[Senate Hearing 114-497] [From the U.S. Government Publishing Office] S. Hrg. 114-497 ALASKA RESOURCE DEVELOPMENT_ OPPORTUNITIES TO CREATE JOBS AND STRENGTHEN NATIONAL SECURITY ======================================================================= FIELD HEARING BEFORE THE COMMITTEE ON ENERGY AND NATURAL RESOURCES UNITED STATES SENATE ONE HUNDRED FOURTEENTH CONGRESS SECOND SESSION ---------- MARCH 28, 2016 ---------- [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Printed for the use of the Committee on Energy and Natural Resources Available via the World Wide Web: http://fdsys.gov S. Hrg. 114-497 ALASKA RESOURCE DEVELOPMENT_ OPPORTUNITIES TO CREATE JOBS AND STRENGTHEN NATIONAL SECURITY ======================================================================= FIELD HEARING BEFORE THE COMMITTEE ON ENERGY AND NATURAL RESOURCES UNITED STATES SENATE ONE HUNDRED FOURTEENTH CONGRESS SECOND SESSION __________ MARCH 28, 2016 __________ [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] Printed for the use of the Committee on Energy and Natural Resources Available via the World Wide Web: http://fdsys.gov ______ U.S. GOVERNMENT PUBLISHING OFFICE 21-970 WASHINGTON : 2017 ----------------------------------------------------------------------- For sale by the Superintendent of Documents, U.S. Government Publishing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, Washington, DC 20402-0001 COMMITTEE ON ENERGY AND NATURAL RESOURCES LISA MURKOWSKI, Alaska, Chairman JOHN BARRASSO, Wyoming MARIA CANTWELL, Washington JAMES E. RISCH, Idaho RON WYDEN, Oregon MIKE LEE, Utah BERNARD SANDERS, Vermont JEFF FLAKE, Arizona DEBBIE STABENOW, Michigan STEVE DAINES, Montana AL FRANKEN, Minnesota BILL CASSIDY, Louisiana JOE MANCHIN III, West Virginia CORY GARDNER, Colorado MARTIN HEINRICH, New Mexico ROB PORTMAN, Ohio MAZIE K. HIRONO, Hawaii JOHN HOEVEN, North Dakota ANGUS S. KING, JR., Maine LAMAR ALEXANDER, Tennessee ELIZABETH WARREN, Massachusetts SHELLEY MOORE CAPITO, West Virginia Colin Hayes, Staff Director Patrick J. McCormick III, Chief Counsel Kip Knudson, Professional Staff Member Annie Hoefler, Executive Assistant Angela Becker-Dippmann, Democratic Staff Director Sam E. Fowler, Democratic Chief Counsel Stephanie Teich-McGoldrick, Democratic Congressional Fellow C O N T E N T S ---------- OPENING STATEMENTS Page Murkowski, Hon. Lisa, Chairman, and a U.S. Senator from Alaska... 1 WITNESSES Anderson, Michelle, President, Ahtna, Inc........................ 4 Barrett, Admiral Tom, President, Alyeska Pipeline Service Company 9 Glenn, Richard, Executive Vice President for Lands and Natural Resources, Arctic Slope Regional Corporation................... 15 Marushack, Joe, President, ConocoPhillips Alaska................. 26 Jeffress, Bill, Principal Consultant, SRK Consulting............. 47 Jorgensen, Bronk, Fortymile Mining District...................... 53 Simon, Lorali, Vice President, External Affairs, Usibelli Coal Mine, Inc...................................................... 57 Tangen, J.P., Attorney at Law, Alaska Miners Association......... 64 Beltrami, Vince, President, Alaska AFL-CIO....................... 259 Herbert, Lisa, President and CEO, Greater Fairbanks Chamber of Commerce....................................................... 265 Hutchinson, Chad, Director, Fairbanks Pipeline Training Center... 272 Pomeroy, Kevin, Business Manager/Secretary-Treasurer, Laborers' Local 942...................................................... 276 ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED Anderson, Michelle: Opening Statement............................................ 4 Written Testimony............................................ 7 Barrett, Admiral Tom: Opening Statement............................................ 9 Written Testimony............................................ 11 Beltrami, Vince: Opening Statement............................................ 259 Written Testimony............................................ 262 Fairbanks Economic Development Corporation: Letter for the Record........................................ 308 Glenn, Richard: Opening Statement............................................ 15 Written Testimony............................................ 17 Herbert, Lisa: Opening Statement............................................ 265 Written Testimony............................................ 268 Hutchinson, Chad: Opening Statement............................................ 272 Written Testimony............................................ 274 Jeffress, Bill: Opening Statement............................................ 47 Written Testimony............................................ 50 Jorgensen, Bronk: Opening Statement............................................ 53 Written Testimony............................................ 55 Longan, Sara: Statement for the Record..................................... 309 Marushack, Joe: Opening Statement............................................ 26 Written Testimony............................................ 28 Milkowski, Stefan: Letter for the Record........................................ 313 Murkowski, Hon. Lisa Opening Statement............................................ 1 Pomeroy, Kevin: Opening Statement............................................ 276 Written Testimony............................................ 279 Schaetzle, Eric: Article entitled ``Global Trends in Renewable Energy Investment 2016''.......................................... 296 Letter for the Record........................................ 315 Article entitled ``An Alaskan Roadmap to 100% Renewable Energy'' dated 1/30/16..................................... 316 Simon, Lorali: Opening Statement............................................ 57 Written Testimony............................................ 59 Tangen, J.P.: Opening Statement............................................ 64 Written Testimony............................................ 66 ALASKA RESOURCE DEVELOPMENT--OPPORTUNITIES TO CREATE JOBS AND STRENGTHEN NATIONAL SECURITY ---------- MONDAY, MARCH 28, 2016 U.S. Senate, Committee on Energy and Natural Resources, Fairbanks, AK. The Committee met, pursuant to notice, at 1:00 p.m. AKDT at the Pipeline Training Center, 3605 Cartwright Court, Building C, Fairbanks, Alaska, Hon. Lisa Murkowski, Chairman of the Committee, presiding. OPENING STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR FROM ALASKA The Chairman. Good afternoon and welcome to all of you. I would like to thank the Pipeline Training Center for allowing us to be here this afternoon for this field hearing of the Senate Energy and Natural Resources Committee. Before I begin my remarks I would like to invite Chad Hutchinson to come up and give us a little bit of a welcome and a safety moment, if you will. Mr. Hutchinson. Hello, everybody. Welcome to Fairbanks Pipeline Training Center. I thank everybody for coming to join us today. We're just going to start out and have a safety minute as we do with all trainings here at the Training Center. The first thing I'd like to point out is the exits. In case of emergency there are the four exits over to the side, out the back, down the hall. Muster point, if we all have to leave we'll be over at camp. We have a construction camp over here and it's got a big letter E on top of it, E. So that will be our muster point. There's an AED (defibrillator) just across the hall out here on the right. The rest rooms are just across the hall to the right also. It is great that you all have come to Fairbanks. You're all looking very excited. You want to get out. You want to do things. Temperatures are getting up into the 40s, but we have to keep in mind it's getting down into the 20s at night, so it's still freezing. Allow yourselves a little bit of extra time, especially in the morning, tomorrow morning. They say it's going to snow a couple inches tonight, again. So if that happens we all know there's going to be ice underneath that snow. So we're going to have to be careful where we're walking, going to have to pay attention. My wife, as some of you know, she's still getting over a surgery on her shoulder. She slipped in a parking lot on ice. So please, take your time, walk. That concludes our safety minute. So with that, thank you, Senator. The Chairman. Thank you, Chad, we appreciate it. And again, thank you for the opportunity to be in your facility here today. I would like to welcome all of the witnesses that have joined us for an important discussion about resource development within the State of Alaska. As many of you, I am sure, know, it was gold mining that ultimately determined the location of Fairbanks. It was Captain Barnette's river boat that ran aground on the Chena and fate determined where his mining supply business was to be located. While Barnette was, perhaps, too late and too far away to profit from the Klondike gold rush, he was part of the Fairbanks gold rush that led us to modern day. Today Fort Knox and Pogo, both world class mines north and south of the city, continue the proud tradition to give meaning to Fairbanks' motto: The Golden Heart City. This region, like so much of our state, is blessed with vast natural resources that we can use to gain prosperity and fulfill promises of statehood. Today is Seward's Day. I actually forgot about that when we scheduled this hearing. But it is Seward's Day and there is still a little bit of laughter and chuckle when people think about Seward's ice box or Seward's folly. But not even Seward could have conceived of the vast resource wealth when the U.S. purchased this amazing state from Russia. Alaska has what virtually no one else has: Tens of billions of barrels of oil, hundreds of trillions of cubic feet of natural gas, a massive supply of coal, countless deposits of hard rock minerals, and of course, renewable resources beyond imagination. If we can harness them, then we can supply them to the rest of our nation to sustain our growth, our competitiveness and our security. Really our hardest task is not in finding the resources or developing the know-how or recruiting the manpower needed to responsibly produce them. Instead, it is really overcoming the restrictions that are imposed, oftentimes, by our own Federal Government which fails to understand why Alaskans must be allowed to explore and to develop. Tens of millions of acres of our lands and waters have been unilaterally withdrawn in recent years, against our strongest objections, and in my view, oftentimes in violation of the law. The 10-02 area of ANWR remains locked away. The Federal Government has made commercial production all but impossible in the offshore Arctic. It took far longer for CD-5 in a National Petroleum Reserve to gain regulatory approval than it should have. We have also witnessed repeated attempts to expand the use of pseudo wilderness designations from ``aquatic resources of national importance'' to ``areas of critical environmental concern'' and ``outstanding national resource waters,'' all to circumvent ANILCA's ``no more'' clauses and to stop development. At the same time federal agencies have generally become less cooperative, less willing to work with us to get to ``yes,'' and instead start and stay at ``no.'' Even producing on state lands has become more difficult, more costly, more complex and more time consuming for the likes of ASRC and Ahtna by virtue of actions that are taken at the federal level. We also face a crush of national regulations, from the Waters of the United States Rule to the Stream Protection Rule and a movement that believes that keeping needed resources in the ground will somehow result in a safer, more stable world. All of this comes at a time of low resource prices, at a time when the Federal Government should be trying to protect the competitiveness of our extractive industries, not finding ways to close off access and strand their capital. This is a time when we should be opening our lands and waters to responsible development, streamlining the permitting process and working to ensure that protests and litigation do not hold us back. This is a critical time for resource production in our state. I believe that we need to speak up. We need to highlight the hypocrisy that we see in efforts to lock down our lands while at the same time demonstrating how well we care for the environment as we develop our natural resources. There is no better way to do that than by hearing from Alaskans who know the benefits that come from increased resource production and what needs to be done at the federal level to unleash our potential. We have played a tremendous amount of defense in recent years and in many ways have, kind of, held our own. But in the remaining months of this Administration we could, yet again, be put back on our heels. We must be prepared for a new Administration that will take office just ten months from now, not knowing whether it will be friendlier in nature or perhaps even more antagonistic. We have got our work cut out for us. That any resource project can survive the current interplay between federal agencies and millions of pages of rules and countless more pages of guidelines, manuals, legal opinions and planning documents seems almost miraculous, but we know that it can be done. The states, including Alaska, typically permit projects in a fraction of the time that it takes the Federal Government. The offshore regulatory regime imposed in Alaska may be chaotic, but look at other countries. Look at Norway and Russia that have vibrant programs in their OCS regions. We can also look around the world and realize that it should take far less than seven to ten years for a new mine to begin operation. But I am optimistic about Alaska's future. We have resources that all other nations covet. We are a provider in a growing and hungry world. We know that prices are low right now, but we have seen prices go up and we have seen prices go down. A majority of our citizens strongly support production because they understand the wide ranging benefits that ``Made in the U.S.A.'' carries, whether it is high paying jobs, to revenues, to energy and national security. So today we are gathering good ideas and counsel on how we might amend, reform, direct and provide oversight of federal law in federal agencies. This is an opportunity, again, to hear from many in the sectors across the state. We have three strong panels that are with us this afternoon. The plan, or the schedule, for the next almost three hours will be to hear from the three panels, taking testimony about five minutes from each witness. I will have an opportunity at the conclusion of each panel to direct questions to the panelists. Once we have concluded the three panels, if we have time before the conclusion of the four o'clock hour, which I am most hopeful that we will, we will invite people who have joined us here this afternoon to offer their public comment. We ask that the comment be limited. There is a signup sheet somewhere in the back, at the back of the room there with Mr. Hammond. When we get to that point in the afternoon, we will give further instructions as to how we are going to move forward with that portion of the testimony. With that, I would like to commence with the first panel. It will be led off by Michelle Anderson, who is President of Ahtna Incorporated. It is good to have Michelle here in her leadership in a host of different areas. We just visited last week down in Anchorage. Admiral Tom Barrett, who is the President of Alyeska Pipeline Service Company, is with us. He will be followed by Mr. Richard Glenn, who is the Executive Vice President for Arctic Slope Regional Corporation. The final panelist on panel one is Mr. Joe Marushack, who is President for ConocoPhillips, Alaska. Know that your full written statements will be included as part of the record as will all those who provide testimony to us this afternoon. So welcome to the field hearing, and thank you for being here. Michelle, if you would like to begin with your comments. STATEMENT OF MICHELLE ANDERSON, PRESIDENT, AHTNA, INC. Ms. Anderson. Thank you. Thank you, Senator. Good afternoon. My name is Michelle Anderson. I am pleased to have the opportunity to provide comments to the Committee. I am a charter member of the Native Village of Gulkana, an Ahtna Shareholder and President of Ahtna, Incorporated. Ahtna is the smallest Alaska regional corporation established under ANCSA in 1971 and represents the interests of over 1,900 Ahtna Athabascan shareholders. The Ahtna region encompasses eight villages and holds title to 1.6 million acres of land in South Central Alaska. All of our villages are connected by the road system. Raised in the Ahtna region, I am deeply committed to protecting my culture and our way of life, responsible land development and securing economic benefits for those I serve. I believe that these goals can coexist. Ahtna's lands extend from the Denali Preserve to the Chitina. They surround North America's tallest peak, Mt. Denali, to America's largest national park, Wrangell-St. Elias. Ahtna has 622,000 acres of land in the Wrangell-St. Elias National Park and Preserve, lands that our