Alaskanomics

41st annual Alaska Resources Conference

The Alaska Resource Development Council hosted its 41^st annual Alaska Resources Conference on Wednesday, November 18. This year’s event was a single day, hosted online. As in years past, the presentations were from industry experts and provided an insight in to the past year as well as a look forward to the future of Alaska’s resource industry.

Not surprisingly, most presenters noted that they were pleased that Ballot Measure 1 was defeated and that tax policy wasn’t changed yet again. There were also concerns about what the new administration would mean for resource development. As has been the case in the past few years, the concern over a stable fiscal plan for the state weighed heavy on most presenters.

Mining did provide a bright spot for a year that saw many disappointments and most of the industries represented were looking forward to the start of recovery in 2021. The full agenda with presentations can be found at https://www.akrdc.org/conference.

The 40th Annual Alaska Resources Conference

Last week, the Resource Development Council (RDC) hosted its 40^th Annual Alaska Resources Conference in Anchorage. The event is the chance for leaders from the tourism, fishery, oil and gas, mining, and forestry industries to come together and share highlights and frustrations from the past year and look forward to the coming year.

Overall the presenters and attendees were optimistic about the future of the resources industries in Alaska. There were concerns due to the tariffs being raised on fish, timber, and other goods. The other overwhelming concern came from the possibility of yet another ballot initiative to regulate oil taxes on the North Slope. The group OneALAKSA has been created to protect Alaska’s economy and oppose the Fair Share oil tax measure - an initiative to raise oil taxes that will likely be on the 2020 ballot. OneALASKA is a diverse group that includes organized labor, business and Alaska Native corporations, outdoor recreation, small business, and non-partisan political leaders. The group is working to make sure the ballot initiative does not make it on the 2020 ballot, and if it does, they will fight to oppose it.

Industry representatives painted an optimistic picture for 2020 and moving forward, dependent on the tax structure staying consistent and tariffs on goods. Most were moving forward with plans for expanded development and exploration and new projects.

It was clear that Alaska is moving out of the recession of the past few years, but speakers were hesitant to say that it was officially over. Individual presenters were happy to report milestones in their industry, such as Fort Knox pouring its 8 millionth ounce of gold this past October. BP expressed gratitude to Alaska for the past 60 years of exploration and development and was happy to have Hilcorp bring new life to the legacy fields on the North Slope.

The two days of the Alaska Resources Conference is always a time to celebrate past victories and rally around new challenges. This year was no exception. The room was more optimistic than the recent past, but that optimism had shades of apprehension over forces outside of the industries that could impact landscape of resource development in Alaska.

All presentations, including videos of each session, are located on RDC’s website.

The 39th Annual Alaska Resources Conference

Last week, the Resource Development Council (RDC) hosted its 39^th Annual Resources Conference in Anchorage. The event is the chance for leaders from the tourism, fishery, oil and gas, mining, and forestry industries to come together and share highlights and frustrations from the past year and look forward to the coming year.

There was clear optimism throughout the conference as many in the room had worked hard on the campaign to defeat Ballot Measure 1. Many of the industry leaders expressed their gratitude to volunteers, donors and voters who helped defeat the initiative.

This is the third year where presenters were optimistic about the future of resource development in Alaska. This year’s optimism was even stronger, especially in oil and gas, mining, and tourism. Fishing is still a bit cautious because of the uncertainty around tariffs and imports/exports with China. The timber industry still has a lot of challenges with federal regulations. There are opportunities for timber, but it will take time to sort those out.

Each year, Neal Fried presents his look at the past year and a look forward to the year ahead for the State’s economy. He looks at all aspects of Alaska’s economy and provides a great overview for conference attendees. Alaska is still in a recession, and while this is the longest recession that the state has faced, it is not the worst. Employment continues to fall, but it is moderating and many believe that 2019 will be the end of the recession. Fried’s presentation has a lot of valuable data and is worth watching if you missed the conference.

