ALASKA RESOURCE REVIEW INSIDE THIS ISSUE n Regulatory challenges continue n Cruises empower tourism season n Fisheries face challenging year n ConocoPhillips raises the bar for 2024 VOLUME 1 | ISSUE 2 | SUMMER 2024 Magazine of the Resource Development Council for Alaska | www.AKRDC.org STANDING TOGETHER! Alaskans carry Alaska’s story to Washington D.C.
Learn more Richfield Oil Co. drills the first well in the Swanson River field and strikes oil. 1957 Alaska becomes the 49th state. 1959 Sinclair Oil Co. discovers the Kuparuk River field. 1969 Alpine field production begins from wells drilled with horizontal well technology. 2000 ARCO discovers oil in the Prudhoe Bay field. 1968 Final Investment Decision is made to develop the Willow project. 2023 ConocoPhillips Alaska and the successes of its heritage companies date back to the greatest oil discoveries in Alaska history. Today we continue our tradition of developing, innovating and delivering value for Alaskans. Committed to Alaska for more than 50 years. © ConocoPhillips Company. 2024. All rights reserved. Western North Slope, Alaska
www.AKRDC.org 3 HAPPY SUMMER EVERYONE! It feels so good to say that (in truth, I’ve been waiting months to say it)! I love to see our days turning into sun-filled hours, passing the Solstice, and leaving last winter’s snow records behind us. For those in southcentral Alaska, you know what I’m talking about! I hope you all enjoyed our last issue of the Alaska Resource Review magazine and in this second comeback, we hope the content continues to inform you of many of the things we are working to support you. As always, I truly want your feedback so please drop me a line anytime! This issue is packed full of great updates. Apart from our regular content on issues impacting our industries, you’ll find a legislative update of our accomplishments in Juneau, a recap of our 49th Annual Membership Luncheon, and a new column I’m calling “Telling Our Story.” This new column will focus on the good things our industries are doing. It’s not just a “pat on the back” or “humble bragging.” Our companies are engaged in some really incredible partnerships that we rarely hear about unless you’re a member of that local community. In this vein, there’s a recognition that we are truly terrible at sharing our stories of the good things you do in your industries and in your communities. It also must be recognized that our lack of sharing these stories comes at a cost. If no one knows these stories, then it becomes harder for us to help promote the good works you do to ensure you have a balanced community of responsible development and economic commitment to sustain your local economies. This will be a recurring column, so if you have a story to share … send it our way! Together, we continue “Growing Alaska Through Responsible Resource Development.” If we’ve learned anything over the nearly 50 years that RDC has been in action, it is that we can’t do it alone. And if I’ve learned anything in my role here at RDC, this has never been truer than now. Following last year’s unprecedented preemptive veto by the EPA of the Pebble Project, recently, BLM issued a nearly unprecedented “no action” alternative on the Ambler Road project. We’ve seen similarly unprecedented expansive rulemakings for the NPR-A and BLM lands that will have the impact of severely restricting any future development of Alaska’s resources. We’ve faced many unprecedented challenges with the current federal administration — challenges that upset what we know as the established system of checks and balances between the several branches (and so-called invisible fourth branch) of government. We must remain unified to continue battling these challenges. As we continue to grow, please help me welcome a new face here at RDC! Some of you have already met him, but please read this edition to “meet” our newest team member, External Affairs and Policy Coordinator, Connor Hajdukovich. He joined our team just in time for the legislative session in Juneau and has been absolutely instrumental in coordinating coverage of our prime policy issues. Connor has extensive experience working for our delegation in Washington, D.C. and comes from a long line of family in Interior Alaska. I couldn’t ask for better! If you haven’t already, please help me welcome him to the team. We just wrapped up our 49th annual Membership Luncheon with one of the largest attendance rates in RDC history. I owe you all a very special THANK YOU for making that possible. It’s truly an honor to see that level and support and I hope we continue to provide the level of content and information that keeps you engaged. Our members, meaning YOU, are a force to be reckoned with when we engage collectively. Let’s continue that momentum for the rest of the year and please, save the date for our annual conference happening Nov. 12-14, 2024! Yours resourcefully, PLEASE SHARE YOUR STORIES AND KEEP MOMENTUM GOING “If we’ve learned anything over the nearly 50 years that RDC has been in action, it is that we can’t do it alone. And if I’ve learned anything in my role here at RDC, this has never been truer than now.” — Leila Kimbrell, Executive Director, RDC VOLUME 1 | ISSUE 2 | SUMMER 2024
PAGE 10-13 STANDING TOGETHER Alaska and Alaska’s resource associations including your RDC were center stage in Washington D.C. on Earth Day, reaching members of Congress to educate and advocate on behalf of support for more freedom to develop Alaska’s vast resources. PAGE 20-21 CONOCO MOVING FORWARD ConocoPhillips VP Kirk Johnson gave a detailed and impassioned speech to our summer 2024 annual luncheon, outlining the energy giant’s 2024 work in Alaska, as well as both its commitment and challenges at continuing to grow here. PAGES 26-27 ROADLESS RULES IMPACT Juneau’s Jim Clark takes a deep look at the negative impacts on mining, timber, and other industries in Southeast Alaska if the Biden Administration’s rollback of Roadless Rules in the Tongass becomes law. PAGE 46 SAVE THE DATE! Join us Nov. 13-14 for our 49th annual RDC Annual Convention in Anchorage! 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 2 | SUMMER 2024 4 ALASKA RESOURCE REVIEW SUMMER 2024 10 30 16 20 26 46 INDEX