elders selected prior to the creation of the park. Ahtna is now one of the largest in-holders of private property within public lands in the United States. Our lands are of paramount importance to the Ahtna people who have lived here for thousands of years and depend on hunting, fishing and other resources to sustain our way of life. Ahtna's leaders have made it possible for the Trans-Alaska Pipeline System (TAPS) to be constructed from 1974 to 1977. A 55-mile corridor through Ahtna's fee-simple lands was set aside for the 48-inch diameter pipeline. TAPS Pump Station 11 and the Glennallen Response Base were built near my family's home. TAPS has transported approximately 17 billion barrels of oil through our lands in a safe and environmentally sound manner. My family, like so many others, directly benefitted from TAPS as both my parents worked on the pipeline. In fact, my father still works on TAPS today for Alyeska Pipeline Service Company. Ahtna's shareholders and many other Alaska regional and village corporations have benefitted from TAPS with employment, contracting and training opportunities. In 2015, 39 percent of Ahtna employees on TAPS were Alaska Natives. These are highly paid jobs in a great work environment. Ahtna's concern is that TAPS is operating at approximately 25 percent of its capacity. The State of Alaska with Prudhoe Bay and Kuparuk have opened up their lands for safe and responsible resource development. Alaska Native Corporations like ASRC and Kuukpik Corporation made Alpine possible. ASRC shares 70 percent of the profits derived from Alpine with other regional corporations as a provision of 7(i) of ANSCA. Alaskans finally got our first North Slope oil in the federally-owned NPRA with CD-5 in late 2015. ConocoPhillips and its predecessor companies have tried for a very long period of time to develop oil. Senator Murkowski has been a vocal advocate of cleaning up NPRA from damages inflicted by the Federal Government over the last 60 plus years and it's finally happening. It takes years, even decades, to drill just one exploratory well when the Federal Government is involved in the process. Our TAPS pipeline needs a lot more oil which needs to come from federal lands. Speaking as a mother of two sons in college, they will need work opportunities to remain living in Alaska. The Federal Government owns over 60 percent of Alaska's 365 million acres of land. Ahtna has proven that a major world-class pipeline like TAPS can safely transport through our own lands. TAPS just needs more oil, particularly from federal lands, to keep running for future generations. In August 2015 I had the pleasure of meeting with President Obama along with other Alaska Native leaders. I stressed to the President the importance of Alaska LNG for all Alaskans. Approximately 35 miles of proposed Alaska LNG pipeline would flow underneath our beautiful Ahtna land. The Ahtna people will require this project to be constructed to the highest worldwide standards including materials and personnel. We are confident that the State of Alaska and its industry partners will be able to deliver. For the benefit of Ahtna shareholders and all Alaskans we need the Federal Government to open up their lands in a timely manner. This must include efficient land uses, permitting and a collaborative relationship with the State of Alaska and industry for both oil and gas and mining. Ahtna owns some of the most pristine lands in the world and we have proven that development can occur safely and to the economic benefit of all Alaskans. The vast majority of Alaska's federally-owned, resource rich lands are seldom, if ever, seen by Alaskans. In 1971, 45 years ago, ANCSA was passed. Ahtna was to receive title to land of 1.77 million acres. All these years later we are still waiting for a quarter of a million acres to complete our land settlement. Alaskans are frustrated that the Federal Government does not move very fast when Alaska acreage is part of the equation. We need the Federal Government to take a proactive approach with their vast acreage to provide economic benefits for Ahtna and all Alaskans. Several Alaska regional corporations, including Doyon and Ahtna, are attempting to develop our own lands for oil and gas. We need major oil and gas and mining companies to continue making multi-billion dollar investments in Alaska to keep TAPS running for the next 40 years to protect our Ahtna culture and to provide economic benefits to our shareholders. On behalf of all the Ahtna people I sincerely appreciate the opportunity to speak today. Tsin'aen. [The prepared statement of Ms. Anderson follows:] [GRAPHIC] [TIFF OMITTED] T1970A.001 [GRAPHIC] [TIFF OMITTED] T1970A.002 The Chairman. Thank you, Michelle. Admiral Barrett, welcome to the Committee. STATEMENT OF ADMIRAL TOM BARRETT, PRESIDENT, ALYESKA PIPELINE SERVICE COMPANY Admiral Barrett. Chairman Murkowski, thank you for the opportunity to testify. I'm particularly delighted to have this opportunity to be at the Pipeline Training Center. Alyeska has been proud to be part of supporting this organization since start-up and they have helped train many of the high skilled, very smart and very tough workers that our company, our industry and actually, the state depends on. So I want to thank them for that also. They've been a huge basis of support for us. TAPS, the Trans-Alaska Pipeline System, is fundamentally sound infrastructure, although it's a little low, but it's fundamentally sound. We have an extremely strong workforce, but we're operating well under capacity. This morning I saw a note from our Oil Movement Engineering Director. He was up at Pump Station One on Friday, and we ran a successful full load test on new pumps that we've installed up there, new booster pumps. That's part of our renewal process on the system. And so we ran them up to a full load and proved that it was running fine. That's 1.09 million barrels for a full load. Today is one of the best days we've had this winter on the pipeline, and our numbers are higher in the winter than in the summer. We were at 556,000 barrels. So without any change, without any strain, without any lift, we could take in up to 1.09 million barrels if it was available to us today. The low flow, as you know and I've talked about before, it creates many challenges with water and wax and just the flow rate. It's, kind of, like your car. It's designed to actually to run very efficiently when your vehicle is at 55/60 miles an hour down the highway. If you ran it all the time at 15 or 20 miles an hour, you'd get super build up and your spark plugs would clog. Pretty soon you would get backfires. You need to maintain the car much more aggressively. And that's kind of, TAPS. We're running well below the space that we were designed to run. We're confident we can handle that. We've got a great, great workforce and are constantly renewing, but it is costly. It's increasingly complex, and it's difficult for us to do. We do know, and our workforce knows, both our own employees and our contractors, that we need to operate safely, and we do. Last year was the safest year ever in TAPS history. We had near perfect reliability. We had an extremely strong environmental record. And as you look around at some of the recognition our people have gotten, we received the API Large Pipeline Operator Award for environmental performance, we received the Governor's Safety Award, for the fifth year in a row we were selected as one of the world's most ethical companies, and we received for our Vessel of Opportunity Program in Prince William Sound a Stewardship Award from the Alaska Sea Life Center. My point to you though is that the backbone of our organization is not simply infrastructure. It's our people, both blue collar and white collar workforces. We're over 90 percent Alaska-based, 70 percent by the way of partnerships with our contractors, our Alaska-based companies. We're 20 percent Alaska Native. We're over 30 percent women. We're over 33 percent minority. And our key partners include companies like Doyon and ASRC and Ahtna and Chugach and NANA. We're very proud of that. And our people, in many cases, are the backbones in their communities so the benefit that comes is not just the jobs, but the people that come with those jobs, the families that come with those jobs and what they contribute to their communities whether it's food banks, United Way, coaching sports teams, being active in churches. They are the backbone of many Alaska communities, and we're very proud of that. They're very generous with their time, their leadership and their energy. So the key to keep our sustained ability is throughput. I heard a statement--up in Fairbanks here you had a big week last week with the Arctic Council meetings. I heard Else-Berit Eikeland, the Norwegian Ambassador to the Arctic Council, speak two weeks ago in Anchorage. She said Norway supports more oil development in the Barents Sea, and this is a senior Norwegian official, recognizing the risks. She said the reason they can get it is because they understand that what comes with that development is foundation to the health and well-being of their communities. Norway has the highest percentage of its population of any circumpolar nation living above the Arctic Circle. So I think that's the opportunity to both sustain and create more opportunities for that population. Senator, you mentioned many times before, we need better access. We need to improve the regulatory environment. If we get that I think we can safely deliver oil that benefits U.S. national security, the State of Alaska proudly and many thousands of people who work on support and benefit from our activities. Thank you very much. [The prepared statement of Admiral Barrett follows:] [GRAPHIC] [TIFF OMITTED] T1970A.003 [GRAPHIC] [TIFF OMITTED] T1970A.004 [GRAPHIC] [TIFF OMITTED] T1970A.005 [GRAPHIC] [TIFF OMITTED] T1970A.006 The Chairman. Thank you, Tom. Mr. Glenn, welcome. It is good to see you escaped from the volcano. Barrow is closed down because of the volcano. STATEMENT OF RICHARD GLENN, EXECUTIVE VICE PRESIDENT FOR LANDS AND NATURAL RESOURCES, ARCTIC SLOPE REGIONAL CORPORATION Mr. Glenn: Yes, if you're headed to Bethel or Nome or Kotzebue or Barrow, you shouldn't be flying today. The airlines closed down the west half of the north portion of our state. Thank you, Senator, for inviting me to this hearing. My name is Richard Glenn. I'm Vice President of Lands and Natural Resources for Arctic Slope Regional Corporation (ASRC), and I am grateful to be on this panel today. I was excited to learn about Ahtna's history. And I hope that in my brief testimony you'll get a little bit of a picture of the Arctic Slope region as well and our views on these important issues. There's four key points that I'd like to present today, and my written testimony will go into greater detail. These points focus mostly on the challenges and barriers to responsible oil and gas development and mineral development in Alaska. We are an oil- and gas-dependent state, and resources extracted from our region are the main artery of Alaska's economy. Over the years we've faced significant challenges and my written comments goes into detail, chapter and verse, on those challenges. The four broad points I'd like to take a look at is first of all, look at the balance of development with respect to communities, Arctic communities. Today's debate seems to sway from absolute, complete, developing protection and stayed there rather than just balance of responsible development and protecting the environment, safe development. Rather than mothballing our resources at the detriment of local communities, consider how tribal and native communities are empowered by development and whether the risk has already been mitigated in the plan for development. Our local leadership works to provide controls on development in our region so that the mitigation is already there when the development proceeds. This preserves the environment, this allows for our local economy and it allows our local subsistence activities to put food on our tables. The local perspective should not be overlooked, dismissed or marginalized as the Federal Government develops resources in the Arctic. Second, I would urge that the Federal Government resist the permanent setting aside of large swaths of land and ocean in the name of, for example, species protection. The Arctic is home to these huge migrations of animals, that go from East to West, North to South, and they go in and out of the frame of the picture for any small, special set-aside patch of land or ocean. It's the migration and seasonality of ice cover and open water is so big that it renders these small parcels almost meaningless. The polar bear critical habitat designation, for example, which is about as big as the State of California is probably going to be a well known example of this, but there are many others and there's potentially going to be many more. But our experience with onshore and offshore is that setting aside of huge swaths of land often has unintended negative impacts. Third, I would like to thank the Administration for embracing green and renewable energy. There can be an appropriate mix of extractive industry and green energy, but green energy, for example, in rural Alaska is not a replacement for commercial development. Also, it's not even a replacement for the diesel fuel, for example, in our region that's the lifeblood of the smallest villages. All you have to do is travel just up the hill to the Cold Climate Housing Research Center and look at some marvelous successes in solar power and energy conservation. We embrace this technology, but we recognize it for what it is. Finally, we have issues with respect to the several agencies within the Federal Government on education. It's difficult to educate them about Alaska Native issues. I think that in this Administration we've made great progress on tribal consultation, but there still needs to be an awareness of this, kind of, braided rope relationship that we have, especially in my region between tribes, municipalities and the ANSCA Corporations. ANSCA land ownership, resource ownership, benefits tribal members. And so, although we are three different animals, we represent the same constituents and we are braided together like strands of a rope. The Administration appears not to understand the value of resource development to municipalities and tribal members. These are our shareholders. We were created by Congress and are the largest private landowners in this state, yet our ownership is sometimes disregarded or it's discounted as if our charge is irrelevant to the contribution to the quality of life for the people who we serve. Senator Murkowski and other Committee members, as you look to development and national energy policy, please remember that Alaska is massive for domestic energy production. It's also our home. ASRC appreciates all of your efforts to pursue federal legislation that would address obstacles to sustainable oil and gas development. We also appreciate your steadfast commitment to the challenging issues before us in federal management, land management, regulations and policies. These have left an uncertainty for developers in this state. ASRC is poised to assist you as you look for proper solutions for these issues. Thank you. [The prepared statement of Mr. Glenn follows:] [GRAPHIC] [TIFF OMITTED] T1970A.007 [GRAPHIC] [TIFF OMITTED] T1970A.008 [GRAPHIC] [TIFF OMITTED] T1970A.009 [GRAPHIC] [TIFF OMITTED] T1970A.010 [GRAPHIC] [TIFF OMITTED] T1970A.011 [GRAPHIC] [TIFF OMITTED] T1970A.012 [GRAPHIC] [TIFF OMITTED] T1970A.013 [GRAPHIC] [TIFF OMITTED] T1970A.014 [GRAPHIC] [TIFF OMITTED] T1970A.015 The Chairman. Thank you, Richard, we appreciate it. The last member on the panel is Mr. Joe Marushack, welcome. STATEMENT OF JOE MARUSHACK, PRESIDENT, CONOCOPHILLIPS ALASKA Mr. Marushack. Thank you, Senator. In the interest of time I'm going to start about halfway through my written testimony and focus on the federal permitting challenges. Exploration and development in the Arctic, and particularly in Alaska, has its own special set of requirements. Because of the nature of the land, the tundra, the exploration wells built outside of existing infrastructure are drilled in the winter using ice roads and ice pads when the tundra is frozen. The ice-based infrastructure melts in the summer and leaves no marks; however, this reduces the amount of time available to drill to about three months of the year. When it comes to developing an exploration discovery the desire to minimize the development footprint requires that we process production from centralized facilities. It requires that we drill wells from central pads using expensive, extended reach drills. All this leads to costly development and longer time frames for exploration development than would be for land based outside the Arctic. There are a number of challenging regulatory issues we continue to have with development on federal lands, and I'll summarize several of these. In order for development, conservation and impact mitigation to proceed orderly in NPRA, agency decisions must be predictable and