Bulk Fuel Upgrade Program

Under 3 AAC 108.100 – 130, the Alaska Energy Authority’s (AEA) Bulk Fuel Upgrade (BFU) program may provide financial assistance and technical assistance including construction management and training to eligible recipients.

Rural Alaska is energized primarily by liquid fuels: diesel for power generation and heating, and gasoline for transportation. Rural villages are located either along rivers or on the coast, so fuel is primarily delivered by barge. Where barge delivery is unavailable or uneconomic, air tankers and in a few cases tanker trucks deliver fuel. Delivery is seasonal and limited by sea or river ice, water levels, or ice road availability. Villages of a few hundred people must store hundreds of thousands of gallons of fuel to meet their annual energy needs.

Many of rural Alaska’s bulk fuel facilities were built in the 1950s and 1960s or earlier. They were not built to national standards or in compliance with current regulations, and some of them are at the end of their useful lives. This infrastructure, however, continues to be in service until upgraded or replaced, in some cases posing risks to personal safety and the surrounding environment.

In recent years, AEA’s BFU program has shifted the focus from new construction to maintenance and improvement where feasible. In many cases, existing bulk fuel tanks can be re-used if they are appropriately painted and/or repaired. Maintenance and Improvement projects focus on minimizing risk, using local workers and equipment, and replacing piping, pumps, valves and tanks that are at the end of their useful life.

Upgrading bulk fuel facilities reduces the unit cost of energy by replacing leaking tanks and reducing the risk of future tank and equipment failure. Bringing these facilities into compliance with federal and state codes and regulations also makes them safer and more reliable. By eliminating fuel spills from leaking tanks, a community is able to use all fuel purchased and avoid environmental cleanup costs. By following the terms of the business plans, owner operators are better able to manage the storage facilities and the fuel inventories to the greatest economic advantage. The graphic indicates the continuous progress toward the goal. Projects flow from left side of the graph to the right as they are identified as a project in need, then progress from conceptual design through construction and are ultimately completed.

For an up-to-date snapshot of the AEA’s Bulk Fuel Upgrade (BFU) program, please see our downloadable Factsheet.

Bulk Fuel Upgrade Statutes and Regulations

• Statutes
• Regulations