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 SUMMER 2024 THE SUMMER AIR WAS FRESH WITH THE SCENTS OF THE TAIGA. We pulled up to the bank of a town that once provided muscovite to the Soviet military during the Cold War. The main street is better described as a boulevard lined by tall trees and large blocky, yet well-organized buildings stood in order, a testament to the Soviet style of community planning. We had just boated 150 kilometers down a river in eastern Russia in a military grade jet boat. Muscovite, also known as mica, is a mineral with very high heat shielding properties, used in building rockets in the Cold War arms race as well as other industrial applications. This was in the late 1990s when optimism of foreign investment in Russia was flourishing. The purpose of our trip was to look at drill rigs and meet management in a company we were going to contract with, to advance scoping work on a Russian mineral deposit which the company I was working for was evaluating. During the course of two years, we made some great technical advances and developed relationships in a part of Russian that reminded me a lot of Alaska. I had always hoped to return to see how those projects had evolved. Today, a few decades later, I fear that visit back to Russia will not happen anytime soon. Natural resource development has often been tied to geopolitical issues throughout human history. Today we are in such a situation again. In the last few months, we have seen increases in geopolitical strife and trade conflicts. As an example, the U.S. has placed increased tariffs on raw materials from China. China is placing export controls on critical material such a germanium and gallium, of which they supply 60 percent and 90 percent of the world’s demands, respectively. These metals are needed for semiconductors, satellites, solar cell applications, fiber optics, and yes, your cell phone. Thus, globally and locally responsible and secure production of natural resources is essential for the world’s growing popuLOOKING AHEAD, RDC WILL CONTINUE ITS PIVOTAL ROLE “Next year, 2025 will be the 50th year of RDC. What will the next 50 years look like and how can we shape that future?” — Lance Miller, Outgoing Board President, RDC Photos Courtesy Lance Miller Russia in the 1990s was a combination of Wild West, leftover Soviet influence and opportunity.
www.AKRDC.org 7 VOLUME 1 | ISSUE 2 | SUMMER 2024 lation and technological evolution. This is where RDC plays a pivotal role in ensuring safe and responsible resource development. So that Alaska’s needs are met for our sustainability, while we address the nation’s energy, food, and mineral independence requirements in the global the supply chain, perhaps better referred to as the supply web. The last year at RDC has gone by in a blur, a good blur. It has been a productive year and I want to thank the board, the officers and Leila, Jennifer and Connor for their work and commitment. RDC staff has grown and tackled numerous legislative and policy issues. We also changed the format in time and style of the Annual Resources conference and saw a record attendance coming out of Covid. This included the young professionals reception which was well attended despite occurring on one of those very snowy days we had last fall. Additionally, in an effort to extend beyond Anchorage we had our annual legislative fly-in and Woman in Resources reception in Juneau during the session. RDC helped to organize the first Alaska Resources Day in our nation’s Capital, which was well attended by more than 200 legislators, staff, policy makers and dignitaries. Additionally, our May Board meeting in Fairbanks included a great tour of the Fort Knox Mine. I believe such outreach around the state helps with awareness of RDC issues and connect with members outside of the Anchorage bowl. We are also seeing the new generation of leaders becoming involved in RDC as well, this is critical to our future effectiveness and the future of the state. RDC provides platforms for voices from all corners of our industries to be heard. We work hard to sustain and expand our membership base, push to inform the public, policy makers, and students on resource issues, and engage with a broad spectrum of stakeholders to drive positive change for resource development in Alaska. I’m extremely proud of the board of directors I was able to work with this year, all of whom worked hard to find common ground and work towards common goals. It is through this collective effort that we have been able to make a meaningful difference in shaping policies and initiatives that support economic growth, environmental stewardship, and community prosperity across our great state. The strength of RDC is in our diverse membership. Issues from differing viewpoints can be discussed, evaluated, and acted on for positive change. Our shared commitment to the responsible development of Alaska’s natural resources for the benefit of all Alaskans is at the core of this work. The solid leadership at the board and officer levels working with the strong management will no doubt set a good course for the future. I have confidence and optimism for the future of the RDC and Alaska. Critical to success will be listening to all stakeholders and keeping a sense of perspective for how all communities can contribute to, are impacted by, and can benefit from natural resource development. Next year, 2025 will be the 50th year of RDC. What will the next 50 years look like and how can we shape that future? Lance Miller on a mine site in Eastern Russia in the late 1990s, when collaboration with the U.S. seemed a real possibility.