reasonably durable. Predictability is essential for developers, residents, investors, the State of Alaska, North Slope Borough, Alaska Native Corps, the tribes and villages on the North Slope. Since we first began exploring in NPRA in 2000 we've seen steadily increasing and evolving requirements from the Federal Government. At this juncture in time we have over 250 federal requirements for new developments that must be addressed in NPRA. Again, time prevents me from reading this list to you, but I've included it in an attachment. The steady increase in standards and mitigation measures is complicated by the agencies revisiting previous work, decisions and compromises. For example, an environmental impact statement that was performed in 2004 explicitly evaluated and approved roads proposed for planned development of CD-5, GMT-1, Mooses Tooth One, Mooses Tooth Two. However, as permitting for each of these projects has proceeded we face additional requirements that were not part of the original project scope, adding time to the schedule, increasing costs and creating uncertainty regarding the viability of development. It is our belief that the current standards and mitigation measures that we follow in NPRA more than adequately address concerns about potential impacts to the environment and subsistence hunting. We recognize the legitimacy of those concerns, but we feel that they have been well considered and properly addressed. One federal issue that threatens even more uncertainty is the November 2015 White House Memorandum calling for the Departments of Defense, Interior and Agriculture, the Environmental Protection Agency and the National Oceanic and Atmospheric Administration and all the Bureaus and Agencies within them, for example, the Bureau of Land Management, Bureau of Ocean Energy Management, Bureau of Safety and Environmental Enforcement, National Park Service, National Marine Fisheries and Fish and Wildlife Services, to develop new impact avoidance and mitigation standards in each of the agency's areas of jurisdiction. This new policy has the potential to upset the balance of protection and development that Congress has directed in the laws under which the agencies operate. From what we have been able to assess the basis for estimating impacts and associated mitigation measures are not well defined, not predictable and do not allow us to estimate the effect that it may have on the overall economics of oil and gas development. As the agencies provide detail around their plans, assuming there's a public process, we'll be submitting comments regarding their concerns. In closing, ConocoPhillips, through its heritage companies ARCO Alaska, Phillips Petroleum and Conoco, has been an active explorer and developer on both federal and state lands in Alaska, both onshore and offshore, from Cook Inlet to the North Slope, for over 50 years. We have a track record of environmental and social responsibility operations. Through our investments and those of our other oil and gas companies we've generated jobs for Alaskans and created wealth for the State of Alaska, Alaska communities, Native regional and village corporations and their shareholders. While we're still very active on state lands, federal lands represent new opportunities to continue supporting the Alaska economy. It's our intent to work with the Federal Government, residents of the Slope, the State of Alaska and other stakeholders to address concerns such that there is a reasonable, regulatory framework guiding oil and gas development on North Slope lands. Thank you, Senator. [The prepared statement of Mr. Marushack follows:] [GRAPHIC] [TIFF OMITTED] T1970A.016 [GRAPHIC] [TIFF OMITTED] T1970A.017 [GRAPHIC] [TIFF OMITTED] T1970A.018 [GRAPHIC] [TIFF OMITTED] T1970A.019 [GRAPHIC] [TIFF OMITTED] T1970A.020 [GRAPHIC] [TIFF OMITTED] T1970A.021 [GRAPHIC] [TIFF OMITTED] T1970A.022 [GRAPHIC] [TIFF OMITTED] T1970A.023 [GRAPHIC] [TIFF OMITTED] T1970A.024 [GRAPHIC] [TIFF OMITTED] T1970A.025 [GRAPHIC] [TIFF OMITTED] T1970A.026 [GRAPHIC] [TIFF OMITTED] T1970A.027 [GRAPHIC] [TIFF OMITTED] T1970A.028 The Chairman. Thank you, Joe. Thank you all for your testimony. Let me ask, probably a general question, to each of you to begin the conversation. Richard, you used the words ``Alaska is an asset.'' ``Alaska is our home.'' When we think about Alaska as the place that we live and work and raise our families, it is important to recognize that we have considerable assets associated with the land. It is how we access those assets and do so in a way that provides for jobs, provides for sustainable economy, but also accesses them in a way that ensures that we are good environmental stewards for the land. We want to raise our families in a place as beautiful as your family has lived for generations, and generations and generations, and we want to be able to do so going into the future. From a broader perspective, given the testimony that each of you have presented here today, what more can we be doing, should we be doing, to ensure that Alaskans are able to achieve their fullest potential with the resources that we have available to us in our state? Joe, you have mentioned from Conoco's perspective, regulations hold us back. I think you have suggested, Michelle, that access is a consideration. I do not care who starts off the conversation, but can you each speak to the areas that you feel that Alaska's potential in accessing our resources is being held back in some way by the Federal Government so that we can know better how to help us? I will throw that out to whoever would like to begin. Mr. Marushack. Go ahead, Richard. Mr. Glenn. I will give it a shot. The Chairman. Okay. Mr. Glenn. I think there are two areas that your question leads me: that has to do with land ownership and federal leasing, leasing of federal lands, both the on and offshore. And also that the price of delay, even an approved project, if it takes multiple years to start from exploration to production, there's a price associated with that. So let us start with that one first. As you know in Alaska most of the resource wells have been produced from state-owned lands, but there is some, and Michelle alluded to it, there is some production now coming from Native-owned lands and there is Native-owned lands now fighting being developed in the National Petroleum Reserve. My point is if the resource development is of value to Native people and then that project is delayed over multiple years, that represents a real financial impact to Native people. We have distributed from the portion of production that is owned by Alaska's Native people, from the Alpine and satellite fields, we've distributed more than $1 billion to all of the regional corporations throughout the state. And yet if there is some portion of our resource that is made unavailable to us over a period of years, that has a real, measureable, financial impact to all of Alaska's Native Regional Corporations. So that is the first one, there is a cost associated with delay. The second one is that the terms for leasing might be reconsidered. The federal leasing terms should consider a revamp that somehow protects the terms of the leases during this lengthy exploration to production phase. Given our setting, it is remote, it is Arctic, it is sensitive. There are all kinds of reasons for why it should take a measureable, well thought out process from exploration to development. My point is get rid of the excessive delay and reconsider the terms for federal leasing that somehow takes into account the multiyear phases it must go even at its most efficient pace from exploration to production. The Chairman. Thank you. Joe. Mr. Marushack. Sure, sure. So I picked up on a point when you asked your question, Senator. It is not the regulations that are so problematic, it is the interpretation and the unpredictability in how those regulations are going to be interpreted sometimes. We believe that the regulatory agencies should be following their statutory mandates not only to protect the environment and subsistence but also by a reasonable and balanced path to ensure transparency and predictability in those regulations and to avoid overlap among the agencies regarding lands that are leased well in advance of development. As Richard mentioned, one of the things that we think makes some sense as well is for areas that have been taken off limits but ought to be reconsidered. We think that there are some good opportunities for exploration and development. It is kind of amazing that I think that the Native Corporations and the people of the North and people developing these resources can come to an agreement on how that ought to be developed, but we're precluded by doing that by some of the federal mandates. The Chairman. Others? Admiral Barrett. Senator, a couple of thoughts specifically on regulations. I have been on both sides of this fence both with the Coast Guard, the Pipeline Safety Agency, USDOT and now with the pipeline operator. I think fundamentally some of my background at the Coast Guard, 35 years ago, it is a different philosophy or approach to regulating an industry to a certain extent, but it is complex. You cannot dumb it down. But always in the Coast Guard the goal was never to stop ships from sailing. The goal was not to tie up the ships. The goal was to have them sail safely because there is an acknowledgement and a recognition that maritime commerce is important to the economy, the health, the security and the well-being of this nation. I do not see that relative to oil and gas. I think a much more collaborative relationship between the agencies that implement statutes and write regulations and less prescriptive one, but fundamentally collaborative. I feel strongly some of our best ideas that work, we have got 800 employees, another 600 baseline contractors, thousands of others. They show up every day trying to do a good job at what they do. We are not the enemy of anybody. I think working with us and with companies is somehow perceived as a conflict. It is very much a command and control regime that is going to find you doing something wrong. In the long-term I think that gets you less safety, less reliable performance, more environmental risk than just an upfront, open, collaborative approach to what a regulation might mean to track where those go and then follow it. I just think, I don't see that. So I think that is an opportunity to shape the regulatory regimes in that direction. The Chairman. Okay. Michelle, do you have anything to add? Ms. Anderson. Just real briefly. You know, development in our area, just like it is anywhere else in terms of the federal delays or barriers that you are asking about, it is very hard. It is very challenging to work with individuals or people who are interpreting regulations who have never even been to our area, who don't understand the lay of the land, if you will. So we do a lot of education of these individuals and agencies when they have already scoped out a project or an area and then coming back to us, the people that live there, and trying to make their project fit where we are at. So, just more involvement of local people, landowners, from the beginning verses bringing us in at the end, I think, would be helpful. The Chairman. Well that, kind of, ties into a follow on question that I wanted to ask which is how we, as Alaskans, again who are choosing to live and work and raise our families here, how we convey to the rest of the country, and often to the rest of the world, that what we seek to do here is to develop our state's resources and assets but that we do so with an eye towards stewardship. We oftentimes do not get very much credit for the fact that we do have the kind of safety record that you have cited, Admiral Barrett; that we do have a level of care for production up on the North Slope, for instance, the likes of which you do not see anywhere else in the world in terms of the standards that are adhered to. The question that I would ask, and I will direct it initially both to you, Richard, and to you, Michelle, is how we can keep our minds straight on development and environmental protection? I will take you to a quote the President made when he was up in the state in September. Governor Walker had been urging that he look to expand access for oil and gas development, and the President said, and I am quoting here. ``One of the ironies when you're up in Alaska, and I mean this sincerely, it shows you that everybody can be two minds about this. I have some people saying we ought to protect this beauty and scenic areas and make sure that no one, nobody, is polluting it. And then, oh and by the way, let's get going on some oil drilling at the same time.'' I am one of those people, I guess, in the ironic category because I do support new access and I do support new development and I do not see the conflict in our ability to protect our lands and to make it available, not only for this generation, but generations going forward. How do we do a better job? Michelle, you mentioned education. Richard, you have been in the, perhaps not so enviable, position of being invited back to Washington, DC on numerous occasions to testify. How can we do more? How can we convey the message that it is not ironic? That we want to help our people and at the same time we can care for our lands? Mr. Glenn. Yeah, welcome to our world, right? So, the issue at home is stark. I mean we ask ourselves who is going to--our grandchildren, what kind of school would they go to? Will there be reliable power in their communities? How will we fund the road maintenance? Even snow blowing and ambulance service, things that the rest of the world takes for granted are present in each of our communities only because of the presence of development in our region. So we are open about it. We depend on continued development for the survival of our communities. It is great that we have the ability to hunt in our region, but we do not have a home to come home to if we do not also have development in our region. And so, the message or the task becomes how do you convince the world that there is something between absolute protection like putting a jar over something and never letting anything in it and allowing people to live? And the pristine mystique of the Arctic will rub off and go away pretty fast when you are in survival mode or when your community is in a survival mode. The way we have been able to do it at home, I think, is to create alignment. That is, we have invested in development in our region as an owner, a landowner, and an equity owner. That way when there is success for the explorer, there is success for our community's residents. If we were just victims of development, that is the opposite of the spectrum, the opposite end of it where we have no ownership, no participation and we are just victims of negative impacts. We looked at that and decided that the way to create success in our region is to create alignment. The way to create alignment is by investing in the only industry that has been around in our region long enough to pay taxes. We have a bus that fills itself with tourists this time of year. They leave Alaska Airlines, they get on a bus, they drive around the town, they leave the bus, they go in a hotel, they go back on the bus, and then they leave. It is almost full every day with three jet flights every day. Yet, even that industry can barely supply its own needs as far as tax base. So we recognize our dependence on the oil and gas industry in our region, and we created alignment by investing in it. We think that that is the answer to this we/they syndrome between sitting on the inside and sitting on the outside. We are blessed in our region that it is big. There is room for everything. There is room for everybody. If you look at a map of the North Slope and you look at the infrastructure of oil and gas pipelines, it depends on the width of the ink that they use to draw the map, but you get the impression that there is a spider web full of pipelines. If instead you get dropped off in the middle of nowhere on Alaska's North Slope, you are going to find out that there is a lot of open space and you will be thankful for that infrastructure when you do eventually come across it. [Laughter.] So, there is a lot of room in our region. The Chairman. Thank you. Michelle. Ms. Anderson. Thank you for asking. It gives me an opportunity to share Ahtna's vision which is our culture unites us, our land sustains us, our people are prosperous. Our people highly prize our land and our food resources, so we are extremely protective over both. We would never jeopardize or compromise the future of our people by standing for irresponsible land development. Our people are born there. They are buried there. That is our home. We would take care of it to the very best of our abilities and protect it. We also, you know, that second line of the vision statement, our land sustains us. While it feeds us and provides us homes, we also believe that our elders selected those lands to take care of us. We are resource rich and we are very interested in not only developing those resources, but getting