Alex DeMarban

EPA issues long-awaited final determination halting Pebble mine

The Biden administration wielded a little-used tool on Tuesday to stop the controversial proposed Pebble mine in Southwest Alaska, issuing a final determination under the Clean Water Act to prevent the project from being developed. The Environmental Protection Agency said the mine would cause “unacceptable, adverse” harm to the valuable Bristol Bay salmon fishery. Fishermen, tribes and other Pebble opponents hope the decision spells the project’s demise. They celebrated the announcement. The developer of the copper and gold prospect and the administration of Alaska Gov. Mike Dunleavy have both threatened legal action to reverse the decision, and issued statements strongly opposing the action. The EPA employed a rarely used clause of the Clean Water Act that allows it to “veto” projects before they’ve completed the federal permitting process. Specifically, the EPA wants to block Pebble or any future similar mine from releasing “dredged or fill material,” essentially rock or gravel used in development, into streams that support the fishery. [What Alaska leaders, advocacy groups and industries are saying about EPA’s Pebble decision] The special action has been used sparingly in the past and will trump any final decision from the U.S Army Corps of Engineers, which denied a permit for the mine in 2020. Mine developer Pebble Limited Partnership has appealed that decision, a process that remains underway. The Pebble project is on state land about 200 miles southwest of Anchorage, near headwaters of Bristol Bay, home to the world’s largest sockeye salmon fishery. The EPA’s 435-page final determination completes a process that began in 2010 after several tribes in the Bristol Bay region petitioned the agency for help to stop the project from being built. Agency officials said the decision follows an extensive review of scientific and technical records dating back two decades to show that Pebble’s 2020 development plan, if completed, would destroy about 100 miles of stream that support salmon habitat. EPA administrator Michael Regan, speaking with reporters on Monday, called the Bristol Bay watershed a “one-of-a-kind ecosystem” that supports valuable jobs and the sustenance of fishing traditions in about two dozen Alaska Native communities in the region. “This final action demonstrates the Biden administration’s commitment to safeguarding our nation’s indispensable natural resources and protecting the livelihoods of those who so deeply depend on the health and well-being of these magnificent waters,” he said. The fisheries are worth about $2 billion annually and support about 15,000 jobs and subsistence fishing for Alaska Native communities. The Pebble deposit contains minerals worth hundreds of billions of dollars, and supporters say development there will support the Alaska economy and create many new jobs. Reaction to the decision was swift and widespread. Alannah Hurley, head of the United Tribes of Bristol Bay, called the EPA action “historic progress” toward the goal of safeguarding the Bristol Bay watershed. Hurley was included as a speaker during EPA’s Monday call with reporters. “The EPA has not only restored its commitment to science and law, but truly has listened to the original stewards of this land,” Hurley said. James Metrokin, chief executive of the Bristol Bay Native Corp., the Alaska Native corporation for the Bristol Bay region that has also opposed Pebble, said the EPA has listened to the voices of residents. “Today is a great day for Bristol Bay, and one that many thought would never come,” Metrokin said. “While the immediate threat of Pebble is behind us, BBNC will continue working to protect Bristol Bay’s salmon-based culture and economy and to create new economic opportunities across the region.” The Pebble Limited Partnership maintains that the mine will not harm the fishery. The company on Tuesday called the EPA’s veto effort unlawful and warned that legal action could follow. John Shively, chief executive for Pebble Limited, said in a written statement that the land around Pebble was chosen by the state for its mineral potential as part of the process that led to statehood in 1959. “The EPA is violating the U.S. Constitution by taking away the state and the project’s legally protected property interests in the mineral rights underlying the land, without any just compensation,” the statement said. “This preemptive action against Pebble is not supported legally, technically, or environmentally. As such, the next step will likely be to take legal action to fight this injustice.” Likewise, the governor’s office said in a statement that EPA’s decision covers more than 300 square miles of state land and harms the state’s ability to develop its resources. “EPA’s veto sets a dangerous precedent,” Dunleavy said in the statement. “Alarmingly, it lays the foundation to stop any development project, mining or non-mining, in any area of Alaska with wetlands and fish-bearing streams. My administration will stand up for the rights of Alaskans, Alaska property owners, and Alaska’s future.” Alaska Attorney General Treg Taylor said Tuesday that the EPA’s decision short-circuits Alaska’s normal process for environmental review and the Corps’ appeals process. He called the EPA action “legally indefensible.” “Washington’s overstep into the State’s process was unwarranted and should not be allowed to continue,” Taylor said. “As such, the state intends to challenge EPA’s decision. The state presented strong legal and policy arguments outlining why EPA’s decision is wrong and we look forward to meeting EPA in court.” Alaska’s Republican U.S. senators, who have said they oppose Pebble but don’t support an EPA veto, expressed concern about what the decision might mean for other Alaska projects. “Today, the Biden administration is doing something different — using a pre-emptive veto, which raises serious legal questions and has the potential to establish a very troubling precedent for resource development on state of Alaska lands,” Sen. Dan Sullivan said in a statement. Sen. Lisa Murkowski said the final determination should “mark the end of Pebble.” “To be clear: I oppose Pebble,” she said in a statement. “To be equally clear: I support responsible mining in Alaska, which is a national imperative. This determination must not serve as precedent to target any other project in our state and must be the only time EPA ever uses its veto authority under the Clean Water Act in Alaska.” Alaska Rep. Mary Peltola, a Democrat, said the decision would prevent development of the Pebble deposit, which she hopes will be comforting news for Bristol Bay residents. “I also understand that some Alaskans might be disappointed by this decision,” she said in a statement. “To all of you, know that I am committed to our state’s development and to helping local communities build robust economies with good-paying jobs.” The final determination was signed by Radhika Fox, assistant administrator of water for the EPA. On Monday, she stressed that it does not apply to other resource development projects in Alaska. “It provides a roadmap for those types of projects that would create these adverse impacts, but does not at all apply to other projects that could potentially be considered and it does not apply to any resource development beyond this one in the state of Alaska,” she said in a briefing with news media. Regan, the EPA administrator, said the agency has rarely used its veto power. The determination represents the third time in 30 years the agency has taken final actions using the authority. It’s never been finalized in Alaska until now. Regan told reporters the final determination could face court challenges, but the agency has used “sound science” and created a “strong record” to create the decision. For years, the mine’s fortunes have been subject to a roller coaster of on-again, off-again decisions. Exploration at the deposit began in the 1980s. Northern Dynasty Minerals, the small Canadian mineral exploration company that owns Pebble Limited, has pursued the project for about 20 years. Over the last decade, major mining companies have backed away from the project. In 2020, the project’s standing suffered a blow with the leak of videos that led to the resignation of Pebble Limited’s then-chief executive. Three straight U.S presidential administrations have blocked the mine’s progress. The EPA initially proposed stopping Pebble in 2014 under President Barack Obama. The mine developer sued, leading to a 2017 settlement agreement under Donald Trump making it so the EPA would step aside and let Pebble pursue a federal permit. The U.S. Army Corps under Trump later rejected that permit application — action that’s now under appeal. Then, about a year ago, the EPA under Joe Biden renewed its effort to halt Pebble after the developer filed a mining plan. The project has also faced significant public opposition, led by a broad coalition of fishermen, tribal governments and conservation groups. They’ve pointed out that if built, Pebble would be one of the world’s largest open-pit mines, and a spill there would threaten a salmon fishery that has seen record returns of sockeye as many other salmon fisheries struggle for survival. The agency received more than 582,000 public comments in the lead-up to its final decision. The comments were overwhelmingly against the project, EPA officials have said. Bristol Bay leaders who have fought Pebble for a generation said in a press conference on Tuesday that they were prepared to legally defend the EPA decision. They also said the federal government’s final determination does not mark the end of their effort to protect Bristol Bay and prevent development of the Pebble mineral deposit. Russell Nelson, chair of the Bristol Bay Native Corp., said the region needs a salmon and fisheries preserve that protects every stream. Each one plays a role in Bristol Bay’s large salmon runs, he said. Hurley, with United Tribes of Bristol Bay, said groups are looking for support from Alaska’s congressional delegation to create additional protections. “We have over 20 active mining claims throughout the region,” Hurley said. “We do not have salmon habitat prioritized within any of those lands. The EPA action only applies to the Pebble deposit, so we are in dire need of much broader watershed-wide protections.”

Alaska’s population is still younger than US but is aging at a dramatic rate

Alaska’s share of youth has shrunk and its retirement-age population has grown sharply, opposing factors that are reducing the state’s workforce and complicating the pandemic-related labor shortage, state experts say. Alaska economists touched on the diverging demographic trends in an annual jobs forecast released by the state Department of Labor and Workforce Development. The aging of Alaska is a long-term issue that will continue to squeeze the workforce from both ends of the age spectrum, according to the report. “An older population means a smaller pool of working-age people, and a lower birth rate translates to fewer future workers,” wrote Alaska economist Karinne Wiebold. And there are other impacts. Parts of Alaska are closing schools as the population of young people shrinks, while the rapidly rising elderly population has led to demand for new health care facilities and services. For now, Alaska has about 11,000 fewer jobs than it did before the pandemic, wrote Wiebold. Despite that, the worker supply is still short. And job openings in the state hit record levels last year, she wrote. People leave the workforce for a variety of reasons, including to care for children or ailing relatives, or maybe they’re going back to school and training for a new career. Fewer people moving to Alaska is another factor, she writes. “An older population means a smaller pool of working-age people, and a lower birth rate translates to fewer future workers,” Wiebold wrote. Older than in 1980 Alaska is still younger than the rest of the U.S. by a couple of years, state experts say. The state’s average resident is now about 36. That’s a decade older than they were in 1980. Older people are helping bend that curve. Their numbers have “grown dramatically,” Wiebold writes. In the last four decades, the share of Alaskans 71 and older has increased several times over, from a little over 1% to close to 8%. Then there are the children. Alaskans 15 and younger have fallen from about 29% of the population to about 22%. Lower birth rates in Alaska, though still above the national average, is one factor for the drop in children, said David Howell, the state demographer, in an interview. Alaska’s birth rate over the last decade has fallen to 1.9, about two-tenths lower than what’s considered necessary to replace the population over the long haul, he said. “That doesn’t sound like much, but it’s a lot,” he said. The number of births annually has fallen to 9,400, down nearly 2,000 births from six years ago. “In addition to the fertility rate, you have a lot of millennials aging out of the prime birth years” and now getting into their 40s, he said. ‘Aging in place’ In the 1980s and 1990s, younger people were moving to Alaska, starting families and sometimes bringing children with them, said Howell. Some of those people are still in Alaska and hitting retirement age, he said. “They’re aging in place,” he said. Also helping thin the workforce, and reducing the number of children who could one day join the workforce, is net outmigration, Wiebold said. More people have been moving away from Alaska than coming here over the last decade, she writes. That also shrinks the population of children. Movers are disproportionately in their 20s and 30s, and when they move they take their children with them, she writes. Changing demographics affect education, health care The implications extend beyond the workforce. In education, the dwindling share of young people is creating difficult conversations for school administrators, Howell said. Fewer students, added to an ongoing budget crunch, contributed to the Anchorage School District’s recent move to recommend shutting down some elementary schools. The school board recently agreed to close Abbott Loop Elementary, down from the six school closures proposed by the district, but school board members say more could close in the future. “There’s not a big group of kids about to enter the school system,” Howell said. “There are smaller and smaller numbers due to births declining since 2016.” As for health care, Alaska’s growing population of retirement-age residents is expected to continue buoying the industry for many years to come, Alaska economist Neal Fried wrote in the publication, in a jobs forecast focused on Anchorage. “Alaska’s 65-plus population nearly doubled from 2010 to 2021 and grew by 6,000 from 2020 to 2021 alone,” Fried wrote. “This age group will keep growing through at least 2035.” “As Anchorage is the state’s health care hub, an older Alaska will raise demand for health services in the city,” Fried wrote.

