Alaska's economy depends heavily on increasingly expensive diesel fuel for heating, transportation, electric power and light. Though wind and hydroelectric power are abundant and underdeveloped, proposals for statewide energy systems (e.g. with special low-cost electric interties) were judged uneconomical (at the time of the report, 2001) due to low (less than 50¢/gal) fuel prices, long distances and low population. The cost of a gallon of gas in urban Alaska today is usually 30–60¢ higher than the national average; prices in rural areas are generally significantly higher but vary widely depending on transportation costs, seasonal usage peaks, nearby petroleum development infrastructure and many other factors.

Why were alternative energy sources judged uneconomical in 2001?