INSIDE THIS ISSUE n 2023 Annual Convention Recap n Busy Winter on North Slope n What’s Ahead for 2024 n A Look Back: RDC Through the Years ALASKA RESOURCE REVIEW VOLUME 1 | ISSUE 1 | WINTER 2024 Magazine of the Resource Development Council for Alaska | www.AKRDC.org REFILLING TAPS: New Work on Slope Bodes Well for Future Introductory Issue: The New Alaska Resource Review
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www.AKRDC.org 3 DEAR RDC MEMBERS AND SUPPORTERS: There is so much to be thankful for this year and for us at RDC, it’s YOU! As we begin a new year of challenges, we never waver from our mission of defending Alaska’s resource industry, it’s worth a moment to look back at 2023’s successes. As you see in the many pages to follow, we recently celebrated RDC’s 44th Annual Alaska’s Resources Conference with a theme of Alaska’s Resources: Leading the Way. This conference was a huge success, with one of our highest attendance rates yet. A very big thank you to all our attendees, sponsors and exhibitors for making this a true success! With nearly 60 speakers spread across two days of content, valuable updates and discussions were had as to where, how and why Alaska’s resources are leading the way to ensure a strong economic future for Alaska, our role in securing domestic energy security and independence, our mineral potential for supplying and supporting new energy technologies, and job creation our industries produce for Alaskans. It was an information-packed two days of industry and policy updates across our tourism, timber and forest products, oil and gas, and mining industries. This year’s conference also included a new event: a networking reception for emerging professionals with established professionals. Thank you to all our sponsors who made our inaugural young professional event a great success. We were pleased to once again support fundraising for two very important nonprofit organizations that make Alaska a better place to live: Alaska Resource Education (ARE) and Challenge Alaska. Congratulations to all of our raffle and centerpiece auction winners! If you missed it, mark your calendar for next year! Beyond what you read here, our website includes presentations from the event.If you have not done so, please take our conference survey to share feedback from your experience. And now, back to business … While the fun of conference continued in November, our federal regulatory and permitting challenges also continued. Thank you to everyone who commented on the ANWR lease cancellations and BLM’s SEIS for the ANWR leasing program last month. The battle continues despite Congress’s clear direction to allow oil and gas leases sales in the 1002 Area of ANWR. BLM issued a proposed rulemaking that threatens to restrict future development in the National Petroleum Reserve – Alaska (NPR-A) on Alaska’s North Slope.This rulemaking suggests BLM is merely implementing current land management practices; however, it proposes new provisions for managing special use designated areas in a way that creates a presumption against permitting future development. The public comment period for this action ended Dec. 7, and we’ll await a decision soon. Roadblocks continue also for the Ambler Access Project. BLM released its draft Supplemental EIS for the Ambler Mining District Industrial Access Project, theproposed 211-mile industrial access road to the state of Alaska’s Ambler Mining District. Despite this access being guaranteed in federal law, the permitting process is still underway eight years after the application was first submitted. It’s time to move forward on this project and grant access that was promised by Congress in 1980. Your commitment to supporting these projects through testimony is critical, and the reason we will always alert you to public comment opportunities. Your voices matter. In your hands you’re holding the first issue of the new Alaska Resource Review magazine. We have published a newsletter since 1975, and this is a new bigger, redesigned version, now with national circulation. A digital version will also be available on our website, for you to share via social media and email. We’ve teamed with Fireweed Strategies here in Anchorage, who has great expertise in publishing magazines like ours. We are looking for guest contributors, so if you have a topic of interest you would like to submit, please let me know! There are also advertising opportunities … we hope you’ll support what we’re doing! Our breakfast forum series for 2024 has begun. Please join us all year for these critical updates to what is happening in our state. After many years in our current location, RDC is moving offices! Our new address: 301 W. Northern Lights Blvd., Suite 406 Anchorage, AK 99503 Our telephone numbers will remain the same. Stop in and say hi if you’re in town! And now, we’re off for another busy, challenging, always interesting year. Thank you for all you do for Alaska! THANK YOU FOR SUPPORTING RDC’S MISSION “There is so much to be thankful for this year and for us at RDC. And now, we’re off for another busy, challenging, always interesting year. Thank you for all you do for Alaska!” — Leila Kimbrell, Executive Director, RDC VOLUME 1 | ISSUE 1 | WINTER 2024
FEATURES IN THIS ISSUE PAGE 9 NORTH SLOPE REBOUND A flurry of winter activity on Alaska’s North Slope, plus the growing momentum in the Willow Project and Santos development lay foundation for major new oil in the Trans-Alaska Pipeline System. PAGES 14-35 BREAKING RECORDS, SETTING DIRECTION Our 2023 conference in Anchorage broke records for attendance. It also set a direction for the challenges and opportunities before Alaska resource industries in 2024 and beyond. PAGES 37-40 A LOOK BACK AT HISTORY In our new magazine, we look back at some of the history of our organization, in the pages of our Resource Review over the decades! PAGE 44 BECOME AN RDC MEMBER! Join RDC as a member and join us throughout 2024 at our major events and forums. ALASKA RESOURCE REVIEW is published in partnership with the Resource Development Council for Alaska, Inc. by Fireweed Strategies LLC, 4849 Potter Crest Circle, Anchorage, AK 99516. For advertising information and story inquiries, email Lee.Leschper@FireweedStrategies.com. ALASKA RESOURCE REVIEW is mailed at no charge throughout Alaska. To subscribe, email Admin@FireweedStrategies.com. Publisher: Lee Leschper | Editor: Tim Bradner | Production, Design: Will Leschper | Contributing Photographer: Judy Patrick PLEASE NOTE: RDC HAS MOVED OFFICES! Please update your records with our new physical and mailing address: 301 W. Northern Lights Blvd., Ste. 406, Anchorage, AK 99503 VOLUME 1 | ISSUE 1 | WINTER 2024 4 ALASKA RESOURCE REVIEW WINTER 2024 9 30 16 12 37 44
www.AKRDC.org 5 At Santos, we are proud to develop the world-class Pikka Project on the North Slope. Phase 1 will develop about 400 million barrels from a single drill site with first oil expected in 2026. And we are even prouder that our interest in Pikka will be net-zero on Scope 1 & 2 emissions!