Alaska oil producers squeezed more oil out of the North Slope in 2022

In a rare feat, oil production on Alaska’s North Slope increased slightly in 2022. The giant oil patch has seen dwindling production for decades, with its primary field at Prudhoe Bay aging. But the Slope remains a key part of Alaska’s economy. Industry observers said the annual increase is a positive sign, though it doesn’t meaningfully change the long-term slide in Alaska oil production. That will likely take large new fields producing oil, they say. The bump added about 6,000 barrels of crude oil daily to the 800-mile trans-Alaska pipeline, operator Alyeska Pipeline Service Co. announced in January. The increase pushed last year’s daily oil production to 483,000 barrels. This marks only the fifth yearly increase since 1988, when Alaska oil production peaked at more than 2 million barrels daily, four times more than today, according to Alyeska pipeline data. The last increase came in 2017. The small bounce won’t increase Alaska revenues by much, said Larry Persily, a former deputy commissioner of the Alaska Department of Revenue, who recently left a position with Democratic U.S. Rep. Mary Peltola. Still, it’s a meaningful accomplishment that reflects investments by Hilcorp, the operator of the Prudhoe Bay field, and ConocoPhillips, the state’s largest oil producer, he said. “It’s a reason to be happy, but not to drop balloons from the ceiling,” Persily said. Hilcorp has slightly reversed declining oil production at Prudhoe Bay after becoming operator there in 2020, following its acquisition of assets from former Alaska producer BP. Hilcorp has also produced several thousand barrels more daily at its Milne Point field, injecting a polymer substance to produce viscous oil that is thicker than conventional crude oil and does not flow as easily. The company said in a statement it’s committed to operating in Alaska for “decades to come.” “At Milne Point, production has more than doubled since Hilcorp became operator in 2015, primarily due to increased Schrader Bluff viscous oil production,” said a statement from Luke Saugier, senior vice president for Hilcorp Alaska. “Prudhoe Bay production continues to trend upward as we invest heavily in drilling new wells, fixing old wells and improving and enhancing facility capacity.” Persily said ConocoPhillips has brought new projects online in recent years, including at the Greater Mooses Tooth-2 in late 2021 and Fiord West Kuparuk in May. “ConocoPhillips Alaska and other North Slope operators have invested heavily in existing fields and new developments” over the past several years, said Rebecca Boys, a spokeswoman with ConocoPhillips Alaska. That has resulted in a more stable throughput in the Trans-Alaska Pipeline System, she said. Betsy Haines, interim president of Alyeska, said in a statement, “The best long-term solution for safe and sustainable TAPS operations is more oil, so this increase is a notable milestone.” Low flows of crude oil require more technical solutions to keep the oil flowing smoothly. The increase in part “reflects the innovative work of Alyeska staff and TAPS contractors in the face of declining flow,” Alyeska’s statement said. Brad Keithley, a former oil and gas attorney, said Alaska oil flow could increase sharply if two giant new discoveries begin production. Oil Search Alaska, a subsidiary of Australia-based Santos, expects its Pikka oil field to begin producing oil in 2026. ConocoPhillips’ Willow field awaits a contested permitting decision from the Biden administration before construction can begin. Combined, the fields have the estimated potential during their peak production to add more than 250,000 barrels daily to Alaska production. The fields would improve the state’s fiscal position by injecting new revenues into the budget, Persily said. “If you can get Willow and Pikka on line, then you will see some substantial increases in not just oil production but in revenue to the state,” Persily said.

Alaska regulators approve Enstar sale

The state has approved the $800 million sale of Alaska’s largest natural gas utility. Enstar Natural Gas, with about 150,000 customers in Anchorage and the Cook Inlet region, is being sold by AltaGas to Alaska Utilities Holdings, a subsidiary of TriSummit Utilities. The parent companies, both based in Canada, announced the deal in May, pending approval from the Regulatory Commission of Alaska. The agency approved the deal on Dec. 21 in a 48-page order. The sale is expected to close early this year, the companies said. All Enstar employees will move over to the new company, AltaGas said. Enstar employs about 200 full-time workers. The proposal for the acquisition shows there is “sufficient organization, financial backing, technical facilities and equipment, operations expertise and managerial and administrative experience to support a finding of fitness, willingness, and ability to provide public utility service,” the state agency said in its order. The deal will more than double TriSummit’s customer base. The natural gas distribution company has about 133,000 customers in Canada. AltaGas said the sale will help it reduce debt and create financial flexibility for future growth in other areas. Enstar reported net income of $24 million in 2021, with assets at $610 million and liabilities at $430 million, the agency’s order said. The sale involves assets that include Enstar’s majority ownership of Cook Inlet Natural Gas Storage Alaska, which protects against potential gas supply disruptions in Southcentral Alaska. The storage facility, like Enstar, is a standalone utility. It reported net income of $11 million last year.

EPA regional administrator recommends killing Pebble mine, setting stage for final veto

The Environmental Protection Agency on Dec. 1 moved to deal a major blow to the proposed Pebble mine, a large copper and gold prospect that is located in a salmon-rich Southwest Alaska region and has been hotly contested for more than a decade. Casey Sixkiller, the administrator for the EPA’s Pacific Northwest region that includes Alaska, recommended the agency stop the mine from being built under a rarely employed agency action called a veto, setting the stage for a final decision from EPA headquarters by February. The EPA has said the mine if built would be among the world’s biggest open-pit copper mines and would destroy about 100 miles of stream that support salmon habitat, through the release of “dredged or fill material” — essentially rock or gravel — in the mining area. That would cause “unacceptable adverse effects” to fishery areas in a watershed of “unparalleled ecological value,” the agency has said, supporting its special action. “If affirmed by EPA’s Office of Water during the fourth and final step, this action would help protect salmon fishery areas that support world-class commercial and recreational fisheries, and that have sustained Alaska Native communities for thousands of years, supporting a subsistence-based way of life for one of the last intact wild salmon-based cultures in the world,” Sixkiller said in a statement. Mine opponents have long called for the EPA action, and say it is unlikely to be overturned and could close the door on the project. Those groups celebrated the news. Pebble’s developers and its supporters, however, decried the announcement and asserted it would be illegal. The state of Alaska is poised to sue the agency if it finalizes the veto, Republican Gov. Mike Dunleavy’s office said in a statement after the announcement. Alannah Hurley, head of the United Tribes of Bristol Bay, urged the Biden administration in a statement to finalize the decision to veto the project. She and other opponents have argued that pollution from the mine will destroy the fishery. “After twenty years of Pebble hanging over our heads, the Biden administration has the opportunity to follow through on its commitments by finalizing comprehensive, durable protections for our region as soon as possible,” Hurley said. “We look forward to reviewing the EPA’s Recommended Determination in greater detail to ensure it achieves the goal of protecting our people and region from the threat of the Pebble Mine.” “Our fishermen were able to deliver 59 million wild sockeye to the market — something that isn’t happening anywhere else in the world,” said Katherine Carscallen, director of Commercial Fishermen for Bristol Bay, calling the announcement “an important step towards finalizing urgently needed protections for the region.” Supporters say the mine can coexist with the fishery without harming it, and that it could open a region of Alaska that contains minerals worth hundreds of billions of dollars, creating new jobs and helping the state’s struggling economy. In a prepared statement, Pebble Limited chief executive John Shively asserted that an EPA veto will be illegal. “Congress did not give the EPA broad authority to act as it has in the Pebble case,” Shively said. “This is clearly a massive regulatory overreach by the EPA and well outside what Congress intended for the agency when it passed the Clean Water Act.” Pebble Limited in September warned that legal action may follow if the EPA finalizes the veto. The EPA action is separate from a decision by the U.S. Army Corps of Engineers in 2020 to reject a permit for the mine under the traditional federal permitting process. The Corps said the mine was not in the public interest. Mine developer Pebble Limited Partnership is appealing that decision. EPA’s decision would overrule any Corps conclusion on the project. The mine site, located on state land, straddles headwaters of Bristol Bay about 200 miles southwest of Anchorage. It is home to the world’s largest sockeye salmon fishery, worth an estimated $2 billion. The project has been in the works for decades after exploration began in the 1980s. Its history has been marked by a roller-coaster ride of events, including attempts to stop it under three U.S. presidents, the leak of videos that led to the resignation of its then-chief executive in 2020, and overwhelming opposition to the project by the public in EPA comment periods. In a recent comment period, the agency received more than 582,000 public comments on its proposal, said Suzanne Skadowski, an EPA spokeswoman. The comments were overwhelmingly against the project, similar to past EPA comment rounds, she said. Alaska’s congressional delegation, Republican Sens. Lisa Murkowski and Dan Sullivan, and newly elected Democratic Rep. Mary Peltola, oppose Pebble. The senators have said EPA intervention is not the right way to stop Pebble, but they supported the permitting process led by the U.S. Army Corps of Engineers, and the Corps’ earlier decision to reject the project. Gov. Dunleavy has taken multiple actions that support Pebble, including urging the EPA in September not to veto the project. In the statement describing the state’s intent to sue over EPA’s action, the governor said, “The state of Alaska has the duty, under our constitution, to develop its resources to the maximum in order to provide for itself and its people, so it’s important that any and all opportunities be explored in furtherance of this idea.” “The recent decision on the Pebble mine, which is solely located on state land, is the wrong decision,” Dunleavy said. Attorney General Treg Taylor in the statement called the action “legally indefensible,” and said his office would defend Alaska’s rights in court if EPA finalizes the veto. The state has argued that the federal government conveyed the land to Alaska for this sort of development, in a deal in 1976 that involved the state providing lands that led to the creation of Lake Clark National Park in the region. The recommendation from Sixkiller will be transmitted to Radhika Fox, an assistant administrator for the Office of Water at the EPA. Fox is expected to make a final decision within 60 days on the veto proposal, said Skadowski with EPA. Fox can reject the veto proposal, modify it or accept it, Skadowski said. The EPA’s Office of Water will review the record on the proposal so far, and other information provided by the Corps and Pebble Limited, including what corrective action the developer might propose to limit harm to the watershed. The history of EPA’s proposal on Pebble dates back years. In 2014, the agency initially moved to stop the mine under President Barack Obama, proposing to use the same special authority being pursued today. Pebble Limited at the time had not submitted a plan for approval to the federal government, but several tribes from the Bristol Bay region sought the veto action, concerned the mine would harm the fishery and environment. That proposed EPA action led to a lawsuit from the developer, and a decision by a federal judge against that proposal, bringing the effort to a halt. In 2017, under President Donald Trump, EPA stepped aside under a settlement agreement between the agency and the developer, allowing Pebble to pursue its project under the federal permitting process. Under that process, Pebble submitted a development plan for approval to the Corps, leading to the agency’s permit denial, which also came under the Trump administration. The EPA announced in 2021, under Democratic President Joe Biden, that its special action to potentially veto the project was back on the table. The agency has taken final actions to use its special veto authority only 13 times in its 50-year history, in an effort to protect important resources. If this action is finalized, it will be a first for Alaska and the Pacific Northwest region that includes Oregon, Washington and Idaho. Ivy Spohnholz, director of The Nature Conservancy in Alaska, said research by her organization shows that none of the EPA’s 13 final determinations have ever been overturned, indicating that a final veto will very likely be a permanent action stopping the project. Mike Heatwole, a spokesman with Pebble, said EPA’s “extraordinary action” against Pebble is unusual compared to past EPA vetoes. ”I am not aware of a veto of a project that had not completed (Corps) permitting,” Heatwole said.

