A small but growing fellowship program aims to combat Alaska’s brain drain

“Hey, let’s grab lunch next week!” It’s a fairly standard text message that is sent and received countless times each day. But when Matthew Robinson read it, he laughed out loud. The sender lives 2,846 air miles away from Anchorage, in Chicago, Illinois. “I’ve told him that I’m in Alaska, he knows,” said Robinson. “I’ve sent my friends photos, they’ve seen the posts on social media, but they just don’t think it’s real. Maybe they think I’m using Photoshop or something?” Robinson has been living in Alaska since September. He’s part of the Alaska Fellows Program (AFP), a fall-to-spring residential fellowship program that pairs recent college graduates with community-focused organizations and professional mentors. Although Robinson was immediately attracted to the idea of applying some of the concepts he’d learned while earning his degree in public policy from the University of Chicago, his choice to move to Anchorage was met with mixed reviews. “Some of my mentors seemed mind-boggled over me coming here, a couple of them actually said ‘Why Alaska, what’s there for you?’ But my family was really supportive for me to get out of Chicago and experience more of the world, and my mom is excited to come visit in the spring,” Robinson said. Robinson is one of 24 Alaska Fellows living in Anchorage, Fairbanks, Juneau and Sitka. They hail from near and far — about 30% of fellows are from Alaska, and the rest are from all over the country. Host organizations pay between $20,000-$22,000 to participate in the program, and fellows receive a modest stipend and live communally for nine months while working for nonprofit or public sector organizations. Examples of fellowship positions and responsibilities include college and career counseling at Sitka’s Mt. Edgecumbe High School, providing rural community health with OneHealth and conducting housing policy research with Cook Inlet Housing Authority. Outside of work, fellows have helped with tax preparation services in rural Alaska, butchered moose, ran the Equinox Marathon in Fairbanks, worked as deckhands on commercial fishing boats, coached Junior Nordic skiing or high school debate and joined the volunteer fire department. Meredith Redick, who recently concluded her term as executive director, says that the program was launched in part to combat “brain drain,” which is when Alaskans leave the state for educational or professional opportunities and don’t return. AFP does the reverse, offering young Alaskans a reason to stay and attracting recent college graduates to the state. Alaska has the most unstable population in the country, with thousands of people coming and going each year. Recent trends show fewer people moving to the state while the number of those leaving remains consistent, causing population declines. In 2020, the state lost an estimated 4,000 people. So far, nearly half of the fellows have extended their time in Alaska for at least a year after their fellowship concluded, with many staying indefinitely. Redick is one of them. Back in 2016, she was unsure of what she wanted to do after completing her two-year commitment with Teach for America, and was drawn to the built-in community of the program. “The idea of moving to a new city and getting an apartment by myself was terrifying,” she says. “But with AFP, you know where you’re living, there’s a site coordinator, and you have the other fellows experiencing everything together.” During her fellowship, Redick worked for the University of Alaska Southeast in Sitka providing science education to K-12 and undergraduate students, and then stayed on as a site coordinator which grew into becoming AFP’s first full-time Executive Director. “There are clear career pathways if you want to work in medicine, law, or finance, but if you’re interested in nonprofits or local government, it’s not as straightforward,” she says. “Alaska is an incubator, a great place to get your feet wet and try new things while you figure out what you want.” Her hope for the program is that participants see Alaska as a place to launch a fulfilling career and be part of the community. AFP founder Jonathan Kreiss-Tomkins feels the same. “It’s been so gratifying to see fellows put down roots in Alaska, investing in their communities, buying houses, moving into leadership positions professionally, and mentoring new fellows who are just starting the program.” He says he started the program because an informal college summer internship program he’d begun in 2010 had led to great experiences for participants. “Many of the students who spent the summer in Sitka were graduating and looking for something similar, so I thought to myself, ‘Why not create a program that lets recent grads spend a whole year in Sitka?’ So that’s what we did, and people had life-changing experiences, and ran with it. Now we’re in four different cities.” Robinson, who is splitting his time between the Municipality of Anchorage 49th State Angel Fund and the University of Alaska Center for Economic Development doing entrepreneurial ecosystem building work, has enjoyed connecting with local startup founders. “There’s a real urgency to entrepreneurs here, and they seem motivated to find resources to help them,” says Robinson. “And the community really encourages and pushes them too. I think there’s a recognition that entrepreneurs here are building business that Alaska needs, in areas like air cargo or energy efficiency.” So far, he’s helped organize Alaska Startup Week; regularly hosts 1 Million Cups, a weekly event to educate, engage, and connect entrepreneurs; and helps facilitate Upstart Alaska, an entrepreneur development accelerator. Robinson has been impressed by Alaska entrepreneurs’ adaptability, something he’s working on for himself. “I’m getting to know myself better, and am learning to adapt to new environments. In Chicago, everything is very up tempo, and there’s always something going on, it almost feels like the city is moving nonstop,” he says. “In Anchorage, the focus is more about doing things outside, and I’ve really come to appreciate that kind of activity and the peace it brings. I’ve learned it doesn’t take much for me to enjoy where I am.” Despite his growing appreciation for Alaska, Robinson will return to Chicago in the summer to finish up his master’s degree. Redick says she’s planning to stay in Alaska. “I didn’t expect to stay here, but I’ve been in Sitka five years now and it truly feels like home. I think it would be really hard to live anywhere else.” Gretchen Fauske is the associate director for the University of Alaska Center for Economic Development, board president for Anchorage Downtown Partnership and a Gallup-certified CliftonStrengths coach.

A small but growing fellowship program aims to combat Alaska’s brain drain

“Hey, let’s grab lunch next week!” It’s a fairly standard text message that is sent and received countless times each day. But when Matthew Robinson read it, he laughed out loud. The sender lives 2,846 air miles away from Anchorage, in Chicago, Illinois. “I’ve told him that I’m in Alaska, he knows,” said Robinson. “I’ve sent my friends photos, they’ve seen the posts on social media, but they just don’t think it’s real. Maybe they think I’m using Photoshop or something?” Robinson has been living in Alaska since September. He’s part of the Alaska Fellows Program (AFP), a fall-to-spring residential fellowship program that pairs recent college graduates with community-focused organizations and professional mentors. Although Robinson was immediately attracted to the idea of applying some of the concepts he’d learned while earning his degree in public policy from the University of Chicago, his choice to move to Anchorage was met with mixed reviews. “Some of my mentors seemed mind-boggled over me coming here, a couple of them actually said ‘Why Alaska, what’s there for you?’ But my family was really supportive for me to get out of Chicago and experience more of the world, and my mom is excited to come visit in the spring,” Robinson said. Robinson is one of 24 Alaska Fellows living in Anchorage, Fairbanks, Juneau and Sitka. They hail from near and far — about 30% of fellows are from Alaska, and the rest are from all over the country. Host organizations pay between $20,000-$22,000 to participate in the program, and fellows receive a modest stipend and live communally for nine months while working for nonprofit or public sector organizations. Examples of fellowship positions and responsibilities include college and career counseling at Sitka’s Mt. Edgecumbe High School, providing rural community health with OneHealth and conducting housing policy research with Cook Inlet Housing Authority. Outside of work, fellows have helped with tax preparation services in rural Alaska, butchered moose, ran the Equinox Marathon in Fairbanks, worked as deckhands on commercial fishing boats, coached Junior Nordic skiing or high school debate and joined the volunteer fire department. Meredith Redick, who recently concluded her term as executive director, says that the program was launched in part to combat “brain drain,” which is when Alaskans leave the state for educational or professional opportunities and don’t return. AFP does the reverse, offering young Alaskans a reason to stay and attracting recent college graduates to the state. Alaska has the most unstable population in the country, with thousands of people coming and going each year. Recent trends show fewer people moving to the state while the number of those leaving remains consistent, causing population declines. In 2020, the state lost an estimated 4,000 people. So far, nearly half of the fellows have extended their time in Alaska for at least a year after their fellowship concluded, with many staying indefinitely. Redick is one of them. Back in 2016, she was unsure of what she wanted to do after completing her two-year commitment with Teach for America, and was drawn to the built-in community of the program. “The idea of moving to a new city and getting an apartment by myself was terrifying,” she says. “But with AFP, you know where you’re living, there’s a site coordinator, and you have the other fellows experiencing everything together.” During her fellowship, Redick worked for the University of Alaska Southeast in Sitka providing science education to K-12 and undergraduate students, and then stayed on as a site coordinator which grew into becoming AFP’s first full-time Executive Director. “There are clear career pathways if you want to work in medicine, law, or finance, but if you’re interested in nonprofits or local government, it’s not as straightforward,” she says. “Alaska is an incubator, a great place to get your feet wet and try new things while you figure out what you want.” Her hope for the program is that participants see Alaska as a place to launch a fulfilling career and be part of the community. AFP founder Jonathan Kreiss-Tomkins feels the same. “It’s been so gratifying to see fellows put down roots in Alaska, investing in their communities, buying houses, moving into leadership positions professionally, and mentoring new fellows who are just starting the program.” He says he started the program because an informal college summer internship program he’d begun in 2010 had led to great experiences for participants. “Many of the students who spent the summer in Sitka were graduating and looking for something similar, so I thought to myself, ‘Why not create a program that lets recent grads spend a whole year in Sitka?’ So that’s what we did, and people had life-changing experiences, and ran with it. Now we’re in four different cities.” Robinson, who is splitting his time between the Municipality of Anchorage 49th State Angel Fund and the University of Alaska Center for Economic Development doing entrepreneurial ecosystem building work, has enjoyed connecting with local startup founders. “There’s a real urgency to entrepreneurs here, and they seem motivated to find resources to help them,” says Robinson. “And the community really encourages and pushes them too. I think there’s a recognition that entrepreneurs here are building business that Alaska needs, in areas like air cargo or energy efficiency.” So far, he’s helped organize Alaska Startup Week; regularly hosts 1 Million Cups, a weekly event to educate, engage, and connect entrepreneurs; and helps facilitate Upstart Alaska, an entrepreneur development accelerator. Robinson has been impressed by Alaska entrepreneurs’ adaptability, something he’s working on for himself. “I’m getting to know myself better, and am learning to adapt to new environments. In Chicago, everything is very up tempo, and there’s always something going on, it almost feels like the city is moving nonstop,” he says. “In Anchorage, the focus is more about doing things outside, and I’ve really come to appreciate that kind of activity and the peace it brings. I’ve learned it doesn’t take much for me to enjoy where I am.” Despite his growing appreciation for Alaska, Robinson will return to Chicago in the summer to finish up his master’s degree. Redick says she’s planning to stay in Alaska. “I didn’t expect to stay here, but I’ve been in Sitka five years now and it truly feels like home. I think it would be really hard to live anywhere else.” Gretchen Fauske is the associate director for the University of Alaska Center for Economic Development, board president for Anchorage Downtown Partnership and a Gallup-certified CliftonStrengths coach.