6 ALASKA RESOURCE REVIEW WINTER 2024 THE FIRST CARIBOU DOWN WAS ALREADY BLENDING INTO THE LANDSCAPE AS THE BLOWING SNOW BEGAN TO COVER IT. A ground blizzard was developing, and it was getting dark. One of our party cut a small piece of fresh, still warm backstrap for a snack and to share as we cut up the animals. I recall such experiences with fondness (despite fighting to keep my hands warm). I embrace my hunter and gatherer side, and mostly the hunter gene. Sometimes I ask what is the drive? Perhaps it is the simplicity of a basic, hard wired connection humans have to the earth and the recognition that sustenance comes from the natural world. Maybe just the fact one never knows what the outcome will be of a hunt or adventure. The unknown and challenge is exciting. Regardless of one’s self-reflection, our survival and thriving from the dawn of human history has been based on the natural resources of the earth. Human population grew from utilization of natural resources and technological innovations. These improvements and adaptations occurred episodically. They were all rooted in the need for survival. After tens of thousands of years of human evolution, we have a technologically advanced society which still relies on our ability to utilize the resources that surround us. Even in this technological age, basic resources from the earth are critical. A fun resource fact is there are roughly 4.8 billion cell phones in the world. A phone contains over 25 metals and over 40 elements and rare earth elements. That is greater than 50percent of the periodic table! With eight billion people on the planet just cell phone use alone drives the need for metals. Advances based upon natural resources have led to global population growth. If you are 30 the population has grown by 2.4 billion since you were born. If you are 60 it has grown by nearly four billion, a doubling of the world’s population. These are staggering numbers, with every person needing resources. Based upon these examples interestingly, yet not surprisingly, today some of the biggest issues facing society remain utilization of natural resources for food and energy. The framework of climate change with the recognition that we will need more resources, has engendered interesting and often lively conversations around natural resource development. Ambitious national and international goals to reduce Green House Gas emissions by 2030 are driving many of the projections for the need for renewable energy and electric vehicles. Presently wind and solar contribute only 12 percent of the domestic electricity generation. Climate change is now a common household and political theme. One of the solutions is to increase the power generation from renewables and switch to electric vehicles to reduce emissions. However, achieving such goals is not simple or straightforward. A recent study by the Fraser Institute and the International Energy Agency reveals that to reach the international aspirational goals of electric vehicle and renewable energy integration by 2030 we will need over 388 new mines to supply renewable energy, electric vehicle, and battery technologies. Principal metals of concern are lithium, nickel, cobalt, copper, manganese, graphite and selected REE’s (rare earth elements). Given current projections there is a clear supply-demand gap of minerals essential for an energy evolution. The World Economic Forum (WEF) has advanced an initiative called Securing Minerals for the Energy Transition. A December 2023 publication by the WEF in collaboration with McKinsey and Company has highlighted the risks of reaching these ambitious goals and has identified a key element of global collaboration required to reduce the risks. We are truly at a crossroads where responsible resource development is critical to feed the world, provide energy and help reduce the impacts of climate change. For Alaskans, one question is how and where Alaska’s abundant energy resources fit in with our global and national strategies and economies. Another societal consideration is the growing pushback of renewable energy projects in one’s backyard, whether wind turbine farms, acres of solar panels or hydroelectric power from rivers or the oceans. Certainly, in the United States we need to grapple with these conflicting dynamics. The need for domestic metals in concert with mixed messaging on energy policies and permitting are effectively pushing development overseas. The leveraging of oil and gas, fishing, tourism, forest products and mining can help to diversify our Alaskan economy if we capitalize on threads common to all. The synergies of innovation, common infrastructure builds, environmental stewardship, policy advocacy, community engagement and social license must be integrated and balanced. From an Alaska perspective a strong base in the resource industries can support a growth in finance, transportation, and trade and marketing. While also ideally lowering our cost of living. Close to home, energy source availability and costs will be an issue for the rail belt of Alaska. This is not just an urban Alaska issue. The ripple effects of unaffordable energy in the urban areas will increase the cost of goods and services to rural Alaska. At RDC, we strive for a strong economic base through a diversified private sector. Finally, the organization itself embodies the most significant resource, human resources. As we move into the exciting world to come, now is the time to think creatively about working together, locally, and globally. No one has a crystal ball for the future. Just like a hunt you can plan only so much, and the outcome is never guaranteed. We had finally cut up the last caribou and the meat bags were secured in the sled. It was still an hour’s ride out in the dark with the snow blowing across the beams of the snow machines’ headlights making the ride mesmerizing. Other than an occasional ptarmigan flushing away in our lights we only had the blown in trail to follow. We were happy with our fortune from the land. In closing, rather than offer a plan I would like to challenge us all to be creative to find solutions. We are tied to our earth resources, whether the minerals needed for cells phones and advanced technology, energy to keep the lights on or simply finding your next meal. With these thoughts…. best in 2024! CREATIVE SOLUTIONS VITAL TO THRIVING ALASKA FUTURE “The leveraging of oil and gas, fishing, tourism, forest products and mining can help to diversify our Alaskan economy if we capitalize on threads common to all.” — Lance Miller, Board President, RDC