Alaska continues to lose ground on wages compared with other states, though pay is still high

The “legendary” wages that once coaxed people to Alaska have continued to shrink compared to the rest of the U.S., due partly to a statewide recession before the pandemic and a slow recovery after it, according to a new report from the Alaska Department of Labor and Workforce Development. Alaska’s average wages still outperform the rest of the country, said economist Neal Fried, writing in the agency’s latest publication of Alaska Economic Trends. They placed eighth nationally last year at $30.52 an hour, behind Maryland, about $2.50 above the national average. But Alaska wages no longer hold the top spot they’ve held at times in the past, he wrote. “Since the economic bust of the mid-to-late 1980s, Alaska’s wage advantage has narrowed,” he wrote. “While Alaska wages still rank high among states, they aren’t the lure they once were, something that’s evident by the past decade’s downturn in migration.” Since 2010, average wage growth in Alaska rose by $1.09 an hour, adjusted for inflation. But during that time, U.S. inflation-adjusted wage growth outpaced Alaska by almost 40 cents. Alaska’s average wage in 2015 was 15% higher than the national average. Last year, it was 9% higher. “The narrowing isn’t surprising given the economic contrasts over that period,” Fried wrote. “Between 2016 and 2019, the nation’s economy prospered as Alaska weathered a statewide recession and a brief, weak recovery before COVID-19. The pandemic-led recession that followed hit everyone, but Alaska’s recovery has lagged behind the nation’s.” Alaska’s wages have stayed perched in the top 10 for decades, thanks to factors like the state’s higher cost of living, tough working conditions and periods of strong economic growth, Fried wrote. But the state today has a smaller percentage of high-paying jobs in areas such as oil, than it once did. And there is a greater percentage of lower-paying jobs, such as in the service sector that includes restaurants, he said in an interview this month. He said Alaska’s shrinking wage gap and relative economic underperformance are factors in the state’s net outmigration. More people have left Alaska than moved here since 2012, he said. A different report released last month by the University of Alaska Center for Economic Development focused on Alaska’s overall economic performance compared to its national peers. That report said Alaska’s economy has performed “at or near the bottom” nationally for seven straight years in four key measures of economic health: employment growth, unemployment, gross domestic product and net migration. The report said low oil prices are the primary culprit — they crashed in 2014, hurting the industry that drives the state’s economy — though oil prices have improved in recent months. Fried said the Alaska economy has many positives, including an array of employment openings across many fields. “The job market is unbelievable,” he said. “There are plenty of opportunities.” And Alaska’s economic performance could change quickly compared to the rest of the U.S., he said. That can happen “if our economy is again outperforming the national economy, and it doesn’t have to be by a huge degree,” he said. What 12 Alaska jobs pay Here’s the average hourly pay for 12 jobs in Alaska, from the state’s lowest-paying to top-paying jobs: Ushers and ticket takers: $12.09 Waiters and waitresses: $13.86 First-line supervisors of retail sale workers: $23.40 Sailors: $30.19 Derrick operator, oil and gas: $35.52 Roofers: $36.90 Nurse practitioners: $54.72 Commercial pilots: $59.81 Construction managers: $72.23 Architectural and engineering managers: $78.83 Family medicine physicians: $142.84 Surgeons: $161.97 Source: Alaska Department of Labor and Workforce Development statewide 2021 wages

Former Dunleavy chief of staff named head of AIDEA

A former chief of staff to Republican Gov. Mike Dunleavy is taking over as head of an Alaska economic development agency. Randy Ruaro is becoming executive director of the Alaska Industrial Development and Export Authority starting Jan. 3, replacing Alan Weitzner, who resigned last month, according to a statement from the agency. The agency’s chief investment officer, Morgan Neff, has served as interim executive director. Ruaro has a long history in Alaska government. He recently served as the governor’s special assistant for statehood defense, which helps coordinate the state’s action on disputes with the federal government involving control of Alaska lands and waters. He has been chief of staff in the Senate and House Finance committees and served in leadership roles in multiple Republican administrations in Alaska, starting with Gov. Frank Murkowski about two decades ago. Ruaro takes over a state agency that has often been the target of opposition from environmental groups. It has made a controversial decision to buy federal leases in the Arctic National Wildlife Refuge and pursued development of a road to the Ambler mineral district in Northwest Alaska that has faced strong opposition. The agency in November also launched an effort for an independent review of its financial history after a report funded by a conservation group alleged that the agency has a history of poor investments. Ruaro, who holds a law degree from Willamette University College of Law, has supported many of the Alaska Industrial Development and Export Authority’s projects, including the Ambler road and the refuge leases, according to the agency’s statement. “Randy has extensive experience leading departments for the State of Alaska and we look forward to working with him and AIDEA’s talented executive team as we advance economic growth and diversification for Alaskans,” said Dana Pruhs, chair of the agency’s board. The board consists of five public members who are appointed by the governor to two-year terms, plus two board seats filled by the commissioners of the Alaska Department of Revenue and the Department of Commerce, Community and Economic Development.

Pressure mounts on Biden administration for Willow decision

A major oil prospect on federal land in Alaska is hanging in the balance as pressure mounts on the Biden administration for a final decision to approve, or reject, the project. Political observers say they don’t know where the Biden administration will land, saying the president is a tough political position. Conservation groups and climate activists have urged the administration to deny ConocoPhillips the permission it needs to build the $8 billion Willow oil project. National groups protested outside the White House in December, arguing the project will imperil wildlife and undermine Biden’s goals to combat climate change. The project’s advocates, including Alaska’s bipartisan congressional delegation, are calling for approval from the administration so construction can start immediately during the North Slope’s short winter season, or else it will be delayed until next year. They say the project is vital for the struggling Alaska economy and could combat future high oil and gas prices. Alaska Native leaders are also weighing in, both in favor and against. ConocoPhillips has said it will begin construction as soon as the administration makes a decision supporting development. “Any further delay (at Willow) is unwarranted” after five years of environmental review of the project, the company said in a statement Dec. 22. Additional delay “jeopardizes ConocoPhillips’ ability to initiate construction of the project in this winter season and further advance major contract awards that are needed to execute the project,” the company said. In December, ConocoPhillips Alaska President Erec Isaacson signaled in an interview with Bloomberg that the company will back out of the project if the Biden administration scales the development down to two drill pads. ConocoPhillips said the “viable path forward” is a development proposal with three initial drilling pads, a plan the federal government proposed this summer. That plan arose after a federal judge rejected initial approval of the project by the Trump administration in 2020, after conservation groups argued that the government had underestimated the plan’s harm to wildlife, among other factors. Alaska delegation meets Biden officials If built, Willow would be one of the first oil fields in the National Petroleum Reserve-Alaska. The reserve, which is the largest block of federal land in the U.S., was established by President Warren Harding in 1923 as a source of oil for the U.S. Navy. But commercial oil didn’t flow from the reserve until ConocoPhillips established its first small field there in 2015. The Willow field could produce 600 million barrels of oil over three decades, worth $50 billion at today’s oil prices. Its oil could also lead to the release of 278 million metric tons of carbon dioxide emissions during that time, equivalent to what 76 coal-fired power plants emit in a year, conservation groups say. Alaska Republican Sens. Lisa Murkowski and Dan Sullivan and Democratic Rep. Mary Peltola said in a Dec. 21 statement they had met twice recently with senior Biden administration officials to urge approval of the project. The meetings included John Podesta, Biden’s senior adviser on clean energy innovation, and Labor Secretary Marty Walsh, Sullivan said in an interview. The administration has committed to releasing a final environmental report for the project before February, and a final decision before March, according to the delegation’s statement. In September, the delegation had implored the administration to approve the project by year’s end. Spokespeople with the Interior Department declined to comment on the current timeline for a decision. “We have nothing offer on this,” said Melissa Schwartz, communications director with the agency. Sullivan said the timeline is “disappointing” and limits the development that could begin in the four-month construction season that begins in January. Work that can’t happen this year will need to wait until early next year. Climate activists protest Willow outside White House Climate activists in early December protested at the Ellipse outside the White House, unfurling a bright-yellow banner that said “Stop the Willow Oil Project.” “Our recent climate wins, the clean energy advancements we’ve made, President Biden’s 2030 goals — they’re all for nothing if the administration approves this colossal drilling project,” said Magnolia Mead of This is Zero Hour. “Youth turned out to elect President Biden and Democrats because of their ambitious climate promises, and all eyes are on him to follow through.” Alaska Native leaders have also weighed in. Rosemary Ahtuangaruak, Nuiqsut’s mayor, wrote in a November opinion piece in The Hill that her village, the closest to the project, is being ignored as Biden “barrels towards approving” it. “The Biden administration is moving forward with a massive oil and gas project that is a climate disaster waiting to happen while refusing to listen to the voices of my constituents and community, who will bear the burden of this project with our health and our livelihoods,” she wrote. Harry Brower Jr., mayor of the North Slope Borough that includes Nuiqsut, and borough president Amaulik Edwardsen, expressed support for Willow in a September opinion piece in The Wall Street Journal. “We are tired of outside groups trying to turn this project and every other oil and gas project in our region into the poster child for a global movement away from fossil fuels,” they wrote. “This is more than a political oil debate for us; it’s about access to land we were promised many years ago. Without projects like Willow and their crucial economic benefits, many of my neighbors would be forced to leave the lands they and their ancestors have inhabited for thousands of years.” ‘A tough spot’ for Biden Observers of oil field activity and federal policy in Alaska said they weren’t sure where the Biden administration would land on Willow. Andy Mack, former Alaska Department of Natural Resources commissioner under independent Gov. Bill Walker, noted the Biden administration has taken positions that have allowed the Willow project to advance. The Bureau of Land Management and ConocoPhillips have worked together to find a way to reduce harm to the environment that would have been caused by an original development plan proposed by the oil company, he said. “I think they’ve done as much as they can do to mitigate the impacts” through the project’s design, said Mack, chief executive of Kuukpik, the Alaska Native village corporation for Nuiqsut, and an oil field services provider. Mack said Willow is an “economic opportunity” for Alaska. But it is “immense” and will have environmental impacts, he said. Kuukpik will push for improvements, such as urging the federal government to require electronic monitoring of caribou in the area to provide details on their status, he said. Pat Pourchot, the former top Interior official in Alaska for six years under President Barack Obama, said in an interview he thinks Biden is “under a lot of pressure” on Willow. Biden has set ambitious goals to reduce carbon emissions, but the Willow project will increase those emissions, he said. That creates a contradiction in policy, something emphasized by conservation groups, said Pourchot, board president for the Alaska Wilderness League, which was part of the legal effort that stopped Willow’s approval under the Trump administration. Pourchot said the administration also has political calculations to consider in a Willow decision. That includes future support that might be needed from Sen. Murkowski, a moderate who at times has been a critical swing vote on issues that Democrats favor. And Democratic leadership will want to support Peltola politically, who they’ll need in two years to regain control of the House, he said. “The Biden administration is in the crosshairs between his own policies and on the political side,” Pourchot said. “I think Biden is in a tough spot and I don’t know what he’ll do on Willow.”