our people long-term jobs and careers at home so they do not have to leave the area to work in Anchorage, or Fairbanks, or wherever, you know. Our lands were selected for a reason, and we take very good care of them. The Chairman. Admiral Barrett, you mentioned that we are at 556,000 barrels of oil moving down the pipeline at this moment. The capacity is 1.09 million per day that we could see if we were to have full capacity in TAPS. What would that mean in terms of additional jobs for Alaskans and exactly what type of jobs? Admiral Barrett. Sure. So what it would mean for Alaskans to start with is you would have to have the development to fill us up, right? So that is thousands of jobs on the exploration and development and all the work that goes with it. But the types of jobs we have in this industry are generally high tech. We have been strong supporters of the Alaska Native Science and Engineering Program since its start as have some of the other people at this table, ANSEP. We need a high quality, high talent workforce. It is engineering heavy in the white collar, but it is every skill set. It is accounting and it is finance and it is engineering. We are almost 40 percent blue collar, alright? So this is background American jobs, but they are instrument techs. They are mechanical techs. They are electricians. They are electrical techs. They are skilled jobs, they pay good salaries and they allow people to make a good living. But fundamentally they are skilled jobs, skilled labor. And the people up here that we have working for us and the people that train them do a fabulous job and they are very, very good at what they do. But it is a skill set whether it is blue collar or white collar, and it is all across the board, Senator. The Chairman. Let me just ask one more question of you, Mr. Marushack, and then I think we will move to the next panel. Your testimony has spoken, primarily, to Conoco's activities there within NPRA, GMT-1 and 2, but Conoco is also a lease holder in our continental shelf areas. Have you given much thought to a better leasing and regulatory system that could be implemented in frontier areas in our OCS? Mr. Marushack. Well Senator, yes. One thing that has to happen is you have to have lease sales on a fairly regular basis. The last one was 2007. The next one is 2020. It is extraordinarily difficult to do oil and gas development when you have got 13 years in between those areas and when so many of the best perspective opportunities are taken off the table. But that is just to go back also on that to answer your question on how we can develop these areas responsibly. Having worked all over the world I can tell you that industry's ability to protect its license to operate is based on safety and environmental performance. In Alaska we are absolutely, I am very pleased with the amount of safety and environmental performance that we focus on. You know, the other thing is our relationship with the Native Corporations and the people, the owners of the Slope. All over the world this is very, very unique. So to come back to your question again then. If we can do it in an environmental and safe process and if we have the support of the local landowners and people that live up there, it feels to me like we ought to have opportunities to develop and expand this opportunity on a much more regular basis. The Chairman. Last chance, final word from any of the four on the panel? Mr. Marushack. So could I tell you one---- The Chairman. Yes. Mr. Marushack. That is operating within NPRA. NPRA is about the size of the State of Indiana. Our developments on CD-5, Mooses Tooth 1, Mooses Tooth 2, are 185 acres, 0.0008 percent of the acreage up there is what we are trying to develop right now. The Chairman. 0.000? Mr. Marushack. Eight. The Chairman. Eight. Mr. Marushack. Percent. The Chairman. Percent. Mr. Marushack. 185 acres over roughly 25 million acres. The Chairman. That puts it in context. Admiral Barrett. Admiral Barrett. You mentioned too about how people can understand that we are able to reconcile these apparently competing interests. I would just ask people to look--I mean I have been up and down the pipeline now for five years. I have seen black and white bears, caribou, moose, fox, wolves, squirrels, birds, the caribou herd in our region is four to five times larger than it was before we started development. I think our quotes are instinctively conservationist. We pay a lot of attention to it. But they even value the environment we are in more than anybody else because they live in it. And I think if you actually look at the record of the pipeline and the development on the Slope, the record stands very strong, yet it is hardly even moved. The Chairman. I appreciate that. Michelle. Ms. Anderson. Thank you, Senator. I guess my last comment on the subject is come visit us in January and not spring when it feels like they should have a say in terms of what is vulnerable, a person or a region or the agencies that create the regulations that we have to follow. Look at our fuel bills. Look at how our people have to make choices. I am not just talking about Ahtna people, I am talking about people that live in the communities all along the road system. We are not Anchorage. We are not Fairbanks or some of the larger communities where there are stores and choices and jobs. We are there because we want to be there. That is our home. We want jobs. We want resource development. We want to be able to raise our families there. We do not want any more schools closing. So I would urge people that, you know, before you make a decision for other people, come and live in our situation for a little while and see what it is really like. We find it beautiful, and I think it would be an absolute tragedy for the state if we were to force people to leave their homes to go to bigger cities in order to survive. Rural Alaska is beautiful and it will continue to remain so, so long as its people are there. The Chairman. Well put. Thank you all. Mr. Marushack. Thank you. Admiral Barrett. Thank you. Mr. Glenn. Thank you. Ms. Anderson. Thank you. The Chairman. With that we will thank our first panel and move to panel number two. [Applause.] [Recess.] The Chairman. We will reconvene with our second panel. Panel number two is composed of Mr. Bill Jeffress, who is a Principle Consultant at SRK Consulting. He will be followed by Mr. Bronk Jorgensen, who is with the Fortymile Miner's Association. Good to have you with us today. Ms. Lorali Simon, who is the Vice President for Usibelli Coal Mine, is with us. The panel will be rounded out by Mr. J.P. Tangen, who is an Attorney at Law here in Fairbanks and a long time consultant and knowledgeable person when it comes to our federal land and particularly mines. So we appreciate that. Again, same kind of contours as far as testimony this afternoon. We would ask you to keep your comments to about five minutes. Your full written statements will be incorporated as part of the record. Once you all have completed your statements, we will have a chance for a little bit of back and forth with questions. With that, Mr. Jeffress, if you would like to lead us off. Thank you for being here. STATEMENT OF BILL JEFFRESS, PRINCIPAL CONSULTANT, SRK CONSULTING Mr. Jeffress. Thank you, Senator, thanks for the opportunity. My name is Bill Jeffress. I am the Vice President of Alaska Miners Association, a member of the Alaska Minerals Commission and Principal Consultant for SRK Consulting here in Alaska. I have been involved with research and development for over 40 years. Because of the vast difference between Alaska and other states, federal programs do not always adapt to Alaska even though some of those programs may very well meet the needs of other states. The U.S. Department of Interior agencies, such as Bureau of Land Management (BLM), U.S. Fish and Wildlife Service and National Parks control over 201,000,000 acres of the total 365,481,600 left in Alaska. Over 75 percent of the federal land in Alaska is closed to mining. That translates into fewer opportunities for jobs. Federal flexibility and state collaboration to balance national policies with local conditions is needed for successful resource development. The State of Alaska and Alaska resource development industries have a long history of successful collaboration with federal and local jurisdictions. Unfortunately, federal land management agencies under this Administration are developing guidelines and policies without input from the State of Alaska or resource industries. The most alarming of these issues is that recently BLM resource management plans for Eastern Alaska, Bering Sea, Western Interior, Central Yukon planning areas include massive ``areas of critical environmental concerns,'' the ACECs you spoke of earlier. In addition, the natural research study areas, there are no timelines for completion of studies of these areas prior to lands being available for any type of resource development, if ever. BLM has implemented draft mitigation policies for a project on the North Slope and BLM's Solicitors Office has rolled out a new interpretation of 43 CFR 3809 regulatory requirements. BLM, last Tuesday, proposed new reclamation standards for placer miners. BLM has not afforded any opportunities for industry or affected state agencies to participate in the development of these new requirements or policies. Alaska placer miners, whether they are large or just the mom and pop operations, are now required to prepare extensive supplemental plans and baseline documents. The new reclamation standards for Alaska placer miners were developed in the BLM bubble without any consultation of State of Alaska resource agencies that have decades of reclamation and habitat enhancement experience. Collaboration with resource industries in the State of Alaska resource agencies on lessons learned is nonexistent. The end result, and some would say the design result, is the elimination of all placer mining on BLM land. So much for the multiple use concept that was the mantra when I was in college. To further add to the frustration during this downturn in the economy, on November 3rd, 2015, President Obama's Memorandum on Mitigation has initiated another round of government bureaucratic uncertainty for the resource development industry and a job killer. This Memorandum directs the Department of Interior, along with other government entities, to develop mitigation plans based on avoid, minimize and mitigate, a concept that has been administered by the U.S. Army Corps of Engineers for decades. If you will indulge me, I'd like to step back in time to the early 1990s. Over 48 percent of Alaska's surface area, 175,000,000 acres, is wetlands which is regulated by the Army Corps of Engineers. Under President Bill Clinton's directive and some political persuasion from then Senator Ted Stevens in the form of the Alaska One Percent Rule, the Corps of Engineers, EPA, U.S. Fish and Wildlife Service and National Marine Fisheries initiated a two-year process that resulted in the 1994 Alaska Wetlands Initiative. This document, signed by all parties on May 13th, 1994, recognized the unique aspects of Alaska, the limited opportunities for mitigation and the need for additional flexibility in the Clean Water Act 404 permitting process. Even prior to President Obama's Memorandum on Mitigation, the Corps of Engineers, through agency consultation during the review and permitting process, considered mitigation options offered by U.S. Fish and Wildlife Service, EPA, NMFS and BLM. As a lead agency on most federal permitting activities in Alaska, the Corps of Engineers makes the final determination if provisions of the Clean Water Act are satisfied by avoidance and minimization or if mitigation would be required, what form of mitigation will it take such as permittee responsible mitigation, in-lieu fees or compensatory mitigation. The Corps of Engineers review and permitting process using the 1994 Wetlands Initiative as one of the tools to incorporate flexibility, where appropriate, although not perfect and without its own hiccups, has provided industry with some certainty. The President's Mitigation Memorandum removes that certainty and potentially it leaves all developers and especially extractive resource industries faced with multiple mitigation requirements. These mitigation requirements not only are on federal land, but private and Native Corporation land. If Alaska is to develop its natural resources for the good of its citizens and the nation, this governing by command and control must cease. We need to reinitiate collaboration and cooperation for the good of the state and the health of the nation. Thank you very much. [The prepared statement of Mr. Jeffress follows:] [GRAPHIC] [TIFF OMITTED] T1970A.029 [GRAPHIC] [TIFF OMITTED] T1970A.030 [GRAPHIC] [TIFF OMITTED] T1970A.031 The Chairman. Thank you, Bill, appreciate it. Mr. Jorgensen, welcome. STATEMENT OF BRONK JORGENSEN, FORTYMILE MINING DISTRICT Mr. Jorgensen. Thank you. I'd like to thank the Committee for letting me testify on behalf of the Mining District today. The Fortymile Mining District is currently made up of about 100 miners and was established on the Fortymile Bar of the Fortymile River on March 25, 1898 under the 1866 Mining Act and the 1872 General Mining Act, making the District 118 years old this week. The District is approximately 6,000 square miles and is the oldest and longest standing mining district in the State of Alaska. Since 1898 the District has been actively engaged with governmental agencies to promote family placer mines and create a healthy and vibrant environment for all user groups of the Fortymile watershed. Placer mining in the Fortymile is a clean process, as it is across the state. No acid leeching or other chemicals are used, just water and hard work. The overall footprint is minimal to the extent that the 1986 Environmental Impact Statement (EIS) showed that collectively all placer mining in the Fortymile District would have no significant impact. The number of acres that the EIS assumed in 1986 would be mined by 1996 hasn't even been reached today, and we're 30 years out. Total, all placer activity in the Fortymile is smaller than an Iowa farm. Clearly, gold is a critical part of our society, needed in the assembly of vehicles, computers, cell phones and all kinds of other necessities. The gold produced by our operations is used for these and other items without the environmental impact caused by other forms of mining. All placer mines in the state are currently facing an unprecedented obstacle in dealing with regulatory agencies like the BLM, EPA, DEC, U.S. Army Corps. In spite of the fact that there is no history of any environmental damage done by any members of our District, we are inundated by instructional memoranda, reinterpretation of regulations and a complex REM policy for reclamation. BLM has failed to provide adequate funding and staffing for the 3809 mining program but at the same time has spent hundreds of thousands on the REM policy. On my personal operation, in five years I think I'm on my sixth inspector. The BLM's use of areas of critical environmental concern will close off access and lock up over 700,000 federal acres and essentially land-locking thousands or more acres owned by Doyon and the State of Alaska in the Fortymile region. This will remove any possibility of critical, strategic mineral prospecting in the area. The ACECs are also clearly contrary to the ``no more clause'' of ANILCA. In 2008 the BLM started the scoping process to replace the individual resource management plans for the Fortymile Rivers, White Mountains and Steese National Conservation Area. The BLM has claimed that they are only amending, consolidating and updating these resource management plans. This is incorrect. BLM is replacing these plans with the proposed Eastern Interior Management plan. The current Fortymile Rivers Management Plan was required by and was approved by Congress in 1982. The BLM does have the ability to update the plan but not replace it as stated on BLM's website. Sitting in front of me is the old plan, and underneath the microphone, the new plan. There is something fundamentally wrong with what is happening when you look at these two piles. The BLM is treating the Fortymile District as if it were an evil entity that needs to be governed with an iron fist. Currently in the Fortymile BLM will not allow any new mining claims to be staked because of the withdrawals. This is in direct conflict with the 1872 Mining Law which gives citizens of the country the right to mine and ANILCA specifically granted prior existing rights to the users of the resource and the rights they have. The Fortymile Mining District would like to be positive, and what we need to be doing is helping family placer mining operations. This will help with the economy and strengthen national security. But with the current regulatory scheme it is tough to be positive. In essence, this boils down to federal overreach that goes against the Statehood Act, ANCSA and ANILCA. We need to lift the federal land withdrawals so the federal ground is once again as it was supposed