Interior Department report seeks more revenue from oil and gas on federal land

A brief but anticipated report from Interior Department leaders largely concludes the government is not charging enough for oil and gas produced from federal territory. Industry representatives said the report is the latest in a series of confusing messages from the Biden administration regarding energy policy. Alaska-based oil and gas analysts noted the administration did not go out of its way to target Arctic leasing and development as some expected, which could be viewed as a victory of sorts for the industry in the state. Interior officials said in a statement accompanying the report that the agency recommends reforms that would improve returns for taxpayers, discourage speculation in leasing federal acreage and hold operators more responsible for site remediation. “The Interior Department has an obligation to responsibly manage our public lands and waters — providing a fair return to the taxpayer and mitigating worsening climate impacts — while staying steadfast in the pursuit of environmental justice,” Interior Secretary Deb Haaland said. “This review outlines significant deficiencies in the federal oil and gas programs, and identifies important fiscal and programmatic reforms that will benefit the American people.” According to the report, onshore federal royalties “are consistently lower than state-issued leases and federal offshore leases” and in many instances have never been raised. Interior officials also highlighted that leases not sold in a competitive auction can often be acquired by an operator for a “modest” administrative fee without needing to offer a bonus bid. The report subsequently recommends Bureau of Land Management officials increase royalties for individual lease sales and initiate rule-making processeses for setting higher minimum royalties as well as increasing the $2-per-acre minimum bid for most federal leases — a price set in 1987. “Such low prices for leases, coupled with generous 10-year lease initial terms that are frequently extended, encourage speculators to purchase leases with the intent of waiting for increases in resource prices, adding assets to their balance sheets, or even reselling leases at a profit rather than attempting to produce oil or gas,” the report states. Alaska Republican Sen. Lisa Murkowski said in a statement from her office that the report is “a series of preordained conclusions” aimed at eventually ending production from federal acreage. “What is especially upsetting is that it took Interior 10 months to produce a document that is just 15 pages long, lacking any meaningful analysis, and that repeatedly misrepresents how development actually works,” Murkowski said. “The policies it calls for won’t maximize returns for taxpayers or even reduce emissions — instead, they will hurt production in states like Alaska, further raise energy prices, and increase our nation’s import dependence.” Delegation staffers also questioned why royalty rates that are a portion of production value and not a nominal fee need to increase over time, as well as how the report and other actions the administration has taken will impact how the industry deploys capital in the country. President Joe Biden ordered the report via an executive order issued shortly after he took office, directing agencies to review all rules and policies that could impact climate change. The Interior Department claims the authority to make most of the recommended changes through regulation. Alaska oil and gas analyst Brad Keithley wrote via email that from the state industry’s perspective, the report could be a positive for what it doesn’t have — Alaska-specific provisions or broad, climate or environmental-focused rules, which leaves room for those items to be more tailored to local conditions. However, Keithley also noted the report mentions Interior agencies will continue evaluate ways to revise fiscal terms “to monetarily account for the costs of carbon dioxide, methane, and nitrous oxide.” “These can be addressed as they arise, but it leaves a sense that this report isn’t the last word on what may be coming down the pike,” he wrote. Alaska Oil and Gas Association CEO Kara Moriarty called the report simply “disheartening,” particularly given the president’s recent decision to sell a portion of the Strategic Petroleum Reserve and his urging for OPEC nations to increase production to curb price increases amid recovering demand following the 2020 market collapse. “Why wouldn’t you be sending signals for immediate policy and future policy that says, ‘We want to meet that demand and increase supply here.’ ” Moriarty said. Longtime Alaska petroleum economist Roger Marks said federal leases are often more fiscally attractive to oil and gas operators because the royalty rates are typically lower than those tied to state or private acreage and the federal government does not impose a severance tax on produced resources. Royalty rates in Lower 48 states with significant production generally range from 16.67% to up to 25% in portions of Texas. The state of Alaska charges a 16.67% royalty on most new leases and 12.5% on the legacy leases that supply the vast majority of oil production from the North Slope. Because oil companies predominantly judge investments in leases based on an expected rate of return, higher royalty rates on produced resources would likely lead to smaller and fewer bids, but that might not be a bad thing for the Treasury as long as there is eventually production, according to Marks. “If a property comes through (and produces) you’ll end up getting much more money, and if the property doesn’t prove to be commercial you’ll end up getting less money because the bid will be less,” he said. Marks also said he previously encouraged the Alaska congressional delegation to find ways to increase taxes and fees for production from federal lands because states are at a competitive disadvantage. In Alaska, the situation mostly applies to offshore production from fields beyond the three-mile state boundary. That’s because the state’s oil production tax applies to the 23-million-acre National Petroleum Reserve-Alaska on the North Slope, the result of management legislation specific to the NPR-A. Additionally, royalty rates are 16.67% for leases in the “high-potential” areas of the NPR-A — mostly in the eastern, more accessible portion of the reserve — and 12.5% for other areas. Bidding activity in NPR-A lease sales has ebbed and flowed with industry’s view of the area’s prospectivity. Millions of dollars of bids were submitted in the years after the discovery of the large Alpine oil field on nearby state lands, followed by a period of relative dormancy before ConocoPhillips’ Willow discovery in 2017 refocused attention back to the NPR-A. Elwood Brehmer can be reached at [email protected]

Imports to exports: US set to lead world in LNG sales

Sometime next year, when Venture Global’s Calcasieu Pass terminal in Louisiana ramps up toward full production and Cheniere Energy starts commercial operations through the latest addition to its nearby Sabine Pass terminal, the United States will become the world leader in liquefied natural gas production capacity. More than Qatar, which held the title for more than a dozen years. More than Australia, which dethroned Qatar a couple of years ago after a $200 billion investment bonanza that lasted about a decade. And almost 20 years sooner than ExxonMobil had predicted in 2016, when it said that North America would become the world’s top LNG exporter, but not until 2040. The LNG coronation is a long way from 15 years ago — before the start of the shale gas boom saved the U.S. from a natural gas deficit — when analysts, government officials and the oil and gas industry expected the country to become a world leader in LNG imports, not exports. Marketed U.S. gas production shot up 80% from an average 53 billion cubic feet, or bcf, per day in 2006 to about 96 bcf per day in November and is headed to a record year in 2021, according to federal data. Of that, more than 11 bcf per day in November was piped to liquefaction terminals for export — enough to fill three standard-size LNG carriers for overseas customers. The transformation from the impending title of Import Nation to Export Leader was a costly lesson in how quickly, and dramatically, commodity markets can shift — although it looks to eventually be a profitable lesson for many developers that poured billions of dollars into building new terminals to import LNG, or expanding and reopening mostly unused LNG import facilities from the 1970s. The leader in reversing direction from imports to exports has been Houston-based Cheniere Energy, which now operates two liquefaction and export plants in Louisiana and Texas with a total annual output capacity expected next year of 45 million tonnes, which is almost 10% of worldwide capacity. But it wasn’t until the company had sunk almost $2 billion into building its import facility in Sabine Pass, Louisiana, that it saw the market start to turn at about the same time the plant went online in 2008. Though Cheniere could see that investing in exports was the only way to salvage a failed investment in imports, it was not an easy sell to lenders, or to analysts. “It is more likely to see snow in New York in July than to see exports of gas from LNG terminals in the United States,” Fadel Gheit, senior energy analyst at New York-based Oppenheimer & Co., was quoted in The New York Times in January 2011. A few months later, Cheniere received export approval from the U.S. Energy Department. It took a couple more months, but Charif Souki, then CEO at Cheniere, sent Gheit a pair of snow boots. Lenders were just as skeptical of exports, at first. They told Cheniere, which was close to defaulting on its debt for the import terminal, “show us some money, and then we’ll consider making a loan.” A key element of putting together financing for Cheniere’s export project at Sabine Pass was that the developer did not ask lenders to take any commodity price risk, Roberto Simon, head of project finance for the Americas at Societe Generale, retold at a natural gas conference in London in 2012. The developer’s customers would take the risk of fluctuating gas prices. They would have to pay Cheniere for its services, regardless of the profit or loss on the gas at the other end of the market. That clinched the cash flow for Cheniere. When Cheniere approached French bank Societe Generale for help with financing, the bank told the company to get its federal export authorization and construction approval, gather up a lot of equity, get 20-year contracts with investment-grade customers, and then come in to talk about a loan, Simon said. Cheniere, which had no ready cash of its own, raised $2 billion for its equity contribution toward the almost $6 billion project; $1.5 billion from Blackstone Group-affiliated investment funds and a combined $500 million from a Singapore investment bank and U.S. private-equity firm. Cheniere first spent the equity on construction, Simon said, only later gaining access to the debt. The company’s bonds for the project were rated below investment grade by Standard & Poor’s. That was more a reflection on the parent company than on the LNG export project itself. “For us it was a matter of life and death,” Souki said in 2012. His company was close to bankruptcy and needed to find a way to salvage its investment. It still had half of its 1,000-acre riverfront site available for construction, which made it very economical to add liquefaction units and operate an export terminal. Cheniere was one of several U.S. import terminal owners that saw the value of turning their unused or underused operations into profitable export facilities. The dock, storage tanks and other facilities already were in place. Owners of other terminals in Louisiana, Texas, Maryland and Georgia made the same business decision and are now sending out LNG, with two more North American export plants under construction at the facility-sharing site of an import terminal. However, the growth of U.S. LNG exports to South America, Asia and Europe has not gone unnoticed by large industrial users in the domestic market. The businesses don’t like paying higher prices for natural gas, and figure keeping more of it at home would help reduce prices. The Industrial Energy Consumers of America sent a letter on Nov. 22 to U.S. Energy Secretary Jennifer Granholm, offering a dozen reasons why the department should scale back export approvals. Two months earlier, the same group urged the department to require exporters to throttle back their cargoes. Not our fault, an LNG trade group said of current high prices for U.S. buyers. “This is a short-term sort of issue,” Charlie Riedl, executive director for the Center for Liquefied Natural Gas, told the Houston Chronicle the day after the industrial group issued its call to scale back exports. “We’re not going to run out of natural gas because of LNG exports,” Riedl said. Larry Persily can be reached at [email protected]