A small Fairbanks company wants to build Alaska’s biggest wind farms

A Fairbanks man and his Lower 48 business partner are advancing plans to build what could become Alaska’s biggest wind farms, one each outside Anchorage and Fairbanks. Andrew McDonnell, formerly an oceanographer at the University of Alaska Fairbanks, and Matt Perkins, an engineer from Nevada, are taking steps to build wind farms that could be several times more powerful than the Eva Creek Wind Farm near Healy and the Fire Island Wind Project outside Anchorage. Those wind farms, currently the largest in Alaska, were built in 2012, the last major developments of their kind in the state. But today’s turbines are much more efficient, and there is strong and growing interest to support new renewable energy projects in Alaska and nationally, Perkins and McDonnell said in an interview. More wind power “will help our economy, stabilize energy costs and reduce the environmental impact of energy generation here, and allow us to participate in a broader energy transition to renewable energy,” McDonnell said. Nearly two years ago, they launched Alaska Renewables, a private company. A subsidiary of the company, Shovel Creek Wind, has filed plans with the state seeking permission to lease land for 40 years about 20 miles northwest of Fairbanks near Murphy Dome. The site is large enough to support up to 60 wind turbines producing 200 megawatts of power, McDonnell said. That is eight times more capacity than Eva Creek Wind, the largest project in Alaska. An initial phase at Shovel Creek would likely consist of 15 to 30 turbines, McDonnell said. The site was burned in the Shovel Creek Fire in 2019, which will reduce the environmental impact of development there, he said. A different subsidiary of their company, Little Mount Susitna Wind, proposes building a wind farm more than 35 miles northwest of Anchorage, across Cook Inlet and north of Tyonek. That project could support up to 80 turbines, potentially cranking out up to 250 megawatts. McDonnell said each project’s size will be determined by various factors under consideration. They include utility needs, engineering and wind constraints at the site, cultural assessments of the land, and public input once the state releases a draft review of the projects, perhaps late this year. For the most part, the projects should not be noticeable from Anchorage or Fairbanks, he said. Chris Rose with the Renewable Energy Alaska Project said the proposals, if they can be fully built, could fulfill over 20% of the current power demand from Homer to Fairbanks, along the Alaska Railbelt. Rose said that would dramatically reduce the need for fossil fuel power sources that provide much of the region’s electricity. Projects of that size can help move Alaska quickly toward the renewable energy standard proposed by Gov. Mike Dunleavy last year, Rose said. Legislation introduced by the governor last session called for the Railbelt to use 80% sustainable power by 2040, significantly higher than today. Other clean-energy efforts in the state include Alaska’s largest solar farm going up in Houston, state-led development of an electric vehicle charging network, and utilities from Homer to Fairbanks proposing $200 million in upgrades to support more renewable power. The activity comes amid an infusion of federal funds into clean energy. Rose said the wind projects could benefit substantially from tax incentives included in the Inflation Reduction Act passed in August. Concern about future supplies of Cook Inlet natural gas, the primary source of power for most Alaskans, is also driving interest in renewables. Chugach Electric Association is interested in adding wind power from the Anchorage project to its portfolio when it is available, said Julie Hasquet, a spokeswoman with the Anchorage-area utility. It will reduce the utility’s reliance on natural gas and reduce carbon emissions. “We have initiated feasibility studies for this project located near Little Mount Susitna (about 7 miles west of Mount Susitna) that could connect to Chugach’s existing transmission lines on the west side of Cook Inlet,” Hasquet said. “A key condition of the project is that it will not result in higher electric rates.” Purchases from the project will depend on completion of studies involving economics, interconnection and integration, and approval from the Regulatory Commission of Alaska, Hasquet said. At Golden Valley Electric Association in the Fairbanks area, wind provides about 5% of power. The utility is looking to add more renewable power as spelled out in a strategic generation plan that’s designed to offset carbon emissions and control costs, said Meadow Bailey, a spokeswoman with that utility. Diesel fuel and coal are the utility’s main sources of power. Reducing Golden Valley’s carbon emissions can be a benefit to companies, such as some mining entities, Bailey said. “We need to reduce our carbon footprint because our commercial customers want to reduce their carbon” dependence, Bailey said. McDonnell said he left his university job this summer after many years to focus on Alaska Renewables. He met Perkins, who liked traveling to Alaska to participate in endurance races, not long before they formed the company. Perkins previously worked with General Electric and has helped launch clean energy startups in the Lower 48. As an oceanographer, McDonnell said, he has studied the impacts of carbon emissions on water and land, helping spark his interest in renewable energy. He has served on a solar power committee at Golden Valley Electric, where he saw the public’s growing interest in renewables. He said sites for the projects were selected based on earlier studies of wind characteristics at the University of Alaska Fairbanks and elsewhere, as well as terrain features and other data. Wind prospects at the sites are being studied under state land-use permits, he said. Perkins said Alaska Renewables has received financial support from Alaska and Lower 48 investors. He declined to name them. He said clean energy projects are attracting investors because they provide a long-term, low-risk supply of sustainable energy. “The investment communities of the world are desperate to make clean energy happen,” he said. “People realize it’s an investment in the future.”

McKinley Management acquires Alaska Growth Capital

Alaska-based investment firm McKinley Management will add lending and community development to its mix of services, after recently acquiring Alaska Growth Capital BIDCO. The company will be renamed McKinley Alaska Growth Capital, the investment firm said. Alaska Growth was founded in 1997. It’s a major lender to rural and low-income regions in Alaska that are often underserved by the traditional banking system. It’s known as a Native Community Development Financial Institution and is Alaska’s leading provider of business loans using programs under the Small Business Administration and U.S. Department of Agriculture. McKinley Management acquired the firm from Arctic Slope Regional Corp., the Alaska Native regional corporation for the North Slope. McKinley will partner with Bristol Bay Native Corporation, a regional Native corporation of the Bristol Bay Native region in Southwest Alaska. The Native corporation will own shares in McKinley Alaska Growth and provide leadership on the board. “Alaska Growth Capital is a natural fit with McKinley’s investment business,” said McKinley chief executive Rob Gillam in a statement. “With this acquisition, we’re excited to add a company with a talented team, a long history of supporting Alaska businesses, and a commitment to supporting community development throughout Alaska. Alaska Growth Capital adds valuable capabilities to our financial platform, which enhances our ability to positively impact Alaska’s economy.” Current McKinley employee Logan Birch has been named president of the recently acquired company. Birch is a former president of Alaska Growth Capital. McKinley Alaska Growth Capital will be located in McKinley’s offices at the JL Tower at 3800 Centerpoint Dr. in Anchorage. All Alaska Growth Capital employees are being retained and McKinley is posting three new jobs there. McKinley Alaska Growth Capital will be the fourth line of business at McKinley, along with McKinley Capital Management, McKinley Alaska Private Investment, and McKinley Research Group (formerly McDowell Group).

Geologist whose 2013 discovery ‘revolutionized’ North Slope oil exploration lays plans to drill again this winter

The risk-taking geologist who discovered a giant Alaska oil field in 2013 that companies had long overlooked is taking another stab at exploration drilling on the North Slope, this time on federal land west of existing development. Bill Armstrong, owner of Colorado-based North Slope Energy, in August filed a plan with state environmental regulators, spelling out his intention to drill two wells into a prospect known as West Castle. The site is located in the northeastern section of the National Petroleum Reserve-Alaska, more than 50 miles southwest of the village of Nuiqsut. Armstrong said the prospect’s characteristics look similar to the giant Pikka oil field that he discovered on state land nearly a decade ago, and similar to ConocoPhillips’ huge Willow prospect, found after the company followed in the footsteps of Armstrong’s discovery. Oil from Pikka and Willow, if the fields are developed, is expected to significantly boost Alaska oil production and revenues. The federal government is currently weighing approval of the Willow prospect. As for Pikka, two major oil companies announced this summer that they would commit $2.6 billion to begin developing it. Armstrong said in an interview there is no guarantee that West Castle, located southwest of Pikka and Willow, also holds a colossal cache of oil. “We know what we’re looking for and we know it looks like Pikka and Willow, but at the end of day, these are wildcat wells,” he said, referring to drilling outside existing fields. “Even though the likelihood is better than just a random wildcat, it’s still a wildcat, so it’s not a sure thing.” At West Castle, Armstrong will target the Nanushuk geologic formation, the same formation containing the oil at Pikka and Willow. Previous explorers had not expected the Nanushuk formation would contain such massive amounts of oil, until Armstrong’s discovery, said Dave Houseknecht, senior research geologist with the U.S. Geological Survey. But explorers are now targeting that formation, which has become the hottest conventional onshore prospect in the world, Houseknecht said. That geologic formation has yielded multiple discoveries and “revolutionized everyone’s perspective of oil potential in Alaska,” Houseknecht said. At West Castle, Armstrong will have limited data to rely on, Houseknecht said. The federal government drilled a test well there decades ago, the only well in the vicinity. But there is three-dimensional seismic data showing underground features, and Armstrong knows how to read it, Houseknecht said. “It’s certainly a bold move, one that looks promising,” Houseknecht said. Houseknecht said there are many other oil prospects in the Nanushuk formation across the North Slope, based on seismic data. The formation presents an unusual opportunity for oil companies because most big prospects today exist offshore, and in deep water, Houseknecht said. Also, the crude oil in the Nanushuk is known as “light” and “sweet,” requiring limited processing compared to other types of oil, he said. “It’s the oil everyone wants unless you are making tar, so it’s kind of the best you can wish for,” Houseknecht said. Mark Myers, former head of the U.S. Geological Survey under President George W. Bush, said Armstrong is skilled at “geological detective work” and has a track record indicating he’ll be successful at West Castle. But while seismic data can bear the fingerprints of a large pool of oil, it’s possible that oil previously trapped there dissipated to other areas. And that’s just one of the challenges facing explorers, he said. “You don’t know (what’s there) until you drill it,” said Myers, a former senior staff geologist for Arco Alaska, which later became part of ConocoPhillips. Drilling could take place this upcoming winter, according to Armstrong’s plan. But Armstrong said in an interview it’s possible the drilling may need to be pushed until next winter. There are no permanent roads nearby to help access the project, making logistics difficult, though the state and North Slope Borough in 2020 took a preliminary look at a road concept in the area. Instead, the plan calls for access using 100 miles of ice and snow roads that support drilling rigs in winter. Despite the challenges, Armstrong said it’s a good time to drill. Oil prices are strong and the trans-Alaska pipeline has the capacity to transport a lot more oil. And, he said, oil will be important globally for decades to come, even as electric vehicle use grows. “I’m for an all-of-the-above strategy when it comes to energy, whether it’s solar or wind, and now they’re talking about hydrogen, and there’s nuclear,” he said. “The world is energy starved.”