www.AKRDC.org 7 DENALI SPONSORS w Ahtna, Inc. w Alaska Laborers Union w ConocoPhillips Alaska w Inc. w GCI w Hilcorp Alaska, LLC w Kinross Alaska w NANA w NANA Construction w Northrim Bank COSPONSORS w Alaska Frontier Constructors w ASRC Energy Services w Chugach Alaska Corporation w Cook Inlet Region, Inc. w ENSTAR Natural Gas Company w ExxonMobil w ICE Services, Inc. w Lynden w Matson w Pebble Limited Partnership w Sealaska Corporation w Teck Alaska w Van Ness Feldman LLP w Westward Fishing Company w Westward Seafoods Inc. GENERAL SPONSORS w Alaska Business w Alaska Journal of Commerce w Alaska Petroleum Joint Crafts Council w Alaska Railroad w Aleut Corporation w Alyeska Pipeline Service Company w Bering Straits Native Corporation w Blueprint Alaska w Calista Corporation w Chugach Electric Association w Donlin Gold LLC w DOWL w Doyon, Ltd. w Graphite One w Halliburton w Hotel Captain Cook w Judy Patrick Photography w Marathon Petroleum w Mass Excavation w North of 60 Mining News w Northern Star Resources (Pogo) LLC w Petro 49 Inc/Petro Marine Services w Petroleum News w RESPEC w Ruen Drilling, Inc. w Teamsters Local 959 w TEMSCO Helicopters Inc. VIP RECEPTION w Hosted by Santos YOUNG PROFESSIONALS OPENING RECEPTION w Alaska Airlines w Alaska Railroad Corporation w Arctic Slope Regional Corporation w Energy & Resource Economics w Eyak Corporation w North Star Equipment Services, Inc. LET’S MAKE A DEAL! w Hecla Greens Creek Mining Company BREAK SPONSORS w Alaska Oil and Gas Association w ConocoPhillips Alaska Inc. BREAKFAST SPONSOR w ExxonMobil w Wells Fargo CENTERPIECE SPONSOR w Alaska Airlines LUNCH SPONSORS w Holland America Line w Northrim Bank NAME BADGE SPONSOR w MTA Business ESPRESSO STAND SPONSORS w ASRC Energy Services w Hecla Greens Creek Mining Company w Stoel Rives CHARGING STATION SPONSOR w GCI UNDERWRITERS w ABR, Inc. w AIDEA w Alaska Communications w Alaska Earth Sciences, Inc. w Alaska Housing Finance Corporation w Ambler Metals w Arctic Slope Regional Corporation w Aspen Hotels of Alaska w Associated General Contractors of Alaska w Boreal Environmental Services w Bristol Bay Native Corporation w CLIA w Coeur-Alaska Kensington Mine w Conam Construction Company w Cook Inlet Tug & Barge w Crowley Fuels Alaska, Inc. w Cruz Construction w Delta Constructors w ERM Alaska w EXP Energy Services w First National Bank Alaska w Flowline Alaska, Inc. w Granite Construction Company w Hawk Consultants, LLC w HDR Alaska, Inc. w Homer Electric Association, Inc. w Michael Baker International w MTA Business w NC Machinery /NC Cat Rental Store w NMS w NANA Worley, LLC w North Star Equipment Services w Northern Economics, Inc. w Northwest Hydraulic Consultants w NV5 Geospatial w Owl Ridge Natural Resource Consultants, Inc. w Pacific Seafood Processors Association w Papé Kenworth Alaska w Perkins Coie w Petro Star Inc. w Price Gregory International w QPS America, Inc. w Resource Data, Inc. w Samson Tug & Barge w SRK Consulting w Taku Engineering w TOTE Maritime Alaska w Tower Hill Mines, Inc. w Trust Land Office w Udelhoven Oilfield System Services w Ultra Safe Nuclear Corporation w Usibelli Coal Mine, Inc. w WSP USA w Yuit Communications THANK YOU TO OUR 2023 CONFERENCE SPONSORS!
8 ALASKA RESOURCE REVIEW WINTER 2024 IN ALASKA WE HAVE TO TAKE ADVANTAGE OF EVERY OPPORTUNITY WE HAVE. We’re not California, and we’re not Texas. We don’t have the luxury of ongoing projects, so we cannot afford to say “no” to any project that creates jobs and wealth. You’ve heard how many times people have said “no” to oil and gas and “no” to mining, “no” to the Ambler Road, “no” to Pebble and “no” to Donlin. Then there’s “no” to timber, “no” to fishing, and “no” to different ideas on energy. We simply can’t afford to say “no” anymore. Look out your window tell me if you see any (construction) cranes. From the 17th floor of the Atwood Building, I don’t see any cranes. No matter where I go in this state, I don’t see any cranes of any consequence. Alaska has room to grow. but where are the construction cranes? Here in Alaska, we don’t have any cranes because we say no to almost every project. The “nos,” lead to instability and chaos. Investors don’t want to invest in chaos. They want stability. The culture of “no” also kills risk-taking. Who wants to take any risk if you know that somebody is going to try and stop you? We need to get from “no” to “yes!” but we also have to think about a couple other things: The future isn’t going to belong to those who plan based on the last 20 years or even the last year. It’s going to belong to those who plan on what’s going to happen in the next 50 years. We have to consider technology including AI. This is going to have to in any conversation in your business. If you don’t have an AI expert on staff now you better hurry and get one. The future will belong to those who use technology to become efficient, to lower costs and deal with the shrinking labor force. Investments now in AI technology will pay dividends we can’t even calculate today. Finally, I want to touch on population, or more specifically a shrinking population. We’ve seen what happens in Japan and Korea, as well as China, and the trouble that a shrinking population spells. Here in the U.S., we’re heading in the same direction. It may even be more catastrophic. Without people you don’t have workers; without people you don’t have kids in schools and without kids in schools you can’t have a robust university system. Without people you can’t have an opportunity or have an economy. Unfortunately for decades it’s been pounded into our heads that kids are a burden, that they suck up your money and your time, and it’s just not worth having a family. With that thinking, it is no surprise that we’re having fewer and fewer children, and without children there is no future. I’m not suggesting that you all go out and have 10 or more children, but somebody should be having more kids. We also need to revisit the whole concept of immigration. We’ve got to find people from somewhere. We shouldn’t allow everybody into this country, and I am a proponent of a strong wall but also one with many doors that get people into this country who believe in our ideals. Alaska is blessed that we have a large Native American population in the nation, but the fact remains that this state is made up to a large degree of descendants of immigrants. Yes, we need to build a strong wall, but we also need to get as many people legally entering this country legally as soon as possible so that we have a labor force and a future. EDITOR’S NOTE: GOV. DUNLEAVY’S REMARKS WERE GIVEN AT THE RDC CONFERENCE ALASKA’S BIG CHALLENGES INCLUDE THE SAYERS OF ‘NO’ “The future isn’t going to belong to those who plan based on the last 20 years or even the last year. It’s going to belong to those who plan on what’s going to happen in the next 50 years.” — Mike Dunleavy, Governor of Alaska
