Alaska Produces Oil for the World and Pays the Highest Energy Costs in America
Alaska spends more on energy per capita than any other state in the country. That number matters because Alaska also sits atop some of the largest domestic oil and gas reserves in the United States.
The gap between production and affordability has become impossible to ignore. When the U.S. war with Iran forced the Strait of Hormuz to close this spring, fuel prices in remote Alaskan communities spiked overnight. Gas surged past $12 a gallon in some areas. For communities like Arctic Village, a Gwich’in settlement in northern Alaska with no road access, that meant fuel had to keep arriving by plane at prices that put heat and electricity out of reach.
“Everything has to be flown into our community.”
Tonya Garnett, spokesperson, Gwich’in Steering Committee, July 2026
The price spike hit more than gas. Because nearly all goods in roadless communities arrive the same way fuel does, basic necessities like milk jumped in price simultaneously.
State and Federal Policy Bet Everything on More Extraction
Governor Mike Dunleavy has responded to the crisis by calling for faster domestic oil and gas production, arguing it will stabilize Alaska’s economy and strengthen U.S. energy security. On his first day back in office, President Trump signed an executive order reopening previously suspended oil leases in the Arctic National Wildlife Refuge and directing faster approval of energy and mining projects across the state. The administration frames Alaska as central to American energy dominance in global markets.
That bet carries real risk. Alaska’s utilities are already running short of natural gas. School budgets are under severe strain from rising energy costs. A system built around fossil fuel exports has left the state dependent on the same global price shocks it helps create.
Rural Communities Are Building a Different Path
Many rural Alaskan communities are not waiting for state or federal policy to catch up. Small-scale renewable energy projects are spreading across the state, driven by a practical calculation: local solar and wind generation cannot be cut off by a war, a closed shipping lane, or a stretch of frozen river.
The effort is incremental. Community microgrids and small wind installations reduce diesel dependence, but they require sustained investment and technical support that state and federal budgets have not prioritized. The state continues to direct its major energy resources toward extraction for export rather than affordable power for residents.
The logic here is not new. Communities that produce a resource but cannot afford to use it have been making the same argument for centuries. In Alaska, that argument is now a budget crisis.
What You Can Do Now
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Call your U.S. senators at (202) 224-3121 and tell them to fund the USDA Rural Energy for America Program, which supports renewable energy projects in rural and tribal communities. Ask them to oppose cuts to this program in the current budget reconciliation process.
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Contact the Alaska Governor’s office at (907) 465-3500 and ask Governor Dunleavy to increase state investment in community renewable microgrids. Alaska’s Renewable Energy Fund has financed hundreds of rural projects since 2008; ask that it be fully funded and expanded.
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Find your tribal energy contact. The Bureau of Indian Affairs Energy Division provides technical and financial support to tribal communities pursuing energy independence. Share this resource with Alaska Native communities in your network.
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Submit a public comment to the Bureau of Land Management at regulations.gov opposing new ANWR lease approvals until a community energy affordability review is completed. Search “ANWR” to find open comment periods.
Sources
- Nebraska has awarded roughly half of $218M in funds allotted for first year of rural health program — Nebraska Examiner (2026-07-31)
- Texas lawmakers want to halt plan to build high-voltage transmission lines across the state — Texas Tribune (2026-07-31)
Alaska Beacon: Alaska’s Energy Paradox, Rural Communities Face $12 Gas and No Roads U.S. Energy Information Administration: Alaska State Energy Profile and Per Capita Costs Gwich’in Steering Committee: Arctic Village and Tribal Energy Advocacy USDA Rural Development: Rural Energy for America Program Overview Alaska Energy Authority: Renewable Energy Fund Project History