Alaska Resource Review is the official magazine of the RDC, published three times a year to inform Alaskans and others about the importance of Alaska’s resource industries as well as advocate for issues critical to the success of those industries. Resource Review reaches more than 20,000 readers important to these industries, in print, at RDC events and online via digital, social and email media.
VOLUME 2 | ISSUE 2 | SPRING 2025
ALASKA RESOURCE REVIEW
50 Years of Responsible Resource Development Supporting Alaska!
INSIDE THIS ISSUE n Alaska on the Hill Brings Together Coalition for Alaska n Alaska LNG Project Moves Forward in New Partnership n North Slope Bustling With Flurry of Ongoing Activity n New Federal Land Orders Set to Open Exploration
Magazine of the Resource Development Council for Alaska | www.AKRDC.org
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VOLUME 2 | ISSUE 2 | SPRING 2025
"For all of you that have shared your voice of support for our industries in Juneau or at the federal level, we appreciate you!"
— Leila Kimbrell, Executive Director, RDC
THE RDC IS GRATEFUL FOR YOUR EXCEPTIONAL SUPPORT
D EAR RDC MEMBERS & SUPPORTERS, It’s been a busy and produc- tive spring here at RDC. Our work has been cut out for us in Juneau and, as you can see by our cover, we are making great strides expanding our message to policy makers in Washing- ton, D.C. (more on that later). But, most importantly, RDC reached a big milestone in April — achieving 50 years of operations! You’ll see more on those reflections through- out this issue and throughout the year. Our work and longevity would not be possible without the support of our members, supporters, volunteers and partners like you. “Thank you” hardly seems to say enough but it is truly heartfelt. We can’t wait for the next 50 years! As I mentioned above, we have been growing our reach and for the second year joined a group of Alaskan trade associations on an advocacy mission to Washington, D.C. You’ll recall we start- ed as a group of 10 and a small group of staff last year with what we then called Alaska Resources Advocacy Day. This year, we saw exponential growth and rebranded to “Alaska on the Hill” with more than 16 sponsoring associations. We had more than 120 Alaskans fly out to D.C., several indus- try briefings, a congressional roundta- ble with several senators, congressmen
ects like Graphite One, Donlin Gold, Ambler Access and many more mining projects. And we are seeing strong support for our seafood and timber in- dustries. For all of you that have shared your voice of support for our industries in Juneau or at the federal level, we appreciate you! And finally, MARK YOUR CALEN- DARS! Our 50th Annual Membership Luncheon will be held June 18, 2025, in Anchorage. Registration and sponsor- ship opportunities recently opened and you’ll want to reserve your table soon. We are excited to announce keynote speaker, Steve Goreham, a national energy and environmental researcher, will be joining us for an engaging pre- sentation on current energy and climate trends. In addition to other program- ming and announcements at this time, you won’t want to miss the incredible networking opportunities as we expect over 600 attendees! I hope to see you there. Yours resourcefully, Leila Kimbrell, Executive Director
and many staff in attendance, 25-plus meetings on the Hill, Department of Interior agency meetings, and, of course, a world-class Alaska reception with nearly 300 in attendance. It was a remarkable week and we are so fortu- nate to have a congressional delegation provide us such strong support of our cause. It is clear that the rest of the country wants to understand more about our state, our resources and our people. We returned home inspired to continue the momentum. Back in Alaska, we are tracking through the end of legislative session in Juneau with the last regular day scheduled for May 21. Several revenue measures remain at play that could have negative impacts on our industries. We continue to advocate that now is not the time for our policymakers to pass legislation that could chill investment in resource industries. Particularly as we see unprecedented growth and investment on our North Slope, unprecedented tourism projec- tions, positive developments for proj- THANK YOU ONCE AGAIN FOR READING AND FOR YOUR SUPPORT. AS ALWAYS, WE WANT TO HEAR YOUR FEEDBACK AND IDEAS. PLEASE SEND THEM IN TO RESOURCES@AKRDC.ORG.
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INDEX
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PAGE 12 LEGISLATION WOULD TAX ALASKA OIL PRODUCERS The Alaska Legislature is short of funding to balance the state budget and Legislators are looking to raise new revenue. Not surprisingly, they look first to taxpayers that don’t vote — oil and gas companies — to bridge the funding gap. PAGE 28 ALASKA ON THE HILL BRINGS TOGETHER STRONG COALITION RDC staff, board members, together with 15 other Alaska organizations and more than 120 Alaskans traveled to Washington, D.C. to attend the annual Alaska on the Hill event, celebrating "Alaska’s Resources & Industries — America’s Future.” PAGE 38 ALASKA TOURISM INDUSTRY LOOKS TO BANNER YEAR Alaska saw a record of more than 3 million visitors last year and the outlook for the busy summer and winter travel seasons is looking bright, according to Jillian Simpson, President and CEO of the Alaska Travel Industry Association.
