THE LINK SUMMER | JULY 2024 The official magazine of the Alaska Support Industry Alliance INSIDE THIS ISSUE n Facing Federal Challenges Head-On n Cook Inlet: Facing Gas Shortfall n Education: Academies of Anchorage n Celebrating 50 Years on Haul Road NORTH SLOPE BOOM: THOUSANDS OF WORKERS ADVANCING WILLOW, PIKKA www.AlaskaAlliance.com
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THE LINK: JULY 2024 4 Alliance Members and Friends: As I’m sure you’ve heard, we’ve had some bad news from the Bureau of Land Management (BLM) since the last time I wrote to you. The BLM selected the “No Action” alternative in the Ambler Access Project SEIS, tantamount to saying they don’t intend to let Ambler Road cross federal land. They also updated their NPR-A rule for the first time in 40 years, making it much harder to develop oil and gas projects in the region. Perhaps I’m mistaken, but last time I checked, NPR stands for National PETROLEUM Reserve. We’re no strangers to adversity as the men and women who develop Alaska’s resources. We will overcome these challenges with advocacy, responsibility and hard work. Remember that administrations come and go, but Alaska’s resource wealth is generational. We are going to make our industry and state prosper, together. The Alliance will continue to fight for our interests at the local, state and federal level. These setbacks come on the backdrop of an incredible resurgence in activity on the North Slope. I don’t know if you noticed, but business is booming. Camps are full, equipment is sold out and it’s pretty hard to hire people right now because Alaskans are at work. I hope every Alliance member reading this is making hay while the sun shines. Together we will bring the Willow and Pikka projects to fruition and move on to the next great opportunity. The substantial increase in activity brings an extremely important topic to the limelight: safety. Recent tragedies have reminded us that we need to look out for our brothers and sisters in the support industry, especially with the influx of new employees. Taking the time to mentor new colleagues keeps us all out of harm’s way. There’s no task so urgent that we can’t do it safely, and everyone is allowed to stop the job if something isn’t right. Going home safely is everyone’s responsibility, and it’s the most important thing we do. Let’s build Alaska’s future together — I know Alliance members are up to the task. Liam Zsolt Board President Prosperity, safety should remain our top priorities Message From Liam Zsolt, Board of Directors President Connect with The Alliance We are working proactively to keep our members informed and connected via online platforms and events. Watch for our updates through email and social media. LinkedIn: www.linkedin.com/in/the-alliance-4939251b Facebook: www.facebook.com/alaskaallianc X (formerly Twitter): x.com/AKAlliance And if you’re not receiving our updates, email info@alaskaalliance.org. Stay up to date on our website at AlaskaAlliance.com.
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Page 10 Feds hammer down on Alaska’s resources New Federal restrictions unveiled in April are more than the usual election year politics and threaten the very future of Alaska’s economy and working families. Page 18 Santos continues its progress with Pikka Santos has completed about half of its work to bring oil production from the company’s Pikka project online in 2026. Page 22 Interior utility to haul LNG to Fairbanks A new plan to truck North Slope liquified natural gas to Fairbanks could be the first opportunity for Alaska’s own gas to be the future of the state’s energy needs. Page 27 Anchorage schools focus on career paths Anchorage School District has launched an innovative new program, Academies of Anchorage, to help high school students chart a career path beginning their freshman year. FEATURES The Link is published in partnership with the Alaska Support Industry Alliance by Fireweed Strategies LLC, 4849 Potter Crest Circle, Anchorage, AK 99516. We actively seek contributions from Alliance members and the oil and gas and mining industry. For advertising information and story inquiries, email Lee.Leschper@FireweedStrategies.com. Our magazine is mailed at no charge throughout Alaska to those interested in resource development and a healthy Alaska economy. To subscribe, email Admin@FireweedStrategies.com. Publisher: Lee Leschper | Editor: Tim Bradner | Production, Design: Will Leschper Contributing Photographer: Judy Patrick THE LINK: JULY 2024 6 ON THE COVER Thousands of Alaskans like this Armstrong crew are hard at work on the North Slope on new projects. But all that work and future projects are at risk under new Federal restrictions on oil drilling as well as development of key infrastructure like the Ambler Access Project. Photo by Judy Patrick ON THIS PAGE Santos made history this spring, opening its new office on 5th Avenue in downtown Anchorage, marking the company’s commitment to Alaska long-term.