Roadless Rule tug of war continues under Biden

Once a hot-button issue that epitomized the fundamental conservation-development debate across a large portion of the state, the continued fight over the Roadless Rule in Alaska has now become a better example of the bitter tug-of-war consuming much of the national political scene than a representation of what’s actually happening on the ground, according to some key stakeholders. U.S. Department of Agriculture officials in the Biden administration did their part to continue the fight Nov. 23 when they kicked off a 60-day comment period on their plan to reverse the Trump administration’s wholesale repeal of the rule, which was finalized just more than a year ago. Robert Venables, executive director of the Southeast Conference, noted that while USDA and Forest Service leaders are asking for the public’s input on their proposal to flip the overarching land management regulations for the massive Tongass National Forest back to pre-Trump times, they have made their intent clear for months. The Southeast Conference is a regional community development organization. To that end, USDA Secretary Tom Vilsack announced the agency’s preference to reinstate the Clinton-era Roadless Rule in July as part of their “Southeast Alaska Sustainability Strategy,” which includes $25 million for short-term investment priorities identified by local communities. Under the Trump administration, former USDA Secretary Sonny Perdue in 2018 similarly announced intentions to completely exempt Alaska from the 2001 Roadless Rule before a draft environmental impact statement analyzing a range of management options was published. The full repeal at least temporarily opened 9.2 million acres of the nearly 17 million-acre Tongass previously classified as roadless to more development activities, such as mining, logging and energy development, all of which are made easier and economic with road access. USDA and Forest Service officials under Trump additionally disregarded recommendations by a group of leading Tongass stakeholders convened by former Alaska Gov. Bill Walker, who opposes the rule, for a scaled-back but not fully repealed Roadless Rule as a means of ending the political and legal challenges. The regulatory changes apply only to the Tongass; the Chugach National Forest in Southcentral Alaska historically has not been used for large-scale timber harvests. The State of Alaska first secured an exemption from the Roadless Rule for the Tongass as part of a 2003 court settlement to a lawsuit over the rule’s applicability in the state with the Bush administration, but that exemption was overturned by a Federal District Court of Alaska judge in 2011. Subsequent appeals and other attempts by the state and resource development groups to have the Roadless Rule invalidated proved fruitless. This time, Alaska Republican Sen. Lisa Murkowski called the Biden administration’s move to reinstate the rule a “needless” decision that will impact numerous industries because of other protections already in place for the Tongass. “It misses a genuine opportunity to work together to establish a sustainable regional economy. And it is exasperating, given that we just passed a historic infrastructure bill, that the Biden administration is intent on returning the Tongass to an overly restrictive environment where projects almost always take longer and cost more, if they can proceed at all,” Murkowski said. “Everything from the deployment of broadband to the development of more affordable energy stands to suffer under a return to the failed Roadless Rule.” According to a Forest Service report detailing comments received in 2019 on the draft plan to repeal the Roadless Rule, 96% of the 15,909 unique comments the agency received on the plan supported keeping the rule in place. Venables, who served on the state’s Roadless Rule advisory committee, said it’s unlikely anyone is surprised by the Biden administration’s actions, but it’s unclear what will change practically. He and other Tongass stakeholders said when the exemption was finalized that the continued political uncertainty regarding the status of the Roadless Rule would probably serve to stymie any now-enabled large developments. “We were very much involved in trying to craft some compromise solutions towards Tongass management that we thought had really good merit for them,” Venables said of the advisory committee. “The local input rarely has the input you hope for.” The Southeast Conference has long opposed the Roadless Rule, primarily for its restrictions on community-level infrastructure projects such as energy development. “As long as the trees grow and people need wood and jobs (the Roadless Rule) will be a discussion item, and until both sides come together and agree on a custom compromise, it’s always going to be that back-and-forth, and here we are today,” Venables said. Sitka Conservation Society Executive Director Andrew Thoms, who also served on the state advisory committee, said he’s pleased the rule will almost certainly be back in place, but what’s often more important is that there are adequate resources for local forest managers to address projects proposed in Roadless areas. “In Sitka my computer and my lights are running off of a hydro project developed under the Roadless Rule,” Thoms said of the Blue Lake project. “With the Southeast Alaska Sustainability Strategy I think we see there’s so much more we can do with the Tongass if the staff and management levels (in the Forest Service) are right.” Alaska Forest Service officials said in mid-November that they received more than 270 investment proposals totaling more than $273 million in a separate comment period earlier this fall. Timber industry advocates also contend that even with the complete exemption in place, the widespread clear-cutting of old-growth stands that many Roadless backers fear just won’t happen, in part because the forest-level land-use plan doesn’t call for it. The Tongass Land and Resource Management Plan finalized in 2016 by the Forest Service allows for roughly 188,000 acres of timber to be harvested across the Tongass without the Roadless Rule, according to the record of decision. Roughly 165,000 acres of old-growth stands, just less than 1% of the Tongass, is newly available for harvest under the total exemption, according to an analysis by the Alaska Forest Association. Venables said he does appreciate federal officials attempting to address other sectors of the economy through the sustainability planning. “It’s not all doom and gloom, but the (Roadless) conversation has been a hard one to have because the process hasn’t really been set up to hear and act on what’s been heard,” he said. Elwood Brehmer can be reached at [email protected]

Drill results add to Ambler-area copper prospect’s high-grade reputation

Alaska weather hampered drilling at the remote Arctic hard rock mine prospect for much of the summer, but Ambler Metals was still able to identify mineralization that bolsters the company’s claims of a high-grade deposit, according to recently published drilling results. The first two infill drilling holes located near the center of the proposed open-pit mine combined to hit three mineralized zones with copper equivalent grades of at least 4.77%. Those results were highlighted by a 19.9-meter interval of mineralization containing more than 6.7% copper, nearly 7.6% zinc and approximately 97 grams of silver per ton of ore, for an overall copper equivalent grade of more than 11.7%, according to the drilling report. Trilogy Metals, the firm that first advanced the multi-metal Arctic prospect and is now an owner in Ambler Metals, the joint-venture operator, released the results Nov. 22 and Nov. 29. Richard Gosse, vice president of exploration at Trilogy, said the zones hit near the heart of the pit are some of the best in the long history of the prospect. “These assays from the 2021 drill program are an exciting start to the infill drill program at Arctic. Grades of almost 12% copper equivalent over 20 meters, considered close to true width, is one of the best intervals at Arctic since the first hole was drilled in 1967,” Gosse said. Initially targeted for its copper, the Arctic deposit is the most advanced exploration project in the broad Ambler mining district along the southern edge of the Brooks Range in the Interior. Currently envisioned as a 12-year, open-pit mine with a startup cost estimated at just more than $900 million, according to a feasibility study published last year, the deposit is currently believed to contain about 2.1 billion pounds of probable copper reserves at an average grade of more than 2.2%. Copper reserve averages exceeding 1% are generally considered high-grade deposits for large-scale mines. It’s that concentration of mineralization that has made the prospect attractive, Trilogy leaders have said. The company also owns the nearby Bornite prospect currently estimated to hold roughly 6 billion pounds of copper. Drilling on the northern edge of the delineated pit hit zones of nearly 25 meters averaging 3.5% copper equivalent and a 5.6-meter zone with a nearly 10.2% copper equivalent grade. The two bore holes hit multiple zones of silver exceeding 25 grams per ton, which contributed to the boosted grades of blended mineralization. Gosse said the high-grade extensions were discovered in holes drilled primarily to collect geotechnical information. Ambler Metals originally planned to drill and collect roughly 14,500 meters of core samples last summer but persistent low clouds kept the helicopters needed to support drilling grounded for extended periods, company leaders said in September. The Arctic program ultimately consisted of about 4,100 meters of drilling, according to Trilogy. A decision to ultimately build the mine will depend primarily on how quickly the Alaska Industrial Development and Export Authority can progress development of the Ambler access road. Trilogy leaders have long said the 211-mile industrial-use road is a prerequisite to constructing any mine in the remote mineral belt. Local governments for villages near the road’s planned intersection with the Dalton Highway have formally opposed the road over concerns it will impact migrating caribou and could eventually be opened to the public — thus increasing hunting and recreational pressure — in areas relied upon for subsistence harvests. Critics have also questioned the economics of the toll road concept given the Arctic prospect is the only one in the region anywhere close to development-ready. Elwood Brehmer can be reached at [email protected]

Brown's Close: A crowd-pleasing list of Thanksgiving dinner topics

No family gathering is complete without at least three political discussions so passionate they clear the room. To aid you at your forthcoming Thanksgiving feast, here is a proposed list of timely dinner topics sure to make your evening a night to remember: Masks. Vaccines. Inflation? Yay or nay? Does Joe Biden sniff women? Or do women sniff Joe Biden? Jeff Bezos, or Elon Musk? Bernie Sanders, or Elon Musk? What’s Mike Pence up to these days? Can cryptocurrency be most likened to the Holland tulip bulb mania of the 1630s? Was Aaron Rogers immunized? Airline seats – to recline, or not to recline? Megan Markle versus Piers Morgan. Janet Jackson versus Justin Timberlake. Brittany Spears versus Justin Timberlake. Brittany Spears versus Christina Aguilera. Brittany Spears versus all of the other Spears. Is Benedict Cumberbatch hot? Wired headphones? Or wireless headphones? What’s cool now? Did Epstein kill himself? The ecclesiastical calendar, subdivided by the difference between All Saints Day and All Souls Day. The pros and cons of Kamala Harris’ laugh. Hepatitis A. Is Jennifer Lawrence hot? Is Justin Bieber a good singer? Turkey and gravy soda – a genius invention, or a monstrosity inflicted upon man? The First Amendment. The Second Amendment. The Third Amendment. Nicolas Cage’s acting career – please submit responses in the form of a dissertation. Why is everything so expensive? I, for one, look forward to discussing the elusive sex appeal of Pete Davidson, whether or not Joe Biden’s neurologic exam was honest and above board, and to finally resolve, once and for all, whether aliens are invading Hawaii.   Sarah Brown is, what her grandmother would call, an instigator. Tweet her @BrownsClose1 or email her at [email protected] “Close” is a British term for alley or cul-de-sac. For more of Sarah’s musings, visit Browns-Close.com.

Why giving is part of our Alaska way of life

This holiday season, GCI is encouraging our fellow Alaskans to offer a hand to our most vulnerable neighbors in need. Giving Tuesday on Nov. 30 is a great place to start. Started in 2012, Giving Tuesday began simply: a day to do good. Over the years, it’s found a spot in the squares on our calendars and, more importantly, grown into a movement. The need for giving back and supporting each other is great, especially around the holidays.  Alaskans are a generous group by nature. We share our fish, we shovel each other’s driveways — it’s who we are. Likewise, as an Alaska-born-and-raised company, giving back is just a part of what we do at GCI. It’s built into our company values. Giving Tuesday is truly a great place to start, but it’s not an end. Together, we can make a great impact for a day, but what each of us do with the other 364 days matters, too.  This year, we were proud to support nearly 200 organizations from every region across Alaska that support programs focused on cultural arts and innovation; education; healthy communities; youth; animals; diversity and inclusion; and public safety. We are proud to support the organizations in Alaska that are doing the hard work every day to serve our communities.  One of our main pillars of giving is the GCI Suicide Prevention Fund. This year, our reach to combat suicide in Alaska has extended to Inupiaq youth in Kiana through OPT-In Kiana, LGBTQ+ youth experiencing homelessness in the Mat-Su Valley and the Kenai Peninsula through Choosing Our Roots, and Alaskans with eating disorders through the Alaska Eating Disorder Alliance, to name a few.  In addition to monetary support, we know the importance of recognizing the people who go the extra mile to make Alaska a better place. This year, GCI presented Beverly Hoffman with the GCI Gives Trailblazer of the Year Award for her work with the YK Delta Lifesavers, a group of community members in Bethel concerned by the number of deaths by drowning. Hoffman, who operated a community gym in Bethel for years, led the group forward in fundraising to build a swimming pool and offer lifesaving classes. People like Beverly aren’t afraid to do what it takes and it’s our pleasure to honor her and encourage others to follow in her footsteps.  Another way we can all support our communities is through being a good partner. Coming together with others is the best way for us to meet the needs of Alaskans. That’s why we teamed up with Alaska Airlines to cover transportation for the biggest-ever Alaska delegation of Special Olympics athletes, partners, coaches, and support staff to the 2022 USA Games in Orlando. (Special Olympics Alaska, oh yeah!!) We also encourage employees to give back to their communities, both on and off the clock, by offering 16 hours of paid leave for volunteer efforts. From volunteering at their children’s schools, supporting the tradition of mushing at  The Iditarod and Kuskokwim 300, GCI employees do it all. The holiday season is a great time to get out into your community and help, hands-on. We hope to see you out there!

