Rural Alaska and High Energy Costs

ANCHORAGE — While I was working on a piece about Gov. Sarah Palin’s energy policies, one local pointed me to the story of a town of about 300 residents on the Aleutians, called Adak, about 1,300 miles southwest of Anchorage.

While there are tanks of diesel standing by, the town cannot afford to buy the fuel to run the local electricity generator. The only thing left for residents to do, town officials have said, is to leave.

The reasons for the town’s shutdown are complicated, but energy prices are at the heart of the problem. Adak cannot afford the rising cost of diesel, which is higher in rural parts of Alaska because it is expensive to ship it there.

Unfortunately for Adak, the $1,200 energy surplus checks Palin distributed last month to combat the high costs of energy haven’t solved its energy problem.

In an interview with Oliver Scott Goldsmith, an economics professor at the Institute of Social and Economic Research at the University of Alaska, Anchorage, Goldsmith said that “in many rural areas, [the $1,200] wasn’t really enough, and in many urban areas it was more than enough.”

Alaska has a history of allocating resources equally to all residents. Every man, woman and child, for instance, receives a check each year from oil royalties collected by the state. The distributions are equal, regardless of income.

Palin’s similar approach to handing out these checks is still surprising to an outsider, considering the stark differences between life in rural Alaska and in places like Anchorage and downtown Wasilla, where all the amenities of modern life are readily accessible at about the same price as in other major U.S. cities.

For the 30 percent of the state who live in rural areas, life is tough — and expensive.

Today the New York Times reported on life in the rural village of Akiachak, where one-third of the homes are not connected to water and sewers. Reporter Dan Barry noted the high prices of some basic goods: $8.29 for a box of Cheerios; $7.39 for a 20-ounce bag of Lay’s potato chips.

Gasoline runs about $6.59 a gallon, and heating oil is topping $7.06 a gallon.

None of the village leaders said anything about their governor.

The Times story notes that there is a notable migration out of these villages to Anchorage, “the Oz of Alaska.”

I’ve heard some talk that many people living in rural areas will spend their $3,200 dividend and fuel surplus checks to relocate to places like Anchorage.

That probably wasn’t how the Palin administration envisioned the checks being spent. But then again, Palin has said she’s “confident the people of Alaska can spend the surplus dollars better than state government is going to spend them.”