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Alliance Members and Friends: As we enjoy our long summer days and our beautiful surroundings, we are well aware that in August and November we are facing state and national elections. Just 10 short years ago, on Aug. 19, 2014, the referendum to repeal SB 21, “An Act relating to the Oil and Gas Production Tax, Interest Rates on Overdue Taxes, and Tax Credits” was on the primary ballot. Many of you will remember that SB 21 reversed tax policy that had left Alaska’s oil and gas economy in the dust, while the rest of the world drilled, explored, developed and produced significant amounts of oil in a very high price environment. Fortunately, 10 years ago, Alaskans had the vision to reject the repeal — 99,855 of them voted “no.” Those 10 years of tax stability have created an investment friendly environment for our oil and gas industry and have led to projects like Willow and Pikka, hundreds of thousands of barrels of new oil, and thousands of jobs for our support industry family. Elections Matter. Though we aren’t facing any tax threats via ballot measure in our fall elections, we are facing threats at the state and national levels if we don’t elect the right people. At the national level, we will choose a President and a host of Senators and Congressmen. At the state level, all 40 House districts and 10 Senate districts will choose their representatives. There are clear differences between all the candidates. There are those who understand that oil and gas have fueled prosperity in this state since 1959 and will continue to do so for at least the next 50 years. And there are those who are calling for the phaseout of fossil fuels, even an aggressive phasedown of TAPS — turning their backs on always available energy for intermittent, not developed, or ready to use sources. There are two critical things I would ask you to do in this election: 1. Educate yourselves on who is helping our industry and who is hurting our industry; and 2. VOTE like your job depends on it — because it does. Remember, I am always here as a resource should you need more information on Government Affairs updates or Alaska’s political races, and which candidates stand up for our industry. Respectfully, Rebecca THE LINK: JULY 2024 8 It’s vital this election season to help protect our lifebloods Message From CEO Rebecca Logan
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THE LINK: JULY 2024 10 Restrictions put on NPR-A, Ambler, public lands April 19 was not a good day for Alaska. The U.S. Department of the Interior acted to finalize restrictive new rules for the National Petroleum Reserve– Alaska in northern Alaska and ended, for now, a planned 211-mile industrial road to a remote area of Northwest Alaska where promising mineral discoveries are being explored. That same day the department issued new public land orders restricting the use of federal lands. This was too much for Alaska’s U.S. Senator Lisa Murkowski. The senator said she may now seek cuts to the Department of the Interior’s budget, unless the department starts following federal laws on resource development in Alaska. Interior Secretary Deb Haaland appeared May 8 at a hearing held by the Interior Appropriations Subcommittee, where Murkowski is Ranking Member, to testify about the Biden administration’s budget request for the Interior department for federal Fiscal Year 2025. In the hearing Murkowski cited Haaland’s decisions to close off 13 million acres of in the National Petroleum Reserve without consultation with Alaska Natives and tribal entities; to reject the Ambler Access Project, which is guaranteed by federal law; and to issue a major federal land plan that closes millions more federal acres in Alaska while ignoring directives of a law Murkowski wrote to lift federal Public Land Orders. “I see a department ignoring the law with regard to Ambler, our petroleum reserve, our land management plans, our Coastal Plain, and the prioritization of conservation above all else,” Murkowski said. “Had the Interior department consulted with Alaska Natives on the North Slope before finalizing the NPR-A rule, “you would have learned they don’t want Interior to ‘protect’ them from the economic development that has done more to increase their life expectancies than anything else.” “Why are we treated like one big National Park and Wildlife Refuge, instead of a state that has balanced the need for development and the desire for conservation?” Murkowski said. If Interior is going to use its funding to make these types of decisions, “then we need to find ways to cut your budget, until the Department gets the point, and returns to following the law,” the senator said. The NPR-A rule decision was expected. Drafts of the proposed rule had been circulating for months. But the way the decision was made on the proposed Ambler road was a surprise. The Interior department recommended “no action” on the SupFeds hammer down on Alaska’s resources Photo Courtesy Santos Ltd.
www.AlaskaAlliance.com 11 Full-service logistics. Get a free quote: 800.321.6518 AlaskaRailroad.com/freight Reliable • Eco-friendly • Made for freight UNCOMPLICATE YOUR FREIGHT LOGISTICS plemental Environmental Impact Statement, or DEIS, that had been prepared for the road. Many Alaskans had hoped Interior would instead make a “no recommendation” decision on the DEIS rather than “no action.” No recommendation would have left flexibility for choices in the final Record of Decision. “No action” shuts the door on the road, at least the way it is now planned. Both decisions will prompt lawsuits. In the NPR-A, there will be litigation over Interior’s failure to do tribal and community consultations required by federal law. In the Ambler road case, however, the state will argue that the Interior department action violates provisions in the 1980 Alaska National Interest Lands Act, or ANILCA, that is explicit in granting an access corridor across federal lands from the state’s Dalton Highway to the Ambler Mining District. On the NPR-A, half of the 23-million-acre petroleum reserve will be in a protected status, about the same amount of acreage as when Sally Jewell was President Barack Obama’s Interior Secretary. Most of this has little oil and gas potential except northeastern areas of the reserve where ConocoPhillips is developing Willow. While ConocoPhillips’ federal leases around Willow are not affected, for now, the new BLM rule allows special designated protected areas in the reserve to be expanded which could affect any expanded development near Willow or along the Colville River near where Santos and Repsol are working. Part of the Santos and Repsol leases around the Horseshoe discovery south of Pikka extends into federal lands in the petroleum reserve. In that area the new rule adds uncertainty. As for Ambler, most of the proposed road route is on state-owned land as is the mining district where companies are exploring. The nearterm effect of Interior’s decision will be on exploration companies. South 32, a major Australian mining company, and Trilogy Metals, a small Canadian “junior” exploration company, have done significant exploration at the Arctic highgrade discover, but had paused their work in the last two years because of the uncertainty over BLM’s position on the road. Ambler Metals, the CONTINUED on PAGE 12