8 ALASKA RESOURCE REVIEW SUMMER 2024 WHAT AN HONOR IT IS TO BE THE NEW PRESIDENT OF RDC. It is year 49 for our organization, which came together in April of 1975 to support the industries of our 49th state. In that time, Alaska has grown and changed, but much of what binds us at our core is the same as it has always been. Change is sure to come, and we must be poised to capitalize on it while protecting that which makes our state the great place we all love. Love. It’s no exaggeration … I LOVE this state. There is a feeling of adventure around every corner, and with that comes an intense excitement and desire to play in the great outdoors. I am told as a child I saw my first float plane, and I excitedly told my grandfather, “I’m going to fly one of those someday.” I worked on docks throughout high school, then went off to flight school with the goal of returning to those same docks to pilot locals and tourists alike around Southeast Alaska. As often happens, my first love of flying morphed into a desire for more, and I used my education and experiences to grow into the position I hold today with Alaska Airlines. So many of us share this story — a love for a place and a lifestyle that grows into a profession. We live, work and play in Alaska — a lifestyle rarely found in other places. It is what attracts people to visit our state and is the common thread that binds Alaskans together. As we look to the year ahead, I am excited for what we can accomplish together. Alaska is and has always been blessed with an abundance of natural and human resources, which create so many economic benefits and jobs for Alaskans. From our more traditional natural resource industries like fishing, mining, forestry, and oil and gas, to our robust tourism industry, there are so many opportunities for Alaska to continue to grow. As president, I would like to see RDC continue to provide a platform for open dialogue and collaboration among industry leaders, policymakers and community stakeholders. We have such a diverse membership, which I believe empowers us to make a real difference in the future of responsible resource development in Alaska for ourselves and the next generation. Alaska’s limited workforce challenges our ability to advance projects and initiatives. We have a large outmigration of young talent, and attracting new talent to our state in a competitive work environment is difficult. This dynamic is straining our ability to grow Alaska’s economy. Our collective industries need to work harder to educate and energize Alaska’s next generation about career opportunities right here at home to ensure we have a devoted workforce and growing economy. None of us are getting any younger, so tapping into the next generation of Alaskans is critical for our future. RDC will celebrate our 50th anniversary next April. The organization has accomplished so much over that time. Alaska is a better place today thanks to the hard work and devotion of so many. Let’s work together to identify pivotal moments and key contributors over the past 50 years so we may celebrate the wins and those who were the driving force. We will draw from the past to help guide tomorrow’s path. LET’S DRAW FROM THE PAST TO HELP GUIDE OUR PATH “As president, I would like to see RDC continue to provide a platform for open dialogue and collaboration among industry leaders, policymakers and community stakeholders.” — Scott Habberstad, Incoming Board President Photo by Lee Leschper Incoming Board President Scott Habberstad presented a gold pan to outgoing President Lance Miller at the summer RDC luncheon.
Discussion focuses on how global seafood market impacts state U.S. SEN. DAN SULLIVAN (R-ALASKA) CONVENED A ROUNDTABLE MEETING IN MAY WITH ALASKA COMMUNITY AND FISHERIES LEADERS, COMMERCE SECRETARY GINA RAIMONDO, AND OTHER SENIOR FEDERAL OFFICIALS TO DISCUSS HOW THE GLOBAL SEAFOOD MARKET CRISIS IS IMPACTING ALASKA BUSINESSES, COASTAL COMMUNITIES AND FISHERMEN. Sen. Lisa Murkowski (R-Alaska) and Rep. Mary Sattler Peltola (D-Alaska) also joined. The discussion focused on federal policy initiatives that can improve the competitive position of U.S.-produced seafood. “Alaska’s fishermen, seafood industry and coastal communities are in dire straits, facing the worst market conditions in decades,” said Sen. Sullivan. “High inventory and Russian dumping of seafood have eroded prices, and high production costs in the U.S only continue to accelerate. I convened this meeting with Secretary Raimondo and other senior administration officials because, like any other vital economic sector, our fisheries deserve secretarial leadership and a strategy across the federal government to meet these unprecedented challenges.” “Alaska’s commercial fishing industry is in crisis, which is threatening our coastal communities,” said Matt Alward, President of United Fisherman of Alaska. “There are specific actions the federal government can take to help the fishing industry withstand the global market collapse.” “Fishing is the backbone of all the CDQ communities, and vital for dozens of other communities throughout the State,” said Luke Fanning, CEO of the Aleutian Pribilof Island Community Development Association. “The salmon market collapse has devasted the Bristol Bay economy and our residents’ way of life,” said Michael Link, President & CEO of Bristol Bay Economic Development Corporation. “But we are in the midst of an unprecedent crisis across the entire seafood industry and BBEDC is heavily invested in salmon processing and all the offshore fisheries.” The Alaska seafood industry employs roughly 48,000 workers and provides a tax base for more than 142 communities. www.AKRDC.org 9 VOLUME 1 | ISSUE 2 | SUMMER 2024 ALASKA DELEGATION, FISHERMEN MEET ON CRISIS