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ALASKA RESOURCE REVIEW is published in partnership with the Resource Development Council for Alaska, Inc. by Fireweed Strategies LLC, 4849 Potter Crest Circle, Anchorage, AK 99516. For advertising information and story inquiries, email Lee.Leschper@FireweedStrategies.com. ALASKA RESOURCE REVIEW is mailed at no charge throughout Alaska. To subscribe, email Admin@FireweedStrategies.com. Publisher: Lee Leschper | Editor: Tim Bradner | Production, Design: Will Leschper | Contributing Photographer: Judy Patrick PLEASE NOTE: RDC HAS MOVED OFFICES! Please update your records with our new physical and mailing address: 301 W. Northern Lights Blvd., Ste. 406, Anchorage, AK 99503
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“While advocating for resource development, RDC has consistently emphasized the impor- tance of environmental responsibility because no one cares for Alaska more than Alaskans.” — Scott Habberstad, President, RDC
THE RDC: 50 YEARS OF ADVOCACY AND GROWTH
F OR HALF A CENTURY, THE RESOURCE DEVELOPMENT COUNCIL FOR ALAS- KA (RDC) HAS PLAYED A PIVOTAL ROLE IN SHAPING THE STATE'S ECONOMIC LANDSCAPE. Founded in 1975, RDC has been a steadfast advocate for responsible resource development, ensuring that Alaska’s vast natural wealth is har- nessed in a way that benefits both the economy, the environment and the people of Alaska. Since its inception, the team at RDC has worked tirelessly to promote policies that support industries such as oil and gas, mining, fisheries, forest- ry and tourism. The organization has been instrumental in linking diverse stakeholders, including Alaska Native corporations, local communities and industry leaders, to build a strong and diversified Alaskan economy. RDC’s founding mission was its advocacy for the Trans-Alaska Pipe- line System, a project that transformed
Alaska’s economy by enabling the efficient transport of crude oil from the North Slope to domestic and global markets. Over the years, RDC has con- tinued to champion infrastructure proj- ects that enhance responsible resource development, in support of the indus- tries that drive Alaska’s economy. RDC’s efforts have significant- ly contributed to Alaska’s economic stability. By supporting policies that encourage investment in natural re- source industries, the organization has helped create thousands of jobs and generated billions of dollars in revenue for Alaska. We have played a crucial role in educating policymakers and the public about the importance of responsible re- source development. Through forums, publications, and conferences, RDC has provided a platform for informed discussions on land use, environmental regulations and economic growth. While advocating for resource
development, RDC has consistently emphasized the importance of envi- ronmental responsibility because no one cares for Alaska more than Alas- kans. The organization has supported initiatives that promote sustainable practices, ensuring that Alaska’s natural beauty and ecological integrity are pre- served for future generations. RDC has been involved in discus- sions surrounding the Endangered Spe- cies Act, land conservation efforts and responsible fisheries management. By working with regulatory agencies and industry leaders, RDC has helped shape policies that balance economic growth while taking care of the land we love. As RDC marks its golden anni- versary, the organization continues to evolve, addressing new challenges and opportunities in Alaska’s resource industries. The upcoming 50th Annual Membership Luncheon will celebrate our collective achievements and set the stage for future initiatives.
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Note from Publisher Fireweed Strategies
Fireweed Strategies LLC has expanded our team for our Alaska magazines and publi- cations for 2025. Will Leschper is now leading all content, design and production for the Alaska Re- source Review as well as other Fireweed publications including those of the Alaska Miners Association and the Alaska Support Industry Alliance. He has been designer and production manager of Fireweed's publica- tions since 2020. Will is a nationally recog- nized writer and photographer, and a fre- quent contributor to national magazines with more than 20 years in publishing. Direct news, photos and story requests to Will (leschperw@gmail.com). Mary (Leschper) Schaper is now support- ing business and advertising for all Fireweed publications for 2025. Mary has over a decade of experience in energy policy communica-
tions in Washington, D.C., with roles on U.S. Sen. Lisa Murkowski’s staff, on the U.S. Senate Energy and Natural Resources Committee, and at the American Petroleum Institute. Mary is the primary contact for advertising and financial questions (mary@lunastrategiesdc.com). Lee Leschper remains the CEO of Fire- weed Strategies, an Anchorage-based LLC founded in 2015 to share the full story of Alaska’s resource development industries. As some of you may have heard, Lee was involved in an accident last fall, but he re- mains committed to Fireweed’s mission while continuing his recovery. Fireweed Strategies publishes unique magazines that connect key industries with diverse audiences while highlighting re- source development’s impact on the state’s economy and national security.
IN MEMORIAM: ROBERT 'BOB' STILES JR.
ROBERT "BOB" BENTON STILES JR., AGE 82, PASSED AWAY ON MARCH 31, 2025, IN SAN ANTO- NIO, TEXAS, SURROUNDED BY FAMILY. Born in Victoria, Texas on December 18, 1942, Bob lived a life as big, bold and spirited as the landscapes he loved to explore. Bob was a dynamic leader
Development Council. His work took him from the mountains of Montana to the rugged frontiers of Alas- ka, and across the globe to Japan, China, Korea, Taiwan, and Mexico, where he mar- keted projects with vision and enthusiasm.
wife, Deb Stiles; his parents, Robert Benton Stiles Sr. and Rose Lavelle; his brother Doss Stiles, and his great-grandson, Henry "Hank" Haynes. He is survived by his sisters, Lisa Williams and Christine Frank (Chris); his children, Cindy Silverstein (Brad), Wendy Stiles (sig- nificant other Jeff Sill), Robert Stiles III (Lori), Scott Stiles (Marty) and his former wife, San- dra Kiolbassa, the mother of his children, with whom he shared a common bond. Bob was a proud grandfather to Ka- tie Haynes (Mark), John Blair (Jill), Grace Torres (Ethan), Samantha Silverstein, Ellen Brodbeck, Shelby Janaky (David), Jett Power (significant other Rebecca Anthony), Rachel Cole (Padraig Keane), Shane Cole (Kaybree), Robert "Ben" Stiles IV (fiancé Reagan Hayes), Sydney Stiles, Bryton Wolfe (Kendall), Scotty Stiles, Annika Stiles, and Jovonte Ginez. He is also survived by his cherished great-grandchildren; Emily & Juliet Blair, Colton & Ava Haynes, Hudson Torres, Bro- dy Brodbeck, Kashton & Kellan Cole, Ronan & Fianna Keane, and Jack Wolf. Many nieces and nephews and his faithful black Labrador Retriever "Major." A celebration of Bob's extraordinary life was held May 12 at Holy Spirit Catholic Church in San Antonio.