Dr. Ian Mead, Assistant Administrator for Energy Analysis with the US Energy Information Administration shared global energy trends and where Alaska fits in. His presentation outlined that global energy consumption continues to rise, especially throughout non-OECD Asia. Fossil fuels remain dominant and will supply 77% of the world’s energy consumption in 2040.

Governor-Elect Dunleavy wrapped up the first day with remarks to the crowd regarding his administration’s focus on bringing business to Alaska and his desire to work with the resource development industry to grow Alaska’s economy. He also announced the Corey Feige would be the Commissioner for the Department of Natural Resources. The Governor-Elect made it clear that he wanted to work with industry as a partner not as an adversary.

Keith Meyer highlighted the work that was being done to move the Alaska Gasline forward. He noted that the project has momentum and Alaska should get ready for the mega-project to kick into high gear. The focus for 2019 is accelerate. His slides show the progress that has been made to date and how Alaska has a competitive advantage over global competition when it comes to the natural gas market. Meyer noted that the gasline would be beneficial for not only the oil and gas industry, but other resource development sectors throughout Alaska. Gas will power Alaska’s growth.

This year’s conference was much more optimistic than the recent past and industry leaders are working hard to make sure that all resources are safely and responsibly utilized throughout Alaska. There was a lot to celebrate a week after the election and presenters and attendees seemed to be reenergized to move forward with projects that have been on hold or slowed because of the recession and uncertainty around Ballot Measure 1. There will always be areas of concern for the resource development industries, but you could feel a sense of relief moving into 2019.

All presentations, including videos of each session, are located on RDC’s website.

The 38th Annual Alaska Resources Conference

Last week, the Resource Development Council (RDC) hosted its 38^th Annual Resources Conference in Anchorage. The event is the chance for leaders from the tourism, fishery, oil and gas, mining, and forestry industries to come together and share highlights and frustrations from the past year and look forward to the coming year.

As was the case in 2016, presenters were cautiously optimistic about the future of resource development in Alaska. There is still major concern about the State’s fiscal situation. The continued lack of a sustainable plan has caused great frustration in the industry.

There was a bright spot in the first morning’s presentation when Senator Murkowski phoned in to say that the Senate Committee on Energy and Natural Resources released budget reconciliation legislation to open a small part of the non-wilderness portion of the ANWR, known as the ‘1002 Area’ to responsible oil and gas development. On the Senate Committee’s webpage, Senator Murkowski is quoted by saying, “This legislation is a tremendous opportunity for both Alaska and our country. The legislation I released tonight will put us on a path toward greater prosperity by creating jobs, keeping energy affordable for families and businesses, generating new wealth, and strengthening our security- while reducing the federal deficit not just by $1 billion over ten years, but tens or even hundreds of billions of dollars over the decades to come.”

This announcement was an encouraging start to the conference. An additional positive note was that for the 2^nd year in a row, there has been an increase in production on the North Slope and more oil in the pipeline. The increase has been small, but everyone agreed that any increase was good. There was also renewed excitement for the Alaska LNG project, after the announcement of the agreement between Alaska and China. Governor Walker noted that due to the fact that the project had support from the highest levels of government in China and the United States, he was optimistic that the project has new life and could move forward with renewed enthusiasm.

Many speakers noted frustrations that there was still no sustainable solution for the State’s fiscal crisis. Rather than focusing on the negative, presenters chose to focus on what they could do within their own industries to help encourage development across all sectors. Individual presentations highlighted the work that has been done in the past year, as well as plans for future development.

The conference highlighted work between different industries that will help grow the Alaska economy. All presentations, including videos of each session, are located on RDC’s website.

Resource Development Council Hosts Annual Conference

Earlier this month, the Resource Development Council (RDC) hosted its 37^th Annual Resources Conference. It’s the time of year when the resources industries come together to celebrate the accomplishments of the past year and look ahead to the coming year. Conference organizers took a new approach to the sessions with panel discussions and it was a great change. Instead of hearing from each presenter individually, the moderator led a facilitated discussion and asked questions relevant to each specific area. This provided a well-rounded discussion on current events and a look to 2017 and beyond.