THE LINK: JANUARY 2024 12 joint-venture of the two companies, plans a limited program of environmental work this year, but no drilling. Continued exploration at Arctic and Bornite are important because it would still be years before a road can be built. That’s because Ambler Metals needs more metal reserves confirmed before a mine can be constructed. One or more mines are needed to get the road financed and built because companies must sign contracts for toll fees for shipping ore concentrates. Signed contracts are needed for AIDEA to issue revenue bonds to fund construction. By denying authorization for a road, the agency is signaling that it will continue to oppose access to the area. NANA Regional Corp., the Alaska Native regional corporation for northwest Alaska, is critical of Interior’s action. “BLM’s actions threaten Alaska Native corporations’ responsibility to advance the socioeconomic interests of shareholders in accordance with the Alaska Native Claims Settlement Act,” and goes beyond the law in several aspects, NANA said in a statement. “NANA will continue to defend access to our region as mandated by Congress in the Alaska National Interest Lands Conservation Act (ANILCA), which authorizes surface transportation across the Gates of the Arctic National Park and Preserve to the Dalton Highway. “For more than 40 years NANA has successfully developed our resources alongside trusted industry partners in ways that respect our way of life and advance our region as a whole,” said John Lincoln, NANA president and CEO. NANA has concerns with the Ambler road project, but the corporation NANA still has a cooperation agreement with Ambler Metals on development of the Arctic and Bornite deposits and supports surface access to the area. Meanwhile, in another adverse federal action the U.S. Army Corps of Engineers denied an appeal of the corps decision against a key wetlands permit, the federal Section 404 dredge and fill permit for Pebble, a proposed copper, gold, and molybdenum mine north of Lake Iliamna, 200 miles from Anchorage. The Army corps based its denial on the earlier decision by the U.S. Environmental Protection Agency to ban large-scale mining in a huge area in the Bristol Bay region, in southwest Alaska. Similarly, the Alaska corps has not acted on a request by its own upper management at the corps’ Pacific region to review the Section 404 denial because of defects in the decision. Senior corps officials found fault with the agency’s denial of the Pebble wetlands permit, arguing that little consideration had been given to a wetlands impact mitigation plan and that only environmental impacts but not the economic benefits were factored in the decision to deny the permit. These actions have spawned more lawsuits. Both the state of Alaska and Pebble Partnership Ltd., the Northern Dynasty Minerals subsidiary hoping to develop Pebble, have filed lawsuits in federal court seeking to overturn the EPA action, arguing that EPA’s use of a veto authority over a large area of state-owned lands is unprecedented. — Tim Bradner CONTINUED from PAGE 11 Photos Courtesy Ambler Metals Ambler Metals camp at Bornite.
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THE LINK: JULY 2024 14 ConocoPhillips wraps up successful season on Willow
Willow will add 180,000 barrels per day at its peak ConocoPhillips Alaska is off to a good start in building its Willow oil project on the North Slope. “We are wrapping up a successful first major winter construction season,” said Erec Isaacson, the company’s president, said May 2 in a statement on progress at Willow. “Significant achievements this winter include gravel road and pad construction, vertical support member installation, bridge construction, and progressing the fabrication of the Willow Operations Center. We are also advancing the Nuna project in the Kuparuk River Unit which is projected to see first oil in early 2025.” Capital expenditures, much of it on Willow, totaled $720 million in the first quarter of 2024, according to ConocoPhillips’ statement on quarterly Alaska performance. In a May 2 earnings call with analysts, Kirk L. Johnson, the company’s Senior Vice President of Global Operations, said ConocoPhillips was able to successfully build out seven miles of gravel road and 30 acres of gravel pads for future facilities during the season. “We’ve successfully constructed all of the pipelines that we planned for this winter season. In addition, module fabrication has continued to progress well this winter and spring,” Johnson said. “We still expect to be in the range of $1.5 billion (on Willow) for 2024 and the progress we’re making gives us confidence to keep our estimate on total capital to first production as unchanged. We’re still in that $7 billion to $7.5 billion range,” for the total project,” Johnson said. When completed Willow will add 180,000 barrels per day at peak production for the North Slope starting in 2029. ConocoPhillips and its contractors had 1,800 employed on Willow construction this winter, he said. The activity is keeping contractors and suppliers busy. Nate Andrews, Alaska vice president for Delta Constructors, said his company has ConocoPhillips projects in the Kuparuk River Unit and the Colville River Unit, where the Alpine field is located. Many of those are needed to support Willow production when it comes online. There are other developments www.AlaskaAlliance.com 15 Photos by Judy Patrick CONTINUED on PAGE 16