Whether building bridges be- tween cultures or forging deals in the boardroom, Bob brought unmatched energy, curiosity, and fearlessness to the task. Bob had stories for every oc- casion, some that were probably better left untold, but he told them anyway. He had a wander- lust that could not be satisfied and had an everlasting sense of adventure. He hiked, biked,
and global adventurer whose professional achievements were matched only by his deep civic and spiritual commitments. A tireless volunteer, accomplished international businessman, and devoted dog trainer, he brought passion, integrity, and a servant's heart to every corner of his life. A proud alumnus of Central Catholic High School (1961) and
Texas A&M University (1968), he earned his degree from the School of Aerospace Engi- neering, where he served as the Chairman of the Student Branch of the American Institute of Aeronautics and Astronautics. Bob began his career in the aerospace industry, but it was in the resource develop- ment sector that he found his calling-serv- ing as President of Drven Corporation, Past President of Diamond Shamrock's Coal Di- vision, Past President of the Alaska Coal As- sociation and Past President of the Resource
hunted, and fished in nearly every corner of the earth and was always up for anything that sounded remotely dangerous. He was afraid of nothing. His children will always cherish the memories made outdoors — hunting from Texas to Montana, fishing from helicopters in Alaska, 4x4ing through the backcountry in his beloved International Scout, and get- ting gloriously stuck in remote parts of Col- orado and Montana. Bob was preceded in death by his beloved
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VOLUME 2 | ISSUE 2 | SPRING 2025
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VOLUME 2 | ISSUE 2 | SPRING 2025
LEGISLATURE'S TALL TASK ON BUDGET IN SPOTLIGHT
Declining revenues, rising costs contribute to massive shortfall BY TIM BRADNER IT HAS BEEN A TOUGH SPRING FOR STATE LEGISLATORS MEETING IN JUNEAU FOR THE 34TH LEGISLATURE SESSION. Revenues are down thanks mainly to dipping crude oil prices while expenses are up thanks to inflation, health care costs, supply chain issues and all the other head- aches that private businesses are all too fa- miliar with. Schools are strapped and have not seen increase in regular state funding since 2017, during which inflation has taken a big bite out of dollars the state has made available. There is money available, of course. The state’s $60 billion Permanent Fund now makes a major contribution to support the state budget through a percent-of market value formula, or POMV, similar to the way big endowments support their host institu- tions. The POMV has supported most of the budget in recent years, relieving taxpayers of this burden. The state’s main savings ac- count, the Constitutional Budget Reserve, has about $2.8 billion available for emer- gencies and in the past the state has drawn on the CBR to cover deficits. Some want to do that again this year but partisan legisla- tive politics can get in the way since a “su- per-majority” vote is required to tap the re- serve. This means the Legislature’s minority party, which happens to be Republican this year, have a big stick to extract concessions from the majority, which this year happens to be coalitions of Democrats and moderate Republicans in both the House and Senate. Since the Legislature by law must pass a balanced budget by June 30, the end of the fiscal year, the majorities are under the gun to find the money to cover expenses, and
Legislators in Juneau have been faced with many tall tasks, namely the state budget shortfall.
create a major deficit. A draw on the CBR that would deplete about half of the reserve fund is proposed to pay for the large divi- dend. Few legislators think this is financially prudent. The House and Senate Finance Committees have wrestled with what might be affordable and those amounts range be- tween a $1,000 PFD and a $1,400 PFD, but even the smaller dividends could leave defi- cits. It’s possible the PFD could be reduced further if there are still deficits. Some lawmakers call for new revenues but the only proposals are for new taxes on oil and gas companies and a tax on out-of- state digital firms that do business in the state. Legislators must make decisions on these issues in the closing days of the 2025 session and they are not pleasant choices to make.