This year’s presentations provided a cautiously optimistic look towards the future of resource development in Alaska. Recent years have been tough for oil and gas, mining, and forestry. Fishing and tourism have had good years, but also see a lot of regulation and federal overreach.  This year, speakers noted that with the shift in federal administration, there could be some hope for a change federal overreach and regulations that have crippled the industry in recent years. There are still a lot of unknowns, but most are hopeful for a favorable adjustment to way the State of Alaska and the Federal Government interact.

The area where the optimism faded was when the state’s fiscal situation was discussed. For many, the lack of a sustainable budget plan causes angst and uncertainty. This topic has been a headliner at the conference for the past couple of years and while attendees hoped that things would be better next year, they were realistic to the fact that difficult decisions were needed to maintain any sort of sustainable budget. Many stated that while they were hopeful for a solution, they knew that hope was not a good strategy and real work must be done to move the state forward. Numerous legislators were in the audience throughout the conference and speakers reminded them of their responsibility to make difficult decisions to maintain a functioning state government.

The team at RDC always puts on a great conference, with detailed information on the happenings throughout resource development, networking opportunities and a chance to plan for the future of Alaska. Presentations and videos of each session are saved at RDC’s website.

Resource Development Council Conference Wrap-up

The Resource Development Council hosted its 36th Annual Alaska Resources Conference on November 18 and 19 in Anchorage. Each year, members of the resources industry gather to discuss the past year’s accomplishments as well as look to the future of tourism, fisheries, oil and gas, mining and forestry.

Governor Walker opened the conference with a few words about his desire to make sure that there is more oil in the pipeline for all Alaskans. He was encouraged about the exciting time in the mining industry and the good steps being taken in the AKLNG project. The Governor also noted that he would be soon releasing his plan for a more sustainable budget and it would be without sacrificing Alaska. He assured attendees that he would not shy away from the tough decisions that are part of his job description. He also noted that he would stay strong in his message to Washington DC and that Alaskans need more access the natural resources in our state.

The conference continued with the updates from the industry, including an overall update from State of Alaska economist, Neal Fried. Presenters shared a lot of what attendees already knew and gave a sense that while there are struggles with the resource development industry, that there are also things to be excited about and there are opportunities available.

News from the oil and gas industry was understandably less optimistic as it has been in past years. Presenters from ConocoPhillips and BP discussed the work being done to progress the AKLNG project. Both companies want to continue the momentum that was gained during the special legislative session. All parties must be aligned to assure success for the project.

The Arctic, Federal overreach, Pebble Mine and Point Thomson rounded out the day’s discussions. Due to the United States’ Chairmanship in the Arctic Council for the next two years, the world is focused on Alaska. Many different interests throughout the state and the rest of the US are competing for the attention of the Arctic Council and the world.

Day two of the conference started with a session titled, “Real Solutions to Alaska’s Budget Crisis”. It included a presentation about the necessity to look at state spending and how it relates to a sustainable budget. Everyone agreed that there were no easy answers when it comes to the State budget. Spending and new revenue will need to be part of the equation and the speakers agreed that something would have to be done sooner, rather than later. Today’s budget crisis is much different than the last one the state faced. A concern is the fact that we are depleting budget reserves without anything to refill those reserves on the horizon. Using the earnings from the Permanent Fund while keeping the dividend, buys time to work on a more sustainable solution. Not doing anything in 2016 damages the ability to come out of this crisis in the future. Speaker Mike Navarre, Mayor of the Kenai Peninsula Borough, noted, “There is no perfect plan and we cannot be crippled while waiting for the perfect plan”.