10 ALASKA RESOURCE REVIEW SUMMER 2024 We must continue to engage wide audiences to share our vital roles BY LEILA KIMBRELL, EXECUTIVE DIRECTOR, RDC AS MENTIONED IN MY WELCOME MESSAGE AT THE BEGINNING OF THIS ISSUE OF ALASKA RESOURCE REVIEW, WE ARE STARTING THIS NEW COLUMN I’M CALLING “TELLING OUR STORY.” My hope is that this standing column highlights the many positive actions and partnerships our industries engage in. I invite you all to share examples for us to highlight in future editions. This is not just to give us a “pat on the back” or a “humble brag.” Rather, I’ve realized that through many meetings, field trips, and site visits around Alaska, there are some great examples of local partnerships and stewardship. There are abundant stories out there that we rarely hear about. We have to change that. I’ve also noticed that our companies don’t always widely share these good stories, of local clean-ups, community giving and selfless partnerships, either because they think the story is already shared or doing so is self-serving. Yet so often I hear “Wow, I didn’t know that about [fill in the blank].” I see so many examples of our industries voluntarily engaged in practices that benefit, balance, and sustain our environment, communities, and minimize footprints. And our companies in Alaska take great pride in their records and community partnerships to ensure a long future of sustainable development. We need to share these good examples and help spur innovation for the future. In April, we started that process for our federal policymakers. RDC, along with a coalition of nine other Alaska trade organizations, hosted the first-ever “Alaska Resources Day” in Washington, D.C. This event came from a recognition that we need a better forum for advocacy at the federal level to tell Alaska’s story. We have great partners with our Alaskan Congressional Delegation, but they alone can’t be our only voice in Washington, particularly in an age of growing and viral social media campaigns that can be difficult to message against. Our inaugural event had a great turnout and was widely attended indicating that not only is there support for this type of advocacy, but also great interest in learning more about Alaska’s resource industries. I am proud RDC was part of initiating this new opportunity for Alaskans to unify and show our strength in numbers in a way only we can do. And in true RDC-fashion, having multiple representatives in one room from our several resource industries, even if we do not always align, sent a powerful and unified message of responsible Alaska resource development. As they say, you have to see it to believe it. Well, believe it, D.C.! And we’re already planning next year’s event. Many thanks to all who were able to participate this year and we look forward to continuing these collective efforts to tell Alaska’s story. Why is this important? When I worked in D.C. several years ago, I often heard the analogy that Alaska should be treated like a “snow globe.” This paints a convenient picture for some, but it is offensive to Alaskans. We aren’t anyone else’s to lock up. But if we aren’t present to tell our story, there is no push back on this narrative. This is why we must continue to engage in uncomfortable spaces, make the long and expensive trek to D.C., and find new ways to tell our story. That’s where you come in and where I need your help. Let’s keep sharing our stories. DO YOU HAVE A STORY TO TELL? PLEASE SHARE IT WITH US AT LEILA@AKRDC.ORG ALASKA RESOURCES DAY HELPS ‘TELL OUR STORY’ Hundreds attended the inaugural Alaska Resources Day in Washington, D.C. SEE MORE PHOTOS ON PAGE 12 -13
www.AKRDC.org 11 VOLUME 1 | ISSUE 2 | SUMMER 2024
12 ALASKA RESOURCE REVIEW SUMMER 2024 ON THE COVER: Alaska’s nine resource development industry associations were well represented in Washington, D.C. in April. Pictured with Sen. Lisa Murkowski are (left to right), Rene Limoge, Cruise Lines of Alaska; Deantha Skibinski, Alaska Miners Association; Kati Capozzi, Alaska Chamber of Commerce; Kristine Lynch, Pacific Seafood Processors Association; Alicia Amberg, Alaska General Contractors; Sen. Murkowski; Leila Kimbrell, Resource Development Council for Alaska; Kara Moriarty, Alaska Oil & Gas Association; Rebecca Logan, Alaska Support Industry Alliance; and Jillian Simpson, Alaska Travel Industry Association.
www.AKRDC.org 13 VOLUME 1 | ISSUE 2 | SUMMER 2024 Alaska Resources Day included face-to-face discussions with key Congressional leadership.
Cook Inlet oil and gas development incentives go without solution BY TIM BRADNER ALASKA’S STATE LEGISLATURE HAD A MIXED RECORD ON NATURAL RESOURCES IN ITS 2024 SESSION. One big positive was passage of Gov. Mike Dunleavy’s House Bill 50, which establishes the statutory framework for injection and underground storage of carbon dioxide. The bill carried with it a number of resource-related measures that were attached and approved as the session adjourned May 15. Another positive was the removal of an amendment added to HB 50 that would have imposed new state taxes on Hilcorp Energy, a major Alaska operating company that produces most of the natural gas from Cook Inlet. A negative was the Legislature’s failure, at the end, to include new incentives for Cook Inlet oil and gas development. The looming decline in natural gas production in the Inlet is well known, but the legislation included incentives for oil as well. Oil production in the Inlet is falling fast, down from 18,000 barrels per day in 2018 on average to an average of 9,000 barrels per day in 2022. The concern for natural gas is to supply utilities like Enstar Natural Gas Co., which provides space heating in Southcentral communities. But oil production matters because it supplies crude oil to the Marathon Petroleum Co. refinery at Nikiski. Marathon provides most of the gasoline used in Alaska and a good share of the jet fuel for Ted Stevens International Airport in Anchorage, a major refueling stop for international air cargo flights. The refinery also supplies ultra-low sulfur diesel used in trucks and heavy equipment including on the North Slope. Marathon also refines North Slope crude oil, but it must be shipped from Valdez, adding expense. The lighter Cook Inlet oil is preferred at the refinery. The governor’s carbon dioxide injection and storage bill is part of a two-part package of legislation introduced in 2023 with the first part passed last year. This was a bill that allows the sale of “offset” credits for carbon dioxide absorbed