ConocoPhillips readies Greater Mooses Tooth-2 for startup

ConocoPhillips Alaska is coming out of the industrywide pandemic slowdown with a $1 billion-plus oil project almost ready to go and a lengthy lineup of North Slope prospects behind that. The Houston-based producer’s $1.4 billion Greater Mooses Tooth-2 project is on track to start producing oil within weeks, slightly ahead of schedule after three years of work, according to North Slope Asset Development Manager Vincent Lelarge. Drillers were finishing work on the fourth well at GMT-2 when Lelarge discussed the company’s activities during the Resource Development Council for Alaska virtual conference Nov. 17. The project is permitted for up to 36 wells, according to ConocoPhillips. “We’ll be drilling for years to come,” Lelarge said, adding that the reservoir qualities identified in early production tests “are at or better than expected.” Production rates from GMT-2 should ramp up throughout next year. ConocoPhillips estimates peak production could reach 40,000 barrels per day. The Alpine satellite is also another incremental step west into the National Petroleum Reserve-Alaska with industry infrastructure. Development of GMT-2 followed on the heels of Greater Mooses Tooth-1, a $700 million oil development brought online in late 2018. ConocoPhillips Alaska has produced more than 600 million barrels of oil since startup at Alpine in 2000 and, according to Lelarge, company leaders expect to send another 600 million barrels through the field’s processing facilities over the coming decades, as well. Much of that oil is likely to come from the Brookian geologic sequence topset sands — popularized by Armstrong Oil and Gas and Repsol in the Pikka Unit — that have proven to be a very hittable target across the western portion of the Slope in recent years. To that end, ConocoPhillips is working toward production from the predominantly north-south play, internally dubbed the “Narwhal trend” this year after drilling from the existing CD-4 site in Alpine. “The Narwhal trend is a great example of a Brookian topset,” Lelarge said. ConocoPhillips applied with state Division of Oil and Gas officials Nov. 12 to establish a Narwhal participating area, an administrative step necessity prior to producing new oil. Future production from the Narwhal trend could come from CD-8, an Alpine satellite planned for later this decade to the south of existing facilities, according to Lelarge. Additionally, the company’s powerful extended-reach drilling, or ERD, rig, which arrived to the Slope in early 2020, is now drilling from CD-2 drill site. From there, ConocoPhillips finally expects to produce oil from its long-held Fiord West prospect that underlies the sensitive Colville River Delta north of the Alpine field. In 2015, ConocoPhillips agreed with the Alaska Department of Natural Resources to commission a rig that could pull oil from the Fiord West prospect in the company’s Alpine oil field without needing additional pads, roads and pipelines. Committing to the new drilling rig gave ConocoPhillips the opportunity to extend its leases for Fiord West. Division of Oil and Gas officials also approved an updated drilling plan for another one of the company’s mid-sized North Slope prospects on Nov. 17. ConocoPhillips representatives previously requested to change their current development plan for the large Kuparuk River field to include additional appraisal drilling at its partially developed Nuna project. The company purchased the Nuna project from struggling independent Caelus in 2019 after Caelus invested significantly in initial infrastructure; a transaction company leaders referred to at the time as “$100 million for 100 million barrels.” Now, ConocoPhillips plans in April to start drilling an injector/producer well pair into the Torok reservoir targeted by Caelus following tests of an existing well pair. And that is all without mention of the company’s preeminent prospect, the $8 billion Willow project north of the GMT Unit in the federal petroleum reserve. Lelarge said the company is continuing to advance detailed engineering and design work on Willow while its permitting team works with Bureau of Land Management officials to remedy project approvals partially vacated by a U.S. District Court ruling earlier this year. A ConocoPhillips Alaska spokeswoman wrote via email that there is no expectation regarding how long the supplemental environmental impact statement for Willow will take, but company leaders “encourage BLM to proceed in a manner that will minimize delay.” A BLM Alaska spokeswoman was unable to comment on a schedule for the Willow permitting work. Industry advocates view Willow as another major hub — much like Alpine — for additional development further west in the NPR-A. Alaska’s Republican leaders lauded the Biden administration in spring when Justice Department attorneys defended the Willow record of decision approved by BLM officials in the Trump administration. Elwood Brehmer can be reached at [email protected]

Little projects add up to no oil production decline at Prudhoe

Hilcorp Alaska has arrested a longstanding downward trend in oil production at Prudhoe Bay in the year-plus the company has run the iconic North Slope field but, according to Hilcorp leaders, it isn’t the result of anything particularly big or drastic the company has done. Rather, it has been “hundreds of fairly small projects” that have combined to add enough production to bend the decline curve quite abruptly, said Jill Fisk, senior asset team lead at Prudhoe Bay West for the normally tight-lipped Hilcorp. In some cases it has been as simple as returning idled equipment back to service. Production rates have been increased at drill sites across the expansive field as the company has brought more wells online, “not by drilling new ones, but by repairing and returning to production the ones we have,” Fisk said. Facility repairs will allow Hilcorp to return a drill pad to service at the Lisburne satellite field as well. “We now have a record number of wells online in the western satellite fields (of Prudhoe),” she said. Hilcorp assumed operations at Prudhoe Bay in July 2020, culminating the company’s $5.6 billion purchase of BP’s remaining Alaska assets. The Houston-based producer is scheduled to take over operations at the Point Thomson North Slope gas field by early next year as well, part of a separate, non-monetary agreement with ExxonMobil, the majority owner and current operator. Hilcorp also increased facility “uptime” at Prudhoe from 85% to 94% in its first year at Prudhoe, another incremental production improvement, according to Fisk. She spoke during a virtual edition of the Resource Development Council for Alaska’s annual conference on Nov. 17. Many facilities at the mature field have long acted as a de-facto limit on production capacity because of the need to process water and natural gas produced alongside the oil. To that end, Hilcorp has worked to increase daily water throughput by approximately 200,000 barrels per day year-over-year, according to Fisk, and additional projects to increase gas handling capacity have added roughly 15,000 barrels of new production per day. “When you can move more gas or move more water you can make more oil,” Fisk said. According to Hilcorp’s figures, the average daily oil production capacity at Prudhoe has been flat at just less than 290,000 barrels since the company took over the field. That followed years of capacity decline of about 4% per year. Raw production data from the Alaska Department of Revenue largely backs up the company’s numbers. The volume of oil produced and processed through Prudhoe Bay facilities averaged just over 304,000 barrels per day in October, up from an average of approximately 299,000 barrels per day in October 2020 and 271,000 barrels per day in 2019. While oil production volumes for a given month can be influenced by temperature differences and facility maintenance, the stabilized production trend is generally consistent across the calendar. “This achievement is due to the hundreds of projects executed all across the field by the hundreds of people all working towards the same goals,” Fisk said. Hilcorp resumed development drilling at Prudhoe this fall after drilling was stopped following the collapse of oil prices at the onset of the pandemic. The initial drilling is focused on Schrader Bluff reservoirs in the western satellite fields; the same formation targeted for enhanced production at the Milne Point field via polymer flooding techniques. “We will extend our experience and knowledge base from Milne into Prudhoe,” Fisk said. The company is now more than three years into a long-term reservoir flood experiment with U.S. Department of Energy researchers to test the effectiveness of polymer-based liquids to recover heavy oil from Milne Point. Hilcorp representatives have said as the project has progressed that early promising signs are translating into strong results. According to Fisk, the polymer test floods have economically produced about 630,000 barrels of oil over what could have been achieved with a traditional water flood of the Milne Point reservoirs. “(Hilcorp) is on track to deliver one of the most successful polymer floods in the world as far as current results go,” she said.   Cook Inlet gas On the other end of the state, Hilcorp will continue steady development of its Cook Inlet gas resources, according to Fisk, which includes full-time work for onshore and offshore drilling and well repair rigs into next year. Hilcorp is the primary supplier of natural gas to Southcentral region utilities. After a delay, gas production has commenced from the Seaview drill pad in Anchor Point and the company plans to drill an exploration well at nearby Whiskey Gulch soon, Fisk said. Hilcorp previously received approvals from state regulators to drill two oil and gas exploration wells over the summer from an onshore pad at Whiskey Gulch, just outside of the Seaview unit. Those wells, according to plans filed with the state, targeted Sterling, Beluga and Tyonek gas formations as well as underlying oil prospects. Fisk said Hilcorp is also working to replace pipelines associated with the Middle Ground Shoal platform to bring the offshore field back into production. Elwood Brehmer can be reached at [email protected]

Congressional Democrats using turnabout in budget bill to take back ANWR leases

Almost exactly four years after Republicans used a budget bill to get oil and gas leasing in the Arctic National Wildlife Refuge coastal plain through Congress by the slimmest of margins, Democrats are turning the tables. When House Democrats passed the $1.75 trillion Build Back Better Act Nov. 19 without any Republican support, they set the stage for what is shaping up to be a mirror image of the political melodrama centered around drilling for oil along ANWR’s north coast that played out in late 2017. Much like how the overall Tax Cuts and Jobs Act signed by former President Donald Trump had virtually no Democratic support, the Build Back Better budget reconciliation bill has been lambasted as a package of wasteful spending and job-killing taxes. Many Democrats have dubbed it the “human infrastructure” bill, building on the much more bipartisan $1.2 trillion Infrastructure Investment and Jobs Act President Joe Biden signed into law earlier this month. Both the 2017 tax law and the reconciliation bill headed for debate in the Senate contain the seemingly ill-fitting ANWR provisions to avoid the 60-vote Senate threshold and a filibuster, which almost assuredly would have killed the 2017 rider mandating lease sales and would probably do the same today to Democrats’ language to repeal it, with both sides holding slim majorities at the respective times. More specifically, Republicans, largely led by Sen. Lisa Murkowski, who then chaired the Senate Energy and Natural Resources Committee, in 2017 justified inclusion of the ANWR lease sale in the budget bill on the grounds that the sales would generate upwards of $1.1 billion over 10 years for the Treasury, according to the nonpartisan Congressional Budget Office. CBO analysts wrote in a report on the Build Back Better Act that the federal leasing provisions are too broad to generate budget estimates. Republicans have long sought to launch oil drilling in the area, citing the economic and national security boon of the estimated 10.4 billion barrels of oil and 8.6 trillion cubic feet of natural gas contained in the deposit, according to a U.S. Geological Survey analysis. Alaska’s all-Republican congressional delegation hailed passage of the ANWR lease sale legislation — via 51 Republican votes in the Senate — as a historic step towards economic prosperity in the state, while national Democrats and local environmental organizations derided it as a purely political move that would only help exacerbate climate change. But by using the budget process to pass the ever-contentious ANWR provision, Republicans set Democrats up to repeal it the same way. This time, the narratives have flipped, and with Vice President Kamala Harris acting as the tie-breaking vote in an otherwise 50-50 Senate, so have the political circumstances. The first lease sale held by Bureau of Land Management officials shortly before Biden took office in January netted $14.4 million in winning bids, most of which came from the state-owned Alaska Industrial Development and Export Authority, or AIDEA. Half of the lease revenue also went to the state of Alaska, per language in the 2017 tax bill. The members of the Alaska delegation and other backers of ANWR oil leasing largely blamed the political tug-of-war over the issue for deterring bidders. Industry sources, however, generally say the National Petroleum Reserve-Alaska on the other side of the North Slope is more attractive for companies. Politics aside, it is seen as more prospective geologically and importantly is closer to existing infrastructure. The ANWR language in the Build Back Better Act is straightforward; it would repeal the lease program provision from the 2017 tax bill and refund all lease-related payments to the lessees within 30 days after it is signed into law. As of early November, AIDEA had spent just more than $12.8 million on its leases, an amount that includes the initial bids, the first year of rent and administrative costs, according to spokeswoman Colleen Bryan. Murkowski said in a prepared statement following the House vote on the Build Back Better Act that Democrats’ resource provisions are some of the most partisan in the entire 2,400-page bill and will only eventually benefit Russia, China and OPEC nations. “In the midst of high energy prices and mounting inflation, responsible domestic (energy) production from Alaska, including the prospective 1002 area is needed more than ever. Despite that , House Democrats and the Biden administration are trying to throw it all away through an illegal taking that would fundamentally alter how U.S. leases have been administered for decades,” Murkowski said. “We will do everything we can to strike the ANWR provision — and others — from the reconciliation bill when it comes to the Senate.” The ANWR coastal plain is regularly called the “1002 area”, a reference to the section of the 1980 Alaska National Interest Lands Conservation Act, or ANILCA, that describes it. ANILCA established many of the designated federal areas in Alaska, including ANWR. Section 1002 of the exhaustive legislation called for the initial wildlife and hydrocarbon resource assessments and outlines the subsequent steps for oil and gas exploration and development if Congress were to approve it. Zack Brown, a spokesman for Rep. Don Young, wrote in an email after the House vote that in a “worst-case scenario,” the State of Alaska could sue the administration in an effort to maintain the existing leases. Murkowski also urged AIDEA leaders to sue federal officials ahead of the House vote. More generally, she has expressed a belief that some Democrats’ own misgivings over portions of the massive spending bill could ultimately sink it. AIDEA actually already sued Interior agency leaders and Biden Nov. 4 for using an executive order the day they took office to suspend the lease sale program they were directed by Congress to carry out. Justice Department attorneys have not yet responded to AIDEA’s complaint filed in the U.S. District Court of Alaska. Elwood Brehmer can be reached at [email protected]