underway. Nuna, a new project in the Kuparuk River Unit that is expected to add 20,000 barrels per day when it is completed. The work benefits other Alaska communities, too. For example, a drill site module for Nuna is being built in Anchorage at the North Star Terminal and Stevedore facility in the city’s Ship Creek industrial area. Delta Contractors has about 350 workers on the North Slope this year and another 75 in Anchorage, Andrews said. The workforce challenges affecting most businesses in Alaska are being felt by North Slope support contractors but are being managed. “Electricians are a struggle for everyone,” he said. “We’re able to source welders but it’s not like it was five years ago,” when more were available. Delta Contractors has recently been able to recruit welders trained at the Alaska Vocational and Technical Center in Seward. Supply chain issues are easing after serious disruptions caused during the pandemic. But inflation continues to affect equipment and material costs, with some costs up 20 percent from last year, Andrews said. Isaacson said Alaska’s stable fiscal regime is clearly working to promote new and ongoing investment. Projects like Willow and Nuna are a result of changes made in 2013 by the state Legislature to stabilize the state’s oil and gas tax system. “Our investment in projects like Willow and Nuna demonstrates our continued commitment to deliver new barrels and contribute significantly to the State’s economy,” Isaacson said. — Tim Bradner THE LINK: JULY 2024 16 CONTINUED from PAGE 15 ConocoPhillips Alaska reported net income of $346 million in the first quarter of 2024. During the quarter, ConocoPhillips Alaska incurred an estimated $421 million in taxes and royalties, which includes $303 million to the State of Alaska and $118 million to the federal government. Since 2007, ConocoPhillips Alaska has incurred more than $45 billion in taxes and royalties to the State of Alaska and the federal government. Of that amount, about $35 billion went directly to the state. In that same period, ConocoPhillips Alaska’s earnings were approximately $26 billion. — Tim Bradner ConocoPhillips’ 1Q Alaska income: More to government than earned
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THE LINK: JULY 2024 18 Santos employed 2,200 during its winter season Phase One at the big Pikka project on the North Slope is nearing the halfway mark toward completion, Australia-based Santos Ltd. said, following completion of its first major winter construction season. Santos holds a 51 percent interest in Pikka, with Repsol, based in Madrid, holding 49 percent. Six of Pikka’s planned 43 production wells were complete in mid-May. Three of the wells have been tested with results comparing favorably with pre-drill expectations, Santos told the 2024 Macquarie Australia conference. Pikka is on 32 state oil and gas leases near the ConocoPhillips-operated Alpine field, which is west of the large Prudhoe Bay and Kuparuk River fields. The well production tests are important in confirming the potential of the Nanushuk oil reservoir, the source of most of Pikka’s oil. Santos will be executing the first major production in the Nanush, so the yield of wells is being watched closely. Some of Pikka’s oil will come from the Alpine C reservoir, which is found in the nearby producing Alpine field and is better know The longest well drilled so far at Pikka is over 18,000 feet. As in other North Slope fields the bulk of the drilling at Pikka is for horizontal wells where a drill rig at the surface drills laterally to a point in the underground reservoir sometimes several miles from the surface location of the rig. Santos provided additional details on its first season of construction at a May 2 briefing to a Resource Development Council breakfast meeting in Anchorage. It has been a busy winter season at Pikka, with over 2,200 people employed. Forty miles of pipeline were installed along with over 4,800 vertical support members, which support the above-ground pipelines, as well as over 3,300 pilings. The seawater treatment plant for Pikka is 62 percent complete, and the fabrication and installation of oil processing, drill site and camp facilities are on track for “first oil” of phase one in the first half of 2026, Santos said at the Macquarie conference. The seawater treatment plant planned to be located at Oliktok Point will be mounted on a barge as described in the plan approved by the U.S. Army Corps of Engineers in November 2022. It will have a capacity of treating 100,000 barrels per day of seawater for use in water injection for reservoir Santos: Pikka’s first phase 50% complete Photo Courtesy Santos Ltd.
www.AlaskaAlliance.com 19 pressure maintenance at Pikka. It will begin operations in 2026. Meanwhile, all major construction contracting is complete at Pikka, with issued purchase orders under awarded contracts totaling more than $2 billion, Santos told RDC members at the briefing. Pikka’s phase one will produce 80,000 barrels per day at its peak rate, with oil coming from one production pad. Other production pads are planned and permitted as part of the next phase of Pikka, which has not yet been sanctioned. As of August 2022, the estimated proven and probable recoverable reserves are 397 million barrels in the reservoir area being tapped in phase one. Reserves are expected to grow as Pikka expands in subsequent development phases. Santos has embraced a “net zero” carbon emissions goal at Pikka, which is part of a corporate-wide strategy to reduce carbon dioxide releases that contribute to global warming. Pikka’s operations will be heavily electrified, and the company has also negotiated a forestry-based carbon “offset” program with an unidentified Alaska Native corporation which owns lands. Santos is also engaged with research and development of carbon dioxide underground injection and storage as well as projects to capture CO2 from power plant emission as well as direct air capture. Pikka was discovered in 2013 when Armstrong Oil and Gas and Repsol drilled the Qugruk 3 discovery well. Additional appraisal drilling was done to confirm the discovery. Armstrong sold its share of Pikka to Oil Search, which is based in Papua, New Guinea. Oil Search was subsequently acquired by Santos. Santos and Repsol made the Final Investment Decision for the $2.6 billion Pikka phase one in August 2022. — Tim Bradner Photo by Lee Leschper Tali Birch, General Counsel - Alaska, Santos, provided an update on the project’s progress at an RDC breakfast in May.
