The Denali Commission is an independent federal agency that funds infrastructure projects across rural Alaska. It supports energy, transportation, telecommunications, bulk fuel storage and community facility projects in remote Alaska villages.
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Kivalina, Wales and Eek lead off $100 million push to replace village fuel tanks
Contractors were headed to Kivalina, Wales and Eek this summer to start building new bulk fuel tank farms, the first three of 10 rural Alaska villages sharing a $100 million federal grant that runs through July 2028, the head of the Alaska Village Electric Cooperative wrote in July.
"This is life changing money for the communities involved," AVEC President and CEO Bill Stamm wrote in the column, which the cooperative posted online Wednesday. Contractors "are hitting the beaches this year to begin construction" in the three villages, he wrote, and tanks for all 10 projects have been bought and are being built for delivery over the next two years.
Aging tanks
Villages off the road system usually get fuel by barge once or twice a year, in summer. They have to store enough heating oil, transportation fuel and diesel for power generation to get through the year, Stamm wrote. That fuel is costing more: in AVEC communities that had received fuel by August, the delivered cost was 35% to 40% higher than last year, he wrote, Alaska News reported Thursday.
Many of the tanks that hold it are old. The Alaska Energy Authority counts more than 400 bulk fuel facilities in rural Alaska, most of them more than 40 years old, and puts the deferred maintenance at about $1 billion. In August 2024, the agency moved two tanks in Shageluk that were within two feet of falling into the river, according to its budget request. Shageluk is one of the 10 villages.
In Wales, the old tanks are in poor condition and at risk from coastal erosion and flooding from Bering Sea storm surges, according to AVEC's request for a state water quality certification. The new tank farms would sit farther from the coast, on a gravel pad built up to 17 feet above sea level from ground that sits 8 to 10 feet up. The pad would hold four 30,000-gallon AVEC tanks, three 30,000-gallon tanks for the city's retail fuel sales and a new power plant. AVEC estimated the work would run from June 2026 to June 2028.
All of the new facilities will be raised above flood level on earthen pads or steel piles and built inside secondary containment, which holds fuel if a tank leaks, Stamm wrote.
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