Bering Sea fishermen press North Pacific Council on halibut bycatch

After years of deliberations, the North Pacific Fishery Management Council is inching toward a decision on whether to tie halibut bycatch limits in the Bering Sea to abundance indices. The action, known formally as Bering Sea-Aleutian Islands halibut abundance-based management, or ABM, is intended to reduce bycatch of halibut in the Bering Sea by the Amendment 80 trawl fleet when the fish stocks are lower. The Amendment 80 fleet is a group of catcher-processor vessels that are allocated a portion of groundfish harvest. Each year, the fleet is bound to a hard limit on how many halibut they can take as bycatch, known as the prohibited species catch, or PSC limit. That limit is fixed, however, while halibut stocks and the allowable catch for the directed fleet vary. Over the last six years, the council has been considering whether to instead adjust the PSC limit to fluctuate with halibut abundance indexes based on two surveys, effectively pushing more of the halibut available for harvest to the directed fishery fleet. Depending on which of four alternatives the council chooses — from no action to varying changes —the effects could range from a 45% cut to a 15% increase, depending on abundance. Chris Woodley, executive director of the Groundfish Forum, a trade association representing members of the Amendment 80 fleet, said the draft environmental impact statement provided to the council points out that a shift to ABM would overall be detrimental economically. “There are a number of things the Groundfish Forum is concerned about — the primary one being that the draft EIS is very clear that there is going to be little to no benefits to the halibut stocks or to conservation in general and that the net (economic) benefit to the nation is expected to be negative,” he said. “That’s very up front and very clear.” The issue has been controversial from the beginning, in part because of the cost to the trawl fleet. The National Marine Fisheries Service estimates that cost to the Amendment 80 fleet would be between $68 million and $138 million, depending on fishing variables and the alternative implemented. By contrast, the draft EIS estimates that the economic benefit to the directed halibut fleet would be between $1.1 million and $2.2 million. There are about 835 crew positions in the Amendment 80 fleet, compared to about 400 in the directed fishery for halibut in the region. Because the loss is so large and the number of people relatively small, the reduced revenue would pencil out to about a $30,000 loss per crew position in the Amendment 80 fleet under one alternative. “There’s virtually zero upside to the directed fishery and a huge amount of downside to the Amendment 80 fishermen,” Woodley said. Though the review concludes that the net benefit of implementing abundance-based management would be negative economically, both the social and economic impacts are considered. Diana Stram, a senior scientist with the NPFMC who worked on the document, said the statement about the net benefits is largely an economic one. The council is bound to consider the 10 national standards under the Magnuson-Stevens Fishery Conservation and Management Act, which include standards like conservation, minimizing bycatch to the extent practical and minimizing costs. Stram said the council must balance its decision across those standards. “Certain actions are going to be more related to one of the national standards than others,” she said. “What we do as analysts in the document is we try to provide some narrative to help the decision-makers understand how this plays into their actions, but the onus is on the council if one alternative is balancing one standard higher than another.” None of the four alternatives have a significantly different impact on the spawning stock biomass for halibut in the Bering Sea, according to the draft EIS. That’s because the International Pacific Halibut Commission manages the halibut stocks as well and sets the catch limits based on its survey for sustainable harvest levels, Stram said. Whatever the council decides to do would only affect the amount of fish available for harvest, not the spawning stock. Some fishermen in the Bering Sea region are pushing for the council to enact the motion both out of economic and sustainability concerns. The directed halibut fleet in the Bering Sea is one of the economic mainstays for coastal communities in Western Alaska. Halibut is also a critically important subsistence resource in many of the communities of the Aleutian Islands and Bering Sea, particularly as other stocks like crab decline. St. Paul Island is one of those communities. The island, with a population of about 480 people, depends on subsistence foods and commercial fishing. Halibut is a staple there, and the community has a vested interest in the long-term sustainability of the stock, said Lauren Divine, the director of the ecosystem conservation office for the Aleut Community of St. Paul. None of the alternatives are enough to do what the community feels is necessary, but they want to see something happen, she said. A number of other halibut-dependent coastal communities have already stopped fishing for halibut, in part because of the decline connected with the static bycatch cap, Divine said. The community of St. Paul is home to a Community Development Quota group, the Central Bering Sea Fishermen’s Association, and people on the island do depend on fishing jobs, but it’s not just about the economics for community, Divine said. “From an Indigenous community perspective, it’s not just about money,” she said. “It’s a way of life people don’t want to give up.” Heather McCarty, a fisheries analyst who works with the Central Bering Sea Fishermen’s Association, said the group is advocating for Alternative 4, but feels for a number of reasons that the draft EIS doesn’t provide enough information for the council to make a decision. For one, she said Alternative 4 is the only option that meets the council’s purpose and needs statement for the project. For another, the draft EIS focuses on the perspectives of the CDQ groups, which may not always be the same as the perspectives of the communities. The group supports the action because it would help spread out the burden of conservation to the trawl fleet, she said. Because the bycatch cap is static, in some years, the trawl fleet might be able to take nearly all the halibut available for harvest. “The directed fishermen bear the entire burden of conservation,” she said. Divine said the Aleut Community of St. Paul also finds Alternative 4 preferable. “Alternative 4 isn’t enough, but it is a good start as we move into abundance-based management away from static caps,” Divine said. “But I think this is going to be an ongoing (issue).” Stakeholders on both sides of the discussion agree that the EIS has some information holes in it that need to be addressed before the council uses it to take action, including on topics such as the effects of climate change on fish populations. The council is expected to take action on BSAI halibut abundance-based management at its upcoming meeting beginning Dec. 8. Both McCarty and Divine said the communities aren’t advocating for the trawlers to be completely closed, but for there to be a more equitable division. National Standard 9 of the MSA requires the council to reduce bycatch to the extent practicable. The Amendment 80 fleet has taken multiple steps to reduce halibut bycatch as more attention has turned to the issue. Since 2007, the fleet’s bycatch is down by 49%, the vessels have reduced their bottom contact by an estimate 90%, and are communicating about areas with higher halibut bycatch to avoid fishing there. They are also using excluders, deck sorting, avoiding night fishing and using small tows, among other efforts. In the past few years, the fleet has encountered high numbers of halibut on the grounds, such as in 2019, when record-breaking warm waters affected fisheries all over Alaska. Woodley said one of the fleet’s concerns is that the 2019 conditions will become a new normal, so the fleet wants more flexibility within bycatch regulations to adapt. “We are committed to continued halibut bycatch reduction, but with halibut bycatch already so low and with all current tools fully utilized, future efforts will likely result in only small incremental improvements.” Reach Elizabeth Earl at [email protected]

What does thriving look like for entrepreneurs? Alaska Startup Week 2021 emphasizes community and diversity

When people talk about startups, the image of the lone, intrepid founder is often the first thing to come to mind. But as a first-time participant in Startup Week, I was amazed by the strength, resourcefulness and diversity of the Alaskan entrepreneurial community. From Nov. 8 to Nov. 12, organizers from nine different sites and hundreds of attendees gathered online and in-person to celebrate Alaska Startup Week 2021′s theme of “North to the Future: Start Up, Pivot, Thrive.” Through Zoom meetings, numerous emails and impromptu phone calls, I got to know — and learn from — incredible investors, ecosystem builders, professionals across a variety of industries, and, of course, entrepreneurs. What does Startup Week mean for the volunteers who devoted their energy, talents and countless hours to it? Other than an embodiment of the “give first” mindset that powers the Alaska startup community, it is also “a spotlight on our entrepreneurial and innovation ecosystem, its successes, and its challenges across the state,” according to Startup Week co-chair Melanie Lucas-Conwell. As manager for the 49th State Angel Fund, Lucas-Conwell frames the significance of Startup Week from an economic perspective. “This is a time to listen to Alaskan entrepreneurs’ experiences and understand where the 49SAF can bring the most value,” she said. “For government entities, this is a celebration of economic development impact; individuals are looking for new ways to generate income and create jobs, coming together and sharing ideas on how to improve the world around us.” At the same time, this week of programming is an opportunity to recognize the exciting changes taking place across the state. “The types of events being hosted and the variety of attendees also show that Alaska’s industries are diversifying and becoming more sophisticated, such as manufacturing, mariculture, and equitable business practices,” Lucas-Conwell said. For Carrie Shephard, community engagement coordinator at Cook Inlet Housing Authority, serving as co-chair of Alaska Startup Week 2021 was a “proud, full-circle moment” that reflected her personal journey. Just as she grew from a shy business founder into a much more confident, connected and savvy entrepreneur, Startup Week evolved from humble beginnings into a “full-fledged celebration of entrepreneurship.” In 2015, while working at The Boardroom in downtown Anchorage, Shephard stumbled upon the kickoff of Anchorage Startup Weekend. She was immediately drawn to the palpable excitement of the gathering. When a committee member asked her if she wanted to join, Shephard said “yes,” and was given “a life-changing introduction to a different approach to business.” Until that moment, Shephard recalled, “I only knew how to find a gap in the marketplace and fill it. My business degree-provided roadmap looked like this: Start a small business, bootstrap until profitable, and one day sell it. After that weekend, though, I learned startup methods: the interactive process, customer discovery, mind-blowing options to integrate technology for scalable solutions, and how to be investor-worthy. It completely changed my perspective on how I saw the economic landscape. It changed how I saw the opportunities for myself as an entrepreneur.” Anchorage lead organizer Sarah Katari echoes the transformative quality of Startup Week. The founder of marketing agency Katari Creative is inspired by “everything that’s helped me become a successful young entrepreneur: A community of supportive people who continue to show up and show out for their startup community, an honest recognition of the lifestyle that isn’t easy nor for everyone, and spaces that foster real conversations about topics that are relevant and important.” Seeing community as the key to success, Katari is motivated by the commitment of Startup Week organizers to give back in turn. “Being a part of Alaska Startup Week for however many years to come will always be an easy ‘yes’ for me. Because it means investing the only resource we all have limited amounts of — time — into the place I call home,” Katari said. But there is more than one way to give back and build community. Peter Webley of the Center for Innovation, Commercialization, and Entrepreneurship noted the importance of a multi-pronged approach. In addition to giving founders a platform where they can share lessons learned, Center ICE featured groups that provided resources for entrepreneurs and highlighted startup companies and small businesses, providing them with “a venue to not only talk about their experiences, journeys, and new growth, but also to provide advice to those attending and watching afterwards.” Event hosts expressed similar sentiments on the importance of supporting local communities. Dorsey & Whitney LLP attorneys Jill McLeod and Siena Caruso presented a comprehensive webinar on the legal issues that founders should consider when forming a business. “We are grateful that our firm supports community service and leadership through partnerships with local organizations,” Caruso said. “It is intensely gratifying and exciting to sponsor events like Pitchfest to help start and grow businesses here in our own community. We look forward to continuing to support our local entrepreneurs in the years to come.” Dorsey partner McLeod additionally praised the “energy and breadth” of Startup Week offerings, noting that “[the programming] is a critical element for the success of Alaska’s incubator ecosystem.” Beyond a diverse range of topics, a major focus of Startup Week 2021 revolved around looping diverse communities into the discussion through outreach and events on equity and inclusion. Jasmin Smith, the founder of The Business Boutique and BabyVent, said that “by definition, Alaska is a diverse state.” Despite this, however, diversity “is not in the places that we should see it the most,” she said. This serial entrepreneur and community activist sees supporting BIPOC founders as “mak(ing) space for their experiences, support(ing) their needs and ideas for their community, and ensur(ing) equal disbursement of resources and capital in a way that allows BIPOC founders to assess the best usage for their businesses and cultural communities.” So how does one get involved in Startup Week? Becky Strub, founder of Alaskan Owned Apparel, has a suggestion for volunteers and entrepreneurs: “Please reach out to participate in 2022! Step outside your immediate community and you will find wide open, welcoming spaces in Alaska’s business world.” Tiana Wang supports entrepreneurship at the University of Alaska Center for Economic Development through the Alaska Fellows Program. She has worked in a variety of roles, from editorial acquisitions at a publishing house to copywriting at a content marketing firm, and holds a B.A. from Yale as well as a certificate in mediation from California Lawyers for the Arts.