if that means making withdrawals from the CBR, the minorities are in a powerful bar- gaining position. This is why the end of leg- islative sessions on the 121st-day legal limit can be so messy. Then there is the Permanent Fund Div- idend, the payment sent every year to qual- ifying Alaskans, children included, from earnings of the Fund. For many years, when the Fund was smaller, the PFD was a mod- est payment for which many Alaskans were grateful in helping pay bills but not large enough to be a significant part of a family’s income. But now, as the Fund has grown, larg- er dividends are possible and elected offi- cials including Gov. Mike Dunleavy have campaigned for reelection on promises of a large dividend. This year the governor has proposed a $2,500 PFD, which would
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LEGISLATURE STEPS IN TO HELP WITH SEAFOOD
Seafood Task Force looks to take steps amid issues affecting industry BY TIM BRADNER ALASKA’S SEAFOOD INDUSTRY IS FACING ROUGH WATERS AND THERE’S NO INDICATION WHEN THINGS WILL IMPROVE. The primary causes through much of the year have been market conditions and geopolitics. Now President Donald Trump’s tariffs are adding new levels of uncertainty. In addition: The war in Ukraine and its accompanying embargo have cut off U.S. access to Russian markets; a strong dollar has made exports of U.S., mainly Alaskan, products expensive for buyers overseas; inflation worries among U.S. consumers have depressed domestic demand (there is still a perception that seafood is expensive protein); cost escalation and supply-chain issues, a continuing effect of the pandemic, have all combined to make a perfect storm over the last year. The National Oceanic and Atmospheric Administration (NOAA) has estimated that Alaska’s seafood industry lost $1.8 billion last year. Now there are new wrinkles: Tar- iffs and tariff-induced inflation; continuing workforce challenges; and new uncertain- ties as to whether foreign workers will be able to get temporary work visas to staff seafood plants. However, there is better news. Alaska’s traditionally strong fisheries management continues to result in sustainable harvests. Although these vary by region and species, the net effect is relative stability. That being said, a recent concern is the impact of sharp cuts to the NOAA workforce by the Depart- ment of Government Efficiency (DOGE). NOAA biologists monitor the health of offshore fish stocks and recommend sustainable harvest levels. The seafood in- dustry depends on those and the work of NOAA scientists to defend the offshore
Shutterstock Photo Alaska legislators continue to look for solutions that will help alleviate issues within the industry.
fisheries against lawsuits. Added to that list is the concern for DOGE cuts to the National Weather Service and the weather forecasts that fish harvesters depend on, said Sen. Gary Stevens, president of the Alaska Senate who led the Legislature’s sea- food task force last year. The other bit of positive news is that sev- eral of the recommendations made by the seafood task force for legislation that would help harvesters, seafood processors and coastal communities are moving through the Legislature, Stevens said in a briefing. These won’t solve the big issues affect- ing the industry but they will help ease the pain. One proposal that may be enacted in the current session is an expansion of the seafood product development tax cred- it that will help processors invest in new equipment and technology. There is a seafood product development tax credit now that has been shown to be successful, but it is limited to species listed in the state statute. The proposed change will expand this to all fisheries, giving har-
vesters and processors greater flexibility and the ability to tap new markets. A second proposal is a bill that would allow fishing vessel owners to form insur- ance cooperatives that would lower in- surance costs by pooling risks. Obtaining affordable insurance has become a major issue for harvesters, Stevens said. A third piece of legislation would have the state in- crease the share of revenues from the state fisheries landing tax paid to municipalities in coastal communities. Communities along the coast that sup- port processing plants and harbors for fishing vessels now get a share of the state revenue which has declined. The legislation would in- crease the share. Another proposal is to pro- vide some state funds for the Alaska Seafood Marketing Institute (ASMI) to promote U.S. domestic sales of Alaska fisheries products. There are several other proposals still being developed by the Seafood Task Force that will be considered in the 2026 legisla- tive session and in the following year, Ste- vens said.
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BARRICK GOLD SELLS ITS SHARES OF DONLIN GOLD
NovaGold, Paulson plan to focus on expanding gold reserves, resources BY TIM BRADNER BARRICK GOLD IS SELLING ITS 50% SHARE OF THE BIG DONLIN GOLD PROJECT IN THE MID-KUSKOKWIM RIVER REGION TO PAULSON ADVISORS LLC AND NOVAGOLD RE- SOURCES INC. Paulson will pay Barrick $800 mil- lion for a 40% share of Donlin Gold, and NovaGold will pay $200 million to in- crease its current 50% share to 60%, the companies announced in late April. The new partners will shift to up- dating a project feasibility study done several years ago and will focus a 2025 exploration program toward expanding gold reserves and resources. NovaGold is a “junior” Vancouver B.C. based com- pany whose biggest asset is its 50% hold- ing in Donlin Gold. Paulson is NovaGold’s second largest shareholder and has been involved with the company since 2010. Its chairman, John Paulson, is very familiar with Don- lin Gold and sees it as, “one of the most attractive undeveloped gold projects in the world,” with 39 million ounces of gold resources and reserves. Barrick is an experienced gold min- ing company and its involvement has long been seen as a big plus. While Paulson is considered a savvy investor in gold projects, he has not been engaged in managing development of a large project like Donlin. NovaGold has been engaged with the project for de- cades as part owner but has similarly not developed a large project. Some in the mining industry see positives including that the new owners will be aggressive in pursuing development, while Barrick, a large company, may have had Donlin on
The new partners will shift to updating a proj- ect feasibility study done several years ago and will focus a 2025 exploration program toward expanding gold reserves and resources. Nova- Gold is a “junior” Vancouver B.C. based com- pany whose biggest asset is its 50% holding in Donlin Gold.
mated as possible in the EIS. The case is now in U.S. District Court Judge Sharon Gleason’s court in Anchorage. What’s interesting about the change in ownership is that it brings the proj- ect full circle, in a historic sense. Placer Dome, a mining company, became in- volved in exploration at Donlin in the 1980s. However, due to corporate chang- es, the company withdrew after doing extensive drilling. NovaGold, even then a partner, stepped in to invest in new drilling, which resulted in expanded gold resources. Placer then came back in for a 50% share of the project with Nova- Gold holding the other 50%. Barrick Gold then purchased Placer, so Placer’s 50% ownership went to Barrick and the arrangement with NovaGold continued. Now Barrick is exiting and NovaGold is enlarging its share and a new partner, Paulson, is on board. Even though it was not yet in produc- tion over the years, Donlin Gold became a major employer in the Yukon-Kus- kokwim region of southwest Alaska. The company invested in major drilling programs and development work over several decades even in the exploration phase. Jobs created were high-paying, and their seasonality fit well with subsis- tence activities that many mine workers focus on.