www.AKRDC.org 9 VOLUME 1 | ISSUE 1 | WINTER 2024 Exploration east of Prudhoe Bay could yield new discoveries BY TIM BRADNER IT’S SHAPING UP TO BE A BUSY WINTER ON ALASKA’S NORTH SLOPE. ConocoPhillips is gearing up for its big Willow project, while Santos Ltd. has construction underway on its Pikka project. In a third development, a major exploration program on the eastern North Slope led by Lagniappe Alaska LLC, an independent, will see three exploration wells this winter and three more next year. For Willow, module fabrication has started on the U.S. Gulf Coast, a new gravel mine has been opened on the North Slope, ice roads are being built in preparation for road construction. Vertical Support Members, or VSMs, for pipelines will also be installed starting this season in preparation for pipeline construction next year. Willow is expected to start producing in 2029 with a rate of 180,000 barrels per day at its peak. ConocoPhillips is also confident in its cost estimates to first production in 2029, Andy O’Brien, the company’s Senior Vice President of Global Operations, told investment analysts Nov. 2. Much of the construction for Willow is now under contract and three-quarters of this is on a ‘lump-sum’ basis or unit rate,” he said. “This is the kind of project that is right in our ‘wheel-house.’ We’ve got no first-ofa-kind risk here. It’s three drill sites and one new processing facility,” O’Brien said. Because of that the company feels confident in its $7 billion to $7.5 billion projected cost, even with inflation. About 1,200 will be employed this winter on Willow. Pikka is about 30 percent complete in its second year of construction, said Mark Ireland, Santos’ Senior Vice President for Alaska, in a Nov. 22 presentation to investors. The company will have about 1,200 at work this winter on the project, which projected to produce 80,000 barrels per day in its phase one starting in 2026. Pikka will ramp up to 120,000 barrels per day in a second phase. Santos was able to lock in 60 percent of its phase one contracts and pricing for fabrication and drilling due to the company’s long lead-times in planning. This will allow the company to keep the project on budget, Santos told investors. Meanwhile, there are prospects for new discoveries in the exploration planned east of Prudhoe Bay, but it will take several years for any successful finds to be in construction and several more for new fields to be producing. The parties involved have a good track record. Lagniappe Alaska, an independent, is owned by Armstrong Oil and Gas, of Denver, headed by geologist Bill Armstrong. Armstrong led the exploration and development for several North Slope discoveries including the Oooguruk and Nikaitchuq offshore fields near the Kuparuk River field and, most recently, the Pikka project now being developed by Santos and its partner, Repsol. Oooguruk and Nikaitchuq are now owned and operated by Eni Oil and Gas. Other work is underway. Pantheon Resources, a U.K. company, is continuing production tests on discoveries near the Dalton Highway south of Prudhoe Bay. 88 Energy, of Australia, will do production tests on a discovery made last year also near the Dalton Highway. NORTH SLOPE SEASON BUSY WITH WILLOW, PIKKA WORK Photo Courtesy ConocoPhillips About 1,200 workers will be employed this winter on ConocoPhillips’ Willow project.
Manh Choh Project brings opportunity for responsible development BY: LEILA KIMBRELL, EXECUTIVE DIRECTOR, RESOURCE DEVELOPMENT COUNCIL FOR ALASKA LIKE MANY IN ALASKA, RDC HAS BEEN FOLLOWING THE LOCAL MANH CHOH PROJECT WITH KEEN INTEREST. In fall 2023, we were pleased see the start of test runs of the new, state-of-theart trucks that will be used for the project; however, we were disappointed to see a legal challenge seeking to stop this project – specifically to stop commercial haul trucks from using our public highway system. There has been a healthy debate about the pros and cons of this project, as there should be with any development project; here is why RDC thinks this is a project that can positively shape the future of responsible resource development projects in Alaska and should move forward. A PROJECT PROMISING TRANSFORMATIONAL CHANGE TO REMOTE ALASKA Manh Choh is an historic partnership between the Native Village of Tetlin (Tetlin) and Kinross Gold and Contango Ore, private industry leaders with exceptional environmental records, that promises to bring transformational economic change to this village. One can’t help but think of this much like the Red Dog Mine project between NANA and Teck in northwest Alaska, which is a great example of supporting local hire and respecting traditional and subsistence lifestyles allowing residents to remain in their home communities year-round. Or the discovery of oil on the North Slope prompting the resolution of land claims and the Alaska Native Claims Settlement Act (ANCSA) that created the 7(i) and 7(j) revenue sharing provisions, and together with community revenue sharing provisions. This brought transformational change to the people and communities of the North Slope in ways that have been objectively measured to have improved and extended the lives of the people on the North Slope. The Native Village of Tetlin was one of just a few Alaska Native villages who opted out of ANSCA. When Tetlin opted out of ANSCA, they received surface and subsurface rights to 743,000 acres of land; however, unlike the NANA and the Arctic Slope Regional Corporation (ASRC) and other Alaska Native corporations, Tetlin does not benefit from ANCSA’s revenue-sharing provisions. According to the 2020 U.S. Census, Tetlin is a community of approximately 125. It is located within the federal Tetlin National Wildlife Refuge between Tetlin Lake and the Tanana River. About 20 miles southeast of Tok, Tetlin Village connects to the Alaska Highway by a small gravel road. The people of Tetlin are Upper Tanana Athabascans and the Village of Tetlin consists of 97.4% Alaska Native or part Native. The village has no running water or sewer. The predominant lifestyle of Tetlin is traditional subsistence activities. Employment is limited to government and some seasonal mining jobs. The average annual household income for Tetlin is just $7,500 and approximately 41.82% of the population lives below the poverty level. By comparison, the local job opportunities that will be created by the Manh Choh project will support yearround salaries in the six-digits. Manh Choh is more than just economic opportunity and the promise of jobs. It is a legacy project for the people of the Native Village of Tetlin and the surrounding region. This vision goes back to 2008 when then late Chief Danny Adams and the Village council members made it their priority to develop an economic future for their people. Chief Adams was a well-respected 10 ALASKA RESOURCE REVIEW WINTER 2024 BUILDING PARTNERSHIPS FOR A BETTER ALASKA Photo Courtesy Kinross Alaska