Congress must not break trust with Alaska and its Native people

The United States purchased Alaska from Russia in 1867, but that wasn’t the end of the transaction. Just more than a century later, and nearly a decade after Alaska became the 49th state, what would turn out to be the biggest oil field in North America was discovered in 1968 at Prudhoe Bay on the North Slope. The find, and the need for an 800-mile pipeline to develop it, gave new urgency to settling the Native land claims not only along the proposed corridor but for all of Alaska. Negotiations that had progressed in fits and starts throughout the 1960s culminated 50 years ago with the passage of the Alaska Native Claims Settlement Act in 1971. It included the selection of 44 million acres and nearly $1 billion for the regional corporations created in the bill. Some of the promises of ANCSA have been kept; others have yet to be fulfilled. Right now in Congress, Democrats are trying to break one of them in their proposed budget reconciliation bill. A promise for economic freedom for the Native Village of Kaktovik was made by Congress under ANCSA through the formation of the Kaktovik Iñupiat Corporation. The first step in keeping that promise was finally fulfilled 46 years later through the 2017 Tax Cuts and Jobs Act. The Democrats’ bill would repeal the 2017 provision requiring lease sales to be held for the coastal plain of the Arctic National Wildlife Refuge, which was explicitly set aside for development in the 1980 Alaska National Interest Lands Conservation Act, and it would revoke the leases purchased by the State of Alaska this past January in the first of those sales. On his first day in office, within the executive order that canceled the permit for the Keystone XL Pipeline was another section ordering a moratorium on all activity within the ANWR coastal plain to effectively nullify the legal lease sale that had occurred earlier that month. In the process, the actions of Biden and congressional Democrats will not only expand our trade deficit, end our energy independence and weaken our national security, they are robbing Alaskans of economic opportunity and breaking trust with the Native landowners by denying them potentially billions of dollars in royalty income. The Native Village of Kaktovik, the only community inside the coastal plain, was actively involved in the process of developing the environmental impact statement for the Coastal Plain Oil and Gas Leasing Program. The Biden administration’s stated goal is “strengthening Tribal consultation,” yet it tossed away this consultation with the only Tribe within the coastal plain because it doesn’t fit their narrative. Kaktovik and Voice of the Arctic Iñupiat support the leasing program, and are frustrated by recent decisions to undermine their participation in Tribal consultation and government-to-government engagement. The actions by Biden and congressional Democrats to undo the progress toward fulfilling federal obligations are not only wrong, they are an injustice. Their actions are also out of step with Democrats’ goals to reduce carbon emissions. With prices at a seven-year high, we are importing more oil from Russia than any time in U.S. history, according to the most recent data from the Energy Information Administration. Average imports from Russia per month so far in 2021 are 22 million barrels, which is 34% higher than 2020, and 18% greater than the previous record for a year set in 2010 of 18 million barrels per month. We’ve already imported more oil from Russia this year than we did in all of 2017 or 2018. Not only are we enriching President Vladimir Putin and his cronies in the oil business, we are supporting their production from the very Arctic the Democrats are trying to lock up here in Alaska. Thirty percent of the oil production for state-owned Gazprom comes from Arctic fields and there are multiple exploration and development projects in the Russian Arctic both on and offshore that Americans are now financing at the pump thanks to Biden administration policies supported by his friends in Congress. On top of this, recent court decisions have delayed North Slope projects under rulings that require the modeling of downstream carbon emission impacts, yet our own government isn’t holding itself to the same standard through imports of foreign oil. Why not? Overlooked or ignored is the fact that the practices of flaring or venting natural gas to produce oil are illegal under state law. In 2020 the Climate Leadership Council determined that North Slope energy production is “carbon cheap” and has fewer emissions than the Lower 48 and global averages. Keeping its trust with the people of Alaska is not only required of the federal government, but encouraging cleaner U.S. production that benefits those closest to it is in alignment with all of our goals for environmental, social and economic justice. The Voice of the Arctic Iñupiat, Kaktovik Iñupiat Corporation, the Native Village of Kaktovik and the State of Alaska are unified in the defense of our rights under federal law guaranteeing self-determination and in turn to provide economic opportunities for the people we represent. These rights would be erased under the current proposed budget reconciliation bill and Department of Interior actions, and we urge members of Congress to reject these destructive policies in the name of Indigenous rights, environmental justice and racial equality. Mike Dunleavy is the 12th Governor of Alaska. John Hopson Jr. is the president of Voice of the Arctic Iñupiat, which was formed in 2015 as a 501(c)(4) nonprofit corporation to create a communication network among Arctic Slope communities to establish a unified voice for our region and people. Its members include the Native Village of Kaktovik and Kaktovik Iñupiat Corporation.

Infrastructure bill celebrated for priorities ranging from climate change to mining

A significant reason the landmark $1.2 trillion infrastructure bill has garnered as much attention as it has is likely the broad range of interests it appeals to. It has support not only from the usual backers of a traditional infrastructure bill, such as construction trade groups and labor unions, but also from state and national-level conservation and resource development organizations that are often pitted against each other. In an hour-long press briefing before President Joe Biden signed the Infrastructure Investment and Jobs Act on Nov. 15, Alaska Republican Sen. Lisa Murkowski said the bill received strong bipartisan support in the Senate because it addresses many of the sincere and fundamental needs of the nation and Alaska. “It will be an extraordinary vehicle to make this country more competitive, and really a healthy and stronger country,” Murkowski said. Murkowski was among the bipartisan group of 10 senators who crafted the framework of the bill over the summer, partly in direct negotiations with the president. Layered between the many sections of the 1,000-plus-page bill, which provides hundreds of billions of dollars for road, bridge and port repair, are provisions that fund clean energy production and storage research, as well as others that seek to shorten the time to permit certain mines and other large-scale projects. Economic development advocates have lauded the bill for the large sums of money that will translate to construction jobs and greater broadband access, among other items. Alaska Chamber CEO Katie Capozzi estimated the bill could bring more than $5 billion to Alaska. Steve Cohn, Alaska director for The Nature Conservancy, said he believes many aspects of the bill “frame the importance of land and water as part of our nation’s infrastructure, in some ways as important as our roads and bridges.” Funding for improved — or in some communities, first-ever — drinking and wastewater systems across much of rural Alaska and similar programs will not only help improve public health, but also modernize infrastructure against the effects of climate change, according to Cohn. “We’re seeing the direct effects of climate change on our infrastructure broadly in Alaska, and that’s certainly very prominent in rural communities,” he said. More than $180 million will be directed to water infrastructure projects in Alaska over five years through the state’s clean water and drinking water fund programs, according to Murkowski’s office. An additional $230 million is authorized to similar Environmental Protection Agency programs for Alaska Native villages. More broadly, the bill contains $3.5 billion for Indian Health Services to clear all of the sanitation facility projects off of its current nationwide list, a line item Murkowski said she pressed for. “When you think about basic infrastructure, I think we would all say it’s pretty basic to have clean water and sanitation,” Murkowski said. Also, along with directing nearly $5 billion to orphaned oil and gas well cleanup nationwide — wells drilled decades ago by the Navy have been a longstanding issue in the National Petroleum Reserve-Alaska on the North Slope — more than $3.3 billion will fund wildfire mitigation efforts on federal lands. Another $1 billion is set aside to replace culverts that inhibit fish passage, a simple but significant issue in parts of Alaska, Cohn noted. He emphasized that he sees the legislation as a first step toward continued investments in the environment and countering climate change. ”It’s very heartening to see there is bipartisan support to start to address the impacts of climate change,” Cohn said. Murkowski has been among the lawmakers that have insisted successful, widespread implementation of clean energy technologies will also require additional domestic mineral production, particularly for minerals such as graphite, which is a primary component of modern lithium-ion batteries, among others. To that end, the bill makes critical mineral projects eligible for Department of Energy loan guarantees and makes permanent the “FAST-41″ permitting dashboard for some large projects. Established with the passage of the 2015 surface transportation reauthorization, the FAST-41 process aims to cut the permitting time for major infrastructure developments by directing federal agencies to coordinate more closely on the timing of permit evaluation. The process has cut the time to complete the environmental impact statement process for eligible projects from an average of about 4.5 years to 2.5 years, according to Murkowski. She noted that some of her provisions to improve the efficiency of permitting for critical minerals projects — of which there are several across Alaska — made it in the bill as well. “Recognizing that you can’t build anything until you get the permits, it was critical to make sure we had a process for expedited permitting,” Murkowski said. During a Nov. 11 videoconference presentation to the Associated General Contractors of Alaska, Alaska Miners Association Executive Director Deantha Skabinski said codifying in law permitting reforms typically implemented as regulations should help development sponsors keep permitting agencies on track. “When it is in law it is certainly easier to take people to court and hold agencies’ feet to the fire,” Skabinski said. “We’re hopeful it’s an indication (lawmakers) are aware how hard it is to permit things that are funded in the infrastructure bill.” Hydro in reconciliation package While the Infrastructure Investment and Jobs Act also contains line items for hydropower and marine energy research, Murkowski forecasted that a potentially important piece of legislation she has been working on with Washington Democrat Sen. Maria Cantwell to increase the availability of tax credits for hydro projects could make it into the much more partisan budget reconciliation package. Murkowski, like nearly all congressional Republicans, has been highly critical of the reconciliation bill House Democrats have been crafting much of the year for its price tag, which has floated between roughly $2 trillion and $4 trillion, and said in a prior interview with the Journal she wouldn’t vote for it even with her hydro legislation inside. She most recently said the expanded tax credits for certain investments in hydro facilities, including those owned by nonprofits and local governments, has the support of Oregon Democrat and Finance Chair Sen. Ron Wyden. Cantwell and Murkowski’s original hydro legislation is backed by several national conservation groups as well as the National Hydropower Association. Murkowski said given Wyden’s backing, she believes the hydropower tax credits could also make it through on other traditional year-end legislation if the reconciliation bill falters as she expects. “I believe (the reconciliation bill) is fraught with enough challenges, certainly the scope, certainly the cost, certainly the ‘pay-fors,’ but if that bill does not move forward we will have a tax provision at the end fo the year, which we almost always do, and this could be something that is included,” she said of the hydropower rider. Elwood Brehmer can be reached at [email protected]

