Natural gas for Fairbanks.

Fairbanks is one of the few major communities along the Railbelt that does not have access to clean-burning, natural gas. A home-grown mom and pop business is changing all that.

This year marked the first time in history that natural gas was delivered to commercial and residential consumers in Fairbanks. Until April, the city relied entirely on coal and heating oil, resulting in poor air quality during the winter months. But newly developed distribution facilities-owned and operated by Fairbanks Natural Gas LLC, a subsidiary of Northern Eclipse LLC has changed all that.

"The old power plant in downtown Fairbanks emits tons and tons of pollutants into the atmosphere every day," said Jim Spencer, FNG's marketing manager. He said natural gas' clean-burning aspect is what makes it attractive to Fairbanks and other communities that want to use it for home heating and electrical generation.

Northern Eclipse purchases gas from Arco Alaska Inc.'s share of the Beluga River Gas Field west of Anchorage (Anchorage's source of natural gas); then FNG converts it into liquefied natural gas at a plant located between Point MacKenzie and Wasilla.

The liquefied gas is then transported to Fairbanks in cryogenic tankers, where it is stored in twin 26,500-gallon cryogenic tanks. As it is needed, it is vaporized into an underground distribution system to be delivered to commercial and residential customers. Getting the gas to customers is the next hurdle.

Pipeline crews are extending the gas main infrastructure in Fairbanks, and FNG anticipates having 10 miles of piping in place by the end of this month, serving 35 commercial and 15 residential customers.

"We now have the gas in proximity to several neighborhoods, but we just didn't have time to get service lines in to everyone who wants gas," said Spencer. He said the most frequent comment from potential customers is "When are you going to get to my house?" Expansion into other areas of Fairbanks should be substantial in 1999.

Getting to this point has been a four-and-a-half-year project of husband and wife team Ray and Shannon Latchem.

In 1993, the Latchems founded Northern Eclipse and subsequently Fairbanks Natural Gas to acquire, liquefy, transport and deliver gas to the Fairbanks market. More than $5 million has been spent to date. Ray, president of FNG, was also instrumental in establishing Norgasco, which distributes natural gas at Prodhoe Bay.

Other key personnel involved in the project are Charlie Helm, vice president of engineering and operations; and Keith Hand, chief financial officer. Rosewood Resources, which is owned by the Caroline Hunt Trust Estate, recently purchased a 54-percent interest in FNG.

Though the cost of natural gas in Fairbanks is about double that of Anchorage ($.678 per hundred cubic feet for commercial customers and $.696 for residential, compared to $.328 commercial and $.346 residential in Anchorage), the Latchems are optimistic that North Slope gas will eventually come to market through a proposed pipeline that will provide cheaper gas for the Interior. The owners of slope gas reserves, primarily at Prudhoe Bay, are working on ways to get some of the proven 26 trillion feet of North Slope reserves to market. However, the reality of such a project may be years away.

FNG is also promoting natural gas exploration in areas closer to Fairbanks and said that since the company is a regulated utility, savings would be passed on to the customers.

FNG's headquarters and staff recently moved from Anchorage to Fairbanks to be closer to their market. A natural gas showroom has been created at its headquarters building to demonstrate gas furnaces, fireplaces and appliances, and to provide assistance for homeowners, builders and mechanical engineers.