to be, open to mineral staking and prospecting. As a multiuse agency, BLM should be helping to develop placer mines and access to private, Native and state lands, not rolling out hundreds of new pages of regulations, instructional memorandas and in-house policy. Let's try to work on reducing regulatory paperwork and encourage more people to go out and develop small placer operations. Thank you to the Committee and the Senator for letting us testify. [The prepared statement of Mr. Jorgensen follows:] [GRAPHIC] [TIFF OMITTED] T1970A.032 [GRAPHIC] [TIFF OMITTED] T1970A.033 The Chairman. Thank you, Bronk. Lorali Simon, welcome. STATEMENT OF LORALI SIMON, VICE PRESIDENT, EXTERNAL AFFAIRS, USIBELLI COAL MINE, INC. Ms. Simon. Thank you very much. Good afternoon, Chairman Murkowski. I appreciate the invitation to come today and discuss Alaska's coal resources and how our industry is creating Alaska jobs as well as playing a vital role in strengthening our national security. Usibelli is celebrating our 73rd year of operation this year. We proudly supply 100 percent of the in-state demand to six coal-burning power plants, and we have a long history of exporting coal on the international market. Today Usibelli employs about 108 people. The average wage paid to our employees is more than double the average wage in Alaska. Usibelli's operations directly provide about 20 percent of private sector employment for Healy's year-round residents. The McDowell Group produced a report that was based on 2013 data on the socio-economic impacts of Usibelli Coal Mine. There were 640 direct, indirect, induced and coal-fired power plant jobs which equated to nearly $49 million in wages. Usibelli spent close to $41 million with Alaska businesses and made up 22 percent of the Alaska railroad corporations freight revenue. Coal is Interior Alaska's lowest cost source of energy and accounts for nearly one third of electrical energy generation. In the absence of Usibelli Coal, energy costs in Interior Alaska would be much higher, perhaps 25 percent higher than they are today, a cost of approximately $200 million annually. Fort Wainwright and Eielson Air Force Base spend about $33 million a year on coal purchases. If trucked natural gas from the North Slope becomes available, the bases could switch to natural gas but their energy costs would triple. Let us not forget that natural gas is not available to the military today nor is it available to Interior Alaska. Military spending is estimated to support 30 percent of the Fairbanks' economy. Large increases in energy costs could risk maintaining the military's presence in the Interior. On another note, Senator, we certainly cannot deny the reality that unnecessary government regulation is taking its toll on our industry. Primarily we are deeply concerned about the proposed federal Stream Protection Rule. If this proposed rule becomes final, it will likely kill coal development in Alaska. The Stream Protection Rule represents a complete rewrite of the 1977 Surface Coal Mine Control and Reclamation Act which we call SMCRA. It is not a simple revision. Congress passed SMCRA, yet today we are seeing unelected federal bureaucrats violate legislative intent which will kill America's coal industry. The proposed Stream Protection Rule is a violation of states' rights. It unlawfully seizes the regional discretion granted in SMCRA, and it overthrows state primacy. Senator, I do not need to tell you how unique the geology is on the North Slope verses Southeast Alaska. The Stream Protection Rule targets coal mining in Appalachia, yet it is being smeared across the entire country all the way to Alaska. Alaska was not considered nor consulted in the drafting of the proposed rule. No scientific studies relevant to Alaska are referenced in the documentation and no public meetings were held here. Of greatest concern to us is that we only had 91 days to review over 3,000 pages of documents, all of which took OSM over six years to produce, yet industries, state agencies and stakeholders had only 91 days to review. In summary, I do not believe that the proposed Stream Protection Rule can be fixed enough to be palatable. I believe the entire proposed rule should be thrown out and the agency should begin again, this time with proper consultation with the states. Since it is unlikely that the Administration will take such action, a very simple solution would be the passage of the STREAM Act. Madam Chair, Usibelli Coal Mine respectfully requests the Committee to pass S. 1458, Senator Coats' bill. This bill will require the Secretary of Interior to make publicly available all data relied on for new regulations, environmental impact statements as well as environmental and economic assessments. This bill will also ensure that the Secretary does not needlessly duplicate or encroach upon environmental laws under the jurisdiction of other agencies. The bill will encourage a transparent rulemaking process and guarantee that the proposed SPR, Stream Protection Rule, does not add needless regulation. Thank you for your time today. [The prepared statement of Ms. Simon follows:] [GRAPHIC] [TIFF OMITTED] T1970A.034 [GRAPHIC] [TIFF OMITTED] T1970A.035 [GRAPHIC] [TIFF OMITTED] T1970A.036 [GRAPHIC] [TIFF OMITTED] T1970A.037 [GRAPHIC] [TIFF OMITTED] T1970A.038 The Chairman. Thank you. Last we will go to Mr. J.P. Tangen, welcome. STATEMENT OF J.P. TANGEN, ATTORNEY AT LAW, ALASKA MINERS ASSOCIATION Mr. Tangen. Thank you, Senator. I appear today on behalf of 1,800 members of the Alaska Miners Association. I believe that it goes without saying that the very existence of the State of Alaska is dependent upon the development of its abundant natural resources. Many of the resources needed for our national security are found in Alaska as well. No one can seriously argue that Alaska is not unique in many ways, not the least of which is the abundance and diversity of its mineral resources that are found from one end of the state to the other. The Alaska Statutory Trilogy repeatedly has recognized that abundance. First, the Statehood Act granted to the state 104,000,000 acres of land selections. This is an area greater in size than the entire State of California but justification for such a significant grant was that due to our size, remoteness and sparse population Alaskans would need vast tracts of resource- rich land to develop and support its residents. Second, the Alaska Native Claims Settlement Act in settling long standing land claims afforded indigenous people a commercial paradigm for generating cash revenue independent of the public treasury. The settlement included 44,000,000 acres in land selections which selections frequently were made with an eye towards resource development. And third, the Alaskan National Interest Lands Conservation Act (ANILCA) was adopted to ensure that the distinguished park areas, refuges, rivers and representative woodlands were afforded unique consideration without adversely impacting existing opportunities to develop the resources of the state. The Alaska Statutory Trilogy was adopted in the context of the respective contemporaneous organic mandates of the four major land managing agencies in Alaska. Accordingly, ANILCA, for instance, was consented to and adopted based upon the practices of the four agencies as they were interpreted in 1980. Thirty-five years later these agencies have aggressively evolved in ways that deny the people of Alaska their expressly intended benefits. When adopted ANILCA created numerous conservation systems which frequently surrounded privately held inholdings and allotments which were transected by trails and waterways customarily used for access through and across subsumed areas. Since passage the National Park Service, Fish and Wildlife Service and the U.S. Forest Service have all imposed restrictions vitiating the utility of these holdings and access routes. At this time the Alaska Miners Association is calling for a corrective legislative action either in the form of a stand- alone bill or as amendments to other germane legislation to accomplish at least the following goals. First, the Organic Acts of the four land management agencies need to be amended to harmonize their requirements with the Alaska Statutory Trilogy. I refer you to the expressed language of the Supreme Court of the United States and the Sturgeon v. Frost case which went on at great length to talk about how those two groups of statutes should be harmonized. Second, as a priority, ANILCA needs to be amended to provide a clear, Alaska-specific definition of what constitutes a withdrawal in connection with land management plans in Alaska. Third, the Alaska Land Use Council which was created by Title 12 of ANILCA to facilitate coordination between the State of Alaska and the four federal land management agencies should/ needs to be reconstituted to ensure that the four land management agencies have adequate oversight with regard to Alaska-specific land management activities. Fourth, public land orders that have been recommended to the Secretary for revocation have not been acted on. They should be revoked by statutory action now. Fifth, RS2477 rights-of-way need to be conveyed to the State by statute. RS2477 is self-enacting. It does not require any action by the Department of the Interior or by anybody else and certainly does not need to be processed through the Four Organic Acts, and so those grants should be implemented right away. The State of Alaska has identified a bunch of those RS2477's and those found at A.S. 19.30.400 should be now granted by statute including 50 feet on either side of the center line description and adequate provisions for adequate borrow bits. And sixth, the submerged lands in Alaska which belong to Alaska according to the Statehood Act should also be recognized by statute. We got those submerged lands on account of the Statehood Act, but the Department of the Interior has resisted the conveyance because of the definition of what constitutes navigable waters. There has been already some law that's been developed in that case on that matter and essentially what definition that's been agreed to, at least in one instance, is a body of water that would float a raft that contains a 1,000-pound load. That's a perfectly good definition, and that ought to be in statute. If it can support a 1,000-pound load on water in Alaska, it ought to be deemed navigable. Period, end of story. Madam Chairman, this concludes my recommendations of the Alaska Miners Association at this time. We appreciate the opportunity to present these requests to you and stand ready to assist in your efforts to ensure that Alaska's mining industry remains strong for the benefit of the state and for the security of the nation. 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T1970A.203 [GRAPHIC] [TIFF OMITTED] T1970A.204 [GRAPHIC] [TIFF OMITTED] T1970A.205 [GRAPHIC] [TIFF OMITTED] T1970A.206 [GRAPHIC] [TIFF OMITTED] T1970A.207 [GRAPHIC] [TIFF OMITTED] T1970A.208 [GRAPHIC] [TIFF OMITTED] T1970A.209 [GRAPHIC] [TIFF OMITTED] T1970A.210 [GRAPHIC] [TIFF OMITTED] T1970A.211 [GRAPHIC] [TIFF OMITTED] T1970A.212 [GRAPHIC] [TIFF OMITTED] T1970A.213 [GRAPHIC] [TIFF OMITTED] T1970A.214 [GRAPHIC] [TIFF OMITTED] T1970A.215 [GRAPHIC] [TIFF OMITTED] T1970A.216 [GRAPHIC] [TIFF OMITTED] T1970A.217 [GRAPHIC] [TIFF OMITTED] T1970A.218 [GRAPHIC] [TIFF OMITTED] T1970A.219 [GRAPHIC] [TIFF OMITTED] T1970A.220 [GRAPHIC] [TIFF OMITTED] T1970A.221 [GRAPHIC] [TIFF OMITTED] T1970A.222 [GRAPHIC] [TIFF OMITTED] T1970A.223 [GRAPHIC] [TIFF OMITTED] T1970A.224 The Chairman. Thank you, Mr. Tangen. I appreciate the very concrete proposals here, and they will be a springboard for our conversation here. To the last panel I asked a general question--areas that we might look to that are currently holding us back as Alaskans in accessing our resources. That panel was focused on oil and gas opportunities and access to our lands. We are now looking at mining and recognizing the amazing potential that we have in Alaska for the elements that are buried here. While we have a lot of focus on coal coming out of Usibelli and gold coming out the Fortymile District, our reality is that here in Alaska our mineral resources are extraordinary and world-class. While we think about the vulnerability that we had as a nation when we were so heavily reliant on imports for oil coming in from nations that did not really like us and we always talked about that great vulnerability, that has changed dramatically as we have figured out how to access more of our oil and natural gas potential. But our reality is that when it comes to our minerals we are moving in the same direction that we were with oil and natural gas being more and more reliant on others for elements that are necessary and critical to our daily lives. I am wandering around with a smart phone as are you. Any one of us that want to support and move out on renewable energy sources, if you are interested in more wind turbines, you have got to have those minerals that go into the component pieces of that wind energy turbine. So focusing on minerals and mining, I think, is not only important from a jobs and access to resources perspective, but it is also important from that security perspective. That was, I think, your final line, Mr. Tangen. So the question to each of you. In addition to what you have already mentioned, concerns about the mitigation proposal, concerns about the stream buffer rule, concerns about what we are seeing with ACECs and these, kind of, pseudo withdrawals, how can we be doing more to allow Alaska the opportunity to achieve its full potential when accessing our mineral resources? It was Mr. Marushack who said, ``It's not so much the regulations, it's the interpretation and the unpredictability of the regulations.'' Do you agree with that or is it the regulations? So if we can just start the conversation off this way, and Mr. Jeffress we will begin with you. Mr. Jeffress. I think Joe is absolutely correct on this. One of the things we have seen is the regulated industry can adapt to the regulations, but it's this ever-changing re- interpretation. One of the biggest issues is the fact that objectivity in the regulatory agencies is a thing of the past. We have this subjective climate where individual biologists can nominate ACECs and the group that reviews that nomination area peers within the agencies. I mean, there's other criteria on the Corps of Engineers, not to pick on them, but with some of the other cooperating agencies, U.S. Fish and Wildlife Service, National Marine Fisheries, the objectivity is a thing of the past. It is very frustrating because I came to Alaska to permit the Fort Knox mine, and it was ten years from discovery to production. That is a thing of the past right now too, and a lot of it is not because the regulations have changed. It is because the interpretation of those regulations have changed. The Chairman. Bronk, do you agree with that? Mr. Jorgensen. I would agree with that when we just look at these two piles. The old ones and what is being proposed, especially from a small operation. When you have big companies saying they cannot keep up how is a family operation supposed to keep up with reading this? The Chairman. Can you speak to that a moment because in your written testimony you move to the one-size-fits-all and it doesn't make a difference if it is a mom-and-pop placer miner operation on the Fortymile or whether it is a large-scale mining effort. It basically is a one-size-fits-all approach. Mr. Jorgensen. Correct, and it is also all-50-states- approach-fits-all. I think the Sturgeon case made a good point that Alaska is unique and different. And you know, ANILCA was supposed to help us with that. There is also a law called the Small Business Regulatory Enforcement Fairness Act which agencies are supposed to look at how these regulations will affect small operators compared to big operators. For the most part that's not being done, but it is required. So they need to be looking at both sides, but they are not. When you look at federal mining claims in Alaska in the Fortymile since withdrawals have taken place, in the Fortymile there have been no open stakes. At the time of withdrawal all valid claims that had discovery were valid and could be mined. Now BLM, if you want to change your plan or go mine a claim that does not have an old plan, they are going to require you to do a mineral validity exam, about $60,000 a claim. And if they do not deem that there is enough mineral there, by their opinion, they are going to take it away and you lose the claim. And that is wrong. You know, when the withdrawals took place in the Scenic River corridors, they went around existing valid claims but BLM has blanketed over. So the expense--the government can contest the claim if they do not believe it is valid but they have to pay for it, not the individual miner. This is becoming a big issue with reclamation also. Our plans, most plans, have an acreage limit. You mine some ground. You keep going up the creek. You reclaim the background. If BLM will not sign off on your reclamation you eventually run out of acres and you are