and stored in state forests. Companies buy credits on trading exchanges that allow them to continue emissions but offsetting the CO2 released by storing an amount in trees. Sale of the credits will provide a new source of state income. The second part, passed in HB 50 this year, involves underground injection of CO2 in special wells for that purpose. The gas will be stored in unused space in depleted oil and gas reservoirs or in underground saline aquifers. The state will lease the reservoir space and earn revenues but must also provide monitoring to ensure the CO2 stays underground. HB 50 included language from four other resource-related bills that are now passed. These include language streamlining geothermal leasing that was taken from SB 69, also a governor’s bill. Under this, the Department of Natural Resources, or DNR, will be able to issue geothermal exploration licenses similar to exploration licenses now issued for oil and gas. LEGISLATURE’S MOVES ON RESOURCES MIXED Declining natural gas production from Cook Inlet is going to be a continuing challenge for the Rail Belt. Gov. Mike Dunleavy signing the carbon capture bill in 2023 (right). 14 ALASKA RESOURCE REVIEW SUMMER 2024
This gives geothermal developers access to more acreage and more time to explore, solving two key problems in the state’s existing program. DNR has worked unsuccessfully to get the geothermal changes for several years but has now achieved it. Another provision added to HB 50 brings underground natural gas storage under state regulation. This will ensure reasonable rates on gas stored for use by public utilities in privately-owned gas storage facilities. This is important in helping deal with coming shortfalls in gas supply. The language inserted in HB 50 was taken from HB 394, a bill sponsored by the House Resources Committee. Two other sections added to HB 50 include a provision granting free access to Cook Inlet seismic data owned by the state to explorers looking for new gas and language reinforcing the ability of the Alaska Industrial Development and Export Authority, or AIDEA, to help fund new oil and gas development with a focus on Cook Inlet. The seismic data language was taken from HB 257, sponsored by Rep. Tom McKay, R-Anchorage, and the AIDEA financing provision, called “reserve-based lending” was from HB 388, sponsored by the House Resources Committee, which is also chaired by McKay. www.AKRDC.org 15 VOLUME 1 | ISSUE 2 | SUMMER 2024 Gov. Mike Dunleavy signs carbon capture legislation into law in 2023.
16 ALASKA RESOURCE REVIEW SUMMER 2024 Carbon capture, wetlands permitting remain in spotlight BY TIM BRADNER REGULATORY CHALLENGES CONTINUE TO BE A FACT OF LIFE FOR ALASKANS. Newest of these are adverse decisions like new U.S. Interior Department land management rules in the National Petroleum Reserve–Alaska. There are occasional wins, too. Or at least delays in bad news. For example, Alaska’s coal and gas-fired power plants appear to be excluded, for now, from a new final U.S. Environmental Protection Act rule requiring carbon capture and storage that went into effect April 25. At least for now the rule does not affect coal power plants that are important to Interior Alaska or the natural gas-fired plants like those operated by Southcentral Alaska electric utilities and with the Prudhoe Bay power plant on the North Slope. That could change in future revisions to the rule, EPA has said, but for now Alaska appears to have missed a bullet. What is most concerning about the rule when it was first proposed is that it would have required coal plants — including combined heat and power plants like at the University of Alaska Fairbanks and the Usibelli-owned Aurora plant in downtown Fairbanks — to implement carbon capture, which would be very expensive. The Aurora plant provides steam that heats downtown buildings in Fairbanks. Were the plant not available the alternative, it would be required to install oil-fired heating units. Meanwhile, on another key regulatory issue, federal agencies are still wrestling with how to implement the U.S. Supreme Court’s landmark Sackett vs. EPA decision on federal wetlands regulation in May 2023. The decision narrowed the focus of the U.S. Clean Water Act. There were hopes this would ease the burden of securing wetlands permits for Alaska projects. One year later the U.S. Environmental Protection Agency and U.S. Army Corps of Engineers are still working out how to implement the decision. This will take a while, say people familiar with the issue. Sackett limits the scope of the Clean Water Act to protect water bodies, including wetlands, that are connected to larger streams. Where there is no connection to larger waters, there is no Clean Water Act jurisdiction. Much of the North Slope, which is dotted by small lakes and streams, would appear to be unaffected by Sackett. In contrast, dry upland tundra on the North Slope would seem to be excluded. But this isn’t clear yet, as is often the case under major new court rulings. This could mean that for major industries in Alaska, such as oil and gas, the status quo with permitting will continue. It will take time for Sackett to have any real impact on Corps of Engineers wetlands permitting in Alaska. Companies will still have to do wetlands assessments on many proposed projects and negotiate impact mitigation agreements with the U.S. Environmental Protection Agency if wetlands are affected. Meanwhile, some of the more contentious issues in wetlands permitting also remain, such as the federal agencies’ rules for mitigation. In the Lower 48 states there are many places with damaged wetlands that can be restored to productive ecological use by companies under off-site mitigation programs. In those places there are well-organized mitigation banks, or organizations, that purchase damaged lands and hold them in inventory for companies to invest in restoration. But damaged wetlands are hard to find in Alaska, where most of the state is undeveloped and essentially wilderness. Companies working in Alaska have proposed mitigation plans that repair other kinds of environmental damage, such as those around historic mining sites. However, the U.S. Environmental Protection Agency and U.S. Corps of Engineers have turned down most of these, taking the position that mitigation should deal only with wetlands. The agencies have also said that the mitigation should be done in the same region where the development occurs and sometimes the same watershed. This further limits options for mitigation that are really useful. In practice it has led to companies spending money on purchases of undeveloped lands and other agreements to permanently protect wetlands from development even in remote areas where there is no development planned or even likely. REGULATORY CHALLENGES FOR INDUSTRY CONTINUE Photo Courtesy Aurora Energy