THE LINK: JULY 2024 20 Production decline expected to start beginning in 2027 The Legislature passed a major power transmission regulation bill this session but what was done to encourage new natural gas production in Cook Inlet? Not much, in the end. All through the spring bills were pushed to reduce state royalties on new gas in the Inlet, to empower a state agency to help finance gas development and to extend tax credits to bring a second “jack-up” rig to the Inlet to supplement one already there. But not a lot happened as the session ended May 15. Two royalty reduction bills, one sponsored by Gov. Mike Dunleavy and the second by Rep. George Rauscher, R-Sutton, died in the Senate Finance Committee. The state financing authorization did pass but the Alaska Development and Export Authority, the state’s development finance corporation, has the ability to do this now and has done it, although AIDEA’s authority was clarified. The jack-up rig tax credit introduced by the House Resource Committee died in the House Finance Committee. Following the Legislature’s adjournment state officials are considering ways to boost gas development in the Inlet, but there aren’t a lot of options. Gas production in the Inlet is expected to begin declining in 2027 and to be in serious decline by 2030 and beyond, according to the state Division of Oil and Gas. Enstar Natural Gas Co., the natural gas distributor for Southcentral Alaska, says it is short of gas for 2026. Regulated utilities like Enstar are obligated by law to assure supplies of energy to consumers. Absent new gas production there may be no choice but to import liquefied natural gas, or LNG. Natural gas is important because it fuels space heating for homes and buildings. Gas supports most power generation in the region, too. All through the spring it looked as Legislators don’t help boost Cook Inlet gas Shutterstock Photo The Railbelt’s long reliance on Cook Inlet natural gas is waning with current supply and insufficient exploration to develop new options.
www.AlaskaAlliance.com 21 WWW.SHEETMETALINC.COM WE’RE MORE THAN JUST ALASKA'S PREMIER METAL FABRICATION FACILITY HVAC • PLUMBING & HEATING • CONTROLS • SERVICE & MAINTENANCE • CERTIFIED AIR BALANCING • UV LIGHTING ONE SOLUTION. ONE COMPANY. if legislators had built up a real head of steam to do something to stimulate new gas and avert the need for imported LNG. An intense late winter cold snap had focused the attention of legislators following a sharp drawdown of gas availability due to mechanical problems at a gas storage facility. While this wasn’t directly connected with the depletion of reserves it was a warning of things to come. Why didn’t the gas incentive bills pass? Basically, legislators were cautious in giving up, or appearing to give up, public revenues by reducing royalties. When the winter cold snap ended and the urgency passed lawmakers became distracted by other issues. The Inlet gas royalty bills progressed, but at a slow pace. Rauscher’s bill, HB 223, was introduced in January. The House Resources held three hearings and moved it March 6. The House Finance Committee held another three hearings and moved it May 10. The bill didn’t pass the House until May 14, one day before the required adjournment. HB 223 went directly to the Senate Finance Committee but with one day left and a pile of bills to deal with senators just ran out of time. The governor’s bill, SB 194, also introduced in January, moved from the Senate Resources Committee on May 9 after five hearings. It made it to Senate Finance on May 10, five days before adjournment. One factor slowing the royalty bills, several legislators said, was a delay in hiring a consultant, GaffneyCline & Associates, to model the effects of the royalty reduction. After it was hired GaffneyCline told legislators that promising new gas prospects would likely be uneconomic at the present state royalty, and a reduction could improve things.The state Division of Oil and Gas came to a similar conclusion. A reduction in royalty is seen as the quickest way to get new gas into production. At least one company was prepared to drill this summer. New gas could have been flowing in matter of months. But with the failure of the royalty reduction that won’t happen, at least this year. — Tim Bradner John Sims, President of Enstar Natural Gas, explaining the long-term implications of the utilities supply choices, speaking to the Anchorage Rotary on April 16.
