15 percent increase in energy efficiency, per capita, by 2020. It further establishes a goal of 50 percent electrical generation from renewable or alternative resources by 2025. It declares intent to provide a reliable in-state gas supply for Alaska residents. The bill identifies Power Project Fund as the main source of assistance for energy projects. It declares intent for the state to remain a leader in petroleum and natural gas production while also becoming a leader in renewable energy production.[29]
  • Senate Bill 220, The Alaska Sustainable Energy Act, (2010) created financial incentives and assistance for efficiency, conservation and alternative energy projects. It creates a loan fund for energy efficiency, establishes the Low Income Heating Assistance Program, and provides a renewable energy tax credit. The bill requires that projects funded by the renewable energy fund demonstrate financial benefit and establishes an Emerging Energy Technology Fund.[30][31]
  • Senate Bill 289, The Home Energy Conservation Act, (2008) relates to "home energy conservation and weatherization for purposes of certain programs of the Alaska Housing and Finance Corporation." It requires buildings acquired by the corporation meet certain lighting and thermal standards. The bill also committed $360 million dollars to energy efficiency programs in the state.[32][33]
  • House Bill 152, The Renewable Energy Fund/Task Force/Assist. Act, (2008) established a renewable energy grant fund and recommendation program. It authorizes the Alaska Energy Authority to distribute grants and set the procedures for awarding the grants. Since 2008, Alaska has appropriated $150 million for renewable energy projects.[34][35]

Energy policy ballot measures

Voting on Energy
Energy policy
Ballot Measures
By state
By year
Not on ballot
See also: Energy on the ballot and List of Alaska ballot measures

Ballotpedia has tracked no ballot measures relating to state and local energy policy in Alaska.

Utility policy ballot measures

See also: Local utility tax and fees on the ballot

Ballotpedia has tracked no ballot measures relating to local utility tax and fees in Alaska.

Government agencies and committees

The Alaska State Legislature has two special committees reviewing energy legislation, the House Special Committee on Energy and the Senate Special Committee on In-State Energy that review energy legislation.[36][37]

  • Alaska's Department of Natural Resources was commissioned to "responsibly develop Alaska's resources by making them available for maximum use and benefit consistent with the public interest." The agency manages land, water, and natural resources through geological surveys, permits and leasing programs. The Commissioner oversees this department and appoints the directors for the eight divisions within the department, including the Division of Oil and Gas. The Division of Oil and Gas is responsible for the geologic, economic, environmental and social analysis involved in leasing state land for production of petroleum products and natural gas.[38]
  • The Alaska Energy Authority (AEA) is a public corporation of the state but with legal independence. The responsibilities of the organization have changed significantly since its inception. Originally, the AEA's mission was to construct, acquire, finance and operate power projects and facilities that utilize Alaska's natural resources to produce electricity and heat. Now the AEA oversees rural energy programs such as the Bradley Lake Hydroelectric Project, which adds energy to Alaska's Railbelt Grid, which stretches from Fairbanks to the Kenai Peninsula. Their mission is to reduce the cost of electricity in Alaska.[39]
  • The Alaska Regulatory Commission (RCA) monitors public utilities and pipelines from small village water systems to large telecommunications, electric and natural gas monopolies. They certify qualified providers of public utility and pipeline services and ensure that they provide safe and adequate services and facilities at just and reasonable rates, terms, and conditions. They issue certificates that allow utilities to operate. Along with rate regulation, the RCA also ensures safe and adequate services and facilities. They also regulate oil and gas pipeline carriers.[40]
  • The Alaska Natural Gas Development Authority (ANGDA) is a public corporation created in 2002 by a general ballot initiative. ANGDA has the responsibility to increase the transmission of natural gas produced at the North Slope to communities around Alaska. They achieve this goal by identifying "feasible" opportunities to build pipelines through the state.[41]

Major organizations

  • The Alaska Power Association (APA) includes any electric utilities providing a minimum of 800 MWh per year of electricity. This includes rural cooperatives, municipally-owned utilities and regional electric authorities organized under Alaska law. The organization seeks to "assist our members in accomplishing their goals of delivering electric energy and other services at the best value to their consumers." They provide services to utilities and advocate consumer and owner interests on Alaska energy issues.[42]
  • The Renewable Energy Alaska Project (REAP) is a coalition of utilities, businesses, conservation and consumer groups interested in developing renewable energy resources in Alaska. They were organized in 2004 as an advocacy and education group. They also promote energy efficiency and conservation. They have been influential in advocating Senate Bill 289, House Bill 220 and House Bill 306. Every year, they host a fair in downtown Anchorage offering information about renewable energy in Alaska.[43]
  • The Alaska Energy Efficiency Partnership (AEEP) is an advocate and educational partnership that promotes energy efficiency and conservation. Their members include government programs, utilities, state legislative offices, university programs, businesses and tribal organizations. They organize educational events throughout Alaska and provide educational resources for communities and businesses and make policy recommendations to the state legislature.[44]