Early numbers show Anchorage has had a strong 2022 tourism season

With Alaska’s tourism season winding down, early signs indicate it was a strong summer for the visitor industry in Anchorage. Among the bright spots, hotel demand and overall visitor numbers could reach record levels this year, Visit Anchorage, the tourism bureau for the city, reported. Also, an Anchorage economic development group said last month the city is on track to collect record bed and car-rental taxes this year. Traveler numbers and trip lengths in Alaska this year are being helped by what’s known as “revenge travel,” said Julie Saupe, president of Visit Anchorage. People are prioritizing travel, sometimes taking long trips or multiple trips in a year, to make up for cancellations associated with the pandemic that began in March 2020, she said. “After a couple of years not traveling, some people have decided they were going to go big this year,” Saupe said. “There is pent-up demand, people have been at home saving money, and Alaska checks off what people are looking for: wide open spaces, beautiful scenery and broad horizons.” Like last year, lots of independent travelers unaffiliated with a cruise tour ventured to Alaska this summer, she said. Large cruise ships also returned to Southcentral for the first time since the pandemic. That sharply boosted visitor numbers, even though the ships were only partially full in part because some rooms were set aside as COVID-19 quarantine space, Saupe said. Chelsea Smith said it was a great summer for Go Hike Alaska, a small Anchorage-based company that leads excursions into the Chugach Mountains and other parts of Alaska. “We were slamming in June, July and August,” said Smith, who books trips and is the company’s operations manager. “I believe we had a record year. We had more guides this year than last year, and we were still booked up.” According to Visit Anchorage: • Passenger counts at Ted Stevens Anchorage International Airport are up from last summer. They are only 7% below 2019 levels, a recovery that beats the national average. The airport set a record in 2019 with 5.7 million travelers. • Hotel performance was remarkably strong, with demand nearly equal to 2019′s. “Several weeks this summer saw Anchorage among the top performing markets nationally for accommodations,” the group said in a statement. • Tourists appear to be staying longer, and tourism-related spending and revenues are up. Anchorage municipal hotel bed taxes for 2022 are on track to grow 20% from the year before, the group said. Municipal car and RV rental taxes were up 34% through June. A report last month from the Anchorage Economic Development Corp. also showed strong trends in tourism-related revenue this summer. It predicted that bed taxes for 2022 would finish at a record $35 million, in part because room rates have increased while demand is strong. The report also predicted car rental tax revenue would hit a record $12 million, also because rates have risen amid high demand, including through peer-to-peer rental platforms like Turo. Tourism, like other Alaska industries, has struggled to find enough employees, Visit Anchorage said. Supply snarls were another challenge, the group said. Still, the tourism industry in Anchorage added back thousands of jobs in leisure and hospitality since 2020, some of the strongest growth of any sector in Anchorage, though still shy of 2019 levels, Visit Anchorage said. Hiring, training and retaining employees was a challenge at Salmon Berry Travel and Tours, in part because people are so eager to travel, said co-owner Candice McDonald. The company, providing guided trips in vans across Southcentral Alaska, saw unusual turnover even after boosting pay, and despite good tips and a friendly work environment, she said. It also created its own day care service at a relatively low cost, which helped it hire a few employees because the pandemic has sharply reduced child-care options, she said. “We have had more employees than we ever had, but it’s because no one wants to work full time,” she said. “A lot of people wanted time off this summer, so we had to hire more people to compensate for that. More than one person left before the end of the season because they wanted to travel the world.” But the demand for travel also meant that to date, Salmon Berry has had its best year ever, she said. Bookings are looking strong through October too, she said. “The numbers are great, so we’re pretty happy with everything right now,” she said. “And we’re kind of excited for November because we can take a break.” There are also positive signs on the horizon because demand for conventions and meetings in Anchorage is recovering, Visit Anchorage said. One bright spot this fall will be the return of the Alaska Federation of Natives to the Dena’ina Civic and Convention Center in Anchorage for its first live convention since before the pandemic. The event typically draws more than 5,000 visitors for several days in October and comes amid a constellation of related events, including the also-sizable Elders and Youth Conference held by First Alaskans Institute. “We’re starting to have meetings return again, which is fantastic,” Saupe said. “That’s a market we haven’t seen since 2020.”

New US climate law could lead to a mining ‘renaissance’ in Alaska, drawing excitement and concern

This spring, a small Australian prospecting company sent geologists to a state warehouse to scour old rock collections. The geologists leveled handheld scanners over samples of rock pulled from shelves at the Alaska Geologic Materials Center in Anchorage, drilled in the Cantwell area decades earlier by other mining companies. They found what Discovery Alaska described to shareholders as the “widespread presence” of lithium, the mineral used in rechargeable, lithium-ion batteries for everything from iPhones to electric vehicles. Whether the lithium can be profitably extracted won’t be known for a while, said Jerko Zuvela, the company’s director. “A lot more exploration needs to be done,” he said. But the hunt for the mineral highlights the world’s growing interest in the so-called critical minerals used in the solar panels, wind turbines and electric vehicles that increasingly power the global economy. The nation’s recently passed $370 billion climate law, called the Inflation Reduction Act, is ramping up that interest in Alaska, and focusing attention on the state’s mining prospects as a possible source for many of those minerals. The law, passed last month without Republican votes, provides tax breaks that industry observers say could lead to more mining in the U.S., and Alaska. They include a 10% tax write-off of operational costs for U.S. companies producing critical minerals. Brett Watson with the University of Alaska Anchorage’s Institute of Social and Economic Research said the new law could potentially bring a “renaissance” to Alaska mining. But that is only if the state can overcome the many hurdles that often slow or stop mining projects, including a lack of roads and ports, high energy and development costs, and exploration and construction timelines that can take 20 years. “We have the rocks here in Alaska, but the question is whether or not we can capitalize on the opportunity,” he said. Opposition to mining proposals from people in the region or environmental groups is also a factor. While conservation groups on a national level celebrated the climate law as a huge victory, they are concerned about what it could mean for Alaska. “A short-sighted chase for critical minerals in the name of climate change is not an excuse to rush to build mines everywhere, with reduced oversight and less public engagement,” said Rachel James, public lands and water lead for SalmonState. “If there is to be an increase in mining in Alaska, it needs to be done in a way where Alaskans are in the lead, and our rules and regulations reflect the fact we live much closer to our lands and waters than almost anyone, anywhere,” she said. “As part of the decision-making process, some places will be identified as inappropriate for large scale mining.” Alaska leaders see opportunity Since the act passed, Alaska political leaders have wasted no time arguing that mining in the state could help meet President Joe Biden’s goal of net-zero carbon emissions by 2050. Specifically, the Biden-backed law encourages U.S. development of 50 minerals labeled as critical by the U.S. Geological Survey earlier this year. They’re considered vital economically and strategically, and at risk of supply disruption, with many controlled by China and other potentially adversarial countries. The critical minerals in Alaska include the graphite and cobalt that join lithium and other minerals to make the lithium-ion batteries; the tin and indium used in touchscreen coatings so fingertips control apps; and zinc at Red Dog Mine, one of the world’s largest deposits of the metal, used to prevent rust in solar panels and wind turbines. At a critical minerals conference at the University of Alaska Fairbanks last month, coincidentally held days after the climate law passed, Alaska politicians and others touted the state’s mineral attributes and what they described as unparalleled environmental oversight. They also pressed for streamlined federal permitting. “If you care about the environment we need to produce resources in Alaska,” Gov. Mike Dunleavy said. “If you care about social justice, we need to produce resources here in Alaska. If you care about enriching people, and not dictators, we need to produce resources here in Alaska.” Conservation groups weren’t on the summit’s agenda, but attended it. They’re concerned that the interest in more domestic minerals could lead to irresponsible mining. They’re calling for stronger mining laws. Andrea Feniger, head of Sierra Club’s Alaska chapter, said she worries Alaska will be “sold out” for mining in the wake of the climate law. “It’s exciting that the (Inflation Reduction Act) has tackled a lot of climate issues, but there’s a lot of scary possibilities in it for Alaska,” she said. She said the U.S. should focus on making products more efficient and recycling renewable energy components and materials — also encouraged by tax credits in the law — to reduce reliance on new mines. Mineral diversity in Alaska ‘outstrips’ most other states Under the climate law, renewable energy could support the national economy by creating more opportunities in manufacturing, said Jane Nakano, a senior fellow at the Center for Strategic and International Studies. She said the U.S. has a unique opportunity to make up China’s lead in critical minerals. It has the resources, mining experience, and the financial ability to increase mineral production, she said. Perhaps two-thirds of the 50 critical minerals could be produced in Alaska, though much more needs to be known about their concentrations and other details, said Jamey Jones, with the U.S. Geological Survey’s Alaska Science Center in Anchorage. “Alaska’s geology is incredibly diverse and the state is very large,” Jones said. “And what that translates to is a diversity of critical mineral resources that really outstrips most other states.” In an ongoing effort to boost knowledge of Alaska’s critical minerals, the U.S. Geological Survey recently gave the state $7 million for new geological studies, part of last year’s bipartisan infrastructure law. “The Last Frontier remains a frontier for critical mineral resource development,” said David Applegate, the agency’s director, at the critical minerals conference. The studies will focus on more than a dozen critical minerals, including tin and indium geologists say is found across Alaska. Besides their use in touchscreens, indium is used in solar panels. State geologists have also begun re-analyzing more than 40,000 samples of stream sediment for critical minerals, said Melanie Werdon, chief of Alaska’s mineral resources section. One important prospect is Bokan Mountain, in the environmentally sensitive Tongass National Forest in Southeast Alaska. It contains critical minerals like neodymium and dysprosium, used in powerful magnets for large wind turbines. The minerals are also rare earth elements, which are often difficult to produce and primarily come from China. In Northwest Alaska, the state also hosts the largest graphite prospect in the U.S., owned by Graphite One about 40 miles north of Nome. Demand for graphite is surging as the market grows for rechargeable batteries. But it has not been produced in the U.S. since the 1950s, the U.S. Geological Survey says. Most comes from China. Anthony Huston, head of Canadian-based Graphite One, said the tax incentives could help the company’s project, but details of the law are still being studied to better understand the potential benefit. Graphite One hopes to create a U.S. supply chain for the anode portion of lithium-ion batteries, a major component of the battery. The ore would be concentrated in Alaska and shipped to Washington, with its cheaper power costs for manufacturing, he said. “This will allow the U.S. to become independent on the anode side,” he said. “This is huge.” Controversial mining projects seek favor amid renewables push Alaska contains large undeveloped amounts of copper, too, geologists say. It’s critical for renewable energy, too, conducting electricity in wires. But it’s not on the list of critical minerals because a lot is produced in the Lower 48. Huge amounts of copper exist at the controversial Pebble deposit in Southwest Alaska’s Bristol Bay region, home to the world’s largest sockeye salmon fishery. The Pebble developer highlights copper as a key component in green technology, from electric vehicles to the wires connecting renewable energy projects. But after decades of exploration, the prospect has failed to win federal support under multiple presidents, and continues to face strong resistance from conservation groups, local tribes and members of Alaska’s congressional delegations due to concerns the mine could harm the fishery. Copper also exists elsewhere in Alaska, including in the mineral-rich Ambler Mining District in Northwest Alaska, geologists say. Mining company Ambler Metals is exploring copper at deposits in the region, in the Brooks Range foothills north of the village of Kobuk. It’s also exploring the potential for producing zinc as well as cobalt, a critical mineral processed primarily in China and mined mainly in the Democratic Republic of Congo. Ramzi Fawaz, chief executive of Ambler Metals, said the new law’s tax incentives can make the company’s projects more economical, if it can profitably produce the cobalt or zinc. But the project also needs access from a 200-mile industrial road pursued by an Alaska state financing agency, the Alaska Industrial Development and Export Authority. The road is controversial — it would cut across Northwest Alaska to open up the mineral district, and has drawn opposition out of concerns it would harm the environment and subsistence hunting. After conservation groups and local tribal groups sued, the Biden administration has put permission for the road on hold for further environmental review. The tax-write off alone doesn’t make the project viable, Fawaz said. “If there is no Ambler Access project, there is no mine,” he said. Daily News reporter Riley Rogerson contributed.