THE LINK: JULY 2024 22 Harvest Midstream constructing plant near Deadhorse The Interior Gas Utility in Fairbanks is set to begin trucking liquefied natural gas, or LNG, from the North Slope to Fairbanks this fall, according to reports filed with a state agency. Although relatively small in scale, this is symbolic as the first export of natural gas from the North Slope, where there are large gas reserves “stranded” for lack of a natural gas pipeline. Harvest Midstream LLC, an affiliate of Hilcorp Energy, is now building a small LNG plant near Deadhorse to supply the liquefied gas. IGU has a long-term contract with Hilcorp to supply natural gas to the plant and to purchase LNG. As of March 31, Harvest Midstream had completed prefabricated building structures for the plant with tanks and process equipment arriving through the spring and summer, IGU said in a status report filed with Alaska Industrial Development and Export Authority (AIDEA) the state development corporation that helps provide financing for IGU. Harvest started construction in mid-2023 at the plant and installed piles, thermosiphons, liners, and concrete foundations for three buildings. IGU has meanwhile built a 5.25-million-gallon LNG storage tank in Fairbanks and a second 150,000-gallon plant in North Pole, east of the Interior city. The utility is now receiving liquefied gas from a small LNG plant in the Matanuska-Susitna Borough along with periodic shipments from a plant in Fort Nelson, B.C. The Fairbanks utility is now preparing for shipments trucked down the Dalton Highway from the Harvest plant on the North Slope. The utility’s board has approved a contract with Premier Cryogenic Services LLC for the purchase of 15 large capacity LNG trailers. The first three are to arrive in June. Meanwhile, bids were solicited for trucking services to transport the trailers to Fairbanks, with a contractor to be chosen by IGU’s board in Interior utility to truck Slope LNG to Fairbanks Photos Courtesy Harvest Alaska
June. The utility’s Interior Alaska gas distribution system continues to expand with the LNG storage capacity it now has available. About 200 new gas service lines were installed in 2020; 312 in 2021; and 635 in 2022. In 2023, 535 new service lines were installed, with 405 in Fairbanks and 130 in North Pole. Four miles of main line in the distribution system were also built. The plan for 2024 is for 600 lines, and as of March 31 there were 227 applications received for new service lines in 2024, according to the report filed with AIDEA. Expansion of natural gas service in the Fairbanks area is important in reducing winter air pollution and created by particulates from burning heating oil and particularly wood. Gas is cleaner-burning and will help the community meet goals for cleaner air required by the U.S. Environmental Protection Agency. IGU and a previous small private gas utility have operated for years in Fairbanks with LNG trucked north on the Parks Highway from the small gas li quefaction plant in the MatSu, north of Anchorage. Hilcorp Energy has supplied gas for that plant as well, but from the company’s Cook Inlet producing fields. However, the pending decline in gas from Cook Inlet has caused the IGU to switch its gas supply source from the Inlet to the North Slope, where there are very large proven gas resources. The Mat-Su plant will be maintained on standby as a contingency, IGU said. The idea of trucking LNG from the slope is not new. A few years ago, an LNG plant and trucking operation were considered for Fairbanks but there were concerns for costs of the proposal and the reliability of trucking the fuel on the Dalton Highway, so the project was not pursued. What changed this was Hilcorp’s determination that it can no longer meet long-term gas supply contracts from Cook Inlet to utilities in the region including IGU in Fairbanks. This caused the Interior utility to change its position and work with Hilcorp to bring North Slope gas, known as LNG, to the Fairbanks area. — Tim Bradner www.AlaskaAlliance.com 23
Letter cites need for ‘homegrown energy plan’ Twenty Republican governors including Alaska Gov. Mike Dunleavy challenged President Joe Biden in a June letter. In part, the letter said: “As governors, we are extremely concerned with the impacts your energy policies are having on households across our country and call on you to pursue an all-of-the-above energy approach that will promote homegrown energy that benefits all Americans. Under your administration, Americans have paid over 40 percent more for gas every time they fill up. These policies are disproportionally impacting low-income Americans. “Since taking office, your administration has weakened American energy security by reducing the amount of federal acres leased for drilling, canceling the Keystone XL pipeline, and prioritizing foreign energy over American-made energy. “Even more recently, your decisions to freeze all new liquified natural gas (LNG) export projects and to ban fossil fuel drilling on nearly half of the National Petroleum Reserve in Alaska exemplify your willingness to prioritize political whims over the long-term capabilities of our natural resources. “To address these concerns, we call on you to pause the rhetorical and regulatory hostility towards traditional energy and to include states as active participants in further rulemaking. Secondly, we call on your administration to allow the free markets to flow and adopt an all-of-the-above homegrown energy plan, which includes traditional and renewable energy sources.” The governors’ letter called on the administration to: n End regulatory overreach that unnecessarily restricts domestic energy production; n Increase the number and quality of onshore and offshore lease sales including NPR-A; n Expedite approval of federal drilling permits; n Remove the pause on LNG exports; n Stop the EPA’s war on American energy by rolling back initiatives such as the final rules on methane emissions; n Repeal EPA’s Waste Emission Charge; n Work with Congress to enact comprehensive permitting reform; n Repeal burdensome and unnecessary financial regulations; n Expand critical mineral mining and processing to counter China; and n Support technology to produce reliable, affordable American-made energy. THE LINK: JULY 2024 24 Governors challenge Biden on vast overreach “We are extremely concerned with the impacts your energy policies are having on households across our country and call on you to pursue an all-of-the-above energy approach that will promote homegrown energy that benefits all Americans.”
