In Fairbanks, a new subsidy program will pay residents to replace oil burners with natural gas or propane

Part of what contributes to Fairbanks’ air quality problem is the fact that it gets strong temperature inversions where the air gets stuck and the pollution layers on itself. This photo was taken from the University of Alaska Fairbanks on Jan. 6, 2019, when there was an air quality alert in effect for the area. (Ravenna Koenig/ Alaska’s Energy Desk)

Money to help residents convert to natural gas or propane was passed by the Fairbanks North Star Borough Assembly Thursday night. Like the existing wood stove change-out program, the measure hands out a subsidy to take oil burners and replace them with natural gas or propane burners. 

The money does not come out of taxpayers’ pockets — it is leftover from the court settlement of unpaid property taxes from the Trans-Alaska Pipeline System. It had been set aside since 2014 as a line of credit for the Interior Gas Utility.

But last summer, IGU secured a loan from the Alaska Industrial Development and Export Authority (AIDEA), which freed-up the pipeline tax settlement money. So, Borough Mayor Bryce Ward asked the Air Quality office to develop a program to incentivize conversions to cleaner-burning fuels.

Assembly member Jimi Cash says he has seen the need in his work in the heating industry.

“More than an air quality thing, it is a humanitarian thing, with this program,” Cash said.

The new program uses $1 million of the settlement. Dan Britton, IGU general manager, told the Assembly the utility plans to add hundreds of new natural gas customers this winter and spring.

“More conversions mean a bigger impact to air quality,” he said. “The $1 million will support 150-200 conversions quickly, and will help people that might have a challenge with coming up with the funds initially.”

Anyone with an oil boiler or furnace could apply for up to $7,500 to replace an existing burner that uses heating oil, including parts, labor, a gas line, and hookup fees. If you have an oil-fired system that can be converted, rather than be replaced, you could apply for up to $2,500.

Once conversion is complete, a homeowner has a deed restriction that would prevent a future owner from installing a wood, pellet or coal stove. That didn’t sit well with member Jimi Cash, who tried to amend the ordinance to have the deed limitation not impact homebuyers.

“And so now that person, when they make a decision on how they are going to heat their home, they’re now going to be restricted by a decision made by a previous homeowner,” he said.

For member Aaron Lojewski, the ordinance doesn’t do enough to reduce particulate pollution. He asked why the new program would subsidize people to move from the second-cleanest fuel — that’s diesel oil — to the cleanest fuels, natural gas and propane, when he would like to see getting people off the dirtiest fuels like wood and coal.

 “There’s a very, very minimal reduction of PM 2.5 emissions from going from oil to natural gas,” Lojewski said. “So, if you’re going to subsidize anything, you should subsidizing people not to use solid fuels.”

Solid fuels are now targeted by a different program: the borough’s wood stove change-out program. It’s paid by federal Targeted Airshed Grants, and is ongoing. The new oil boiler-to-gas or propane program will start next year.