Sullivan: Forces aligning for Alaska
Alaska is still in a tough spot, with high crime rates, the nation’s highest unemployment rate and an unsustainable state budget situation, but Sen. Dan Sullivan continues to preach “the gospel of optimism for the state. Optimism, optimism, optimism,” he said to lead off an hour-long interview with the Journal Dec. 29.
Sullivan’s positivity stems from what he believes has been an underplayed momentum for the state to go from economic struggles to successes.
“We have an alignment of forces that are happening, particularly in the bedrock area of the key element of our economy, which is resource development, that we haven’t seen in years,” he said. “It starts with the federal government wanting to be a partner in opportunity.”
Sullivan acknowledged he often disagrees with President Donald Trump’s posturing and social media habits, but said on policy matters the president is in Alaska’s corner.
“I’ve met with him a bunch of times and the guy and his entire team are super pro-jobs, economic growth for Alaska. He is in the details of the King Cove road,” Sullivan commented, noting that the issue of a few miles of gravel road through a wildlife refuge in one of the most remote parts of the country is not usually a topic in the Oval Office.
Sullivan is also clearly still riding the wave of enthusiasm following the passage of Republicans’ tax code overhaul, which (just in case your holiday vacation started months ago somewhere without an internet connection) included a provision to open the coastal plain of the Arctic National Wildlife Refuge to oil development.
While even exploratory drilling is years off and oil production further into the future, the Alaska delegation’s success in the decades-old ANWR battle should be “a psychological boost” for Alaskans today, Sullivan said.
The historic win for the Republicans did not materialize overnight, however.
The last time Republicans controlled Congress and the White House in 2005, a similar attempt to open ANWR via a budget bill stalled in the Senate.
Sullivan pulled back the curtain a little and detailed how it came together this time.
“We had a really good team working together; and it wasn’t working weekly. It was daily on this issue and the last several months it was kind of hourly,” Sullivan said.
Sen. Lisa Murkowski’s position as chair of the Senate Energy and Natural Resources Committee was obviously crucial. It gave the delegation control of the vehicle that would be used to add ANWR to the tax and budget legislation; that is, an order to find $1 billion in new federal revenue over the next 10 years, which would come from ANWR lease sales and royalties.
It was Rep. Don Young’s job to shepherd the ANWR provision through the House, something he had done a dozen times before and could surely do again.
Sullivan described his role as one of “relentless advocacy,” which started with getting a commitment from Senate Majority Leader Mitch McConnell, R-Kentucky, more than a year ago.
He pitched using tax reform as a vehicle to open ANWR during a lunch with McConnell and Vice President Mike Pence shortly after the 2016 election.
“This was a — ‘I’m committed to doing this for you guys’ — big deal, big deal. And he stuck with that through thick and thin,” he said of McConnell. “And there was some thick and thin.”
As for the rest of his colleagues in the Senate, particularly Republicans that had been against the issue in the past, gathering votes meant wearing out a series of PowerPoint slides over months of one-on-one pitches.
The presentation stressed how the State of Alaska has handled Arctic oil development for years.
“It was just about (how) we have the highest standards in the world — ice roads, ice pads. Nobody knew any of this stuff and I’m like, ‘I was the guy in charge of this stuff as the (Natural Resources) commissioner (under Gov. Sean Parnell),’” Sullivan said.
New long-range drilling technologies also allow companies to accurately target more oil from smaller and fewer drilling pads, which in turn allowed Congress to limit surface development to 2,000 acres of the 1.5 million-acre coastal plain.
The ANWR language limits development to 2,000 federal acres. Kaktovik Inupiat Corp. owns 92,000 acres of in-holdings within the refuge boundaries that are also open for development.
Additionally, ExxonMobil’s $4 billion Point Thomson natural gas project, on state land just 1.5 miles from the western boarder of ANWR, was a revelation to many senators as well, according to Sullivan, who negotiated the settlement in 2012 over long-running litigation that led to the development of the field.
“It’s the same ecosystem. Nobody knew about Point Thomson,” he added.
At the same time, constituents of colleagues such as Sen. Cory Gardner of Colorado were being bombarded with ad campaigns by environmental groups condemning the ANWR proposal, Sullivan said.
But that was expected.
What blindsided the Alaska delegation was formal opposition from the Canadian government, as evidenced in an Oct. 31 letter the trio sent to Canada’s Ambassador to the U.S. David MacNaughton.
The letter notes that Canadian embassy officials urged U.S. senators to vote against the Senate Energy and Natural Resources directive to open ANWR in the 10-year budget resolution as well as a letter from MacNaughton to senators further stating Canada’s opposition to developing the so-called “1002” area.