The day continued with discussions about oil tax credits, the progress being made in Cook Inlet, mining and a wrap-up on work on the AKLNG project. The increased production in Cook Inlet has allowed Southcentral Alaska to have a needed gas supply. It was also stated that discovered but not-developed fields could bridge the gap until the AKLNG project comes online in the mid-2020s (if approved).

AKLNG is moving forward and the project received the right to export to both free and non-free trade countries. The Alaska Oil and Gas Conservation Commission (AOGCC) has supported gas offtake and carbon dioxide reinjection. Both of these are good steps in moving forward to a successful project. While there are many more steps to take and hurdles to overcome, the many are hopeful that the project will proceed and be a success. At the end of the day, we all need to do what needs to be done to ensure a successful project to serve Alaskans for many years to come.

For complete conference information and presentations, visit http://www.akrdc.org/november-conference

Resource Development Council Conference Part 1

The Resource Development Council hosted the 35^th Annual Alaska Resource Conference this week. Over the next week, Alaskanomics will highlight the presentations from the conference.

The two-day event allows the resource industry to gather and look back at the past year, while planning for the coming year. There were many things to celebrate at this year’s conference, but participants and speakers were decidedly cautious about the State’s fiscal future.

As is the tradition, the conference started out with an outlook for the coming year by Alaska Department of Labor Economist, Neal Fried. With the exception of 2009, the Alaska economy has been growing for the past 25 years. The growth has not always been by leaps and bounds, but it has been moving in the right direction. In 2014, it is predicted that there will only be about 900 new jobs in Alaska, which is only 0.6 percent. This is not as strong as many would hope and there will be a breakdown of the employment categories in January when the annual wrap up is published. Fried continued with brief updates of the various resource industries.

• Timber has had very little change and is down with record lows
• Mining is largely unchanged as well and has slowed and growth has flattened out
• Fishing grew in both processing and harvesting this past year
• Oil keeps hitting new highs, North Slope employment has doubled in the past decade
• The Visitor Industry is up for the third year in a row

Alaska earnings have grown since a dip in the late 1990s and we currently have the second highest household income behind Maryland. The population grew in the past year, but the growth is starting to slow down.

Kara Moriarty of the Alaska Oil and Gas Association gave the update for the oil and gas industry. She shared the usual numbers that more than one third of all Alaska jobs are tied to the oil and gas industry and for every one industry job, 20 other jobs are generated through industry spending. The oil industry paid $6.9 billion in taxes and royalties and luckily the current tax policy generates more revenue at low prices than the old regime. This is very good since the price of oil has dipped below $80 a barrel. There has been a lot of new development on the North Slope and in Cook Inlet. Moriarty finished with the reminder that while we cannot control the price of oil or Alaska’s high cost environment, we could all be “Resource Proud”.

Stephanie Madsen of the At-Sea Processors Association shared that the fishing industry continues to grow and is currently the number one private sector employer in the state. The value of Alaska’s fisheries fluctuates because of the global market. The industry continues to be challenged by environmental non-governmental organizations (NGOs) calling for protected areas. Madsen continued by noting that Alaskan fisheries historically have been managed conservatively and are continually adapting to the varying definitions of sustainable.

Keith Coulter with Koncor Forest Projects gave the update for the timber industry, which by far has seen the largest decline of other resource industries. He noted that both fishing and forestry are sustainable and renewable and are not mutually exclusive. Rural communities that have lost timber are having a hard time replacing the jobs and income that were seen with the timber industry. Coulter shared that he felt that Federal Forests should be managed in the same way that private forests are and Alaska should resist efforts to adopt federal forest practices. He warned that changes to the Alaska forest practice should be informed by contemporary science. Coulter also urged the need for reform of federal overreach in the Tongass and elsewhere through fewer environmental regulations and restrictions.