the back burner. The Barrick exit would seem to be bad news for Calista Corp., which owns the subsurface minerals as well as all other Alaska Native corporations that would benefit from the sharing of royal- ties under the 1971 Alaska Native Claims Settlement Act. But while the change of ownership creates uncertainties, it will be a plus if the new ownership leads to more aggressive development. There are other challenges facing Donlin Gold, a big one being energy. The mine plan includes a pipeline bring- ing natural gas from Cook Inlet, but gas production there will be winding down. Liquefied natural gas will be imported to supply Southcentral Alaska commu- nities, and while this would presumably also be available to Donlin Gold, it will be more expensive, likely twice the cur- rent price of locally produced gas. But if gold prices are high enough, the Donlin Gold project may be able to afford that. There is also litigation pending over the project’s plans to prevent and con- tain a spill of mine tailings. A consortium of tribal and environ- mental groups has challenged federal permits and the Environmental Impact Statement for the mine arguing that fed- eral agencies did not assess the effects of a larger spill of tailings than that esti-
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VOLUME 2 | ISSUE 2 | SPRING 2025
OIL PRODUCERS TARGETED IN BUDGET SHORTFALL
Pair of Senate bills aim to tax oil production, specifically Hilcorp BY TIM BRADNER THE ALASKA LEGISLATURE IS SHORT OF MONEY TO BALANCE THE STATE BUDGET. LEGIS- LATORS ARE LOOKING TO RAISE NEW REVENUES AND NOT SURPRISINGLY, THEY LOOK FIRST TO TAXPAYERS WHO DON’T VOTE – OIL AND GAS COMPANIES. As lawmakers wrestle with rising school costs and inflation impacts on state operations, two bills were introduced in the Senate to bring in more income. One proposal, SB 92, is the so-called “Hilcorp” tax, which imposes a special state income tax on companies organized as “S” corpo- rations. It would effectively apply only to Hilcorp Energy, a major Alaska producer. The second is SB 112, a proposal to lower a per-barrel production tax credit allowed since 2013 to Alaska producers as an incentive. The Senate leadership has decided to hold SB 112 until next year but SB 92 was being promoted as the Legisla- ture entered the final week. Since a committee-introduced bill must be supported by all of its members this means that the Senate leadership, which heads a coalition of Democrats and moderate Republicans, has signed off on the bills. The Senate’s Republican Minority, consisting of six conservative senators, will oppose the bill. SB 92 faces challenges in the House where the coalition Majority holds con- trol by one vote. The House Republican Minority will oppose the bill and Gov. Mike Dunleavy said he will likely veto it if it passes. Hilcorp is organized as an “S” corpo- ration exempt from state corporate in- come taxes. Larger oil producers are “C” corporations, which do pay the tax. SB
Hilcorp is organized as an S corporation, different than other large oil producers classified as C corporations that pay taxes to the state.
cerns have been raised about it until re- cently, and the company has meanwhile been praised for its performance in re- storing Cook Inlet natural gas produc- tion, which was in fast decline in 2012, and for increasing oil production on the
92 would set up a special income tax that would apply to S corporations that are large oil and gas producers. Hilcorp argues that its form of cor- porate organization, which is common for privately-held businesses, has been known to the Legislature since 2012 when the company entered the state. No con-
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Current legislation introduced as part of SB 112 would reduce the per-barrel tax credit for oil producers from $8 per barrel to $5 per barrel. The bill does more than reduce the per-barrel credit, however. It also puts limits on where the credits can be used.
Hilcorp isn’t the only Alaska oil com- pany that is an S corporation, either. It is a common form of corporate organization among explorers and small independent producers in the state. Hilcorp argues that by essentially targeting one compa- ny, SB 92 sends an adverse signal to small producers and explorers who want to in- vest and grow but would be apprehensive about new taxes if they are successful, as Hilcorp has been. The second oil tax bill, SB 112, reduces the per-barrel tax credit for oil producers
from $8 per barrel to $5 per barrel. The bill does more than reduce the per-bar- rel credit, however. It also puts limits on where the credits can be used. Instead of being allowed to apply the credits against production income from all Alaska op- erations, companies would be allowed to apply them only to production income from certain leases. This sharply reduces the benefit of the credits. The per-barrel credit is a key part of the production tax changes made by the Legislature in 2013 that corrected major
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North Slope since 2013, when Hilcorp began operations there. Hilcorp’s investments since 2012 have resulted in substantial new oil produc- tion and revenues. New revenues total $5.6 billion since 2012 and an investment by Hilcorp of $2.6 billion. Another $750 million is planned this year in new drill- ing and development. The company is now a major employer, with 1,700 on staff and another 2,500 contractor employees.