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18 ALASKA RESOURCE REVIEW SUMMER 2024 Serious concerns linger as federal agencies must be held accountable BY LEILA KIMBRELL, EXECUTIVE DIRECTOR, RDC ON JUNE 28, 2024, AFTER NEARLY 10 YEARS OF REVIEW, THE FEDERAL BUREAU OF LAND MANAGEMENT (BLM) ISSUED ITS FINAL SUPPLEMENTAL ENVIRONMENTAL IMPACT STATEMENT (FSEIS) FOR THE AMBLER ROAD PROJECT, A CRITICAL INITIATIVE TO ACCESS ALASKA’S AMBLER MINING DISTRICT (AMD). Shockingly, the BLM’s preferred alternative was a “no action” decision, effectively halting the project. This unprecedented move should alarm anyone involved in development that must go through federal environmental permitting approval. For those unfamiliar, the background of this project is important. The Alaska Industrial Development and Export Authority (AIDEA) initiated the project in 2015, triggering an extensive multi-agency environmental permitting process. Despite initial approval in 2020, legal challenges and an agency request led to a court-approved voluntary remand of the environmental impact statement (EIS) in 2022. After more bureaucratic delays, the BLM expanded its review of the court’s remand decision and inexplicably reversed its 2020 decision, now blocking the road’s construction. The Ambler Road project’s unique legal status adds another layer of complexity. Congress guaranteed surface access to the AMD under the Alaska National Interest Lands Conservation Act (ANILCA) of 1980. Section 201(4)(b) specifically states: “Congress finds that there is a need for access for surface transportation purposes across the Western (Kobuk River) unit of the Gates of the Arctic National Preserve (from the Ambler Mining District to the Alaska Pipeline Haul Road) and the Secretary shall permit such access in accordance with the provisions of this subsection.” This legal mandate was part of a final compromise to resolve outstanding federal and state land claims and support development in the region. Without the provision above, there is no guarantee of access to the AMD. Nonetheless, the BLM’s decision now ignores Congress’ clear intent and undermines Alaska’s sovereignty. One could also argue this violates the “no more” clause of ANILCA. The rarity of “no action” decisions underscores the gravity of this situation. Typically, compromises are reached to address concerns, but recent trends show federal agencies subjecting Alaskan projects to excessive delays, scope reductions, and lengthy permitting processes. This sets a concerning precedent for future development across all industries, not just mining: No action = no build. This is not a sustainable approach to future development. At its core, this decision represents federal overreach and a double standard. Alaska’s statehood was predicated on resource development to benefit its citizens. Denying access to vital infrastructure impedes economic growth and violates the federal government’s obligations to the state. This disparity in treatment between Alaska and the Lower 48 states is unacceptable and warrants serious concern. What may be worse is that anonymous agency officials leaked the BLM’s decision days before the FEIS was announced, resulting in a one-day 29 percent drop in stock valuation for one of the companies invested in the area. There should be serious concern about agency officials’ actions like this that have the effect of manipulating markets. As stewards of Alaska’s future, we continue to advocate for reasonable access to responsible resource development and hold federal agencies accountable for their actions. The BLM issued its final Record of Decision (ROD) on June 28, triggering AIDEA’s appeal rights. RDC will continue to monitor this issue and advocate for reasonable access to our resources guaranteed by law. BLM’S AMBLER DECISION: ‘NO ACTION’ RAISES ALARM Statement on Ambler Access Road Final Record of Decision. With RDC, the Alaska Chamber, Alaska Miners Association, Alaska Metal Mines, Alaska Support Industry Alliance, Associated General Contractors of Alaska, and Greater Fairbanks Chamber of Commerce have issued this joint response: “We are disappointed by the Biden Administration’s nearly unprecedented ‘no action’ alternative on the Ambler Access Process and flat refusal to grant access for the Ambler Access Road — access that was promised in the Alaska National Interest Land Claims Act (ANILCA). Denial of access to this region is a threat to Alaska’s development that was strategically negotiated more than 40 years ago. Despite a joint letter requesting that BLM reconsider the “no action” alternative, the above-mentioned coalition received no response. “Today’s final decision violates federal law and the clear mandate of ANILCA. This decision also threatens significant future economic opportunity for Alaskans and undermines Alaska’s right to access vital minerals essential for reliable energy and national security, while also disregarding our national and environmental integrity. “This decision is especially unfortunate given Alaska’s resource development community adheres to the highest environmental and safety standards. “While the aforementioned organizations are disappointed with today’s final announcement, we remain committed to responsible resource development in Alaska and will continue advocating for this project and others with potential to improve our economy and provide jobs for Alaskans.”