Karen Matthias with the Council of Alaska Producers gave the update for the mining industry. She was proud to share that both Red Dog and Greens Creek Mines were celebrating their 25^th anniversary of operation. She said the industry needed to do a better job at sharing success stories from around the state. An example is that Usibelli Mine has been in operation for more than 70 years and is mining responsibly. There are more than 5000 direct mining jobs in Alaska with an average annual wage of $100,000. Donlin Gold is in the permitting process and other mines could bring many new jobs to the state. Alaska is number one in the world for pure mineral potential and holds incredible potential in the mining industry. It was no surprise to conference attendees that permitting is consistently the biggest challenge in mining and is a very slow process. The outlook is bleak right now, but the industry can redouble efforts to fight against those trying to block responsible development and educate the public on the positive impact of mining so that things might improve.

Gideon Garcia with CIRI Alaska Tourism wrapped up the year in review with the tourism industry update. This past year, Alaska saw 1.96 million visitors, who spent $3.9 billion. The tourism industry adds 46,000 jobs for Alaskans. The projections for the 2015 season look good. Cruise traffic is predicted to have a 2.8 percent increase and overall visitor traffic is expected to jump 2-3 percent in 2015.

The year in review and 2015 outlook is a staple to the RDC conference and while presenters were proud to share accomplishments within their individual industries, it was obvious that the challenges of federal overreach, commodity prices, and regulations weighed heavy in the room.

Alaskanomics will continue to highlight the conference with Investment in Action by Trond-Erik Johansen of ConocoPhillips Alaska and Investing in Alaska’s Future with Janet Weiss of BP Exploration (Alaska).

Resource Development Council Conference Day 1

The Resource Development Council recently hosted its 34^th Annual Alaska Resources conference. Attendees were treated to two full days of speakers and the chance to network with friends and colleagues. Neal Fried, Economist with the Department of Labor, started off the morning with a review of the past few years before speaking to the trends that he expects to see in 2014. Five years after the recession, Alaska is third in the nation for job gains; behind only North Dakota and Texas. Since late 2008, Alaska’s unemployment rate has been below the national average. Fried continued by outlining highs and lows in each of the industry areas. Employment in Alaska’s timber industry has been at a low level since 2009 and is looking for growth.  Going the other direction, mining has more than doubled since 2002. Fishing has seen nice growth in both processing and harvesting. Even with the decline in oil production, there has been steady growth in jobs since 2004. In the past decade, Alaska has seen a 12% increase in all employment.

The morning session continued with an industry update from oil and gas, fisheries, forestry, mining and tourism. Each presenter gave an outlook on what had happened in 2013 and what was on tap for the coming year. Kara Moriarty with the Alaska Oil and Gas Association noted that Cook Inlet was making a comeback and had grown by 38% from 2012 to 2013. The next step is to bring offshore production online and to realize the full potential of offshore drilling for Alaska and the nation’s economy. Moriarty concluded her portion by outlining the issue facing voters in the August 2014 primary election. The oil tax referendum is a threat to Alaska’s economy. She asked attendees to stand united against the referendum and not only vote ‘No’ on 1, but educate others as to the harmful nature of returning Alaska to a failed tax system.

Greg Baker, CEO of Westward Fishing Company gave his update on the fishing industry in Alaska. The management of fisheries in Alaska is a world recognized model of sustainability. 60% of America’s commercial seafood is harvested off Alaska. The fishing industry has been strong in the recent past and will continue because of the work done to sustain the resource, while still being profitable.

Shelly Wright, Executive Director of the Southeast Conference, shed light on the forestry industry. While timber has not been strong in the recent years, the total harvest hasn’t dropped from year to year. A challenge to the timber industry is that the federal government owns nearly 95% of the forest land, 80% of that is the Tongass National Forest.