Alaska Native corporation pursues Denali-area airport to bring tourists directly from Lower 48

An Alaska Native regional corporation is working with state transportation officials and the Denali Borough on a proposal for a new airport that would allow Lower 48 tourists to fly directly to the doorstep of Denali National Park and Preserve. Doyon Ltd. says the “Denali Airport,” as it describes the concept in a 22-page booklet, could be built north of Healy on state land, allowing tourists to quickly reach the park after jetting in from, say, Seattle, San Francisco or Anchorage. The project must overcome high costs, permitting requirements and other challenges. But if built, it could provide a new travel option for the park’s 600,000-plus annual visitors who want a close-up view of North America’s tallest mountain. Those visitors now often spend a chunk of their day traveling overland to the park as part of a cruise package, especially from Anchorage, more than five hours away by bus and longer by train. “Over the last few years as Doyon has been building our presence in tourism, people in the industry kept using the phrase ‘Move the mountain closer,’” said Aaron Schutt, Doyon’s chief executive, in an interview. That’s what Doyon, the Fairbanks-based Native corporation for Interior Alaska, is trying to do, he said. “One thing about cruise add-ons is you maybe have three days or five days, and if you’re spending a day on a bus, you just burned one of those days,” he said. As Doyon sees it, a relatively small airport could be built at one of two preferred locations off the Parks Highway, according to the booklet. One is about 20 minutes from the park, near Healy. The other is about 45 minutes away, near the community of Clear. But to accept 737 jets with close to 200 passengers, an airport with a runway more than a mile long could cost well over $50 million, according to estimates in the booklet. Under the plan, the runway would be built by the state, using federal funding wherever possible, Schutt said. The proposed terminal, filled with cultural amenities and dining areas, could be built and owned by Doyon, Schutt said. It could cost $18 million. Schutt said the project could boost Doyon’s own tourism enterprises associated with the park, such as a lodge, bus tours and a joint venture providing many park services. But it would also enhance tourism statewide, he said, potentially freeing up visitors’ time for more Alaska travel. “We are creating a bigger pie for hopefully all of us that creates more opportunities throughout the state,” Schutt said. Obstacles include funding, federal approval The idea is drawing some concern in Fairbanks that it may reduce the number of tourists who travel there before heading to Denali, said Scott McCrea, president of Explore Fairbanks. But Doyon’s proposal is so fresh that Explore Fairbanks needs to learn more from the Native corporation, he said. The group has not taken a position on the idea, he said. A bus ride from Fairbanks to the park can take more than two hours. “We support infrastructure growth and bringing more visitors to Alaska and the Interior, but don’t want it to be a detriment to tourism in Fairbanks,” he said. In recent months, the Denali Borough and the Alaska Department of Transportation and Public Facilities have been meeting with Doyon to help advance the idea, Schutt said. The local government and the state agency had already been looking at replacing the small Healy airport when Doyon came along, said Judy Chapman, planning chief for the transportation agency’s northern region. “All three entities have been working on different iterations of planning for a similar facility,” she said in an email. “All efforts came together due to mutual/overlapping interests and are being advanced at the same time,” she said. The borough for many years has been pursuing the concept of a regional airport, to expand aviation options beyond the small airports in the area, said Clay Walker, the borough’s mayor. Regional airports can typically accept domestic flights. “We are pretty underserved aviation-wise here,” Walker said. The borough is excited to be working with Doyon and the state to find ways to bring a regional airport to the area, he said. It could support new jobs and improved emergency and cargo services, he said. “There could be a range of economic benefits,” he said. Doyon has done early engineering and architectural work for more than a year as it has looked for an appropriate site for a runway and terminal, Schutt said. Plans show construction ending around 2028. “It’s not just the funding, but getting the process approved by the Federal Aviation Administration will be a long and hard effort,” Schutt said. “We understand that going in.” A terminal that’s also a tourism hub With tourism expected to continue growing in Alaska, the proposed airport isn’t the only effort underway to attract visitors to the state. Projects include Huna Totem’s plans to build a cruise dock in Whittier, while the Alaska Railroad is taking steps to replace and expand an old cruise dock to handle new, large ships in Seward. Nolan Klouda, head of the Center for Economic Development at the University of Alaska, said he sees the airport and a new travel option to the park as a possible benefit for tourism in Alaska. “It probably has the potential to grow overall visitation more so than poaching from other destinations,” he said. Some organizations that support tourism in Alaska, including the Alaska Travel Industry Association, said they needed to learn more about the details of the concept. “Without knowing detailed plans, ATIA is always interested in learning more about new tourism product and development to enhance visitors’ experiences,” said Sarah Leonard, chief executive of Alaska Travel Industry Association. Doyon sees the airport as part of a cultural corridor it’s developing in Alaska with Huna Totem, a Native village corporation from Southeast Alaska. The corridor focuses on “underexplored visitor opportunities across the state,” according to the booklet. The airport could eventually support trips to, say, villages off the road system, Schutt said. He said it could also potentially remain open in winter, maybe serving tourists who want to see the northern lights or other attractions. As for the terminal, it would be built as something of a destination unto itself, with views of mountains, interpretive trails and exhibits highlighting the area’s environment and culture, Schutt said. “Airports are transportation hubs, not tourism hubs, generally,” Schutt said. “We’re trying to change that up a little with this one.”

Private company gives up oil and gas lease in Arctic refuge, leaving AIDEA as lone leaseholder

Another private company has given up its lease in the Arctic National Wildlife Refuge, leaving an Alaska agency as the lone leaseholder seeking to pursue controversial plans to explore for oil and gas in the refuge’s coastal plain. Knik Arm Services, a small real estate and leasing firm, has asked to have its 49,000-acre, 10-year lease rescinded and its lease payments refunded, the Bureau of Land Management said in a statement on Monday. The agency said it will honor that request. Oil company Regenerate Alaska, the only other private company to bid in the federal government’s 2021 lease sale, also gave up its lease earlier this year. The exit by the two companies leaves just the Alaska Industrial Development and Export Authority, a state agency, to pursue oil and gas exploration in the refuge. The agency acquired seven leases covering about 370,000 acres, and is suing the federal government over the lease suspension. The departure adds to questions about the prospects for oil drilling in the refuge’s 1.6 million-acre coastal plain. A Republican-led Congress approved the lease sale in 2017, but the Biden administration has suspended the leases and is reviewing the leasing program. The Interior Department has called the sale process developed under President Donald Trump legally flawed. Knik Arm Services made its request for a lease cancellation on Tuesday, the Bureau of Land Management said in a statement. “The bureau is directing the Office of Natural Resources Revenue to refund (the company’s) full bonus bid and lease rental payment,” the agency said on Monday. Mark Graber, owner of Knik Arm Services, said he invested about $2 million into his lease and for a first-year lease payment. Graber said he had hoped to hold onto his lease in hope that AIDEA would win its lawsuit, and oil development in the Arctic refuge would produce valuable royalties for years for his company. But it has become increasingly apparent that the fight over the leases could drag on for years, hurting the value of his investment, he said. “It’s just tilting further and further negative and there are better opportunities out there in the world,” he said, referring to financial investments and the prospects for a quick resolution. “I wish AIDEA all the success in the world. They are doing something that is in the interest of Alaskans and the U.S., for that matter.” AIDEA, which provides financing for development in Alaska, purchased its leases to preserve drilling rights in case oil companies did not come forward. Alan Weitzner, executive director of the state agency, said the departure of Knik Arm Services does not change the agency’s plans to pursue oil exploration in the refuge. “There’s too much at risk not to (pursue exploration), when we talk about the potential for jobs and economic development for the state,” Weitzner said. Separately, Hilcorp and Chevron last year canceled their interest in separate, older leases within the refuge’s boundaries, on a small tract of Alaska Native corporation-owned land. Those oil companies spent $10 million to exit their deal with Arctic Slope Regional Corp. Groups opposed to drilling in the refuge praised the departure of Knik Arm Services. They said oil development in the refuge, if it’s allowed, would worsen global warming through more fossil fuel development, while endangering valuable wildlife habitat in the refuge such as the calving grounds of the Porcupine Caribou Herd. The Wilderness Society said in a statement that the leasing program, which also calls for a second lease sale before Dec. 22, 2024, was supposed to generate $1.8 billion in bids and lease payments over a decade, for the Alaska and federal governments to split. But with the departure of the two companies, the one sale held to date has raised less than $10 million, a tiny fraction of what was expected. The Gwich’in Steering Committee, which represents 15 Gwich’in communities in Alaska and Canada, said in a statement that the departure of the companies from the refuge shows that drilling there is not worth the economic risk and liability. The group said that many banks and insurance companies have said they will not support drilling in the refuge. “These lands are sacred, and we – the Gwich’in people – will never give up fighting to protect the Arctic Refuge,” said Bernadette Demientieff, the group’s executive director. “We call on Congressional leaders and President Biden to recognize the rights of Indigenous communities that are being overlooked in Alaska and repeal the oil and gas program in the Arctic Refuge.”

