From Master Resource
By Kassie Andrews
“The actions of Alaska policy makers, led by the governor, are eradicating the free-market principles in our state. A media blackout on the problem has left only citizen-led initiatives driving the train to truth. We the People Alaska publishes an eye-opening substack on many of these topics.”
Alaska’s economy runs on oil and gas. Additionally, oil revenues have accounted for up to 90% of our General Fund revenue. Amid its resource abundance, however, Alaska has a big and growing governmental problem—mostly in Washington, D.C., and increasingly, in local governments trying to appease their federal masters.
Alaska has been in a production decline trend since 1988 when the state accounted for 25 percent of U.S. domestic production. Presently, the Trans-Alaska Pipeline System (TAPS) is running at a quarter of its capacity (485K barrels per day).
The decline is not for lack of resource, as indicated in part from the proposed Willow Project, which would add 180K/d in 2028 to increase overall TAPS deliveries by 13 percent. Santos Pikka Phase I is expected to add 80k/d in 2026, according to the Alaska Department of Revenue – Tax Division.
Recently, the Conoco Phillips Willow Project has been sanctioned in the National Petroleum Reserve-Alaska. The largest oil development project in Alaska in decades was met with fierce opposition from outside environmental groups. The project was pulled back for insertion of language from President Biden’s Executive Order 13990, establishing the Social Cost of Greenhouse Gases (SC-GHG).
Biden’s compromise was an alternative that promises to leave 53 million barrels in the ground. The option to not develop our resources is in violation of Article VIII—Natural Resources of the Alaska Constitution: “It is the policy of the State to encourage the settlement of its land and the development of its resources by making them available for maximum use consistent with the public interest.”
The “public interest” is hardly about Alaska and climate change. A bit of extra warmth from any cause is welcomed year-round in this state, particularly since the “greenhouse signal” is oriented toward winter nights. Moreover, Alaska emits around one hundredth of one percent of global GHG emissions, calculated by multiplying the state’s 0.8 percent of U.S. emissions times the U.S. share of global emissions of 12 percent.
Willow has now moved the yard marker and will be an example for every other resource development project on federal lands, while simultaneously creating a fictitious value to SC-GHG.
Secretary of the Interior, Deb Haaland, has been the ringleader in all of this. Her nomination as secretary was advanced out of committee by Alaska United States Senator Lisa Murkowski, and she was confirmed by both Alaska US Senators Murkowski and Dan Sullivan. Most Alaska oil and gas executives endorsed Lisa for reelection in 2022, a story of pragmatism gone wrong.
Natural Gas for Alaska
Alaska’s (governmental) oil problem is also a natural gas problem. In Anchorage, the majority of power and heat comes from gas. In the last couple of years, the state has been fed a narrative of a looming natural gas shortage in the Cook Inlet basin with ideas floating around recently to import gas.
In 2011, USGS estimated that Cook Inlet Region contained 20 trillion cubic feet of gas (TCF) with a 95% probability of 5 TCF being proved (economic). That is a lot of gas, with proved reserves representing a half-century of usage in the state (primarily Anchorage) at present consumption rates.
Regional gas is supplied to ENSTAR, which was bought out in 2022 by TriSummit Utilities, owned by two Canadian public investment managers, the Public Sector Pension Investment Board (PSP) being one of them. According to TriSummit’s 2022 ESG report,
While our net-zero commitment excludes subsequently acquired assets, such as our pending acquisition of ENSTAR Natural Gas Company and Cook Inlet Natural Gas Storage Alaska, we will strive to bring our emissions reducing mindset to bear as we grow….
Chugach Corporation, the Anchorage area electric utility, uses one fourth of the gas produced from the Cook Inlet. Sentiments from Chugach executives are that natural gas is a “transitional fuel” that can be phased out. As if we desire to sell our souls to the wildly unreliable and expensive renewables.
Since losing two seats to the NGO-led green movement in the Chugach board elections last spring, the renewable energy propaganda in the newsletter is being ramped up as Alaska risks becoming cold and dark. It happened in Texas, and it can happen here.
Governor Dunleavy Problem
Instead of pushing for responsible development of natural gas in the Cook Inlet basin, Governor Mike Dunleavy has plans to turn it into a CO2 carbon capture & storage dumping ground. The Cook Inlet is one of the largest geological sequestration locations on the US west coast. Carbon management legislation, the top priority for the Dunleavy Administration in the 2023-2024 session, was fast tracked and passed 58-2 in a majority Republican legislature.
The scheme was sold as a major revenue source for Alaska, but the fiscal notes were blank. When representatives faced backlash from their constituents, they went as far as to pen opinion pieces claiming that carbon management was “Not ESG.”
Surprisingly, in the 2021-2022 session, Governor Dunleavy introduced a bill for Renewable Portfolio Standards for utilities. This bill would require certain regulated utilities to “derive increasing percentages of the utility’s net electricity sales from clean energy resources in order to minimize costs to consumers and minimize the state’s carbon emissions.” This bill didn’t progress; still, on September 30, 2022, Governor Dunleavy established the Office of Energy Innovation.
On February 23, 2023, Governor Dunleavy established the Alaska Energy Security Task Force. Then on May 25, at the second annual Alaska Sustainable Energy Conference, he signed a bill permanently extending the state’s renewable energy grant fund.
At the same time, Governor Dunleavy unveiled The Alaska Standard Inaugural Sustainability Report wherein it is said: “Alaska stands ready to lead the energy transition.” This report proudly pledged allegiance in a disturbing attempt to explain how Alaska is aligned with the United Nations SDGs.
Alaska Sovereignty at Risk
In a state where oil revenues account for up to 90% of tax revenues, we are obliterating any chance Alaska has at sovereignty. Then again, the Alaska Supreme Court ruled the legislature can raid the largest Sovereign Wealth Fund in the nation, the Alaska Permanent Fund Dividend, which is owned by the citizens, to fund the Jabba the Hut-sized government.
Alaska policy makers, led by the governor, are eradicating the free-market principles in our state. A media blackout on the problem has left only citizen-led initiatives driving the train to truth. We the People Alaska publishes an eye-opening substack on many of these topics.
We need to restore the power of the grand jury; this constitutional right as of one year ago has been halted. Why else would the court rule in violation of Alaska’s constitution if not rife with corruption – the very corruption the grand jury sought to investigate?
It is time for policy reform at all levels of Alaskan government. Overall, we need a critical mass of folks asking the tough questions. Voter apathy is a real issue in this state – turnout for the Chugach electric utility board was only 16%, for example.
I don’t recall anyone asking for any of this to be done to us, however who you choose to represent you and your involvement at the lowest level will mean deciding between food and electricity.
Kassie Andrews is a long time Alaska resident with a particular interest in natural resources and energy policy. This is her first blog at MasterResource.