Distributor moves to stabilize fuel transportation costs
February 16th, 2011 | Margaret Bauman
NorthStar Gas, a fuel distributor delivering to remote communities in Western Alaska, announced Feb. 16 a new alliance, plus the addition of a new barge, that owners hope will help stabilize fuel transportation costs for the region.
"We won't be able to control the price of fuel, but we will be able to stabilize the transportation costs, which is a big component of the fuel," said Elaine Brown, president of the Alaska Native firm owned by 16 village and two regional corporations. Fuel transportation costs can amount to one-third to one-half of the overall fuel costs.
NSG also anticipates that the new barge may be the first of a fleet of barges and possible expansion further into the North Slope area.
The 162-foot long shallow-draft fuel and deck cargo barge being built in Portland, Ore., at a cost of about $3 million will have the capacity to carry up to 200,000 gallons of fuel along with deck freight, Brown said. The advantage of the shallow draft barge is it will be able to get into communities when the water is low, earlier in the spring and later in the fall, she said.
The barge, to be owned by NSG and operated by Delta Western, will be named the "Cauneq," a Yup'ik word meaning "a place or thing to turn to."
In conjunction with the new barge, NorthStar Gas and Delta Western will work together in an effort to help stabilize fuel transportation costs in Western Alaska, Brown said. The timing is important, what with the Obama administration proposing to cut heating fuel subsidies, and rural Alaskans looking for ways to help offset those costs, NSG said in a statement released along with the presentation.
NSG is currently putting together a fuel delivery schedule for spring. NSG currently serves over 150 businesses in nearly 50 villages in the Yukon, Kuskokwim and coastal region, and has delivered to date more than 43 million gallons of fuel. Delta Western has been serving communities in Alaska statewide for nearly 50 years. "We're not sure right now which communities this barge will be hitting," Brown said. "We know it will be hitting the upper Kuskokwim and the lake region,"(which includes Nunpitchuk), she said.
Typically Delta Western or Crowley has been delivering fuel to customers in the past,
"This will add a third barge to the fleet, so the fleet of barges will be able to expand their footprint into rural Alaska," Brown said. "We will continue to serve our core customer base, but it will allow us to expand our footprint to other regions."
The expanded service will also benefit the economy in other ways: jobs.
NSG will be putting together a scholarship program to allow local rural Alaskans to get marine schooling making them eligible for jobs ranging from deck hands to captains.
Most of NSG's customers are owners, living in the 16 villages within the two regions.
They include Calista Corp., NANA Development Corp., Akiachak Enterprises, Akiachak; Askinuk Corp., Scammon Bay; Atmautluak Ltd, Atmautluak; Azachorok Inc., Mountain Village; Chinuruk Inc., Nightmute; Choggiung Limited, Dillingham; Iqfijouaq, Inc., Eek; Kasigluk Inc., Kasigluk; Kokarmiut Corp., Akiak; Kwethluk Inc., Kwethluk; KWIK Inc., Kwigillingok; Napaskiak Inc., Napaskiak; Nunapitchuck Ltd, Nunapitchuk; Qanirtuuq Inc., Quinhagak; Qemirtalek Coast Corp., Kongiganak, and the Kuskokwim Corp.
"We're hoping that within the next year or two that our communities will be able to start utilizing fuel credits," Brown said. Rather than giving the customer a dividend, NSG would put the funds into an NSG account. "Everybody owns stock," she said.
"They would get "x" amount of dollars per share. Those dollars would be turned into dollars of fuel and would sit on account as a credit," she said.
Margaret Bauman can be reached at email@example.com, or by phone at 907-348-2438