out of business. You're going to have to wait until, in essence, the willows grow. If you look at creeks that have been mined you can see that stuff is going to grow. You can see that it is going to happen. But BLM, at this point, is developing this new REM policy. They spent a bunch of money on Jack Wade Creek developing it, and this is not regulation, this is just in-house policy that is come about with instructional memoranda. A few weeks ago they just released it. Now they are doing re-vegetation standards also. The Chairman. So it is not just the regulation, it is not just statute, it is guidance, it is guidelines that effectively come up and---- Mr. Jorgensen. Correct. The Chairman. Grab you from behind. Mr. Jorgensen. The way we see it is BLM employees have to follow those policies. It isn't the law. We do not have to follow it, yet that is the policy so they will not sign off on reclamation work. When I asked for reclamation on Franklin Gulch to be signed off on it took two years for a response. Part was granted, part was not, and there is no definite time period. There is nothing. BLM stated that the Wade Creek Demonstration Project would not be used as a policy and a standard. Yesterday I was given a decision BLM issued on some other reclamation for another miner in the Fortymile that specifically referenced the Wade Creek reclamation job as to how it should be done. The Chairman. Yes, they told us it was not going to be used that way. Let me ask you, Lorali, you are coming from a company that is 73, close to 75 years old, an operation of bigger mining, but with the same set of concerns when it comes to the interpretation of the regulations. You have also cited very specifically that the Stream Protection Rule is a rule that would effectively wipe out Usibelli's operation of mining in Alaska. I think those were your words. Ms. Simon. Yeah, truly it's a mess out there, and I mean the federal regulatory world. It is true that in order for any of us to do our jobs we need a stable regulatory environment. We just want to know what the rules are so that we can play by the rules. But the problem is that you have Congress who enacts legislation and then you have these agencies who are, in essence, rewriting the rules of the game, in our opinion, unlawfully. And so, it makes it very difficult for our industry to survive when there is so much uncertainty, and it really is becoming just death by a thousand cuts. I forget what the figure is, but in the first few years of this Administration there were more federal regulations passed than all of the history of the United States combined. I mean, it just became an absolute onslaught of a new way of creating the business environment in this country. And so, you know, I talked about the Stream Protection Rule. That is certainly under your Committee's purview, but also the Waters of the United States, everybody in this room should be concerned about that. It will affect every single development project in this country, not just mining but construction, your personal home construction, large construction projects, the oil and gas industry. And so, we certainly appreciate your attention to that. That is something that you worked on, quite hard on. But yeah, I mean, really, it is just an onslaught every day of what is coming next. And again, isn't this process a public process where elected officials are creating new rules? I am quite confident this did not come across your desk for a signature, right? So this is not being reviewed by our elected officials. It is being created. The Chairman. J.P., do you want to weigh in here? Mr. Tangen. Yes, Senator. I hope to weigh in with a proposal that may be at least a partial solution and that goes to the point that I made in my testimony, and that is that the Alaska Land Use Council should be reconstituted. I remind you that in 1980 when ANILCA was passed, Section 1201 set up the Alaska Land Use Council and it consisted of the federal land managing agencies plus the representative of the President of the United States, one of the co-chairman and the state counterpart to each of these agencies plus the Governor of Alaska as the other co-chairman. It was primarily in 1201, it was provided that the Land Use Council would be reconsidered in 1990. In 1990 the Land Use Council unanimously recommended to your Committee, this Committee, that the Land Use Council not be sun-setted. Nonetheless, this Committee and the Congress of the United States elected to allow it to disappear. Now, though, the Land Use Council essentially was a forum for coordinating the impact of regulations by the land use, the federal land management agencies, with the needs of the State of Alaska. And it was an opportunity for us to, we in Alaska, to want to have a voice in what was going to happen in regulations and recommendations, and activities that impacted federal lands had to be agreed to by the Council. We need to reinstate that Council. It is a priority, and I think that it would go a long way in addressing many of the issues that were addressed today. At least we would have state influence at a significant level on some of these regulations. These regulatory burdens, I mean. Bronk and Bill and others have made the point. They are outrageous, absolutely outrageous. I have clients cross my office who could not possibly begin to move the first yard of gravel at the placer mining operation if they had to sit down and read every word of the regulatory requirements that impact them. It literally is putting my clients and other people like them out of business. The Chairman. I would certainly, certainly, agree that when you think about those that are just out there on the creek trying to make a living, they are not going home at the end of a long, hard day and sifting through these regs or the CFRs to see what is coming their way. I also think that from the agency perspective, and we do not have anyone from the agencies that are testifying today. We will have an opportunity for that, hopefully, at another hearing. But in terms of what is now being required of your placer miners out there, Bronk, whether or not BLM has the resources, the technical expertise, to review and to issue all of these placer miner permits in a timely manner. So you have got on the one hand the miner not being able to keep up with it, but you also have the agency that has now put on themselves all this additional work. They cannot get to it, so it slows you up and you get to what Lorali has said, a mess, just a general mess. I want to ask each of you about this Presidential Memorandum on Mitigation. We held a hearing in the Senate Energy and Natural Resources Committee three weeks ago now, and we received good insight and testimony on that. The concern that has been raised is that this is not just something that will impact our public lands. I think it was you, Bill, that mentioned it will affect development on private lands, on our Native Corporation lands as well. Can any of you speculate what these additional mitigation requirements might do? We all recognize the uncertainty that it brings, but what might this do to the investment climate because it is pretty tough to get out there and gauge in much beyond a very, very, small operation if there is no investment for your operation. What do you think that this is going to be doing to the investment climate? Bill. Mr. Jeffress: Well I think that, first of all, the uncertainty even with the Corps of Engineers right now with the compensatory mitigation. Until they put the 1994 Alaska Wetlands Initiative back in the tool box, there is tremendous uncertainty on what it was going to cost. You have to figure that into the economics of your project. What this adds now is that every one of the federal agencies named in the Memorandum that has any part in authorization or issuing a permit can now issue or demand additional mitigation and whether avoidance and minimization takes care of that problem. Most unlikely that it will not. We have seen some of the endangered species where they have taken large land areas in the lower 48 with the sage grouse, and we have the same potential that is happening up here. What is critical on this is the Corps of Engineers met the intent of Congress with the Clean Water Act and potential mitigation. Now you have all these other agencies jumping on top of it and their regulations are not written yet. We do not know what their programs are going to be. Would you invest in a project in Alaska with that much uncertainty? It is scary for us. This is a perfect storm between low oil prices, low metal prices and a timber industry that is nonexistent anymore. The Chairman. Have any of the agencies that are outlined in the Memorandum, have they released any statements? Have they communicated in any way how they will either implement or enforce any of the mitigation requirements? Has there been any back and forth, any engagement with the agencies on this mitigation memorandum? Mr. Jeffress. The only feedback that I have had personally is that the draft mitigation policy that the Bureau of Land Management has implemented as a draft, is the template for the other agencies to use which scares the hell out of me. The Chairman. But there was no input to BLM? Mr. Jeffress. No. The Chairman. From anybody here in Alaska. Lorali. Ms. Simon. No, I do not think so. But it is also important to remember how much of Alaska is already under federal jurisdiction. And so to try to find land available for compensatory mitigation is going to get increasingly more difficult. That right there is an excellent answer to your question of what does it do to the investment climate. Again, it is just an enormous amount of uncertainty. The Chairman. One of the clear things that we heard in the testimony before the full Committee was that you have different agencies with an interpretation as to different terminology, different implementation, different standards, and again, just further uncertainty and really, outright contradiction at times. I wanted to ask, and this is probably best to you, Lorali, regarding the federal/state relationship. Can you give me your view on the relationship between the Office of Surface Mining, Reclamation Enforcement and the State of Alaska? The concern that I have here is that we have got our state operation. Ms. Simon. Right. The Chairman. And we have Interior over here and what is happening at the state level is basically being smothered. Ms. Simon. So off the record I may have a different answer. [Laughter.] But on the record I would say that the State of Alaska has been very strong, particularly on WOTUS as well as on SPR. The previous Parnell Administration as well as Governor Walker, they have been very strong on trying to stand up for states' rights and personally with the coal program and the Stream Protection Rule, this very small division within the Department of Natural Resources has an amazing resource talent in their people. They have been able to help a lot of us miners better understand even the Stream Protection Rule at the scientific level. So with that kind of support I see it working properly in that the people who are on the ground, you know, the coal program manager, his direct reports, who are the investigators for our mine. They have been working with OSM to try to break down the rule and really explain how it just does not work in Alaska. It, again, is this one-size-fits-all approach. What may work fine in Appalachia just does not work in Alaska. For example, we cannot collect 12 months of water samples, right? Because when it is frozen. The Chairman. The lake is frozen. [Laughter.] Ms. Simon. Yeah. And so like that type of thing where even this nullification clause of at any point, at any time, OSM could come in and just decide that the permit is not valid and pull our permit. Well, this could be 5, 10, 15, 35 years after we have been mining under this permit, and so then we would be held liable for basically operating illegally up to that point when they deemed the permit nullified. So that type of uncertainty, you are like, well how could that possibly even work? I mean, whose idea was this? So, yes, I guess, I am sorry. My short answer to your question is I believe the State of Alaska is standing very strong in their working relationship with OSM, particularly on the Stream Protection Rule. The Chairman. The last question is directed to you, Mr. Tangen, and you raised the Sturgeon case. We just saw the Supreme Court come out and get back to the Ninth, but there was some good, strong language in that case that recognized the role of ANILCA and the balance that was found in ANILCA. I am going to ask you to speculate a little bit about how the Sturgeon decision can affect the issues that we are talking about here today with regard to accessing our resources. You outlined some specific proposals for the Committee to consider, but given the direction that we saw laid down by the Court, how do you feel that this will impact us, if at all? Mr. Tangen. One has to speculate, obviously. But I think that if one reads the last few pages of this Sturgeon opinion, and I recommend the opinion to everybody who is interested in the subject because it is not very long but it is very powerful, the last few pages of the Sturgeon opinion, among other things in the remand to the Ninth Circuit, calls the Ninth Circuit's interpretation topsy-turvy. I think that that says a mouthful because to the extent that eight justices on the Supreme Court in a unanimous court signed off on that opinion and that language and that has to be a mandate to the federal agencies in Alaska that they need to take another look when they are permitting the land managing organic acts, when they are charged with essential responsibility. They have got to look at the implementation of the Land Management Act whether it is running out and using a hovercraft on the Nation River or almost any other question that comes up. And there are questions of access and whether something is a withdrawal, et cetera, that come up on a fairly regular basis in the courts in this state. They have got to take another look at it almost to ensure that these interpretations are viewed through the prism of what I refer to as, Alaska Statutory Trilogy. It is an important giant step forward. I guess maybe I am more than a little bit optimistic by suggesting that the agencies and the Federal District Courts will follow the clear guidance of the United States Supreme Court. But, you know, hope springs eternal. [Laughter.] The Chairman. Thank you, I appreciate that. With the first and the second panels we have been talking about our resources in the ground, oil and gas and coal and mining. Our third panel that we will turn to now is related to that human resource and the potential. I have just listed a couple of the examples that have been presented today in terms of the size of how or what we access. You mentioned, Bronk, that placer mining within the Fortymile District, the oldest district, 118 years, when you bring it all together it is about the size of an Iowa farm. When we talk about the area in ANWR that we would like to be able to develop, one of the analogies that we use is the size of Dulles Airport right outside of Washington, DC. Joe Marushack mentioned that impacted areas within all of the NPRA is 0.0008 percent. Within the Tongass National Forest, our largest national forest, the fact that with all of the decades of harvesting within that forest, the percent that has actually been harvested in forested areas is still hovering right around four percent. When you think about our state, the size, the scope, the assets that we have and what it is that we are trying to access, it really is a pretty small standard. But we recognize that even if it is just these small areas, we still access them responsibly and with the care for that environmental stewardship. We will now turn to our third panel to discuss the human resources, and that is our Alaskan workforce. So thank you. [Applause.] [Recess.] The Chairman. Alright. We are back with our third and final panel. As I mentioned, this is the panel to look at all of our human resources and the job that is underway to ensure that as we access Alaska's resources for the benefit of Alaskans that we have trained and a skilled workforce. The panel this afternoon will be led off by Vince Beltrami, who is the President of the Alaska AFL-CIO. Thank you for being here. He will be followed by Lisa Herbert, who is the President and CEO for the Greater Fairbanks Chamber of Commerce. Lisa is not having to travel very far. But having to travel even a shorter distance is Chad Hutchinson, who is head of the Pipeline Training Center. Again, thank you for opening your doors to us all here today. Kevin Pomeroy will wrap up the panel. Kevin is the Business Manager for Laborers Local 942. Thank you to all of you for being here and for joining us. We will begin with Mr. Beltrami. Go ahead, Vince. STATEMENT OF VINCE BELTRAMI, PRESIDENT, ALASKA AFL-CIO Mr. Beltrami. Thank you, Senator, and thank you for the invitation to be here. I did submit some prepared written testimony but as I