www.AKRDC.org 17 This year, TOTE Maritime Alaska celebrates 49 years in the 49th State! TOTE is proud to have served Alaska since 1975, connecting communities with dedicated, reliable service from Tacoma, WA to Anchorage, Alaska. With our “built for Alaska” vessels and roll-on/roll-off operations, our service and operations were designed to meet the unique needs of the customers and communities of Alaska. Join us in commemorating nearly half a century of excellence in shipping to the Last Frontier. 49 IN THE 49TH
20 ALASKA RESOURCE REVIEW SUMMER 2024 Global giant heads toward $20 billion in investment in the state BY TIM BRADNER EDITOR’S NOTE: THE FOLLOWING IS A RECAP OF REMARKS GIVEN BY CONOCOPHILLIPS’ KIRK JOHNSON AT THE 2024 RDC ANNUAL MEETING AND LUNCHEON. CONOCOPHILLIPS ALASKA HAS INVESTED $10 BILLION IN THE STATE DURING THE PAST DECADE. EXCLUDING WILLOW PROJECT INVESTMENT, IT WILL INVEST AN ADDITIONAL $10 BILLION IN ALASKA IN THE COMING YEARS. THIS MAKES THEIR TOTAL INVESTMENT MORE THAN $20 BILLION SPANNING TWO DECADES. That’s the upbeat message Kirk Johnson, ConocoPhillips’ Senior Vice President for Global Operations, delivered to the Resource Development Council members at the annual member’s luncheon in Anchorage on June 12. Willow itself is requiring $7 billion to $7.5 billion by 2029, when the field is expected to begin production, Johnson said. The company has other projects underway, too, like “Nuna,” in the Greater Kuparuk Area. “We are continuing to find new opportunities in Alaska,” even near existing fields, he said. Johnson cited Coyote, a new project in the Greater Kuparuk Area, as an example, along with Nuna. ConocoPhillips Alaska and its predecessor, ARCO Alaska, have been in Alaska for more than 50 years and have played key roles in the discovery and development of the major producing fields of the North Slope as well as in Cook Inlet. Johnson started his own career in Alaska, too, working here for 11 years, longer than in any other place he’s worked for ConocoPhillips. “Coming back here is like coming home,” he said. ConocoPhillips has grown over the years and now has operations in 13 countries, with approximately 10,000 employees. The company now focuses on “upstream” oil and gas production and no longer in “downstream” refining and marketing. It is a top U.S. crude oil producer with diverse sources including the Bakken, Permian, and Eagle Ford shale fields. Alaska, however, continues to be a core part of the company’s strategy. Alaska has its challenges, of course. In recent years those have revolved around government fiscal and regulatory policies. “The new rule in the NPR-A (the federal government’s new land regulations there) will raise significant questions on our ability to continue to develop areas in the NPR-A west of Willow,” Johnson told RDC members. In the worldwide perspective, “we’re all aware of the energy transition that is underway,” he said. Wind, solar and other renewable energy sources are growing but growth continues in the world’s appetite for energy, and fossil fuels like crude oil will continue to play a major role. Fossil fuels supply 80 percent of world energy demand today, roughly the same percentage as over the last 60 to 70 years, Johnson said. China is a leading developer of renewable energy and increased its coal capacity last year, he said. Most scenarios for the future also see natural gas growing faster than oil, too. Crude oil demand will continue to be strong, and the U.S. will play a role with an estimated 200 billion barrels of resources. “Based on current Cost of Supply estimates, assuming a competitive rate of return, these resources will continue to be produced,” Johnson said. However, most estimates are that U.S. oil production will see continued growth through the mid-2030’s when we start to see decline. Dependence on foreign oil sources will begin to grow again. All of this puts Alaska in a strong position because of its resource base, reputation as a steady supplier and proximity to U.S. west coast refineries. However, even Alaska’s supply of oil to the U.S. west coast is expected to peak from existing fields by 2030, which makes projects like Willow particularly important. Willow is expected to produce 180,000 barrels a day at peak of new North Slope oil supply starting in 2029. Because of projects like Willow and a stable tax structure, Alaska will continue to be a core part of ConocoPhillips’ plans. “Alaska has a large resource base, and while there are high costs because of its remote operations Alaska’s crude oil is of high quality and sells at a premium, which balances off the high costs,” Johnson said. “In a comparison of worldwide crude oil supply sources, Alaska comes down right in the middle, a good place to be,” he told RDC. CONOCOPHILLIPS ADDS TO ITS ALASKAN GOALS “Alaska has a large resource base, and while there are high costs because of its remote operations Alaska’s crude oil is of high quality and sells at a premium.” — Kirk Johnson, ConocoPhillips’ Senior Vice President for Global Operations
www.AKRDC.org 21 OIL & GAS CONSTRUCTION SERVICES | MINING CONSTRUCTION & MAINTENANCE | POWERPLANT CONSTRUCTION | PIPELINE CONSTRUCTION | REMOTE VILLAGE INFRASTRUCTURE TELECOMMUNICATIONS | DESIGN BUILD & EPC | GENERAL CONTRACTING & MANAGEMENT | PROFESSIONAL PLACEMENT & STAFFING Commitment to Safety & Quality | Anchorage · Kenai · Deadhorse | www.conamco.com | 907-278-6600 BUILDING ALASKA ONE OUNCE AT A TIME CONAM’s track record of successful projects has proven that resource development can be done responsibly while protecting Alaska’s fragile environment. Our firm understanding of Alaska’s unique challenges and commitment to HSSE and planning have translated into satisfied mining clients across the state. We get dirty so you get the pay dirt. VOLUME 1 | ISSUE 2 | SUMMER 2024 Photo by Judy Patrick Photography Kirk Johnson outlined a bold plan for ConocoPhillips to make more investments in Alaska in coming years.