North Slope explorers prep for winter work as Oil Search waits a little longer on Pikka

A couple small explorers are planning wells on the periphery of the North Slope this winter. Meanwhile, Oil Search leaders are going to wait a little longer to pull the trigger on their multibillion-dollar project. Jade Energy Alaska is preparing to drill an exploration well into a corner of the Point Thomson gas unit otherwise controlled by ExxonMobil, according to documents recently submitted to the Division of Oil and Gas. That well was stalled by logistical challenges nearly two years ago. Point Thomson sits on the eastern edge of state land on the North Slope and is adjacent to the northwest corner of the Arctic National Wildlife Refuge. The Jade-1 well is planned for the southeast corner of the unit, just more than a mile from the Canning River and the eastern boundary of ANWR. Leaders of Anchorage-based Jade Energy first filed with state regulators in 2019 to drill the well in early 2020. However, the work was postponed in August 2019 after it was determined the seafloor would need to be dredged around the Point Thomson service pier to accommodate a barge carrying Jade’s contracted drilling rig. The company then set a drilling target for the 2021-22 winter exploration season, according to documents filed with Oil and Gas at the time. The Jade well is set to be drilled to a true depth of approximately 11,000 feet with multiple, stacked conventional light oil targets in the Brookian geologic sequence. Similar oil is found in “over-pressured reservoir sands found throughout the (Point Thomson Unit) and nearby Badami Oil Field,” Jade’s Plan of Operations application states. A Jade manager did not respond to questions in time for this story. Company leaders expect to start the work by about Dec. 1 if their operations plan is approved. Jade entered into a farm-out agreement with ExxonMobil in 2018 to develop the Brookian oil prospects in Point Thomson. The agreement gave Jade a 62% interest in the Point Thomson “Area F” lease. The company acquired 3D seismic data from Area F during the 2017-18 winter. BP drilled two exploration wells in the area in the mid-1990s known as the Sourdough wells and in 1997, BP and Chevron issued a press release stating they had confirmed approximately 100 million barrels of recoverable oil in the area. However, the economic viability of the prospect was unclear at the time. The $4 billion Point Thomson development that ExxonMobil finished in early 2016 is focused on natural gas; the field is estimated to contain upwards of 8 trillion cubic feet of high-pressure natural gas. As a result, it is expected to be a lynchpin for any large gas export project. To the south and west, London-based Pantheon Resources is continuing to hunt its own Brookian targets in a sparsely explored area that so far has yielded promising results, according to company leaders. Pantheon’s operating subsidiary, Great Bear Pantheon, hopes to start drilling the Theta West-1 well about 20 miles south of Prudhoe Bay by Jan. 18, according to the company’s plan of operations. The chosen location for the Theta West well is 10.5 miles northeast of the Talitha-A well drilled by Pantheon last winter, near the confluence of the Kuparuk and Toolik rivers. It would be drilled to a depth of approximately 9,300 feet with the intent of appraising multiple targets in the Brookian sequence there, according to the plan. Pantheon leaders announced last May that two reservoirs intersected near the bottom of the Talitha-A well likely combine to hold 1.4 billion barrels of recoverable light oil. Technical Director Bob Rosenthal said in a prior interview with the Journal that the promising results from the Talitha well transforms the prospect called “Theta West” within the company to an oil project. Pantheon purchased the assets of former Anchorage independent Great Bear Petroleum in early 2019 and has built on the exploration Great Bear previously did in the area. Industry sources who have followed the Great Bear-Pantheon work have generally said it is very probable the company is on a significant oil column, but the porosity and permeability of the rock formations — and the ability to easily get the oil out of them — will most likely determine the ultimate size and success of the Theta West project. Pikka decision delayed Oil Search Alaska employees are likely to spend less time building their large Pikka oil project and more time getting to know their new bosses over the coming months. The 2022 Pikka Unit Plan of Development filed by Oil Search with the Division of Oil and Gas states that the company will continue maintenance work on previously installed infrastructure at Pikka in 2022 and a final investment decision on the first, $3 billion phase of the North Slope development won’t be coming until next year, either. Leaders of Papua New Guinea-based Oil Search and Australian Santos Ltd. in September announced a merger that will give Santos shareholders majority control of the new company. The deal is tentatively scheduled to close in early December. Representatives of Oil Search Alaska in recent months have acknowledged challenges in funding Pikka despite significant appraisal drilling and its close proximity to other infrastructure, but also continued to say they hoped to sanction the project yet this year. If construction of Pikka is approved next year, development drilling is expected to commence in 2023 with first oil in 2025, according to the development plan. Oil Search bought into Pikka in the fall of 2017, when it agreed to an $850 million deal with then-operator Armstrong Energy and a silent minority owner to take a 51% stake in the project over two payment tranches. Repsol remains a 49% working interest owner in the project. Elwood Brehmer can be reached at [email protected]

Lean OPEC coffers, tenuous market conditions buoy oil

Though California motorists paying an average of $4.68 for a gallon of regular unleaded this week may not believe it, the world is not short of oil. Members of the Organization of the Petroleum Exporting Countries have plenty of oil in the ground, and most could boost their output relatively quickly — if they wanted to. But it’s not in their financial interests to oversupply the market and knock down prices, at least not until high prices threaten demand. Russia, a leader with Saudi Arabia of the OPEC+ alliance, also could send more oil to market, though oil and gas are the biggest moneymakers for the country’s budget and President Vladimir Putin likes high prices. U.S. producers, which scaled back their investment and output during the 2014-2016 price crash and then executed even more cutbacks during the worst of the pandemic-induced collapse last year, are moving cautiously to drill wells. They all have their reasons to hold back, none of which make it easier for energy consumers who have to pay the costs at the pump, heat their home or office, run their factory or buy any of the goods made from oil and natural gas. And it’s certainly not easier for government leaders who know that high energy costs can rile up their constituents. So while all the players could add to global oil supplies, they are instead enjoying the high prices of $80-plus per barrel. Some need to keep the cash to rebuild their finances — and their shareholders’ confidence — after last year’s devastating losses, rather than write checks to invest in future production. And as the world moves toward a cleaner-energy future, some are hesitant of how much the oil and gas industry should invest in long-term projects. It doesn’t help encourage producers to spend more on new oil when the U.S. Energy Information Administration and OPEC both forecast the world will turn to a supply surplus sometime next year, pushing down prices. “We forecast that global oil stocks will begin building in 2022, driven by rising production from OPEC+ and the United States, along with slowing growth in global oil demand,” the EIA said on Nov. 9. The agency said rising global production and slower demand growth could cut down the benchmark U.S. oil price to as low as $62 a barrel by the end of 2022. The Paris-based International Energy Agency also sees supply coming back into balance and prices easing next year as OPEC+ alliance members continue their gradual return of production. OPEC+ dramatically cut output in 2020 and has been slowly restoring the flow since late last year, despite calls from around the world — including from President Joe Biden — to open the taps wider and sooner. The alliance members don’t plan to fully restore production until late spring 2022. Oil ministers from Saudi Arabia, the United Arab Emirates, Nigeria and other producing nations have publicly worried that another wave of COVID-19 infections and a corresponding economic slowdown could easily knock down energy demand — so why push more oil into the market now? OPEC+ is cautious because it believes the oil market will switch to a surplus in early 2022, “due to demand softening,” UAE Energy Minister Suhail Al-Mazrouei said Nov. 8 at the Africa Oil Week conference in Dubai. There are still COVID-19 flare-ups, “so we have to be careful,” he said. The collective response from OPEC+ is “go slow” until they are certain a full economic recovery from COVID-19 is underway. Another, even more fundamental reason to go slow is that several OPEC members, including Angola, Nigeria and Kuwait, are unable to meet even their current allocations because of underinvestment in operations and exploration. It appears the world can’t do much but wait on the oil-producing cartel’s monthly boost in production — 400,000 barrels per day added each month, a slow drip of less than 0.5% of global oil demand — or hope that the economic stress of high prices on consumers will push OPEC+ to deviate from its plan and fill more tankers. Just last week, OPEC’s monthly market report said global demand for oil this year will come in 160,000 barrels a day less than earlier forecasts. It’s not enough to cause a supply reaction, but a reminder that price matters. OPEC+ nations are scheduled to meet again Dec. 2. Meanwhile, U.S. shale producers could help boost supply. Output from North Dakota’s Bakken shale basin is still down 400,000 barrels per day from its pre-pandemic peak of 1.46 million barrels per day, but it’s up almost 250,000 barrels per day from its May 2020 pandemic low. Rystad Energy, an Oslo-based research and consulting business, said last week that strong prices are driving U.S. oil production to its highest level since March 2020, the start of the pandemic-induced demand collapse. In the Permian Basin of Texas and New Mexico, Rystad expects production to average just more than 5 million barrels per day this month, the most in data going back to 2015. Overall, U.S. oil production is still below its 2019 peak, but there are signs that some companies are spending money again. ExxonMobil and Chevron last month disclosed plans to expand drilling in the Permian. Company executives reported in earnings calls that they could each add two drilling rigs to their West Texas operations and boost production. Exxon’s third-quarter Permian output rose about 30% above the prior period, CEO Darren Wood said on the call. Chevron’s Permian production could rise to 1 million barrels per day from its current level of 600,000 barrels per day, the company said. Though not all that oil will stay in the country. The U.S. exported about 3 million barrels of crude oil a day the first week of November, according to federal data. That’s almost one-quarter of all U.S. crude production. In addition, 2 million barrels per day of gasoline and fuel oil left the country the first week of November, while U.S. motorists are paying the highest prices at the pump since 2014. Most of the gasoline is going to Latin America, with Mexico and Brazil being the big buyers. Markets are complicated. It shows up at the pump. Larry Persily can be reached at [email protected]