Karen Matthias, Executive Director of the Council of Alaska Producers, discussed the status of mining in Alaska. While the controversy with the Pebble Project gets much of the attention regarding mining in Alaska, Matthias highlighted the 6 producing mines throughout the state. Red Dog, Fort Knox, Usibelli, Pogo, Kensington and Greens Creek are all currently in production stages and contribute to the 4,800 direct mining jobs in Alaska. There are 8 projects that are currently in advanced exploration stages and look to increase mining employment if they are able to move forward. There are many challenges to the mining industry including the uncertain investment climate, the overreach of the federal government in permitting and public perception. Each of these areas makes it difficult for producers to move forward with mines that are still in exploration phases.

Ralph Samuels of Holland America Line rounded out the group with an update on the tourism industry. He stated that 2013 was a good year for tourism and 2014 was looking to be another good year. Tourism not only brings visitors to the state, but it also promotes local products in hopes that travelers will share their experiences and products with family and friends. An exciting project that is in the works is the South Denali Visitor Center. This project is located at mile 135 of the Parks Highway and will be another stopping point for visitors and residents to enjoy interior Alaska. Phase 1 of the project should be completed by fall 2014 and will include construction of an access road, six miles of interpretive trails, and a campground. Phase 2 will include a push to Curry Ridge and will build a visitor center.

Each industry representative shared recent successes and challenges and were hopeful for the coming year. Throughout the conference, speakers encouraged attendees to take an active role in resource development outreach. As the ranking members of the committee, Senator Lisa Murkowski (R-AK) and Senator Ron Wyden (D-OR) discussed the work being done in the Senate Energy and Natural Resources committee. Both shared a mutual admiration for the bipartisan work being done to strengthen the nation’s resource industry and promised that the work would continue.

For the full presentations from each of the first day’s speakers, please visit http://www.akrdc.org/membership/events/conference/2013/presentations/

Alaska DNR releases draft Yukon Tanana Area Plan covering 9 million acres; recommends additions to State Forest and other changes

Alaska's Department of Natural Resources (DNR) has released a draft Yukon Tanana Area Plan covering 9 million acres of land. The plan will direct how DNR will manage state lands within the planning area. The last land use plan covering this area was developed in 1985 and partially revised in 1991.

Since the original plan was developed, the amount of state land in the area has declined significantly - particularly in populated areas along the Parks, Elliot and Dalton Highways - as a result of state land being conveyed to local governments, native corporations, the Mental Health Trust, the University of Alaska, and to private parties through land sales and settlements.

Highlights of the plan include:

• Recommended additions to the 1.8 million acre Tanana Valley State Forest to be managed as a "working forest" for timber harvest, recreation, and fish & wildlife habitat.
• Nearly 620,000 acres designated for "settlement" - seasonal and year-round residences and a limited amount of land for private commercial and industrial use. Settlement land disposals would be phased over the 20-year life of the plan.
• Oil and gas resources are likely, and coal resource potential is high, in the plan area. All of the lands covered by the plan are available for oil, gas and mineral development (unless specifically closed by legislation) following separate leasing and permitting processes set out in state law.
• The plan area includes two million acres of land that the state has selected, but which has not yet been conveyed to the state by the federal government. Fort Wainwright and Clear Air Force Station are included in these lands; those military reservations would only become state land if the military vacated the land.
• Recommended designation of a portion of the Nenana River as a State Recreation River and of portions of the Toklat Springs area as a Critical Habitat Area.

Public meetings on the plan will be held in August; dates have yet to be scheduled.

Alaska's Resources are World Class

In a presentation to the Arctic Imperative Summit last month, Alaska's Commissioner of Natural Resources (DNR) Dan Sullivan shared information with a local, national and international audience about Alaska's resources. If Alaska were a country, according to DNR research, the state would be a leader in a number of important resources:

• Coal: 2nd in the world, with 17% of the world's resources
• Copper: 3rd in the world, with 6% 
• Lead: 6th in the world, with 2%
• Gold: 7th in the world, with 3%
• Zinc: 8th in the world, with 3%
• Silver: 8th in the world, with 2%

We also have 17% of U.S. Forest Land, and around 40% of U.S. water resources. Read the full presentation here.