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THE LINK: JULY 2024 26 Academies of Anchorage preps students for future
Program aimed at supporting new freshmen BY HARRY WHITED The Anchorage School District will launch its Academies of Anchorage program in the fall of the 2024-25 school year with the Freshman Academy. The Academies program is designed to provide the necessary skills they will need in a career they wish to pursue, according to the Anchorage School District website. Amy Habberstad, the Academy Coach for South Anchorage High School, said the Freshman Academy includes four basic elements: n an orientation on the first day of school; n a field trip to a local college campus; n a career exploration fair; and n a semester-long career exploration class. “During that class, they will learn strategies for success in the high school environment and explore their interests and aptitudes for possible career fields,” Habberstad said. The Freshman Academy, which is part of the broader Academies of Anchorage program, is aimed at incoming Ninth-grade students. The Freshman Academy will be available to all 8 ASD comprehensive high schools. Habberstad said the transformation will be supported for the next five years by a $15 million grant from the Department of Education. Going forward, Habberstad said freshmen will take a semester elective called Freshman Academy Career Exploration (nicknamed FACE) where students can choose a pathway that they may want to have a career in. “If that pathway ends up not being a good fit, students will be able to switch, but by doing good work up front with the selection process, we hope to avoid that,” Habberstad said. The Academies model is a four-year program with different pathways featuring a wide range of careers that students can explore. The pathways were developed from workforce data, survey results and “input from more than 148 ASD teachers and staff,” she said. Habberstad said the Academies program is intended to bring many benefits to students who will have to navigate a world where the workplace is constantly changing. “The workplace of today would be unrecognizable 20 years ago. Automation and technology have fundamentally reshaped how our entire society functions. While the industry has evolved, education has stayed largely the same. In order to truly prepare our students for the world that’s waiting for them when they graduate, we have to transform the way we approach public education.” Habberstad said the program has been in discussion since 2018 with ASD working with partners to see if the program would be a good fit for ASD. When the Anchorage School Board passed the College, Career, and Life Ready goal in 2021, it was decided that the Academy model could be a way to put Anchorage on track to meet those goals. The goal, according to the ASD website, is to “transform the high school experience by teaching through the lens of career-building opportunities, helping students recognize the relevance in our community’s future.” “Going forward, you can expect to see more information about the specific career and college readiness options that are being proposed at ASD high schools,” Habberstad said. The Academies of Anchorage Master Plan, which includes information on curriculum, transportation, scheduling, and staffing was approved by the Anchorage School Board in early June. The program may come with some difficulty in finding highly qualified teachers for the specialty courses. Habberstad said ASD has a solution to solving this problem. “The school district takes the challenge seriously and will soon launch a comprehensive recruitment campaign for all open positions across the district,” she said. Habberstad said that with any complex initiative, it takes a lot of effort to make sure that the correct information is reaching all audiences and that incorrect information about the program is addressed and corrected. “We’ll be launching a significant outreach and information effort,” she said. She said she believes that as more people learn about the program and outreach to the community becomes more common, people will begin to understand the program’s effect on schools. Habberstad said that in other communities, as the program becomes integrated, enthusiasm for learning increases among teachers, parents, and students. “In all cases we reviewed, the Academies model became a significant value-add to local high schools. We expect the Anchorage model to have similar results. For that reason, I suspect a fully-integrated program could actually help attract and retain educators,” she said. Dr. Jharrett Bryantt, Superintendent of the Anchorage School District, predicts the program has long-term potential for Anchorage families. “The Academies of Anchorage initiative holds tremendous promise for addressing workforce challenges and increasing graduation rates. Our focus remains steadfast on improving outcomes for our students,” Bryantt said. Visit the ASD website at www. asdk12.org/Academies for more information. Whited is a lifelong Alaskan studying Journalism at the University of Kansas. Harry is regularly published in the University Daily Kansan and recently garnered the Edgar Wolfe Award in short fiction writing. He enjoys returning to his home state of Alaska to enjoy the abundant outdoor opportunities with his family and friends. www.AlaskaAlliance.com 27
Partnership will help train drivers 18-20 years old Lynden and Alaska West Express have launched a new Safe Driver Apprenticeship Program (SDAP) that will allow people as young as 18 years old to start their careers in the transportation industry. This is a unique opportunity to expand Alaska’s commercial driver fleet, while providing an earlier start for drivers who typically have had to wait until they are 21. Tyler Bones, Training Director and Director of HSSE for Alaska West Express, said that the Federal Motor Carrier Safety Administration has prepared for up to 3,000 new apprentices to join the SDAP. “Alaska West Express currently has two apprenticeship positions available. We have had interest from an additional 10 individuals that would like to enter into our apprenticeship program,” Bones said. Bones said that the apprenticeship is an approved Department of Labor apprenticeship program which means that once an apprentice has graduated from the apprenticeship, they will receive a certificate of completion from the US Department of Labor. Bones said that according to the State of Alaska Department of Labor, the certificate is as valuable as a college degree. Bones says some of the benefits the program provides include: sAn education; n A paycheck; n Hands-on career training; and n National Industry Certification Historically, it has been difficult for potential drivers as young as 18 to begin these programs until they turned 21, but Bones said the program is trying to change that