Campaign regulators, Legislature must restore strong contribution limits

What are Alaskan voters to make of the recent advisory opinion that was issued by Thomas R. Lucas, campaign disclosure coordinator for the Alaska Public Offices Commission? That advisory opinion was issued in response to a request for APOC guidance regarding what limits, if any, still exist on a person’s ability to make campaign donations in Alaska. Uncertainty regarding this issue was created by the recent 9th Circuit Court of Appeals decision in the Thompson v. Hebdon case, where a two-judge majority of a three-judge panel struck down as unconstitutional three provisions of the Alaska Statutes that placed caps on donations to the campaigns of candidates for political office. Alaska Attorney General Treg Taylor chose not to protest the removal of all individual spending limits. These caps on campaign donations are strongly supported by the people of Alaska. These limits were enacted into law by a direct vote of the people, through a 2006 initiative. That initiative was backed by 73% of voters. The Alaska Public Research Group (AKPIRG) helped to run that successful ballot initiative. Polling since then has consistently shown that large majorities of Alaskans continue to support strict limits. And it’s not hard to see why these limits are so important. Without campaign spending limits, the ideal of one person, one vote is no longer really true. Instead, whoever has the most money has the most influence. This increases the power imbalance, discouraging decision-making in the best interests of all Alaskans in exchange for a hyper-inside-baseball cronyism that benefits only the wealthiest. We should not create further incentives towards corruption. Unsurprisingly, some entrenched politicians have worked to weaken these campaign donation limits. The 2006 initiative was only necessary because the Alaska Legislature had voted to loosen the caps on donations in 2003. It was an amazing display of political determination and organizing that allowed the people to restore the previously existing stricter caps just three years after the Legislature had weakened them. Politicians who rely upon large donations from small numbers of donors are often likely to undermine the desire of the people for strong limits. So now, in his advisory opinion, APOC’s campaign disclosure coordinator seeks to restore the much weaker campaign contribution limits that had been enacted by the Alaska Legislature in 2003, and that had been overwhelmingly rejected by the people of Alaska. On one hand, it is important that APOC establish a spending cap. However, we do not think these proposed limits are the ones that will serve Alaska best. This advisory opinion is not an official decision of APOC acting as a commission, and these issues will need to be sorted out by the commission and by the Alaska Legislature. We are writing on behalf of organizations that support clean and fair elections. We believe that the will of the Alaska people regarding campaign donation limits should be restored to the greatest extent possible, and that this can be done by simply taking the campaign limits that were in the 2006 initiative, and then indexing those limits to the rate of inflation. Using the Alaska Urban Consumer Price Index, for example, a contribution limit that was $500 in 2006 would be a limit of $619 as of the first half of 2021. While no one can be 100% certain what the courts will do in the future, we believe that this approach would do the most to preserve the limits that were established by the Alaska voters, while still having an excellent chance of surviving constitutional review. The members of APOC will have their next regular meeting on Jan. 26, 2022, although APOC chair Anne Helzer said the commission will likely hold a special meeting before then to decide whether to approve the new proposal. The Alaska Legislature will be meeting in its next regular session starting on Jan. 18, 2022. Both bodies will have the opportunity to address these issues, and to try to restore the protections of the 2006 initiative to the greatest extent possible. The people of Alaska have the opportunity to communicate with both bodies, and to support the restoration of our strong campaign donation limits. If they fail to act, it will be up to us to once again make use of the initiative process to restore fair and reasonable limits on campaign donations in Alaska. Veri di Suvero is the Executive Director of the Alaska Public Interest Research Group (AKPIRG). AKPIRG is a non-partisan 501(c)3 researching, educating, and advocating on behalf of consumers and the public interest. Beverly Churchill is a 4th generation Alaskan who has worked in Alaska’s social services for over 30 years and is a founding member of Alaska Move to Amend.

Revised production plan improves prospects for Interior gold mine

Years of fieldwork and a wholesale review of prior efforts have helped the owners of the large Livengood gold prospect draft a plan that should yield slightly less gold but at a lower cost, according to the latest analysis of the Interior Alaska development project. Sustained strong gold prices aren’t hurting, either. Leaders of Vancouver-based International Tower Hill Mines Ltd. released the results of a pre-feasibility study earlier this month for an open-pit mine that would produce more than 6.4 million ounces of gold from the deposit. The plan for less overall gold production at Livengood improves the project’s economics by actually scaling up production, but doing it over a shorter mine life. The revised operational strategy calls for mining approximately 316,000 ounces per year over 21 years, compared to a 2016 plan that called for producing 294,000 ounces per year over 23 years for nearly 6.8 million ounces of gold overall. The 2016 study, conducted when gold prices were at a near-term low point in the $1,100-per-ounce range, concluded with an all-in cost of $1,247 per ounce. Figures in the most recent study compute to an all-in cost of $1,171 per ounce of gold from Livengood. Gold is currently trading at around $1,800-per-ounce range after nearly hitting $2,000 per ounce early in the pandemic. International Tower Hill CEO Karl Hanneman said the mine has “modest value” at current prices. The Livengood gold prospect is located on Alaska Mental Health Trust Authority land about 70 miles north of Fairbanks along the Elliott Highway. The amount of royalty revenue from the mine to the trust would largely dependent on gold prices during production, but officials for the Trust Land Office estimated in 2016 the mine could be worth as much as $430 million to the trust. International Tower Hill estimates Livengood would support roughly 1,000 jobs during several years of construction and 350 permanent operations positions. While being on the road system limits some of the development and logistics costs incurred by more remote mines in Alaska, Livengood and other mines in the state are susceptible to changes in oil prices because of the amount of diesel fuel used in mine operations. International Tower Hill leaders have previously acknowledged the project’s exposure to oil prices. Hanneman said in an investor call the company has greatly increased its understanding of the Livengood ore body since the last evaluation. Once it was determined the deposit could handle increased mining in the early years of development, the company settled on larger milling equipment “to maximize throughput at optimum grind,” Hanneman said. The larger equipment results in initial capital expenses that would likely be just more than $1.9 billion, according to the study, which is nearly 5% greater than the 2016 plan. However, expectations for lower sustaining capital costs over the life of the project contribute to the lower total cost per ounce. The pre-feasibility study marks the second time International Tower Hill leaders have scaled back their overall mine plan to improve its viability since a similar effort in 2013 concluded a much larger Livengood mine likely isn’t worth it. At one point, the company hoped to produce more than 560,000 ounces of gold per year for total production of nearly 7.9 million ounces over 14 years. Additional metallurgical testing has also helped assure International Tower Hill leaders the company will be able to hit its production targets, according to Hanneman. “We are now confident that we can achieve repeatable and predictable results from our ore body,” he said. The company expects to recover 71.4% of the gold in the mined ore. The current plan for mining the ore minimizes the amount of material that is ultimately moved, thus cutting costs, Hanneman added. “The deposit has an exceptionally low strip ratio, meaning we need to move only 1.2 tonnes of waste to access a tonne of ore,” he said. Overall, slightly more than 100 tons of material will need to be mined to produce an ounce of gold from Livengood, according to Hanneman. With approximately 13.6 million ounces of measured and indicated gold in place, there is ample room for further exploration. “In a rising gold environment, a lot of these resources could fall into reserves, thereby further increasing the (net present value) and mine life of our project,” Hanneman said. Roughly 500,000 ounces of gold has been produced from the Livengood area over the years by placer operations as well. Elwood Brehmer can be reached at [email protected]

DEC proposes changes to regulations on oil spill contingency plans

The long list of changes Alaska Department of Environmental Conservation leaders want to make to spill regulations for oil and fuel shippers and handlers is out, and stakeholders are diving in. DEC Commissioner Jason Brune offered some unique language when attempting to describe the department’s objectives for the regulatory reform effort in a Nov. 2 statement, shortly after the 118 pages of long-awaited proposed changes were published. “The goal is absolutely to maintain Alaska’s high standards for environmental protection, while also modernizing plan-holder requirements and ending ‘administranglia’ for our (spill contingency) plan holders that takes their focus and resources away from the things that really matter. In the end, we want to see contingency plans that are very effective for preventing and responding to spills and don’t get caught up in things that are duplicative, inefficient, or no longer work,” Brune said. The proposed changes to the state’s rules for spill contingency plans, or C-plans, for entities producing, storing or transporting large quantities of oil and fuels come roughly two years after DEC officials first began soliciting input on C-plans from direct stakeholders and the public, ahead of the likely reforms. Currently, there are 131 active C-plans held by 77 plan holders, according to DEC. Most members of the public then urged DEC officials to maintain the current levels of protections in the regulations, and many questioned why the department would open the regulations to possible changes given the state’s reliance on marine resources and the relative lack of large fuel or oil spills in the state since the Exxon Valdez in 1989. Many expressed concerns that the decidedly pro-business Dunleavy administration would ease environmental standards at the behest of industry. Local government officials by and large also emphasized a general desire for the department to uphold current levels of oversight on the oil and gas industry, while also suggesting some changes to clarify and strengthen the existing regulatory code. Several local and Tribal governments across Alaska submitted resolutions against actions to ease the regulations. Fuel shippers, oil field service companies and Alyeska Pipeline Service Co. at the time all offered numerous ways they feel the regulations are too rigid, unclear or outdated. Stakeholders across a range of interests in the realm of spill prevention and response all said they were actively reviewing the more than 30 detailed regulatory changes, and deferred comments on the proposals to a later time. Spill Prevention and Response Division Director Tiffany Larson described the approach that agency officials responsible for revising the regulations took in determining whether important environmental standards are upheld in the proposals with a question. “Do I know more or less information about the regulated facilities with this set of regulations than I would have with the other (previous) set?” Larson said. “We made sure that we didn’t compromise any of our existing environmental protections.” She said the members of the Spill Prevention and Response, or SPAR, regulatory team collectively has about 70 years of experience in those roles. Much of the work in the first draft of changes to C-plan requirements went into “marrying” two sections of at-times arcane administrative code to better clarify what is expected of plan holder, she said. “We were able to reduce a lot of redundancies and citation duplication in regulation that made it confusing, not only for the regulated community, but for agency personnel also,” Larson said. She acknowledged changes in the rules for site inspections and demonstrations of spill response equipment and processes could be viewed differently depending on the perspectives of stakeholders. The proposed regulations would require one site inspection by SPAR staff and one demonstration during the five-year life of each active C-plan. Under current regulations, SPAR officials may call for two inspections over the five years. Larson said the update could potentially be construed as easing the site inspection and demonstration mandates, but emphasized that the draft regulations remove ambiguity and ensure each C-plan holder will be visited regularly. Reforms to how SPAR officials evaluate the effective recovery capacity for response equipment such as oil skimmers are also being floated. The new language would limit the stated capacity to recover spilled oil, fuel and contaminated water to available on-site storage, and not rely on equipment capabilities. “Maybe a skimmer could collect 5,000 gallons in a day but they only have storage for 2,000; well, their capacity is only 2,000 gallons,” Larson said. “That might seem more burdensome to industry than before.” Other reforms focus on more simply on bringing the C-plan rules “into the 21st Century,” according to Larson. That is achieved through adding flexibility for virtual inspections in some instances and subtracting requirements for paper files. “If the state had written that you must submit five copies of something, well then you must have five copies,” she said. Comments on the draft C-plan regulations can be submitted on DEC’s website through Jan. 31. Larson said DEC leaders hope to be able to finalize the packet of new regulations in about a year. Elwood Brehmer can be reached at [email protected]

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