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problems in the previous tax that had discouraged investment for several years. The 2013 change immediately sparked investment drilling and new discoveries such as the Pikka and Willow fields now under construction. Alaska’s oil and gas production tax is a net-profits type tax where expenses are allowed to be deducted before taxes are paid. There are also several incentives built into the tax intended to encourage new production. One of the problems with the previous pre-2013 tax was that its incentives were skewed toward en- couraging capital investment with tax credits applied toward spending, the the- ory being that this would lead to more production. However, concerns were also being raised that the credits linked to invest- ment led to less discipline in planning for capital outlays and a tendency to- ward “gold plating” of projects. A key change in SB 21 was to link credits to production, not spending. This was the concept behind the per-barrel produc- tion credits. Another key change in the 2013 tax change, however, was to increase the net profits tax rate from 25% to 35%, which is the tax rate today. The per-barrel produc- tion tax credit was intended to offset this increase in the tax rate by rewarding pro- ducers who increase production. With all of these changes the Alaska production tax is argued to still be one of the most complicated taxes on industry in the na- tion. There are also other state taxes ap- plied to oil and gas producers, of course, including the state corporate income tax, which is structured differently, and to the state’s advantage, from the state corporate income tax applied to income from other Alaska businesses. There is also a state oil and gas prop- erty tax on facilities like production plants and pipelines and that is the only state property tax. Producers also pay a royalty to the state on production from state-owned land, which is not a tax but rather the landowner’s share of produc- tion or its value. The property tax and royalty are sim- pler in structure and easier for the state to administer, and for taxpayers to pay, than the production tax. The property tax is a flat 20-mill or two percent tax on
The per-barrel credit is a key part of the pro- duction tax changes made by the Legislature in 2013 that corrected major problems in the previous tax that had discouraged investment for several years. The 2013 change immediately sparked investment drilling and new discov- eries such as the Pikka and Willow fields now under construction.
the appraised value of the property. There are complications, of course, particularly when depreciation of assets is allowed, but in principle the tax works like a con- ventional municipal or state property tax. The royalty is similarly simple in con- cept. It is either one-eighth or one-sixth of the actual production depending on the lease or, if the tax is paid in value, or cash, 12.5% or 16.6% of the value of pro-
duction as calculated at the “wellhead,” or point of production. Value is calculated by subtracting tanker and pipeline costs from the nearest market where oil is sold, which for most Alaska production is the U.S. Pacific Northwest, to determine a value at the North Slope.
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AGDC SIGNS DEAL WITH GLENFARNE ON LNG
Private group to manage Alaska LNG Project under new contract BY TIM BRADNER ALASKA’S STATE GAS CORPORATION, ALASKA GASLINE DEVELOPMENT CORP. (AGDC), SIGNED A CONTRACT MARCH 27 WITH GLENFARNE GROUP INC. TO BE PROJECT MAN- AGER FOR THE $40 BILLION-PLUS ALASKA LNG PROJECT. The deal calls for Glenfarne to own 75% of 8 Star Alaska, an AGDC subsid- iary that will manage project develop- ment. That will include attracting in- vestors and customers for the liquefied natural gas project. Glenfarne’s first task is to undertake $150 million in Front End Engineering and Design work (FEED) to update a “pre-FEED” done in 2016 by an industry consortium led by ExxonMobil. Part of the FEED will involve a cost estimated at $42 billion. Glenfarne also will work to attract investors for an initial phase one, the 800-mile 42-inch gas pipeline from the North Slope to Southcentral Alaska that will serve communities in Interior and Southcentral Alaska. Subsequent phases of the project involve a large LNG plant on the Kenai Peninsula that will export liquefied gas to Asia and a large North Slope gas treatment plant that will re- move carbon dioxide from produced gas and inject the CO 2 underground. Glenfarne CEO Brendan Duval said at a March 27 news conference he is confident private equity investments can be raised for the 800-mile pipeline seg- ment, which is treated as a distinct proj- ect, even before the complete project, including the LNG plant is underway. Duval said the FEED study can be done by fall and that a final investment decision for the phase one pipeline can
Glenfarne CEO Brendan Duval said at a March 27 news conference he is confident private equity investments can be raised for the 800-mile pipeline segment, which is treated as a distinct project, even before the complete project, including the LNG plant is underway. Duval said the FEED study can be done by fall and that a final investment decision for the phase one pipeline can come by the end of the year after investors sign on.
come by the end of the year after inves- tors sign on. Despite this optimism, there are un- certainties, mainly on the updated cost. Prices for steel and other materials will have changed and there will be effects caused by President Donald Trump’s new tariff policies, although Trump is a big supporter of the Alaska LNG Project. However, if the pipeline segment can be financed, and construction started, getting investments in the two remain- ing parts, the LNG and gas plants, is ex- pected to be easier. For example, once the pipeline — the single most expensive part of the project — is underway, the LNG plant can be built in increments so that exports of LNG can ramp up as the market is able to absorb them. A key challenge for the original Alas- ka LNG plan is that it would produce and export 20 million tons of LNG from the start, which would be difficult for Asian markets to absorb. Under the agreement signed March 27, AGDC is divesting 75% of 8 Star Alaska, a subsidiary AGDC created to hold and manage all Alaska LNG project
assets, to Glenfarne. Glenfarne assumes the role of Alaska LNG’s lead developer and will lead all remaining development work of the project. AGDC remains a 25% owner of 8 Star Alaska and a part- ner to Glenfarne Alaska LNG is now organized as three sub-projects: the 807-mile, 42-inch pipeline; the large LNG export terminal in Nikiski, on the Kenai Peninsula south of Anchorage; and a North Slope-based gas treatment plant that will be able to inject and store 7 million tons of carbon dioxide annually. “In light of steadily declining gas production from Cook Inlet, which has historically been Alaska’s primary in- state natural gas basin, phase one of the project will kick off immediately, priori- tizing the development and final invest- ment decision of the pipeline infrastruc- ture needed to deliver North Slope gas to Alaskans as rapidly as possible,” AGDC said in a statement. “Following a successful final invest- ment decision, the State of Alaska will retain a 25% share in 8 Star Alaska and have the option to invest up to 25% in
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any or all of the three 8 Star Alaska sub- projects.” Alaska Gov. Mike Dunleavy was en- thusiastic about the agreement. He re- cently was in Asia with AGDC and Glen- farne officials to meet with government and business leaders. “Today (March 27) is a historic day for Alaska,” the gover- nor said. “Oil was discovered in Prudhoe Bay almost exactly 57 years ago, and since then, Alaskans have never given up on finding a way to also benefit from our North Slope natural gas. “Alaska has made a significant in- vestment to develop Alaska LNG to the point where we can engage Glenfarne, a well-qualified industry leader, to bring this great project to the finish line. Alas- ka LNG will strengthen the U.S. geo- strategic position in the North Pacific, provide vital energy security for our residents, our military bases, our busi- nesses, and our Asian allies, and unlock billions in economic benefit at home and abroad.”