Canadian officials have said coastal plain development could hurt the Porcupine caribou heard, which calves in the area and winters across the border in Canada where First Nations people rely on it as a primary food source, mirroring the Gwich’in tribes in Alaska.
Neither Murkowski, Sullivan nor Young could remember another time when the Canadian government actively lobbied senators on a specific vote, according to the letter.
Sullivan went a step or two further in a half-hour phone call with MacNaughton “that, I guarantee you, he isn’t going to forget,” he recounted.
“I said, ‘Ambassador, I’m going to do everything I can to screw your country if you don’t stand down.’ I was dead serious,” Sullivan said. “It was outrageous. The hypocrisy, first, of what you’re doing — everybody knows that in Canada, across the border from ANWR, in the ‘70s you drilled hundreds of wells; you built roads and you didn’t find anything. So now you’re so high and mighty? I said, ‘This is so outrageous; this would be like the U.S. embassy in Ottawa weighing in on Quebec independence. Of course it’s a contentious issue in America but you need to stay out of it.’”
On the other hand, the Alaska delegation’s concerns about the potential downstream impacts of British Columbia mines on Alaska salmon fisheries to Canadian officials have largely gone unanswered.
The state’s minimal-impact Arctic exploration methods might have swayed some in the Senate to favor opening ANWR; for others it could have been the national security argument.
Pro-ANWR development advocates, Sullivan included, have often said producing more domestic energy should be a core strategy to diminishing the global influence of the country’s geopolitical foes that are also major oil producers, namely Russia, Iran and Venezuela.
To that end, Sullivan also recalled a meeting he and Sen. John McCain had with a Russian dissident at the Halifax International Security Forum in November 2016.
McCain, who Sullivan considers a mentor and close friend, was previously against opening the coastal plain, which notoriously put him at-odds with his vice presidential running mate Sarah Palin in 2008.
“At the very end of the meeting we asked, ‘Hey, what more can we be doing to help you guys, help push back’ (against Russian President Vladimir Putin) and this guy looked at us and said, ‘Here’s what you can be doing: Produce more American energy. That’s what you need to do,’” Sullivan said. “Now, John McCain’s sitting right next to me in that meeting.”
In the end, ANWR is now open because this time the Republican caucus stuck together in the Senate. That happened because Alaska’s arguments were simply better than the “stale, tired” talking points of development opponents, according to Sullivan.
“We won. We beat them on the merits, even though they had all the money and all the power,” he said.
He added, however, that the fight is not over. Opposition groups will sue to start legal and administrative battles and the political part will come around again.
The next Democrat presidential nominee will undoubtedly campaign on flipping ANWR back, Sullivan predicted, but said that is something he isn’t worried about now.
“I’m very focused on execution, execution, execution,” he said.
Sullivan emphasized that turning the congressional delegation’s priorities into reality — such as executing ANWR lease sales and ultimately exploring the area — will be all the more possible with the group of Alaskans now in the Trump administration.
Former North Pacific Fishery Management Council Executive Director Chris Oliver is now the National Oceanic and Atmospheric Administration assistant administrator for fisheries, which makes him the head of the National Marine Fisheries Service responsible for managing all of the federal fisheries in Alaska and nationwide.
In December, Chris Hladick, previously Gov. Bill Walker’s state Commerce Department commissioner, took over as administrator of Region 10 of the Environmental Protection Agency, which oversees the agency’s work in Washington, Idaho, Oregon and Alaska.
“Those things don’t just happen. That’s relentless advocacy with the White House, with the top people there, with the agencies, to get our people in,” Sullivan said. “Chris Oliver, I probably hit up (Commerce Secretary) Wilbur Ross over 10 times on getting him to be NMFS director. Same with Joe (Balash), same with Tara Sweeney.”
Former DNR commissioner and Sullivan chief of staff Joe Balash was confirmed as assistant Interior secretary for land and minerals and prior Arctic Slope Regional Corp. Vice President and shareholder Tara Sweeney is likely to be a colleague of Balash’s soon, presuming the Senate confirms her as assistant Interior secretary for Indian affairs overseeing the Bureau of Indian Affairs.
Balash, who supervises the Bureau of Land Management among other duties, will be responsible for guiding the ANWR leasing process. The legislation directs BLM to handle the leasing in the same manner it administers sales in the National Petroleum Reserve-Alaska.
Sullivan said Balash will be particularly crucial to moving ANWR forward because of his current post and his experience in managing Arctic oil projects on the state side.
If it all comes together as he hopes on the federal side, in addition to the several large North Slope oil prospects already in the works, Alaska has a real chance to be “one of the hottest energy plays in the world,” Sullivan surmised.
“We’ve just got to make sure the folks down in Juneau recognize we have an opportunity and don’t do something that’s going to undermine this opportunity, particularly on the resource side,” he said.
Elwood Brehmer can be reached at [email protected].