Oil companies say they’ll move ahead to develop giant Pikka oil project on Alaska’s North Slope

Global oil and gas companies Santos and Repsol said Tuesday that they will invest $2.6 billion to move ahead with development of a huge oil field on Alaska’s North Slope. The money will cover the initial phase of development at what’s called the Pikka field, with 80,000 barrels of oil daily expected to begin flowing in 2026, Australia-based Santos said in a statement. If developed, the field will significantly boost oil flow in the trans-Alaska pipeline, which has fallen about 75% from its peak in the late 1980s to less than 500,000 barrels daily today. Alaska leaders and industry observers have long awaited the announcement from the companies, in hopes that work at the field will boost jobs and the Alaska economy. Pikka is located on state land, east of the National Petroleum Reserve-Alaska, and development is expected to generate billions of dollars in state and local tax revenue, primarily through royalties to the state. Pikka is one of two major oil prospects on the North Slope. The other, ConocoPhillips’ Willow project, has been delayed by litigation and a new Biden administration environmental review. Santos has a 51% stake in the project. The company said in a statement Tuesday that its investment will be $1.3 billion. Santos acquired Oil Search of Papua New Guinea last year, which had been working to advance the project. Santos’ partner in the project is Spanish oil company Repsol. “Global oil and gas markets are seeing increased volatility and countries are looking to diversify their supply sources away from Russia, which according to the International Energy Agency, currently produces 18 percent of the world’s gas and 12 percent of its oil,” Kevin Gallagher, chief executive of Santos, said in the statement. The Pikka field is part of the Nanushuk geologic formation. The Nanushuk’s oil potential was announced several years ago by wildcatter Bill Armstrong, after previous exploration drilling by other companies overlooked it. The Nanushuk play is considered one of the largest onshore conventional hydrocarbon discoveries in the U.S. in 30 years. But Pikka’s prospects were recently challenged by a slew of financial institutions announcing they would not back oil developments in the Arctic, due to concerns about climate change. The project also became mired in a dispute with ConocoPhillips over road access. Alaska political leaders quickly celebrated the news on Tuesday, including Republican Sens. Lisa Murkowski and Dan Sullivan, who said in a statement that the project will create an estimated 2,600 construction jobs and 500 permanent jobs. “I appreciate the approach that Santos and their partner, Repsol, have taken to advance this project,” Murkowski said, emphasizing “their strong collaboration with local entities and communities.” Sullivan called the announcement “great news for energy security, national security, and for economic and community development, including thousands of jobs for Alaskans.” Republican Gov. Mike Dunleavy said it “will continue the renaissance on Alaska’s North Slope.” The companies said they will take steps to offset and reduce fossil-fuel emissions, such as by using natural gas instead of diesel fuel during operations. Fully developing Phase 1 of the Pikka project will involve drilling 45 wells from a single well pad. Related facilities will include a production facility, operating center, seawater treatment plant and pipelines, Repsol said in a statement. The project will bring additional oil supply to markets during a time of reduced investment in exploration and development, Repsol’s statement said. Additional development at the prospect could bring total investment in the field to over $3 billion, Repsol said.

A shrinking workforce is holding back Anchorage’s economic recovery after COVID-19, report finds

Anchorage employers are hiring more workers from outside the city and state to adjust to a severe labor shortage that’s holding back the city’s economic recovery, according to a report released by the Anchorage Economic Development Corp. People — especially young people — leaving Alaska to work elsewhere is a major contributor to the issue, the report said. It’s one unsettling sign for an economy that’s otherwise showing reasons for optimism as tourists flock to Alaska and the huge federal infrastructure bill starts to pump money into the state, according to AEDC President Bill Popp, who unveiled the three-year economic forecast. The job-worker imbalance needs immediate attention, Popp said while presenting the report. Though employment is growing rapidly, it remains below pre-pandemic levels, he said. The lack of workers is creating “serious headwinds” for employers of all stripes. Some can’t operate fully because of the lack of employees, he said. There are thousands more jobs openings than there are people to fill them, about two or three positions for every available worker, he said. “Practically every employer in Anchorage has jobs open that are going unfilled for lack of qualified candidates,” he said. In many cases, there are no candidates, he said. The openings range from skilled jobs like doctors, architects, accountants, teachers and legal aides to lower-paying jobs like food-service worker and janitors, Popp said. 1 in 3 young workers leaving Alaska The cause of the worker shortfall has been years in the making, Popp said. The data doesn’t support the myth of potential workers lazily sitting at home, watching TV and living off government subsidies. The labor force participation rate is a strong 79%, one factor countering that view, he said. A major contributor to the job-worker imbalance has been the city’s shrinking workforce, as people retire and the city’s population has dwindled over several years, he said. The labor force in the city has fallen by 9,000 people, or 4.4%, over five years ending in 2019, he said. Especially problematic is the loss of working-age residents younger than 26. About one in three appear to be leaving permanently for the Lower 48, worse than many other cities, he said. Those long-term forces are compounded by trends that arose during the pandemic in 2020, such as people becoming unable to work because they can’t find child care help, or they face health risks related to COVID, he said. Anchorage employers have adapted in part by hiring workers from outside the city and state in what amounts to a national competition for some workers, Popp said. Three-quarters of the city’s workforce is locally based, he said. Eleven percent come from the Matanuska-Susitna Borough, and 12% come from the Lower 48, he said. Anyone who wants to find a job in Alaska can do so, he said. Job postings are at levels not seen since the group began studying the issue in 2018, the report says. About 4,600 employers posted nearly 31,000 job openings in Anchorage and the Mat-Su Borough for three months this spring, well above the number of workers available to fill them, he said. Even with the labor shortage, employers in the city have added about 5,000 jobs, a 3.6% increase, in the first six months of the year compared to last year. In a strong economic sign, the corporation expects the city to add about 1,000 more jobs this year than it had originally anticipated, Popp said. Tourism roars back Job numbers in restaurants, bars and hotels, part of the hospitality industry, have jumped by 2,000 since last year. Buoying that sector is the return of cruise ships to Southcentral Alaska for the first time since 2019, he said. Also, passenger numbers at the Ted Stevens Anchorage International Airport, at 1.8 million visitors through May, is well above last year. The airport passenger numbers indicate that independent travel, unrelated to pre-arranged cruise ship tours, is going strong, he said. Other signs of a strong rebound in tourism include surging vehicle rental tax and room tax as hotels fill up. The extra tax revenue is in part due to higher room and car-rental rates as prices have jumped, the study said. Other big winners in job growth include the transportation sector, driven in part by record levels of cargo at the Anchorage airport in 2021, Popp said. Employment numbers are also growing strongly in the professional services sector, where engineers and architects are starting to work on projects associated with the federal infrastructure bill that’s expected to pump $5 billion into Alaska over the next five years, he said. The huge number of jobs available should generate optimism, but a consumer sentiment survey of future expectations was not optimistic, he said. Contributing to the view are issues like soaring inflation and fuel prices, supply chain disruptions and the labor shortage, the report found. Despite the consumer views, personal income is expected to grow, a positive sign for individuals, Popp said. Within the next few years, permitted projects in the city should increase, alongside construction activity, and passenger and cargo levels at the airport could hit record levels, the forecast found. New cargo projects at the airport, big oil field prospects on the North Slope, and the redevelopment of the Port of Alaska are among the projects that could also boost growth, the report said. The big challenge will be retaining workers and building a workforce with the right skills to meet demand, he said. The corporation, with the support from other Anchorage business groups and the Anchorage Assembly, hired a consultant to look for solutions, he said. It is also studying other cities for ideas, such as Oklahoma City, which suffered problems like Anchorage’s but now retains many of its workers, enjoys a growing tech sector and has become a major destination for conferences and tourism, Popp said. “We want to learn from our competitors so that we can win the talent war we face,” Popp said.

Cook Inlet lease sale included in Manchin deal

National environmental groups are urging swift passage of a newly released Democratic bill designed to combat climate change. But concessions included in the federal legislation would support the oil and gas industry, dampening the enthusiasm of some Alaska conservation groups. The “Inflation Reduction Act of 2022″ was introduced in late July in a surprise deal between West Virginia Sen. Joe Manchin and Senate Majority Leader Chuck Schumer of New York. The $370 billion measure provides incentives to increase renewable energy and reduce carbon emissions, while raising taxes on big corporations. It’s also designed to help fight inflation. But in what’s seen as a concession to Manchin, a moderate Democrat who rejected a larger climate change package earlier this month, it creates opportunities for more oil and gas production. It will reinstate three recently canceled oil and gas lease sales, two in the Gulf of Mexico and one in Alaska’s Cook Inlet, that must take place by year’s end. It also does not include a measure stopping the oil and gas leasing program in the 19-million-acre Arctic National Wildlife Refuge, something some lawmakers and Alaska conservation groups have sought since Democrats took control of Congress and the White House in 2021. The Alaska Wilderness League in a statement called the bill “generally welcome news” to fight climate change and reduce carbon emissions. But no bill “should be finalized without a provision to repeal the failed leasing program in the Arctic National Wildlife Refuge,” said Kristen Miller, the group’s conservation director. “We will explore every option to see this provision included in a final reconciliation bill.” Bernadette Demientieff, head of the Gwich’in Steering Committee, advocating for Alaska Native people who hunt the Porcupine caribou herd that often calves in the refuge, said she was disappointed the measure did not take steps to prevent drilling in the refuge. “I’m glad that they’re addressing climate change,” she said. “But you’ve got to involve the people that are spiritually, culturally connected to these lands when you’re making decisions like that.” 'One of the best federal tools to tackle climate change' Nicole Whittington-Evans, Alaska director at Defenders of Wildlife, said the bill has flaws when it comes to Alaska. “I think the Alaska provisions will really greatly reduce our achievements, in terms of climate, with this deal,” she said. The won’t allow an offshore lease sale for wind energy projects unless at least 60 million acres of waters are made available for an oil and gas lease sale in the previous year, she said. “So that is very significant and really, you know, does not seem like a great tradeoff for Alaska,” Whittington-Evans said. Others were more positive. Dyani Chapman, Alaska organizer with Environment America, said the bill provides “one of the best federal tools to tackle climate change.” The bill provides billions of dollars in tax credits for solar panels, wind turbines and batteries. Other measures could benefit Alaska, including funding to clean contaminated sites, she said. “The bill obviously isn’t perfect from an environmental standpoint,” Chapman said. “But ultimately, this bill will do more to protect our climate than any legislation ever passed.” Possible revival of Cook Inlet sale pleases industry groups Kara Moriarty, president of the Alaska Oil and Gas Association, said the industry trade group is glad the Cook Inlet lease sale could return if the measure passes. “While a lease sale is just the beginning of a very long process, Cook Inlet natural gas production is absolutely essential for keeping the lights on and homes warm during long Alaskan winters,” she said. Rebecca Logan of the Alaska Support Industry Alliance, representing companies that support oil, gas and mining extraction, said the bill appears to balance support for renewable energy with oil and gas opportunities. The group supports the call for a Cook Inlet lease sale. If the sale is held this year, oil and gas exploration could open up opportunities for the companies her organization represents, she said. But she said the resource development industry also faces downsides in the proposal to increase taxes on large corporations to 15% and a fee on methane emissions. With inflation high, it’s a challenging time to put more burden on companies, she said. In spite of the Cook Inlet lease sale, Alaska’s Republican U.S. senators did not celebrate the newly announced deal. In an interview on Capitol Hill, Sen. Dan Sullivan said he had not read the bill. “If there’s a mandatory lease sale, I’m almost certainly for it,” he said. Speaking to the bill more generally, however, he said, “big tax increases as we’re heading into a recession is, I think, terrible policy.” Sen. Lisa Murkowski, who has tested positive for COVID-19, did not respond to a request for comment. Her office released a short statement about the nation’s gross domestic product shrinking for a second-straight quarter. “The current economic reality is hurting American families and businesses,” she said in the statement. “This is not the time to spend or tax hundreds of billions more.” While the bill would increase taxes on major corporations, it does not raise taxes on families or businesses making less than $400,000 a year, the Associated Press reported. Liz Mering, advocacy director for Homer-based conservation group Cook Inletkeeper, said it’s “very disappointing” that a Cook Inlet sale could be back. The Biden administration canceled the 1-million-acre sale, and the Gulf of Alaska lease sales, just two months ago, citing a lack of industry interest. Cook Inletkeeper at the time said the decision would keep climate-warming fossil fuel in the ground. The lease sales were widely opposed by the general public nationally, she said. “It was a victory because people had their voices heard, and so that makes this feel even harder to have this back on the table,” Mering said. The Daily News’ Alex DeMarban reported from Anchorage, and Riley Rogerson reported from Washington, D.C.

