Murkowski: “It is hard right now. Every Alaskan is feeling it.”
Washington, DC— Yesterday, U.S. Senator Lisa Murkowski (R-AK) spoke on the Senate floor highlighting the impacts the Iran conflict has had on energy markets and prices, particularly in rural Alaska.
Transcript As Delivered
Madam President, like so many across the Senate, really, across the country, I think we've all been watching the news this weekend to see whether or not we would have an announcement from the Trump administration on a possible agreement to reopen the Strait of Hormuz and ensure that Iran never develops a nuclear weapon, among other objectives.
I think the news this morning is promising, and we're all waiting to see what the contours of that agreement will be. We can debate the way the administration started this war, but I certainly stand here today genuinely wishing the administration all the best in ending this on favorable terms.
It would clearly be good for the region, and it would be good for the world if the Iranian regime stops funding terror and permanently abandons its nuclear ambitions. I think we can all agree to that.
And while there appears to be a final agreement, we haven't seen it yet. We want to have a good deal from the U.S. perspective. We're going to learn more this week, and as we do that, I hope that things will begin to reopen and that we will be able to stave off what has been rapidly approaching in our energy markets.
That's what I want to speak to more directly today.
We know the basics here. All across the country, people and businesses are paying a lot more for fuel. We've seen prices go down a little bit today. That's good news. But the fact of the matter is that we've all felt the impact from rising prices.
The price of oil went up substantially during the war. So did the price of gasoline, diesel, kerosene, avgas, and other fuels as well.
That's taking a toll. It's simply more expensive to drive. It's more expensive to fly, to buy groceries. According to one estimate, the average American household has paid nearly $400 more for fuel since the start of the conflict.
As tough as that all is, and it has been very hard for many families, it has also been somewhat tempered.
For the past couple of months, we've been emptying ships with fuel that had already transited the Strait of Hormuz. Some regional flows have been rerouted to bypass it. That has been good in terms of getting product out there. Some producers, particularly here in the United States, have clearly stepped up their production, and we've seen how that has been able to soften things. China has reduced its imports. Refiners have adjusted their runs.
So there's been a lot going on to try to soften this impact. We've also tapped into commercial stocks and our emergency reserves through the Strategic Petroleum Reserve, and we've benefited from some sound policies that this country has put in place. It was not too many years ago that I was very proud to lead the effort to lift the ban on crude oil exports, which as we have seen has greatly stabilized markets so far.
We have avoided the energy crisis that many thought was inevitable after so much global supply went offline. But I don't think we're out of the woods yet.
Global oil inventories are now dangerously low, and many in industry are sounding the alarm. They're telling us things like, "We're running out of runway here." That we've depleted our buffers and shock absorbers, that inventories have declined to levels not seen in more than 40 years.
Once no cushion is left, it's really hard to keep prices down. I hope we're going to be able to avoid that, because the consequences could be catastrophic in some places.
As a senator for Alaska, I’m also keenly aware that even if most of the country is able to avoid the worst, there are some who won't be able to escape it.
In fact, some are already living through it. They're living in my home state right now in communities like Ambler, Galena, and Mountain Village. What they're seeing is the impact of these rising prices. Unfortunately, prices are high now, but it's really hard for them to see relief in sight.
Even if the Strait of Hormuz fully opens this week, even if regional production and shipping come back much faster than projected, Alaskans in these communities and around my state will continue to face the repercussions of this war for months to come.
It's them that I want to draw attention to because, quite honestly, they need some help. They need and deserve help from every level of government, starting in Alaska and primarily from the state of Alaska, but extending to some reasonable actions we can take here.
So let me explain.
How is the war in Iran impacting towns and villages more than 6,000 miles away in Alaska so much more so than in other places? Because I'm hearing from all my colleagues that everyone's feeling the impact in their communities. So why am I standing here today to say our situation is a little harder, a little more challenging, and why will those impacts continue even after the war is over?
You can't have a discussion about Alaska communities without putting it in the context of Alaska as a whole.
Alaska is big. We all know Alaska is big. It's one-fifth the size of the United States of America. If you stretched Alaska over the Lower 48, we would extend from Florida all the way to California, practically from the Canadian border southward (to Texas). It's big.
In the midst of our vast geography, we have some 200 isolated communities around the state—about 20 percent of our total population—that are not connected to the road system.
All of these communities around the perimeter of the state, all the way up to the North Slope, are not connected by road. Down in the section of the state where I grew up, Southeast Alaska is entirely islanded, so nobody is connected by road there.
You've got the Panhandle, the Aleutians, and communities all along the coastline that are not connected by road. They are supplied by boats and planes that bring in goods, food, medical supplies, mail, and fuel. The fuel they rely on.
Many of these small coastal communities rely on diesel power generation. They depend on diesel to be able to keep the lights on. Sometimes that's offset by a little wind or a little solar, but for the most part these communities are diesel-powered.
So how do they get their fuel?
It's not like you can just call up the fuel barge any time of year. Once you get up here, you run into ice-choked waters. Rivers freeze over. To deliver fuel, you have to wait until the ice moves out and melts.
This is the time of year when that happens. It's hotter than the dickens here in Washington, DC, but back home the ice only left a matter of weeks ago. That allows fuel barges to begin resupplying these communities.