Duval echoed the governor’s state- ments. “Glenfarne’s financial, project man- agement and commercial expertise is well matched to lead this vital project forward,” he said. “Alaska LNG will provide desperately needed energy security and natural gas cost savings for Alaskans and give Glen- farne unmatched flexibility to simul- taneously serve LNG markets in both Asia and Europe through our three LNG projects." Glenfarne strongly believes in the benefit of partnering with the commu- nities where we work, and we are already building our Alaska team to bring Alas- ka LNG to life.” AGDC President Frank Richards said: “I’m incredibly proud of the ADGC team that has worked over the past 11 years to develop Alaska LNG. Through persistence, hard work, and determi- nation, Alaska LNG has successfully advanced through the design and per- mitting gauntlet to ignite global market
momentum and attract a world-class de- veloper.” AGDC and Glenfarne executed a let- ter of intent in June 2024 and an exclu- sive term sheet in December in advance of the March 27 binding agreement. Glenfarne is the owner of Texas LNG, which recently announced that its ca- pacity is fully sold out and that Kiewit has joined the project as its EPC con- tractor. A final investment decision in Texas LNG will come later this year. Glenfarne’s affiliate is also the larg- est importer of LNG into Colombia and owns Magnolia LNG, a late-stage LNG export project located in Lake Charles, La. Beyond LNG, Glenfarne owns 50 op- erating assets in the energy sector across five countries. Together with Alaska LNG, Glen- farne’s permitted LNG portfolio totals 32.8 million tons per year of LNG ca- pacity under development, Duval said. Alaska LNG consists of 20 million tons per year of that expected capacity.
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OPTIMISM ABOUNDS ON INTERIOR LAND ORDER Interior Secretary Doug
New administration relaxes restrictions on federal lands exploration BY TIM BRADNER ALASKANS ARE OPTIMISTIC ON A NEW DEPARTMENT OF THE INTERIOR LAND ORDER OPENING AREAS TO OIL AND GAS EXPLORA- TION IN NORTHERN ALASKA. Interior Secretary Doug Burgum is- sued a new order in March relaxing re- strictions on federal lands in the Nation- al Petroleum Reserve-Alaska and the Trans Alaska Pipeline System corridor from the North Slope to Interior Alaska, as well as lands in the Arctic National Wildlife Refuge. Burgum’s order gener- ally restates announcements earlier from President Donald Trump on unleashing exploration and development in Alaska with a few more details, but not yet on specific actions planned. In the Arctic refuge, known as ANWR, the 1.56-million acre coast- al plain was opened to exploration in 2020 under the 2017 Tax Cut and Jobs Act and two lease sales were held. The leases were canceled by former President Joe Biden’s Interior Secretary Deb Haa- land. However, U.S. District Court Judge Sharon Gleason has ordered the leases restored. Gleason ruled Haaland did not have authority to cancel the leases. Another part of Burgum’s March or- der deals with the 23-million-acre Na- tional Petroleum Reserve-Alaska on the western North Slope. The Secretary announced in March that 82% of the re- serve will be available for leasing. Cur- rently, only about half of the NPR-A is available. This is important but it will take time to implement, and explorers will need more details. Federal geologists have said most of the large NPR-A, particularly the south-
Burgum issued a new order in March relaxing restric- tions on federal lands in the National Petroleum Re- serve-Alaska and the Trans Alaska Pipeline System
corridor from the North Slope to Interior Alaska, as well as lands in the Arctic Nation- al Wildlife Refuge. Burgum’s order generally restates announcements earlier from Presi- dent Donald Trump on unleashing explora- tion and development in Alaska with a few more details, but not yet on specific actions planned.