Tanana Chiefs Conference Executive Board member and a visionary leader in the Upper Tanana region. This mine project will make Tetlin financially self-sufficient while allowing its members to continue to live their cultural and traditional way of life. ECONOMIC BENEFITS TO A REMOTE ALASKA REGION A socioeconomic assessment conducted by McKinley Research in 2021 found that the development of the Manh Choh mine will have significant, positive impacts on Interior Alaska, including a combined total of 950 direct, indirect, and induced jobs between 2024 and 2028. Over the projected 5-year life of Manh Choh, these jobs will total more than $120 million in payroll — with the average wage of direct jobs coming in at over $128,000 per year. The mine will be the second-largest employer in region, offering a wide variety of jobs and contracting opportunities — not to mention training skills that locals can use throughout their lifetime. Already, Tetlin, Tok and the greater Fairbanks area have experienced significant economic benefit because of Manh Choh’s construction phase, with ~$75 million in payroll paid to date to bring the mine online. Year-round, this project estimates it will supply 400-600 year-round jobs for the region. It is estimated that $425 million in the purchase of goods and services will be purchased from local businesses in Tok, Delta Junction, Fairbanks and other parts of Alaska. Once the mining phase is completed, Manh Choh will continue to provide economic opportunity though the reclamation phase of the project. The Manh Choh reclamation will bring an additional estimated $40 million to $60 million to the region. In short, Manh Choh has been a complete game changer for this remote region of Alaska — with even greater benefits expected as production begins in earnest. ENVIRONMENTAL AND SAFETY PROTECTIONS MET An interesting aspect of the Manh Choh project is that it will not have onsite milling of the extracted resource; therefore, it will not require an on-site tailings facility. The Manh Choh project plan includes small open pit mining near Tetlin from which rock will be trucked about 240 miles oneway for processing at the existing Kinross Gold Fort Knox mine, located about 25 road miles northeast of Fairbanks. Processing will occur within existing permitted facilities at Fort Knox, eliminating the need for a mill or tailings facilities at Manh Choh. Access road construction for the proposed mine, including a twin road and a site road, as well as site preparation, started in 2022 and completed earlier in 2023. The mine is estimated to start production in 2024 with an estimated mine life of five years. With a such a short mine lifetime, it makes little sense to permit and build a mill at the mine site when Tetlin’s partner has a fully permitted, operational mill that is currently underutilized at the Fort Knox gold mine just north of Fairbanks. Why permit, build and then monitor a new tailings disposal facility at Manh Choh when the tailings can be safely stored in an www.AKRDC.org 11 VOLUME 1 | ISSUE 1 | WINTER 2024 CONTINUED ON PAGE 12
existing facility at Fort Knox? Utilizing existing facilities means a much smaller environmental footprint at Manh Choh and, more broadly, perhaps a new model for future resource development projects in Alaska. This is a goal we all strive for: minimizing impact while maximizing use. This project offers a long-term economic benefit for the Tetlin without worry of long-term management needs a local tailings facility would require. This is a win-win for all involved. Once production at the mine begins, the ore will be transported to Fort Knox for processing. Transportation will occur via the state public highway system. There has been much speculation about the risk of hauling ore from Manh Choh to Fort Knox using Alaska’s public highways. Indeed, those concerns have resulted in a local legal challenge to the project’s transportation plan. Transportation safety and compliance is a critically important issue and Manh Choh’s owners have worked closely with regulators to ensure they meet all highway safety standards before operations begin. The State of Alaska, through its Department of Transportation (DOT), is charged with regulating the safety of our highways. The trucks and drivers to be used by the Manh Choh project are subject to the same safety standards as any other similar commercial truck operator. This means the drivers are subject to the same stringent safety and training standards required for commercial driver’s license (CDL) and heavy equipment operator licenses. DOT is building additional pull out lanes, enhancing visibility in areas around bus stops, and has plans to add additional passing lanes, bridge replacement, and more. Much of the funding to improve this highway will come from the federal Infrastructure, Investment and Jobs Act. The trucks will carry legal loads that do not require additional special permits or exemptions. Total vehicle length will be 95 feet, similar to the double fuel and double cargo trailers you currently see operating on all Alaska state public highways today, with a payload of about 50 tons and a total gross vehicle weight of 82.5 tons per vehicle. The project owners have partnered with a trucking contractor who is long-term Alaskan company based in North Pole, Alaska and boasts an outstanding safety record. They have a comprehensive safety management system, with vehicle and driver monitoring, and an extensive, proven driver training program anchored by a rigorous behind-the-wheels training component. It is important to distinguish that the trucks will transport only rocks, not metal ore concentrates, so there here will be minimal dust associated with the transportation. Further, all loads must be fully covered and secured. Trucking the mine rocks with covered loads is not very different than trucking other materials up and down our public highways, such a rock or gravel for construction projects. Comparatively, for years trucks have been hauling liquefied natural gas (LNG) from Port MacKenzie to Fairbanks and soon will start running daily along the Dalton Highway to deliver LNG to Fairbanks. Yet, there