have listened to the discussion here this morning it has, kind of, shifted to where I thought I would focus on a little bit. So that means I might ad lib a little and hopefully can stay within my five minutes. But I can--the part about what we do in terms of training and how that, maybe I'll be able to circle back to that before we are done. I wanted to start off with something you mentioned earlier in response to the President's visit when you said that I would say consider me part of the ``team ironic'' also. We believe that you can do responsible resource development and be conservationists at the same time, and we have many, many years' record of doing that in the State of Alaska. Alaska is always called the Last Frontier. I think the Arctic is, kind of, that final frontier that we have to look at with more potential, economic benefit to Alaskans and to the Federal Government, actually, if we could work on what I heard were the huge challenges of the previous two panels making sure that the permitting is streamlined and the processes work so that we can put Alaskans to work. Resource jobs have meant a huge amount to Alaskans, particularly to the members that I represent. We have about 60,000 members in the state. About half of those come out of the building trades and a big chunk of those learned most of their training many years ago on the initial construction of the Trans-Alaska Pipeline System. That was a big, probably the largest job constructed in North America. It was done under a project labor agreement meaning that it was done in connection with the best training systems that exist for building trades folks in the world. I think that is our joint apprenticeship and training committees that we have. But a generation of workers were training on that job and on other jobs, and those folks are retiring in droves right now. The one thing that I kind of wanted to shift to on my testimony that is not in what I submitted was that what the state is facing in terms of challenges, financially. I have been going around the state doing other presentations, dealing with the state budget. Up until about a year ago or so, 90 percent of the state's revenues came from what flowed through that pipe. Right now, of course, we are experiencing a huge downturn in those prices, and the oil industry is only providing about 20 percent of the revenue needed to balance our budget that passed last year. So the opportunities that exist are not going to be coming from the state's coffers right now. We just had the smallest state capital budget in the last 15 years last year, and that was only what we had to put up to meet the federal match requirements. So we do not have the $2, $3 billion budgets that we have had over the past several years as a result of oil and gas exploration development and what has flowed through the pipe. But now we have an opportunity. We have to look forward to infrastructure development in the Arctic, on oil and gas, natural resources. The Arctic is going to be that next. We already have everybody heading up there. Russia is heading over there. Everyone is heading to the Arctic and staking their claim and we have to be prepared to do that. Not only do we need to do more responsible resource development, we have got to build infrastructure. I mentioned to you when I saw you in the airport, you know, I want to see a Coast Guard base built. We need to have a deep water port that can handle that maritime commerce that Admiral Barrett spoke to earlier today. There are all kinds of opportunities. Most of them are going to be in the Arctic, and that is where we think the greatest potential for economic stimulation exists. So I will speak just specifically to what we do and how we train in the union-based apprenticeship programs. We have been doing it in the state for about 70 plus years. We spend and we mostly pay for that ourselves. There is $11 million a year, roughly, that we have negotiated that is union employers with the union sitting at the table negotiating contributions that go towards funding our training programs, somewhere, usually, between $0.75 and $2 an hour out of the wage and benefit package goes into raise that money to pay for our students, to get them educated, to get them hands-on training and classroom training and everything that goes along with creating some real skilled craftspeople. And we have over $30 million in infrastructure in the state. Not including this facility which actually my predecessor, Jim Sampson, talked me into taking this job so that he could come here and build this facility. Just a little while ago before we started I was sitting in one of the classroom just going over notes and stuff and just looking around in there at all the personal protective equipment, the gear, the safety stuff and thinking, I sure hope we can fill these classrooms with Alaskans because we are positioned to do this, to partner with our union-based apprenticeship programs and anyone else that wants to come to the table. I think the Pipeline Training Center is a great example of where we work with our union-based apprenticeship programs but also with the university and places like Av Tech and things like that. There is a great training infrastructure, I think, built in Alaska. We have the ability to ramp up our training as we need or ramp it down as the economy dictates; however, we do not want to end up where we ended up back in the mid to late 80's. We built the pipeline and then we went into a recession. We lost tons of folks that we had trained to do that work who left. Luckily there was a lot of work that has come up through the 90's into the 2000's that have been a lot of work that has been vibrant, kept our members working. I think that is one of the biggest challenges. We know that these investments in the Arctic that we are looking at, whether it is gas lines or pipelines or ports or Coast Guard bases or any of those things, they take several years to get going. We are at a time in this state's financial picture where we do not have the state able to provide projects to get people trained for those projects that will be getting started, the big projects, a few years down the road. So it is a real critical time that we look at whether it is G.O. bonds for the state to get projects on the books that we can train people on, whether it is federal spending, whether it is private investment spending. We stand ready to work with all comers in making sure that we can meet the need as we have been able to demonstrate what we have been able to do over the last several decades in the state. So, thank you for the opportunity, and I look forward to any follow up questions. [The prepared statement of Mr. Beltrami follows:] [GRAPHIC] [TIFF OMITTED] T1970A.225 [GRAPHIC] [TIFF OMITTED] T1970A.226 [GRAPHIC] [TIFF OMITTED] T1970A.227 The Chairman. Thank you, Vince. Lisa Herbert, thank you for being here. STATEMENT OF LISA HERBERT, PRESIDENT AND CEO, GREATER FAIRBANKS CHAMBER OF COMMERCE Ms. Herbert. Yeah, good afternoon. As you said, I am the President and the CEO of the Fairbanks Chamber of Commerce. We are a business advocacy organization currently representing over 750 businesses right now, all shapes, all sizes, all industries and they employ thousands of hard working Alaskans. While we tend to focus on local and state policies, we are mindful of the federal impact to the Interior, and Alaskans are both interested and adapted opportunities to responsibly develop those natural resources that are essential to maintaining and growing our sustainable economy. However, history has shown when government interferes with the decisions or jobs best completed by the private sector or imposes rules or regulations that are technologically or economically infeasible to implement, those opportunities are squandered. And as a result Alaskans suffer. While some of the laws and regulations have been formed with good intentions, their reach and complexity have extended to the absurd. My written comments are much more in depth here. I want to thank some of the members that helped frame some of my comments here today. I do not serve in any of those industries, but we have lots of members that benefit through the work of resource development here in the way of indirect jobs. And so, allowing them to, kind of, provide some comments for me to be able to pass along to you was really important. So thanks for that opportunity. So a few of the comments that I had received from my members, just to put on the record, painful examples that have stymied our economic development here include additional wetlands delineations and constraints, particularly where much of Alaska is underlain by permafrost. As Lorali commented, rules that work across the United States may not work here in Alaska. The excessive requirements and evaluation procedures imposed when performing environmental impact statements have reached beyond the original statutory language and intentions and the EPA's preemptive vote for the petal project before the permitting process had commenced on state land. The new BLM revegetation of wildlife habitat standards are anticipated to dramatically increase the effort and complications of work necessary to close out mining claims on federal lands. And I would mention this process was recently disclosed but developed to the point of approval without any involvement or input from the agencies in Alaska or the general public. The unduly frequent violations of the federal statehood compact, ANILCA, and just as the recent Sturgeon v. Frost case by the Supreme Court indicate that the Federal Government has gone too far. OSHA's proposed silica standards for the construction industry will cost more than originally estimated and will therefore translate into significant job losses for this industry and the broader economy impacting many of our Chamber members in the supply and equipment business as well as those in the non-construction sector. One of our members highlighted that they spent over six years in administrative and court procedures before they were able to get a final ruling on whether or not the Army Corps had jurisdiction over the development of the land they owned off Van Horn Road. Ultimately though, after years of litigation, they were able to proceed once the courts ruled in their favor but at a great cost to them. As was mentioned earlier, we are facing unprecedented low oil throughput in TAPS. Even worse, the drastic drop in the price per barrel of oil has dramatically affected our state's budget. There is a significant amount of oil that has yet to be produced but due to delays in government and this has significantly impacted investment here in Alaska. An example including the permitting delays experienced by ConocoPhillips, CD-5 and GMT project, if that project had not been delayed our pipe yards and welding shops would have full parking lots of people, our supply stores would be fulfilling orders and we would have trucking companies hauling loads of freight up and down the roads. But instead, we are sitting here waiting, and we have just been told no. I do think that it is ironic that in a time when our economy is starving for work our government continues to delay forward progress. Certainly resolving the high cost of energy is high on our priority list, has been for a long time. However, the EPA Clean Power Plan will continue to be problematic for Alaska and the evident thesis of ``dirty coal'' standards stands contrary to the practical realities of our Interior electrical energy generation. The substantial increase in requirements and rules of the recent Stream Protection Rule magnifies and further complicates the coal mining needed in Alaska to produce our power. In short, the invention and imposition of many new requirements and federally-administered rules are, in fact, a steady shift away from state sovereignty and economic resource development. Business members are being told no and the finding that Federal Government seems to be more and more restrictive in their issuance of permits. Our state is facing some real economic hard times right now. Over the last eight years Fairbanks has missed out of a lot of local private investment simply because agencies are unwilling to apply common sense, real world scenarios or objective determinations and our lack of natural gas here in the Interior has really stymied some major private investment from large corporations. But what the agencies always seem to fail to understand, especially here in Alaska, is that time really is money. Every delay usually means an entire season is lost out due to our construction season, and the mitigation costs usually are enough to kill the projects, if not significantly delay them. The margin for many businesses in this community are thin, but they are willing to stay here. They are willing to invest, and they are committed to Alaska. Today, on this panel, we have got business and labor represented. I think we are all just here asking for the opportunity to stay in business, get back to work and be assured that we are allowed to proceed making investments that make sense here in Alaska with some sort of certainty. We are a vital business community. We are dedicated to Alaska and its future. I want to thank you again for the opportunity to represent the voice of business here today. [The prepared statement of Ms. Herbert follows:] [GRAPHIC] [TIFF OMITTED] T1970A.228 [GRAPHIC] [TIFF OMITTED] T1970A.229 [GRAPHIC] [TIFF OMITTED] T1970A.230 [GRAPHIC] [TIFF OMITTED] T1970A.231 The Chairman. Thank you, Lisa, I appreciate it. Chad Hutchinson. STATEMENT OF CHAD HUTCHINSON, DIRECTOR, FAIRBANKS PIPELINE TRAINING CENTER Mr. Hutchinson. Thank you, Senator. I would like to start out and provide a brief overview of my background. I am a 25-year member of the Operating Engineers Local 302. I am also a graduate of Local 302's apprenticeship and training program. I spent the first 15 winters of my career on Alaska's North Slope working for Crowley Maritime's division, Catco, supporting Alaska's producers in exploration all across the North Slope's oil reserves and gas reserves. I have been from Camden Bay to Prudhoe Bay, the foothills of my folk's ranch. In 2006 I became an Alaska Operating Engineer's Apprenticeship and Training Coordinator for the Northern Region. In 2015 I was fortunate enough to be hired as the Director of the Fairbanks Pipeline Training Center. Our mission at the Fairbanks Pipeline Training Center is to train and develop Alaska's oil and gas, mining, construction workforce. The training center is a fully integrated facility. It provides classroom and hands on training in the disciplines of cross country pipeline training, building and trades, process tech which is led by the University of Fairbanks Community Technical College. We collaborate with our training partners to deliver training to apprentices, high school and college students, transitioning military personnel and vets and students from Alaska's numerous rural communities. The Training Center also has a linkage agreement with the Fairbanks North Star School District, the APJCC and other educational and training providers to execute workplace safety and on-the-job training with the specific goal of training the next generation of Alaska's oil and gas, mining and construction workforce with an emphasis on legacy jobs. I would also like to mention that none of this could be possible without our partners, oil industry partners, labor, state, Federal Government, as well as industry. They have all come together to make this training center a reality. With so many people talking about the development of the natural gas pipeline coming together, partnerships, the cost of the pipeline, the challenges that lay ahead in these economic times, my concern is who is going to build it? Where are these people at? To have a skilled, productive and safe workforce takes years to develop. Young people starting in apprenticeship programs today will just be moving on to joining their careers in four to five years. It can take another five to ten years before they have the skill and experience they need to move into leadership roles if the opportunities are there. We have two work seasons in Alaska. Summer and Winter. Both can be a very short time to gain the experience needed to move into these positions. In the oil and gas, mining industry there is no single, four-week class that will give you everything you need to know on a career, in these careers. It is the time in the classroom and on the job that creates a safe, skilled, experienced workforce with safety being a key factor. Workforce development and career exploration now will determine the success of a gas line in the years to come. This is a continuing investment that needs to increase double of what it is now. We need to recommit workforce development and career exploration with skilled trades now more than ever. We have been able to reach out statewide with career exploration opportunities. In return, people have had a chance and opportunity to work in their communities. Whether a gas line project develops or not, building a workforce is still needed today to maintain what