The price of power is the price of everything

The fighter planes that won the Second World War were made of electricity.

I mean that almost literally. Aluminum is sometimes called congealed electricity, because smelting it takes staggering amounts of power and very little else. In the 1930s the government dammed the Columbia, and suddenly the Pacific Northwest had about the cheapest electricity on earth. The smelters came almost overnight. By the middle of the war that cheap river power had turned into a huge share of the nation’s aluminum, and the aluminum turned into bombers over the Pacific. A region that had been orchards and timber became an industrial power in a single decade, for one reason. The price of power fell, and everything else followed it down.

That’s the pattern, and once you see it you see it everywhere. Industry does not move to where the speeches are. It moves to where the kilowatt is cheap. Iceland, a lava field in the North Atlantic with fewer people than Anchorage, smelts aluminum for the world because its geothermal power costs next to nothing. Texas, as I wrote a few weeks back, is closing on the entire economy of France, and cheap energy is the floor that whole story stands on.

Now hold that against home

Now hold that pattern up against home.

Alaska has more energy in the ground, offshore, and falling through its rivers than any state in the union. And Alaskans pay among the highest energy prices in America. On the Railbelt we pay roughly half again the national average for electricity. Out in the villages, where diesel comes in by barge, power can cost several times what it costs in Seattle. The state runs an entire program, Power Cost Equalization, that exists for one reason: rural electricity is so expensive we subsidize it to keep the lights on.

And here’s the part that never shows up on a utility bill. In Alaska, the price of power is baked into the price of everything else. Nearly everything we eat, wear, and build arrives by barge, truck, or plane, and every one of those runs on fuel. The freight is in the milk. The diesel is in the two-by-four. The heating season runs more than half the year, so energy sits inside the rent too. When people say Alaska’s cost of living runs about a quarter to a third above the national average, what they are mostly describing, once you trace it back far enough, is the price of energy showing up in disguise.

That is why I have come to think affordable energy is not an issue at all, in the way we normally use that word. Issues sit next to each other on a list. Energy sits underneath the list. It’s the denominator. When power is dear, every number above it gets worse: groceries, housing, the cost of running a shop, the wage a business can afford to pay. When power gets cheap, all of those move at once. There is no other lever in state policy that touches the grocery bill and the paycheck and the job market in the same pull.

I ran the Department of Revenue, so I have sat in the rooms where a company decides whether to build in Alaska. The first serious question is almost never taxes, and it is never the weather. It’s power: what does it cost, and can I count on it. For twenty years our honest answer has sent them somewhere else.

We used to be good at this

It was not always this way, and this is the history worth knowing. In 1969 the first cargo of liquefied natural gas ever exported from the United States left from Kenai, Alaska, bound for Japan. Not Texas. Not Louisiana. Kenai. We invented American LNG exporting and ran that trade for about four decades, while cheap Cook Inlet gas kept Southcentral’s heat and light among the more affordable in the north. Then the field aged, nobody replaced it, the plant went quiet, and the Gulf Coast picked up the business we pioneered. We have studied our own Columbia River moment, the Susitna hydro project, since before I was born, and shelved it more times than anyone can count. The gas that could restart the whole engine is still sitting under the North Slope while Juneau argues terms, which is a fight I’ve written about separately.

So the diagnosis isn’t complicated, even if it’s uncomfortable. Alaska treats energy as a bill to complain about. The places that pass us treat it as the foundation you pour first. That difference is not geology and it is not luck. It’s a habit, and habits can be broken.

What gets possible

Because look at what becomes possible the day Alaska’s power turns cheap again.

The fish we catch could be processed here instead of shipped across an ocean and sold back to us with somebody else’s margin on it. The graphite at Graphite Creek could be refined in Alaska, not just dug here, and refining is where the jobs and the value live. Greenhouses become a business instead of a hobby, in a state that imports the overwhelming share of its food. The world’s computing buildout is shopping the globe for electricity as we speak, and it buys from whoever has power to sell. And underneath all of that sits the quiet version that matters most: a family in Wasilla or Bethel whose heating bill, electric bill, and grocery bill all bend downward at the same time, from the same cause.

That last part is the one I would ask you to hold onto. We talk about affordability and opportunity as though they are two different problems, one for families and one for the economy. In Alaska they are the same problem wearing two coats. Nobody who has priced a winter here against a paycheck here is confused about why people leave. Make energy cheap and both coats come off together. Life costs less, and there is suddenly more worth staying for.

The ingredients are not in question. The gas, the hydro, the geothermal, the wind, the tidal power sitting in Cook Inlet, where Turnagain Arm runs one of the largest tidal ranges on earth. The customers are not in question either. What has been missing, for about as long as I have been alive, is the decision. Places are not born with cheap power. They build it, the way the Northwest built it in the thirties and Kenai built it in the sixties, and then everything else gets built on top.

The price of power is the price of everything. That’s the bad news and the good news in one sentence, because it means Alaska’s affordability problem and Alaska’s opportunity problem have a common answer, and we happen to be standing on it.

I know which decade I’d like the decision made in. This one.