is little opposition about the added influx of these trucks or questioning the safety of such operations. Every day, freight, fuel, and other commercial haul trucks run along all of Alaska’s highways without incident. Though no one can eliminate all risk, we should not discriminate between commerce on our highways at the expense of responsible economic opportunity when that opportunity is properly licensed, insured, and all safety and operating measures are met. Alaskans constantly point to our limited and aging highway transportation infrastructure as a hindrance to expanding economic opportunities throughout our great state. This project can help be a catalyst for a region that threatens to be forgotten. In conclusion, the Manh Choh project is an example of a project that not only exceeds environmental and safety standards but goes further: It is a great example of industry partnering with our Alaska Native people and communities. To quote the current Tetlin Village Chief, Michael Sam, “Our people and indigenous people in Alaska have been living off this land for thousands of years and we are owed the opportunity to secure our own future.” RDC looks forward to the success of this partnership between Tetlin and Kinross for the continued responsible development of our resources as well as for the future economic opportunity and social well-being of our Alaskan communities. The Manh Choh project can become another successful model of how our resource industries continue to lead the way. 12 ALASKA RESOURCE REVIEW WINTER 2024 To quote the current Tetlin Village Chief, Michael Sam, “Our people and indigenous people in Alaska have been living off this land for thousands of years and we are owed the opportunity to secure our own future.” CONTINUED FROM PAGE 11 Photo Courtesy Kinross Alaska
BY TIM BRADNER THERE ARE VOICES UNHEARD IN MAINSTREAM MEDIA REPORTS ON THE AMBLER ROAD. THOSE ARE THE RURAL ALASKANS IN NORTHWEST ALASKA WHO SUPPORT THE ROAD. Here is Second Chief Gordon Bergman of Allakaket, a community near the planned route of the road: “In Allakaket we have 67 adults without jobs; 17 households lack snow machines, and 14 householders don’t have four-wheelers, which are essential in fetching water, wood, and groceries. These households rely on others for their needs, especially when obtaining subsistence resources, sometimes requiring long journeys. The cost of gas is $11,” per gallon, Bergman said at the Nov. 14 Ambler Road public hearing in Allakaket. “It takes cash. It takes jobs. Our community need these jobs,” he said. Opponents to the road, mostly from Fairbanks, were also at the meeting. To them, Bergman said: “You don’t live here. For Allakaket to prosper, we need jobs. That is the path to wellness. Allakaket is near the eastern end of the planned 211-mile industrial access road. Residents of Ambler and Shungnak, at the western end, said the road would bring good jobs and lower living costs. “It is critical to move this project forward. Slowing it down would be a mistake,” said Fred Sun, Tribal Council president in Shungnak. Although opponents to the road showed up at the Anchorage hearing so did a group of Alaska Native elders. All of the elders spoke in support of the project, saying the jobs it would lead to would help them support their families. Opponents, however, said the road will destroy one of North America’s last great wilderness areas and threaten caribou and other subsistence resources. The response: A mine and access road hasn’t harmed wildlife at the Red Dog lead-zinc mine further west or other places served by controlled-access industrial roads, like at the Pogo gold mine east of Fairbanks. The occasions for this debate were public hearings by the U.S. Bureau of Land Management on a revised Environmental Impact Statement for the road, which is planned to be built to the Ambler Mining District where companies are exploring major copper discoveries. The road would extend west across federal and state lands from the Dalton Highway, the all-year road that links North Slope oil fields with Interior Alaska. A state agency, the Alaska Industrial Development and Export Authority, would finance and build the road with its construction cost repaid by tolls on shipping ore from mines built to the west. AIDEA undertook a similar initiative with Red Dog Mine in the 1980s. Red Dog is now the world’s largest lead-zinc mine. Its road and shipping port, still owned by AIDEA, has been a major money-maker for the state. Hearings and public comments on the revised environmental impact statement for the Ambler Road are closed and BLM says it will issue a final document and a Record of Decision in the first part of 2024. BLM could select the no action alternative in the EIS or to choose “alternative C,” an option for a longer road introduced for the first time in the new environmental study. “Alternative A” is the option preferred by AIDEA and is the shortest route, at 211 miles, with the least environmental impacts. Alternative B, at 228 miles, follows a somewhat different route. Alternative C would involve 332 miles of road. If BLM selects Alternative C, it would make the project uneconomic. VOLUME 1 | ISSUE 1 | WINTER 2024 AMBLER ROAD DISCUSSION BRINGS VARYING OPINIONS www.AKRDC.org 13
44TH ANNUAL ALASKA RESOURCES CONFERENCE: LEADING THE WAY 14 ALASKA RESOURCE REVIEW WINTER 2024
Convention Photos by Judy Patrick Nearly 1,000 gathered in November for RDC’s 44th annual Alaska Resources Conference in Anchorage with its theme of “Leading the Way.” It was an upbeat, optimistic crowd that filled the meeting rooms at the Dena’ina Center. ConocoPhillips’ Willow project was about to be approved and Santos, Ltd. was gearing up for a big season at Pikka, another new North Slope project. Both projects promise thousands of new jobs in Alaska. Tourism continued its rebound from the pandemic, with more to come. But work on minerals discoveries continue to be threatened by federal policies, and the state’s seafood industry, Alaska’s largest manufacturing sector, is stressed by adverse markets. Our timber industry continues to face challenges on federal lands but new state programs creating opportunities for our forest products industry were highlighted. Our natural resources industries always have ups and downs, and Alaska business and community leaders tune in to RDC’s annual convention to learn the latest. It’s the go-to place for networking, too. An important signal of business confidence this year: the convention’s annual trade show was up 20 percent from 2022. New in 2023, and a nod toward our future leaders, a “Young Professionals” event was held the day before the convention. Outstanding emerging professionals gathered with established leaders to share experiences. It was a success and promises to be a fixture at future conventions. RDC has been a cornerstone of Alaska’s policymaking arena since 1975. RDC fills a diverse and unique niche as a place where major industries, organized labor, Alaska Native corporations, local governments, policymakers and individuals come together to solve common problems to boost the state’s economy. There can be differences, but the RDC’s events provide a platform to help find solutions to ensure our industries continue to “lead the way” for responsible resource development. See you next year! www.AKRDC.org 15