In the news

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See also

External links


  1. U.S. Census Bureau, "Alaska Quickfacts," accessed March 9, 2014
  2. 2.0 2.1 2.2 2.3 2.4 U.S. Energy Information Administration, "Alaska Profile Analysis," December 18, 2013
  3. Alaska Resource Development Council, "Who Owns Alaska," accessed March 12, 2014
  4. Institute for Energy Research, "Coal," accessed March 12, 2014
  5. This chart depicts the state's energy consumption as reported by the EIA for 2011. Click the image to enlarge.
  6. GasBuddy Organization LLC, "Average Gas Price Comparison," accessed February 20, 2014
  7. U.S. Energy Information Administration, "Petroleum Marketing Monthly," February 2014," accessed February 14, 2014
  8. The Tax Foundation, "State Gasoline Tax Rates, 2009-2013," March 21, 2013
  9. U.S. Energy Information Administration, "State Production and Consumption Rankings," accessed February 28, 2014
  10. Institute for Energy Research, "Alaska: An Energy and Economic Analysis," August 2013
  11. U.S. Census Bureau, "North Dakota Quickfacts," accessed March 12, 2014
  12. Energy Information Administration, "Alaska Overview," December 18, 2013
  13. U.S. Energy Information Administration, "State Energy Data System, Production," accessed February 18, 2014
  14. U.S. Energy Information Administration, "Alaska Overview," December18, 2013, accessed March 12, 2014
  15. U.S. Energy Information Administration, "Alaska Profile Analysis," December18, 2013
  16. U.S. Energy information Administration, "Alaska Field Production of Crude Oil," accessed February 20, 2013
  17. Institute of Energy Research, "Alaska: Energy and Economic Analysis," accessed February 20, 2013
  18. Alaska Railbelt Cooperative Transmission and Energy Company, "Energy Solutions through Cooperative Actions," accessed February 20, 2013
  19. These figures come from the EIA State Profiles and Energy Estimates U.S. Energy Information Administration, "Alaska Overview," accessed February 5, 2014
  20. Alaska Center for Energy and Power, "History of Energy Policy in Alaska," accessed February 20, 2014
  21. University of Alaska at Anchorage, "Structural Analysis of the Alaska Economy: What are the Drivers?," accessed March 14, 2014
  22. Scholar Strategy Network, "How Alaska Citizens Benefit Equally from Shared Wealth," accessed March 14, 2014
  23. According to a report called "The Status of Renewable Electricity Mandates in the States," by the free-market Institute for Energy Research, the cost of electricity in states with RPS were on average 38 percent higher in 2010 than in states without a RPS.
  24. Institute for Energy Research, "The Status of Renewable Electricity Mandates in the States," accessed March 24, 2014
  25. Manhattan Institute, "The High Cost of Renewable-Energy Mandates," February 2012
  26. Alaska Resource Development Council, "Who Owns Alaska," accessed March 12, 2014
  27. Alaska Conservation Foundation, "The Issues," accessed March 14, 2014
  28. American Council for an Energy Efficient Economy, "Alaska," accessed February 20, 2014
  29. Alaska Energy Authority, "Laws of Alaska, 2010," accessed February 20, 2014
  30. Northern Alaska Environmental Center, "Senate Bill 220 - The Alaska Sustainable Energy Act," accessed February 22, 2014
  31. Alaska Energy Authority, "Laws of Alaska," accessed February 20, 2014
  32. Renewable Energy Alaska Project, "History Goals and Accomplishments," accessed February 22, 2014
  33. U.S. Department of Energy, "Home Energy Rating Systems: Senate Bill 289 (Alaska 2008)," accessed February 22, 2014
  34. The Alaska State Legislature, "Bill Text 25th Legislature," accessed February 22, 2014
  35. Renewable Energy Alaska Project, "History Goals and Accomplishments," accessed February 22, 2014
  36. Alaska Senate Energy Policy Group, "Home," accessed February 22, 2014
  37. The Alaska House Majority, "House Special Energy Committee," accessed February 22, 2014
  38. Alaska Department of Natural Resources, "About DNR," accessed February 22, 2014
  39. Alaska Energy Authority, "Frequently Asked Questions," accessed February 22, 2014
  40. Regulatory Commission of Alaska, "Commission," accessed February 22, 2014
  41. Alaska Natural Gas Development Authority, "Overview of the ANGDA," accessed February 22, 2014
  42. Alaska Power Association, "Alaska Power Association," accessed February 22, 2014
  43. Renewable Energy Alaska Project, "History Goals and Accomplishments," accessed February 22, 2014
  44. Alaska Energy Efficiency Partnership, "About Us," accessed February 22, 2014