region, believes the NPR-A has more potential for new and larger discoveries than ANWR, to the east. It also can be explored with less of the political com- plications and lawsuits that will come with reopening the coastal refuge, he said. While the northeast NPR-A areas near ConocoPhillips’ Willow project are of interest to companies, there have long been discoveries farther west along the coast that might now get more explora- tion. Also, a discovery at Smith Bay, on state-owned submerged lands, may get more work if the new federal govern- ment leadership eases restrictions for onshore pipeline corridors needed to transport any oil produced. One question, however, is whether
ern and western parts, have relatively lit- tle oil and gas potential, and companies have expressed little interest in those areas. The part of the petroleum reserve that is most attractive to industry is in the northeast where ConocoPhillips has made discoveries and is now developing its Willow project. ConocoPhillips holds a large block of existing federal leases in the area and has said it will be exploring those. Similarly, Australia-based Santos Ltd., which is now developing its Pikka discovery on state lands near the NPR-A, holds an extensive group of leases to the west in the federal reserve, which also has potential. Richard Garrard, the Alaska explo- ration geologist who is familiar with the
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Burgum’s NPR-A plan will include leasing of ecologically sensitive coastal wetlands north and west of where ConocoPhillips is developing Willow. The Teshekpuk Lake area near the Alaska Beaufort Sea coast, for example, is a prime nesting area for migrating waterfowl. The Teshekpuk area is also judged to have significant petroleum potential but has been protected through several presidential administrations including Republican-led ones. It is unknown whether Burgum will now offer this. If it is proposed for leas- ing, it will draw challenges not only from major conservation groups but also sport hunters interested in protecting migratory birds. Not all lands in the Teshekpuk area are sensitive, however. Former Interior Secretary Haaland expanded the pro- tected area around the lake south, and there are hopes new Interior Secretary Burgum will roll this back to the original protected area, which was established under former President Bill Clinton. Similarly, Haaland had expanded a protected area along the Colville River to the west. There are hopes this can also be reversed. A third part of Burgum’s order will be of strategic importance to Alaska. It would transfer lands in the Trans Alaska Pipeline System federal land corridor to the state. It has long been a state priority to gain control of this area. The state has worked for years to get an old public land order lifted that restricts access to the so-called TAPS corridor, and that dates from the 1970s. Meanwhile, it appears the 1970s-era public land orders restricting federal lands for other parts of the state were left in place by Haaland, although this could change. These are areas in the eastern Interior, Northwest Alaska and other re- gions that make up the 38 million acres of lands where Haaland reaffirmed con- tinued closures last year. One aspect of this is that in some of the public land orders (they differ by area), lifting the restriction would make the land eligible for federal min- ing claims to be filed, raising concerns among tribal groups of a “land rush” of claims staking. It’s not clear why the Secretary left
this in restricted status, but it may be to allow time for Alaska Native corpora- tions and the state to sort out their own claims to lands. All of this stems from the Alaska Native Claims Settlement Act of 1971 (ANCSA) when Congress withdrew lands to entry across large areas of land under Sections d-1 and d-2 of the act. The d-2 withdrawals were made to set aside lands for new national parks, wild- life refuges and forests, to be created in
the 1980 Alaska National Interest Lands Conservation Act (ANILCA). The d-1 lands were withdrawn to al- low Alaska Native corporations to select their lands under ANCSA. However, the d-1 lands are still withdrawn under the decades-old public land orders.
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ALASKA COURT RESTORES CANCELED ANWR LEASES
Biden Administration's move ruled 'improper' in case brought by AIDEA BY TIM BRADNER A FEDERAL JUDGE HAS RESTORED OIL AND GAS LEASES IN THE ARCTIC NATIONAL WILD- LIFE REFUGE (ANWR) THAT WERE AWARDED TO A STATE OF ALASKA AGENCY IN A DECEMBER 2020 FEDERAL LEASE SALE. U.S. District Court Judge Sharon Gleason said former U.S. Interior Secre- tary Deb Haaland was improper in her action to cancel the leases. The Alaska Industrial Development and Export Authority (AIDEA) had filed a lawsuit in federal court contesting the lease cancellation. Alaska Gov. Mike Dunleavy applaud- ed the decision. “This is about more than reinstating illegally canceled leases. It is about up- holding the rule of law in our country,” Dunleavy said. “Now, the leasing pro- gram can move forward and could result in more safe, secure energy production here in Alaska.” It is uncertain whether President Don- ald Trump’s new Interior Secretary Doug Burgum will appeal the decision. AIDEA won seven federal leases in the 2020 sale, which saw bids from only two others, an independent explorer and an Anchorage-based real estate company. The sale was held in the 1.5-million-acre coastal plain, which is in the far northern part of the Arctic refuge, which covers 18 million acres. A week after the leases were award- ed in January 2021, President Joe Biden took office and ordered a moratorium on approvals for activity on the leases. Faced with opposition from Biden, the two private bidders withdrew from their leases, citing continued costs against dim
Most of the refuge was placed in a protected wilderness status but the 1.5-million-acre coastal plain was kept out of the wilderness designation because of its oil and gas potential.
producing, were made in the 1970s and 1980s. In recent years, other finds were made as explorers worked their way east from Prudhoe Bay toward the western border of ANWR on the Canning River. Given that the favorable geology ex- tends further east into the coastal plain of the refuge, it’s likely discoveries will also be made. The government has not allowed exploration, however. That is likely to change soon. AIDEA has previously said it will not develop any discoveries itself but will contract out the
prospects that Biden’s Interior Secretary, Haaland, would approve permits for ex- ploration. This left AIDEA, the state’s develop- ment finance agency, as the remaining holder of leases. ANWR has been a political hot potato in Alaska since the refuge was created by Congress in 1980. Most of the refuge was placed in a protected wilderness status but the 1.5-million-acre coastal plain was kept out of the wilderness designation be- cause of its oil and gas potential. The area is east of the central North Slope where major oil and gas fields, now
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