HIGHLIGHTS: ALASKA’S NATURAL RESOURCE ENDOWMENT IS ITS STRENGTH, BUT A TRAINED WORKFORCE IS NEEDED AND STABLE GOVERNMENT POLICY. ALASKA HAS TO BE COMPETITIVE IN PROJECT DEVELOPMENT AND IN ATTRACTING SKILLED LABOR. MODERATOR: BOB LOEFFLER, Institute of Social and Economic Research (ISER) PANEL: n KATIE BERRY, President, McKinley Research Group n MARY KOPRIVA, ISER, University of Alaska Anchorage n DAN ROBINSON, State Labor Economist n ALLEN WALDROP, Director of Private Equity, Alaska Permanent Fund KEY POINTS: n Alaska a resource state, attracting investment n Oil and gas a major employer; 16% of all jobs n Workforce concern: Aging of population n Education, childcare important in worker retention DISCUSSION: Katie Berry, of McKinley Research, said oil and gas employs one in six Alaskans, or 16 percent of all workers, directly or indirectly through the spending of oil revenues for public services. A new factor in the state economy is the pace of retirements and fast growth of the senior population, which means fewer working-age adults. In 2005, there were 52,000 Alaskans 62 years or older; today the number is 133,000. Transfer payments (pensions, social security, dividends) brought $3 billion in the state’s economy in 2005; $8 billion in 2019 and $10.7 billion in 2022. Dan Robinson, director of the state’s Research and Analysis Division, said the increasing retirement of “baby boomers” (born 1946 to 1964) means a lot of people are aging out of the workforce. “There’s never been a better time to be a job applicant, but for employers, it’s tough,” he said. Alaska is seeing 0.4 applicant for every one job opening, he said. This is a national trend, but the effects seem exacerbated in Alaska. The state has a traditional pattern of seasonal in-migration and out-migration but the outmigration of working-age adults with families has continued for several years now, and economists don’t yet understand this, Robinson said. However, “if you’re an employer, things aren’t going to go back to the way they were anytime soon.” Mary Kopriva, at ISER, said health care costs and lack of, and cost, of childcare are major factors in problems of worker retention and difficulties in recruiting from out-of-state. Alaska has the highest per-capita health care cost in the nation at $13,000 yearly, up from $9,500 per capita in 2019. Through the 1990s Alaska per-capita costs were roughly the same as the nation’s but the gap appeared in about 2000 and has been widening since, and the trend seems likely to continue. The childcare problem is also national but is exacerbated in Alaska by a low pay and a shortage of childcare providers. The good news here, Kopriva said, is that there is a tremendous amount of effort now focused on childcare in Alaska. “The health care cost problem is complex and we’re not sure we understand all of its dimensions. However, there are greater opportunities in solving childcare, “if we can be creative,” she said. Dan Robinson said addressing childcare and health costs will help with worker retention and recruitment. “Is we want to do something soon (with our workforce) we should address these problems,” he said. However, ALASKA’S RESOURCES: LEADING OUR ECONOMY AND FUTURE INVESTMENT 16 ALASKA RESOURCE REVIEW WINTER 2024
improved and stable funding for basic public institutions like K-12 education, the university and public safety are also important in sustaining a workforce. “Alaska has the ability to solve these problems,” Robinson said. Despite these problems, Alaska’s resource endowment is its basic strength, ISER’s Bob Loeffler said in closing the session. “We have the resources. Our minerals are underexplored. Tourism, based on Alaska’s natural beauty and wild places, is still underdeveloped. Alaska’s advantage, Loeffler said, “is that we’re prettier than other places. The same goes for seafood: “Our fish just tastes better.” Allen Waldrop, the Alaska Permanent Fund’s Director of Private Equity, was asked about how private investors are viewing Alaska. The Permanent Fund itself has $16 billion invested in private equity, about 20 percent of the Fund invested in about 7,000 companies globally. While the Fund invests in energy and resources worldwide it cannot be a big player in Alaska projects. “The Alaska projects we see are large-scale, in remote locations,” and have a long-term payback. Most of the (resource) investments we make have three to five year turnaround,” Waldrop said. Infrastructure and workforce issues are also big factors in Alaska, but less so elsewhere. While the Fund is not a big investor in Alaska projects its global activity gives its staff a unique perspective. Waldrop was asked if he sees Environmental, Social and Governance (ESG) criteria as influencing investors’ attitudes toward Alaska. Not so much, he said. There are investment decisions people make based on principles like ESG but that can be double-edged. “It opens opportunities for others because there is less competition,” he said. “People are primarily economic animals. We don’t see people avoiding Alaska,” over ESG issues, Waldrop said. But Alaska has to be competitive and today, with tectonic shifts taking place in the nation’s workplace, being competitive means more than just dollars. “You have to have health care, education,” and other public services to attract a stable workforce and investors look at those things, he said. — COMPILED BY TIM BRADNER Photos by Judy Patrick www.AKRDC.org 17