22 ALASKA RESOURCE REVIEW SUMMER 2024 Minimum wage ballot initiative brings about a number of concerns EDITOR’S NOTE: RDC IS A NONPARTISAN ORGANIZATION THAT ENDEAVORS TO INFORM OUR MEMBERS ON ISSUES THAT MAY IMPACT THEIR ABILITY TO DO BUSINESS IN ALASKA. RDC HAS NOT YET TAKEN A POSITION ON THIS INITIATIVE BUT ENCOURAGES OUR MEMBERS TO TAKE A CLOSER LOOK AT THE DETAILS OF THIS INITIATIVE THAT WILL APPEAR ON THE BALLOT FOR THE NOVEMBER GENERAL ELECTION. BY HARRY WHITED IT’S AN ELECTION YEAR, MEANING ALASKAN VOTERS CAN EXPECT ONE OR MORE BALLOT PROPOSITIONS. Ballot initiatives have become a regular part of life for Alaska voters, with often unintended or unexpected consequences that voters need to weigh. Such is the case in 2024 with an initiative to follow the national trend of mandating higher minimum wages, but also has a provision that could change Alaska rules for employee sick leave. The “Alaska’s Minimum Wage Standards Initiative” is expected to be on the general ballot on Nov. 5. The initiative proposes raising the minimum wage until 2027: n $13 per hour effective July 1, 2025 n $14 per hour effective July 1, 2026 n $15 per hour effective July 1, 2027 It is not raising the minimum wage that concerns industries in Alaska. The issue lies in the new mandate, also in that initiative, for paid sick leave employers would be required to provide employees. While it is not at the forefront of the initiative, it is one of the proposals that raises concern among the state’s industries. The initiative proposes allowing 56 hours of sick leave per year if the employer employs 15 or more people, and 40 or more hours if the employer employs less than 15. The caveat is that seasonal workers would not be exempt from this. Katie Capozzi, President and CEO of the Alaska Chamber, said key Alaska industries could be heavily affected. “The sick leave in particular we have concerns within the hospitality industry, the tourism industry and the fishing industry,” Capozzi said. “These are businesses that are very nimble and frankly don’t have the ability to do things like offer sick leave and keep track of it,” Capozzi said. Capozzi gave an example as to how this initiative could affect businesses regarding sick leave. “If you hire someone six months after they’ve worked for you then the sick leave that they had accrued needs to be carried over,” Capozzi said. Capozzi said this could affect businesses of any size, but especially smaller ones. “Mom and pop” shops, small businesses and nonprofits would have to comply with the mandate no matter the size of their staff. The initiative could affect small businesses the most. Capozzi said larger businesses already provide sick leave. However, smaller businesses could have a harder time since they may not be in a position to provide much sick leave. “It creates a lot of red tape (at a time when) our small businesses are really struggling to bring on staff, keep staff, and have a successful business,” Capozzi said. “Adding this requirement on to (small businesses), we’re concerned about the impact it would have on their businesses,” Capozzi said. “It would be another SICK LEAVE MANDATE WOULD AFFECT EMPLOYERS Commercial fishing in Alaska could be affected by the sick leave mandate in the ballot initiative.
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24 ALASKA RESOURCE REVIEW SUMMER 2024 Anna Atchison brings wealth of experience in breaking down barriers BY BARBARA NORTON GROWING UP ON A HOMESTEAD AT THE BASE OF THE TALKEETNA MOUNTAINS, THERE WAS NOTHING ANNA ATCHISON WAS TOLD SHE COULDN’T DO. It was when she began mentoring women who work in Alaska’s resource industries that she began to realize the extent of the challenges that she and other women face. “I’ve mentored women that have been so direct and blunt with me about their experiences. The last couple of generations of women are so much more comfortable speaking openly about things,” said Atchison, the U.S. Director of External Affairs for Kinross Gold Corporation and Vice President of the RDC’s Board of Directors. She herself was “just not raised to be that way,” she says, but is inspired by the newer generations of women who speak up. “I respect that so deeply and I love that, and I benefit from that.” Though Atchison describes herself as “very late” to recognizing the barriers that she’s faced, she is a critical advocate for women in Alaska’s resources. One manifestation of her advocacy is the RDC’s annual “Women in Resources” reception, which Atchison emceed this spring in Juneau for its 20th anniversary. In recent years, Atchison has worked with a group of other women to help reshape the reception to be more inclusive and expansive, and strengthen its mentorship element. For Atchison, the event is a dedicated space for women to “celebrate our power and influence.” Part of the rebrand involves inviting women who aren’t directly involved with resources, such as academics. Additionally, experienced female leaders are encouraged to invite other women who are at an earlier stage in their career. The purpose of the reception is to “inspire, it’s sharing, making sure we all fight to have a voice at the table,” she said. By contrast, the theme of the 2005 reception was “Gold, Silver, and Jade… Women Love Resources!” The new era of the event, Atchison said, is “a lot more of an inclusive approach.” The event also offers women a chance to “talk through everything,” including the challenges that they face in their industry. “Women don’t have much room to screw up,” she said. “You just don’t when you’re very much in the minority—and in resources, you are. Let’s say you’re one of two to three women on a fourteen-member management team. I’ve been there myself. There’s a lot more focus on you and what you do. You just don’t have room to screw up, you better be on your game.” She cites lower wages, barriers to career development, and male-dominated work environments as a few of the challenges that women frequently face in resources. “Women have learned over time, and I was one of these, to shield themselves. They need to hide their true identity, they have to restrict self-expression. With that comes a lot of burnout,” which she says she has experienced personally. With these challenges, conversations among women are key, she said. At the RDC’s 49th Annual Membership Luncheon in June, she was speaking with a young woman working in mining who was struggling to move into the next DEFINING THE PATH FOR WOMEN IN RESOURCES RDC’s 20th annual Women in Resources reception in Juneau this spring.
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