Effectively what happens, for most coastal and river communities—along the Kuskokwim, the Yukon, and elsewhere—fuel arrives by barge. It may be July before some communities receive fuel, but the deliveries really begin now in June.
Typically, a second delivery comes in September before freeze-up. Sometimes, in many river communities, fuel is delivered only once a year because water levels may be too low later in the season.
And, it's expensive.
Fuel was already expensive in these communities before the war. But if you think $4 a gallon in Denver is bad, try $9 a gallon in Dillingham. If $4 a gallon is bad in New Hampshire, up in Nuiqsut it's about $14 a gallon.
These are prices I had my interns check just last week. These are current prices before the spring barges have arrived.
Think about what's happening. In hubs like Bethel, Nome, and Kotzebue, fuel barges are now arriving. The prices I just mentioned—$9 a gallon in Dillingham or $14 in Nuiqsut—are going to go up.
We're looking at estimates of perhaps 50 percent or more.
This is sticker shock, and it's tough enough to see the increase with those barges coming in. But these are not temporary increases. These prices are going to last for months because communities buy fuel in bulk. These shipments have to last them through September or, in some cases, through the entire winter.
They're locked into the fuel prices they paid over the past month or two, when prices were at their highest.
The hubs are facing strains, but costs will be even higher for communities farther upriver or inland. You can probably add another couple of dollars per gallon for many of those communities.
In King Salmon, which is connected by a small road to Naknek, fuel is running about $9.11 per gallon. You don't just run to the store to buy milk. It's not a cheap commute.
In Hooper Bay, where fuel costs almost $10 a gallon, residents are now paying about $550 to fill their fuel tanks. That's going to translate into more than $1,000 a month this winter.
Even if oil prices continue to fall as we’ve seen today, and again that's good news, my fear is that these communities won't benefit because they had to buy when prices were high. They had to buy when the prices were high and they're locked in now. Time simply didn't work in their favor.
It takes about three months from refinery order to delivery in upriver villages. They couldn't just sit back and wait for lower prices because if they did, they risked not getting fuel at all before winter.
Once sea ice returns, you're locked out. The only solution then is flying fuel in 50-gallon barrels. That's expensive.
It is hard right now. Some of these communities don't have the working capital to pay 50 percent more for fuel. Some are waiting and risking bad outcomes this winter because they simply may not be able to afford to purchase their fuel.
Rural Alaska has faced an affordability crisis for some time. When it suddenly intensifies like this, I don't even know what we call it. But I can tell you this much: if you live in one of these rural towns and villages, you're wondering, "How am I going to make it?"
This is the time of year when you need to fuel up your skiff so you can go upriver fishing to feed your family. Food in the store was already expensive and is now even more expensive.
You need fuel for your four-wheeler so you can hunt caribou.
These challenges affect food security, but people are also asking themselves where else they can cut back because they have to have enough fuel to make it through the winter.
None of these places are easy places to live, particularly in winter.
I received a letter just a couple of hours ago from one of the leaders in the AVCP region. She began by saying, "It's not too often that I am scared, but today I am."
She spoke to the challenge of higher fuel costs, concerns about access to salmon, and the challenge of providing for families.
I talk a lot about rural communities because their situation is just so challenged right now, but it's not just rural Alaska.
Every Alaskan is feeling it.
In Fairbanks, in the Interior, where I went to high school, the local utility announced a new fuel surcharge averaging $45.74 a month. That's on top of already high utility bills.
These are the issues that emerge when your state's ability to responsibly produce its resources has been choked off for decades, resulting in a pipeline system that is one-quarter full, less in-state refinery capacity than we would otherwise have, and less space in the budget to build out new energy systems.
My final point today is that these Alaskans are going to need help.
As I said, most of that should come from the state of Alaska because, in fairness, our budget has benefited from the war. Higher oil prices have helped our state treasury.
I do commend our state legislature. They've already passed legislation providing a $200 energy rebate to each Alaskan. They've doubled the cap on a bulk fuel revolving loan program. They've appropriated additional funding for it. They've made an allocation for school districts to purchase fuel, and they've brought back a community assistance program.
I'm pleased with the direction they've taken. We're waiting for the governor to sign those measures, and I think there is a possibility that our state legislature could do more in a future special session.
Here at the federal level, I think we have an opportunity to complement those actions and help those who have been hurt most dramatically and most immediately by higher fuel costs.
We can work within existing programs. We can provide full funding and emergency contingency funding for the Low-Income Home Energy Assistance Program, LIHEAP.
We can appropriate funding for USDA's High Energy Cost Grant Program, which is administered in Alaska by the Denali Commission.
We could also look at a new mechanism to provide temporary assistance to those grappling with some of the heaviest burdens.
We can help, and I want to underscore that.
As this chamber considers an Iran supplemental to replenish missiles, interceptors, radars, drones, and infrastructure that we've lost, I hope some of these options will be on the table.
Because for some of our fellow Americans, especially those in rural Alaska, the impacts of this war won't end when a peace agreement is signed. They're going to continue long after, making life even more challenging.
I share this with colleagues in an effort to explain some of what we face in a place that many view as far away and remote.
But I would also suggest that we all have rural places in our states. We all have communities that are struggling right now. How we are there for them, how we help them face these challenges within their own families, is why we're here.
Madam President, I yield the floor.
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