HIGHLIGHTS: PRESIDENT BIDEN TALKS OF THE ENERGY TRANSITION BUT HIS POLICIES DO NOT ENCOURAGE DOMESTIC DEVELOPMENT OF THE NEEDED CRITICAL MINERALS. ISSUES AFFECTING MINERALS ARE NOW BECOMING GLOBALIZED. MODERATOR: KAREN MATTHIAS, Executive Director, Alaska Metal Mines PANEL: n LANCE MILLER, Vice President of Natural Resources, NANA n JOHN SHIVELY, Chairman & CEO, Pebble Partnership n BRETT WATSON, Economist, Institute of Economic & Social Research n DEANTHA SKIBINSKI, Executive Director, Alaska Miners Association KEY POINTS: n Alaska needs to process minerals in-state n Copper important: 20 percent supply deficit in 2035 n Gold not just for jewelry – wide uses in industry n Biden Administration talks mineral supply chain issues but it’s just that – talk DISCUSSION: Brett Watson said there is sometimes confusion over which minerals are “critical,” but the designations are important because they influence agency decisions on research and support for infrastructure. John Shively said while copper is not designated as “critical” it is crucial in technology applications, like cell phones, and the world is headed for a supply deficit as early as 2027 and estimated to reach 20% by 2025. The industry needs $100 billion in investment to meet needs. “We have a problem,” Shively said. Deantha Skibinski said the anti-mining narrative is: “We don’t need more gold,” or gold mines, to make more jewelry. Today gold important in many industries but it is often found in association with critical minerals like antimony. Often the gold becomes an “anchor” mineral in a mine that can also produce antimony, Skibinski said. “You often need a gold producer to make production of other metals economic,” she said. Many gold mines also produce zinc. A major problem for the industry is being able to get federal permits. The Biden administration talks a lot about problems in the mineral supply chain but actions on permits by agencies are creating more problems, particular for domestic production. “The Biden Administration is now starting to ‘walk back’ the earlier approvals of the Ambler Road, as an example,” Skibinski said. Another example, she said, is the recent removal of the minerals sector from the “FAST 41” act, a law that streamlines federal permitting on important projects. Shively said the same permitting problems that affect the U.S. mining industry are now showing up in Canada. Part of this is because there are First Nation issues but also that things are just taking longer. Lance Miller said many issues affecting mining are becoming globalized and cropping up in many countries. The industry’s response in many cases is to start earlier on permits to allow for delays, but this can sometimes work against a developer. “Sometimes we can start too early and before we know what a project will really look like,” he said. That could lead to concerns raised in local communities before the company or agencies have all the information. Shively said opponents to mining often complain about It being an “extractive” industry. But many Alaska industries and activities are extractive, he said. Even subsistence. “We’ve become really good at stopping things,” through the federal permit system. “You have to wonder how we’ll ever get anything done?” — COMPILED BY TIM BRADNER WILL ALASKA LEAD ON NATIONAL MINERAL SECURITY? 18 ALASKA RESOURCE REVIEW WINTER 2024
HIGHLIGHTS: ALASKA’S FOREST PRODUCTS INDUSTRY DOMINATED BY SMALL “MOM AND POP” MILLS, WITH THE STATE NOW THE KEY SOURCE OF WOOD SUPPLY. MILL OPERATORS ARE INNOVATIVE, DEVELOPING NEW NICHE PRODUCTS AIDED BY NEW TECHNOLOGY. MODERATOR: TESSA AXELSON, Executive Director, Alaska Forest Association PANEL: n JEREMY DOUSE, Forester, Alaska Division of Forestry n RYAN TINSLEY, Partner, Alaska Adaptable Housing, LLC KEY POINTS: n Alaska wood products industry mostly small businesses n State is major partner in wood supply n Innovations in new product, local lumber grading DISCUSSION: Tessa Axelson: The wood products industry continues although we face challenges in wood supply from the federal landowners, the U.S. Forest Service. Our major partner today is the state of Alaska, with wood supplied from the state forests. “Almost all members in the forest products industry are small, locally-owned businesses, many of them family owned and multi-generational,” Axelson said. “Innovation is alive and well in our industry as we adapt to changing conditions,” she said. Two examples are in new products being developed by Joe Young, in Tok, and in new programs in the state Division of Forestry, mainly a new lumber grading program that will allow wood harvested in Alaska to be sold commercially in Alaska for home construction. This will allow operators to self-inspect and certify their products, after training, and eliminate having to fly in inspectors. Jeremy Douse: “We import most of our wood used in construction. It seemed appropriate to see if we could find ways to use wood we harvest here,” he said. The problem is that lumber has to be inspected and graded for quality by licensed inspectors and we have no way to do that in Alaska without flying the inspectors in from out-of-state, which is very expensive. This means that, for all practical purposes, wood for homes financed by government programs must use lumber shipped in from the Lower 48. “We became aware of a program in Wisconsin where local people are trained to do the inspections. We went there and attended some of the classes, and decided to try this in Alaska,” Douse said. “At first, we looked at developing this as a program within the Department of Natural Resources. State Sen. Jesse Bjorkman, of Soldotna, and Rep. Jesse Sumner, of Wasilla, were very supportive and helped us get bill through the Legislature putting it in statute, and the governor signed the bill. We are now working to set up regulations and with the University of Alaska’s Cooperative Extension Service to do the training. There’s a lot of potential. The Tongass National Forest in Southeast is now transitioning from old-growth to second-growth timber and a lot of small communities have sawmills. In western Alaska villages along the Kuskokwim River want to use local timber to build homes and cabins. Without grading by certified inspectors many types of financing are not available. Axelson: Joe Young was unable to be here because of bad weather and road conditions, so I wanted to speak for him and of some his innovations at the Young Sawmill in Tok. He has developed new products like a fire log made from wood waste that sells for less than conventional firewood. He has also developed methods to remove moisture which improves the quality of the wood. Alaska’s small forest products industry has potential for growth, state natural resources commissioner John Boyle has said. Alaskans can look to Sweden as an example of where managed forestry and sustained-yield harvesting is a major industry and big employer. Gov. Mike Dunleavy hopes this can be done in Alaska, Boyle said. — COMPILED BY TIM BRADNER ALASKA’S FOREST PRODUCTS: LEADING THE WAY IN INNOVATION www.AKRDC.org 19
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