narrative to get younger drivers involved early and start their careers off on the right track. “America needs more truck drivers, the workforce is aging with not enough new drivers entering into the profession,” he said. Bones said that when it comes to recruiting new drivers it has been difficult since the gap from the age of 18 to 21 is too much time for a young adult to find and settle into another career. “By the time they are eligible to become an interstate driver they have already found a job and are generally well established in those career fields. This has been a real problem when it comes to recruiting new drivers,” he said. Bones said that recruitment campaigns have already begun to get the word out to communities about the SDAP and to emphasize the importance careers like this have on our society. “Alaska West Express has been working with the Fairbanks North Star School District and local home school programs to get the word out and to start talking about the great career opportunities available right here at home.” he said, “The transportation industry is vital to the success of our nation.” Bones said historically it has been difficult for drivers under the age of 21 to enter into a driver position. “The Federal government requires drivers hauling interstate freight to be at least 21 years of age,” he said. Bones said that through the program, the younger apprentices could begin their fruitful careers as early as possible. “The SDAP has been designed to take apprentices that have no commercial driving experience through a well-defined program that will prepare them for a long and rewarding career in the transportation industry,” he said. New apprentices do need to meet certain requirements before entering the program. Bones said incoming apprentices will need a Class C driver’s license to begin the SDAP. “We will help them get a Class A commercial driver’s license, which could cost over $10,000 if someone wanted to attend a commercial driving school on their own,” he said. The apprentices will not just learn to drive but they will also learn basic mechanical skills: n Operate loaders, forklifts, and skid steers n Load, unload and properly secure freight n Learn to ensure product and delivery quality “If someone likes a challenge, learning and experiencing something new every day, has a desire to perform a critical job for their community, State, and Nation, and likes feeling accomplished every day then transportation is for you,” he said. More information is available at www.lynden.com/drive. — Harry Whited THE LINK: JULY 2024 28 Lynden launches new young driver program
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THE LINK: JULY 2024 30 For decades, when Alaskans spoke of the Arctic National Wildlife Refuge, they usually spoke of Roger Herrera. As a BP geologist, Herrera took an early and personal interest in ANWR’s coastal plain and was more responsible than anyone in keeping its prospectivity in the minds of Alaska’s state leaders and in Congress. He also became a well-known advocate on Capitol Hill. “I counted 40 times I testified before congressional committees — it may have been 50,” Herrera said. Even on retirement from BP, he soldiered on to help found Arctic Power, the Alaskan group that lobbied for years in Congress to get the coastal plain open. What was the motivation? “For me, it was a promise broken,” by Congress after Alaska Sen. Ted Stevens, now deceased, secured language in the 1980 Alaska National Interest Lands and Conservation Act that the coastal plain of the refuge would be set aside and studied for its oil and gas potential as a prelude to leasing. ANILCA also required a vote on Congress to actually lease lands in the coastal plain for exploration. Herrera and other Alaskans were in the middle of that. They came within a whisker of getting that approval, only to have then-President Bill Clinton veto the congressional approval. As years passed, hopes seemed to fade, but in 2019 Alaska’s congressional delegation seized an opportunity to tack the approval onto President Donald Trump’s tax cut legislation then moving through Congress. An ANWR lease sale was held, and leases were awarded. But new President Joe Biden signaled any permit applications to do work were dead on arrival. Biden was good (bad) to his word. Herrera’s career in Alaska was about more than ANWR. As a young geologist in the early 1960s, his field work helped lay the foundation for BP’s North Slope exploration, which led ultimately to the discovery of Prudhoe Bay, the largest oil find in North America. BP had tasked its geological team in Alaska with assessing the potential of the entire state including regions like the Kuskokwim and Yakutat, where BP drilled a well that proved unsuccessful. BP really had its sights on the North Slope, however, even as the rest of the industry focused on Cook Inlet. There is a story in BP that what first got the company excited about Alaska was when a senior BP director, flying to Tokyo on one of the first trans-polar flights, looked down and saw a North Slope landscape strikingly similar to the Zagros Mountains of northern Persia (now Iran) where BP had made major discoveries. On his return, the director (Herrera doesn’t recall the name) ordered that Alaska’s potential and the North Slope in particular, be assessed. That’s what got Herrera to Alaska in 1960. It wasn’t just table-top geology. There were three years of field seasons with a team of BP geologists out all summer. “We tracked down every oil seep we could find in the literature, and then went to visit many of them. Some were quite large,” he said. The team heard reports of heavy equipment that bogged down in oil-soaked beach sands east of the Canning River, in what is now ANWR, but the oil source couldn’t be located. It was a great life for young geologists. Dinner was often Arctic Char fished from tundra lakes. But there were hiccups, too, including times stuck overnight when weather came down and the helicopter couldn’t get in. Herrera recalls one cold and wet overnight when the team hiked to a nearby coal outcrop and lit it, making a fire to keep warm. Some of the rocks being gathered in what is now ANWR’s coastal plain were so oil-soaked they could be set afire, too. That helped inspire Herrera about the coastal plain potential, verified in more recent years by the U.S. Geological Survey and others. Another lease sale is planned by the government in late 2024 under terms of the federal tax act. The Biden administration could make the lease terms so onerous as to discourage bidding, however. It may be a while before the coastal plain potential is really tested. Herrera now lives in Anchorage, and he still believes discoveries may be made in ANWR someday. — Tim Bradner Herrera had key roles in Alaska exploration Photo by Lee Leschper
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