Biden administration releases draft environmental review for Willow project

The Biden administration has released a draft supplemental environmental review of ConocoPhillips’ giant oil prospect on Alaska’s North Slope, known as the Willow project, after a federal judge last year rejected approval for the project issued during the Trump administration. The announcement drew immediate condemnation from environmental groups, saying advancing the project is contrary to the president’s stated goals to address climate change. Alaska’s political leaders have pressed the Biden administration to move the project forward, given the project’s potential in terms of oil production, jobs and revenues for the state. The environmental review is a step in ConocoPhillips’ efforts to develop the field, though the new, eight-volume report provides a range of development alternatives for the public to consider before the Biden administration can make a final decision on whether to approve the project. The release of the review will open a 45-day public comment period. The Willow project is located in the National Petroleum Reserve-Alaska, west of Prudhoe Bay and near the Arctic Ocean. ConocoPhillips has not yet decided to fund the project, but the oil company has studied Willow for years and believes it will cost $8 billion and create more than 2,000 construction jobs and 300 permanent jobs. It is expected to produce more than 100,000 barrels of oil daily for decades. Conservation groups have fought the project, saying it threatens important habitat for migratory waterfowl, caribou and threatened polar bears, such as at Teshekpuk Lake, and will contribute to more global warming. Industry advocates and many Alaska leaders say the project can help stabilize future oil prices and support the state’s economy, after oil flows following years of development. The Bureau of Land Management in Alaska in a statement highlighted one new development alternative in the draft environmental review that it said would reduce Willow’s potential footprint. The proposal would remove two of five proposed drill sites from consideration, including eliminating the northernmost proposed drill site and associated infrastructure in the Teshekpuk Lake Special Area. BLM expects that under this alternative, ConocoPhillips would need to give up “significant” lease rights it acquired in the special area. The proposal includes a possible fourth drill site, but approval of that would require an additional environmental review process under federal law, the statement said. The draft review includes a “corrected and expanded analysis of potential climate impacts” associated with the Willow project, the agency said. It seeks to address the court’s finding that the original analysis failed to consider downstream foreign emissions from future consumption of oil from Willow. The agency will also consult with groups under the Endangered Species Act concerning listed species, including polar bears, and consider mitigation measures and updates to the range of alternatives. U.S. Sen. Lisa Murkowski, R-Alaska, said in an interview that seeing Willow developed is at the top of her priority list for the Biden administration. “I’ve been leaning on them since the very beginning, trying to impress on them what this means for Alaska, our economy, jobs, what it means to fill up TAPS,” she said. She said she will stay on the administration to make sure the timeline toward a final decision stays on track. In a statement, Sen. Dan Sullivan, R-Alaska, said he too had pressed Biden on the project, saying “he and his team gave me their commitment to fully support the Willow Project.” “We’re not there yet and have a ways to go, but this is a step in the right direction on an energy project which is enormously important for Alaska and America,” Sullivan said. The Wilderness Society condemned the project and said it would add more than 250 million metric tons of greenhouse-gas carbon dioxide to the atmosphere over the next 30 years, if approved. It would also lead to additional oil development in Alaska, the group said. “No other oil and gas project has greater potential to undermine the Biden administration’s climate goals,” said Karlin Itchoak, the group’s state director. “If this project were to move forward, it would result in the production and burning of at least 30 years of oil at a time when the world needs climate solutions and a transition to clean energy.” Conservation groups in 2020 sued to stop the project, saying the agency underestimated the plan’s harm to wildlife, among other factors. U.S. District Court Judge Sharon Gleason last year ruled that BLM and the U.S. Fish and Wildlife Service incorrectly approved the project. The Biden administration had backed the Willow project in the case, a departure from efforts by the administration to throw roadblocks before other Alaska resource development efforts, including in the Arctic National Wildlife Refuge. But the administration and ConocoPhillips declined to appeal Gleason’s decision, leading to the federal government’s supplemental environmental review process announced in February. The agency plans to hold in-person public meetings in Utqiagvik, Anchorage and Nuiqsut, as allowed under public health measures, as well as three virtual public meetings, the statement said. “A subsistence-related hearing to receive comments on the proposed project’s potential to impact subsistence resources and activities will also be held in Nuiqsut concurrent with the in-person public meeting,” the agency said.

Oil prices are through the roof. Here’s why job numbers in the Alaska oil patch are not.

Oil prices in Alaska have surged to their highest levels in a decade. But job numbers in the oil and gas industry have barely budged upward after they crashed during the COVID-19 pandemic, even as other sectors of the economy enjoy a solid rebound. Industry observers in Alaska give several reasons for the tepid job growth in the oil patch. They say it mirrors a trend in the industry nationally, a slow recovery that breaks from past practice. Companies, increasingly flush with cash, aren’t investing in oil field activity like they once did when the good times rolled. They say companies are now more likely to question big, long-term projects, as investors raise concerns about the industry’s past performance and new regulations that could result from climate change policies. Sara Teel, an economist with the Alaska Department of Labor and Workforce Development, said in a June report that companies face shareholder pressure to cut capital expenditures, while some lenders and investors are shying away from funding projects in environmentally sensitive areas such as the Arctic. It’s usually “drill, baby, drill” for oil and gas companies when prices rise, Teel said in a phone interview. “But when prices spiked this time, they restricted spending,” she said. “They are investing some, but not like before.” In Alaska, the COVID-19 pandemic gutted the oil and gas workforce. Jobs plunged by about 40% as demand for crude oil, and the gasoline it makes, collapsed. Alaska North Slope crude oil hit a record low of $16.55 a barrel in April 2020, Teel noted in the report. Two years later, the price rose to $109.41 per barrel, a “whopping” 561% jump, she wrote. Meanwhile, jobs in Alaska’s oil patch have grown by only 18%, to 7,200, after bottoming out in November 2020 at 6,100 jobs, the latest state records show. The workforce is a fraction of what it was in December 2014, when it hit a record 15,300 positions. Oil prices and job numbers at the time began a multi-year slide. But just before the pandemic, the industry was rebuilding, reaching 10,000 positions. Teel wrote that the current slow job growth and “muted” activity is being caused by several factors, including automation in the oil patch that continues to reduce the need for workers. The industry’s tolerance for risk also has changed, she wrote. Alaska projects can also require huge up-front costs, and years of planning. Investment could grow if prices remain high for a long period, she said. The risk of an economic downturn is making the industry more cautious, said Roger Marks, a former petroleum economist for the state. “I think (the slow recovery) has to do with inflation and supply bottlenecks going on throughout rest of economy,” Marks said. “And the recession I think has people skittish about investing too much.” Sean Clifton, a policy and program specialist at the Alaska Division of Oil and Gas, echoed those concerns. [A ‘carbon bomb’ or much-needed energy? A village on Alaska’s North Slope holds key to Biden’s climate policy.] “The likelihood of companies being willing to pull the trigger on projects goes up when the price of oil goes up,” he said. “But there are complications from the supply chain, and access to basic materials like steel.” “So it’s not as easy as flipping a switch and getting back to work,” he said. “Unfortunately, the market is still complicated.” A lean workforce Industry observers say an additional important factor behind the slow job growth is that Hilcorp Alaska took over operation and partial ownership of Alaska’s largest oil field, Prudhoe Bay, in 2020. Hilcorp is known for operating with a lean workforce, compared to the much larger BP, the previous operator, they said. “That’s going to be a permanent change in the industry’s employment profile,” said Brad Keithley, a retired Alaska oil and gas attorney who tracks economic issues in Alaska. Other factors include concerns about future climate change regulations that could impact the industry and increased production of renewable energy that could affect demand for oil and gas, he said. “There’s a fundamental change going on in the oil industry raising questions about its future, and as a consequence people aren’t putting a lot of additional cash into generating additional projects,” Keithley said. Hilcorp has been increasing its workforce in Alaska, said Luke Miller, a spokesman for the company. The company hired about 70 new people last year. It is on pace to more than double that number this year, he said. Hilcorp also produces oil and gas in Cook Inlet in Southcentral Alaska, and employed more than 1,500 people in Alaska last year. Job increases in the Alaska oil industry are generally tied to new projects, said Teel, the Alaska economist. The lack of new fields in Alaska explains some of the slow growth, she said. [Oil refineries are making a windfall. Why do they keep closing?] Kara Moriarty, head of the Alaska Oil and Gas Association, the industry trade group in the state, said oil companies are largely focused on drilling within existing fields, rather than launching big new projects. “If you want more jobs, you have to have more activity,” she said. Projects on hold In Alaska, drilling activity plunged after the pandemic was declared and remains slow compared to pre-pandemic years, according to data from the Alaska Oil and Gas Conservation Commission. The industry completed 291 wells in the two years before March 11, 2020. It completed 138 the next two years, the data shows. Two major projects in Alaska that could sharply boost jobs are on hold or uncertain, industry observers say. ConocoPhillips’ Willow prospect is undergoing a new round of federal review, after a federal judge ruled in favor of conservation groups that had sued to stop it. Also, Oil Search’s Pikka prospect faces major financing questions as banks withhold financing for Arctic projects following pressure from climate activists. And Oil Search’s merger last year with Santos, a larger Australian oil company, has raised uncertainty about Pikka’s future. Santos, now the parent of Oil Search, said in a prepared statement that it employs about 150 people in Alaska, primarily located in Anchorage. “At Santos, we are focused on controlling costs and not the fluctuation in oil prices,” the statement said. The company will maintain that low-cost model as it works toward making a final investment decision on Pikka, the statement said. Tara Stevens, a spokeswoman for ConocoPhillips, said in an email that the recent increase in oil prices is a promising indicator of future industry growth. But high oil prices don’t immediately result in growth, she said. She said ConocoPhillips in Alaska is focused on expanding drilling and production in existing fields, which includes projects in the Alpine field, Greater Mooses Tooth-2 and Fiord West, where new oil production started in recent months. ConocoPhillips’s workforce of 960 has held steady the past two years, while capital spending in Alaska has remained stable, she said. Willow is an $8 billion project that could create more than 2,000 construction jobs and 300 permanent jobs, she said. With the supplemental environmental review underway, ConocoPhillips has not made a final decision to invest in the project.

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