is already in place now and other future products. I was once told the Trans-Alaska Pipeline was a home for the old and a school for the young. Those young people are now retiring and leaving the workforce everyday with history and knowledge that is not in a plans book or in a computer. It is this information that is passed on from Journeyman to Apprentice through the years of continuous workforce development. Thank you for giving me an opportunity to provide a short description of Fairbanks Pipeline Training Center and its value to Alaska oil and gas, mining, construction industries and residents. [The prepared statement of Mr. Hutchinson follows:] [GRAPHIC] [TIFF OMITTED] T1970A.232 [GRAPHIC] [TIFF OMITTED] T1970A.233 The Chairman. Thank you, Chad. Kevin Pomeroy, welcome. STATEMENT OF KEVIN POMEROY, BUSINESS MANAGER/SECRETARY- TREASURER, LABORERS' LOCAL 942 Mr. Pomeroy. Thank you, Chairman Murkowski. My name is Kevin Pomeroy. I am the Business Manager of Laborers' Local 942, and the Vice President of the Alaska District Council of Laborers. Serving in these roles I represent approximately 5,000 Alaskan Union members. These workers are vital to the fabric of Alaska involved in the construction and maintenance of roads, bridges, buildings, pipeline process facilities, pump stations, gathering centers, power plants, mines, maintenance, military facilities as well as workers in the private sector, tourism, manufacturing, facility maintenance and various other industry sectors. As a 47-year resident of the Interior of Alaska, halfway through my construction career, the emphasis has been on stemming the declining throughput. For the last decade as Business Representative of the North Slope and now Business Manager, I have attempted to stay active on issues surrounding new field opportunities, development and expansion of existing infrastructure for both the industry and the members I represent. You ask a traveling laborer that comes up to Alaska who controls most of Alaska's lands, they may in error say the State of Alaska. But many of those same peers are shocked to learn that 61 percent of Alaska's lands are controlled by the Federal Government. This leads to a significant amount of acreage and resources in Alaska which are off limits to resource production which means they are off limits to my members going to work on. Federal land is administered by five agencies: BLM, Forest Service, Fish and Wildlife, National Park Service, and DOD is over 223,000,000 acres. To put this into perspective this would be 5,753 parcels of land all the same size of the District of Columbia or the entirety of both Texas and Utah. That is a tremendous amount of resources my members do not get an opportunity to work on. But why is it so important to folks like us who live and work here? We are a young state. We are probably one of the youngest with the exception of Hawaii. This means we are still primarily a blue collar state. We build things. We are still building things. Yet, control of 61 percent of lands within Alaska are those lands that are off limits to potential resource development. From a peak of 2,000,000 barrels per day running through TAPS in 1988 throughput, as we have heard from the Admiral, has slowed to 540,000 barrels per day and could reach its minimum operating level of 200,000 barrels per day sometime after 2020. This could be, should be concerning for someone that is just starting his construction career. The Alaska economy and its residents rely on the ability to develop natural resources on state and federal land. I do not support the drill, baby, drill, mentality because too many of my bounties that fill my freezer end up from within the state. But because I want wild Alaska game coming from healthy forests and grasslands and my salmon from pristine clear waters, I strongly believe that all oil and gas development in Alaska should be planned, measured and well thought-out. As the gates were opening to the NPRA, ConocoPhillips applied for a permit for their Colville Delta CD-5 satellite development in 2005. Due to the various government agencies voicing concern to justify their existence, it was over ten years to first oil on the development from the time the permit was applied for. It was ten years that my members got to wait. CD-5 was the first commercial oil production from the NPR, set aside for that purpose almost 93 years ago, and it is estimated to hold 800,000,000 barrels of oil. An additional 1.5 million acres were set aside in the 1980s because of its potential enormous oil and gas industry resources in the 10-02 area of ANWR. I am not going to engage in the political, ongoing media controversy over whether to drill for oil in ANWR; however, I would suggest that the minimum acreage needed for development would be the perfect opportunity for the oil industry, national defense agencies and the environmental communities to work closely together. Whether the United States, as a whole, is ready to admit it or not, development of the Arctic's oil and gas resources is and will continue taking place. Alaska is the only reason the United States has a seat at the table. The near shore development of 10-02 or the offshore development potentials in the Chukchi and the Beaufort could be the new environmental gold standard for oil and gas development in the Arctic and the OCS. Imagine collaboration between the oil industries, national defense agencies and the environmental communities as Alaska and the United States show the rest of the Arctic nations what American technology and ingenuity can achieve. As the polar ice recedes, resource development and navigation both become technologically and economically feasible through the Northwest Passage connection between the Pacific and Atlantic Oceans. Let me switch gears just a little bit and talk about timber. I mean, it was timber that brought my family to Alaska from the forests of Northern Montana in 1969. It was timber that used to employ a large amount of my members down in Southeast Alaska. After the passage of the Tongass Timber Reform Act in 1990 the Forest Service had the authority to unilaterally modify the contracts on its last two long-term timber sales. It is no coincidence that timber sales went that year from 2,000 million board feet to about 100 million board feet by 2007. There is a local joke going around Alaska here that when the 2015 Christmas tree was chosen and harvested for the U.S. Capitol it doubled the annual harvest that came out of the Chugach National Forest. In closing I want to briefly address mining. It is hard to defend actions of the Federal Government and not make an argument on overreaching environmental enforcement when raids are being conducted out of helicopters with armed agents. It is even harder when a government agency is less than cooperative in a review of how the raid was conceived and executed. What kind of message does this send to the residents of Alaska? As I sit before you today I feel the Federal Government repeatedly blocks development of Alaska's most resource rich lands and waters. These are the same lands and waters that put many of my members to work. Alaska needs to be allowed to be the stewards of their resources, not bureaucracy 4,000 miles away. The last point I want to make in testimony has addressed the development of our natural resources. We have heard from a lot of industry, we have heard from some of the organizations that represent different industry, but the panel here represents some of the workers, some of the people who live in the Interior, people that it is not just a way of life for them, it is not just a living. But it is who they are. It is why they come to Alaska. Thanks for the opportunity to talk today. [The prepared statement of Mr. Pomeroy follows:] [GRAPHIC] [TIFF OMITTED] T1970A.234 [GRAPHIC] [TIFF OMITTED] T1970A.235 [GRAPHIC] [TIFF OMITTED] T1970A.236 [GRAPHIC] [TIFF OMITTED] T1970A.237 [GRAPHIC] [TIFF OMITTED] T1970A.238 [GRAPHIC] [TIFF OMITTED] T1970A.239 The Chairman. Thank you, Kevin, I appreciate it. Well thank you all. The common thread here is really to figure out a way to stay in business and to keep people working and working in well-paying jobs. The training programs that are offered, whether it is here at the Pipeline Training Facility or through our union programs and the training facilities and then what we have on the private side, this is about putting Alaskans to work in jobs that are good and that can sustain their family. I do not recall whether it was you, Chad, that used the phrase that training needs to be continuous. We all know we live, work and operate in a state where we tend to go from boom to bust, and we have historically. That has been difficult, but it has been our reality. As I think about the challenges that we have as a state with recruitment and retention, listening to the comments about the aging workforce that is part of our oil and gas sector. Admiral Barrett faces it with TAPS. You have got great expertise but that expertise began--I graduated from high school at a time that every able-bodied young man, at the time it was mostly men, were going off and working on the pipeline. Now they are all getting ready to retire. It is good for them. It has been good for their families. But the real question is will their kids, the young men and women that are my son's age at 23 and 24, do they view this as an area that they want to go into? Do they see the promise as my classmates did when we were getting out of high school? This is the concern that I have. It is not being viewed as an area for opportunity because of the uncertainty that we have heard through now three panels. The question to you all is from your perspective, how can we work to reduce some of that uncertainty? Again, those things that are holding back our potential. We know that our men and women here in Alaska are young people. They have extraordinary potential. We give them the training so they can pretty much do anything. But how do we reduce some of the uncertainty? I am going to start the question with a recognition that you have raised, Vince, about the very slim capital budget at the state level this year. So you do not have a good horizon on the state level for projects. We have a pipeline that is at 556,000 barrels a day, down well below half. We have layoffs that have been announced within the industry because of low prices. We have Shell that moved out last year because of regulatory uncertainty and disappointing results after one well at $7 billion in seven years, but one well. What can we do, recognizing the uncertainty that we face, to provide a little bit more optimism for young people so that they view Alaska's resource industry as a place for them to go? I will let anyone of you begin with that long question. Go ahead, Vince. Ms. Herbert. You want to go first? Mr. Beltrami. I guess. The Chairman. We will start alphabetically, V. Mr. Beltrami. There you go. [Laughter.] Well that is a pretty tough question, obviously. In looking at what has happened in Juneau, I guess, one of the things they did do, we are only two weeks, two and a half weeks, from the end of the regular legislative session, and they are talking about what the fiscal plan is going to be for the future. They have got to come up with something that substantially knocks off this $4 billion deficit or people are going to be walking away from their homes like they did in the 80s. Already the credit rating agencies have, you know, downgraded the state's credit rating based on not having a fiscal plan. But the good news is we are one of the most rich states, not only in resources in the ground but with our $53 billion in the Permanent Fund. There are opportunities to solve some of these problems and get the budget in line. Once that is in line, I think, then we can look at investing and like I said, one of the things that the legislature, right now, appears to be fearful of doing is making an infrastructure investment by using G.O. bonds or whatever other measures that we have available to seed some of that infrastructure that is going to be necessary for a long range fiscal plan. We have to have a longer range fiscal plan that includes figuring out how to streamline a lot of the regulatory obstacles and permitting that we find in trying to develop resources in the state. In general, we have got to get the state's fiscal house in order and then we have to look to the Federal Government as well and then streamlining a lot of these projects, I think, will open up opportunities going forward. The Chairman. Lisa, what else for certainty? Ms. Herbert. I think that there is very little certainty. I jotted down some notes just listening to the different testimony and uncertainty, transparency, unpredictability, state sovereignty, were all words that almost every single panelist have used up there. So many of those are within our control. There is no reason why we cannot provide certainty to industry, why we cannot have a predictable investment climate. And for our Chamber, you know, we used to focus on the local and state issues and now at the forefront of almost every single one of our committee meetings of which industry is well represented, they have got experts serving on each of our committees. We are talking about how can we streamline and reform the federal regulations that have burdened the private sector and have put a lot of thought into the work. You mentioned the thousands of employees that get laid off. Industry is operating in an unpredictable environment. I probably do not have the solution here for how to move forward, but it is evident when you have 12 people up here speaking that the uncertainty is really killing private sector investment, jobs and the economic opportunities here in Alaska. The Chairman. Chad. Mr. Hutchinson. We talked about the young generation and new generation coming into the workforce. I often wonder what do they know about it? Do they have an opportunity to go explore these careers? We look a lot at the Fairbanks, Anchorage, Juneau areas, but there are a lot of rural communities out there with a lot of people that are very talented. I think bringing them in and allowing them, these people, to come in and explore different career options will help us build a better workforce. People are going to be able to go to work at something they enjoy not just something that they are put into because that is what is available at the time. Requiring training hours on various projects, the State of Alaska requires hours on certain highway projects. Why can't we do that on the military bases? Why can't we do that on the North Slope? I know it is private up there but we have to utilize the resources that are walking out the door right now. The Chairman. That is a great point on the education. I was at an Alaska Youth Corps Challenge program. They are graduates given an option for an additional month of apprenticeship with different unions. I happened to go out to the iron workers training facility, and you had all these 16, 17, 18-year olds that were being exposed for the first time. Most of these young people were young people who were from villages around the state. Young women saying, ``Man, I want to be an iron worker.'' It was good, but education is a key piece. Kevin. Mr. Pomeroy. I am wondering, you know, it was not that long ago that folks, young folks, that did not want to go into construction, you know, they got a college career. We have had more that are looking at why they are in construction. They, kind of, see the writing on the wall. There are not as many opportunities as they had originally thought. They are actually in construction but I have got some that are talking about going back and continuing in their education. So, you know, having another fallback. It used to be that construction was the fallback. If you could work with your hands you could pretty much make a living, but that is not always the case anymore. I think it was Bronk that had said up here on one of the earlier panels that he had the bigger list of the new standards or the new ``thou shalts,'' there seemed like there would be a way to make those folks, to compel them to come to Alaska or wherever the region is, that they are getting ready to reinterpret. They are going to rewrite the plans book on how these folks play the game or get a way to make them come to Alaska and see some of the obstacles that they may not be seeing from sitting in their ivory tower rewriting these rule books, if you will, because it is scary. I mean, construction we have got to replace where you do not have the workforce in the queue, like Chad had mentioned. You do not create a well drill tonight. You do not create a welder in a year, two years. You do not create an operating engineer in a couple of years. You have got to have enough sustainable work out in front of the workforce, keep them engaged and keep them wanting to be in Alaska otherwise we are going to wake up one day with a big project and we are going to have to import all our labor because they will no longer be there. The Chairman. I am going to ask a question and you can figure out which section of it you want to answer. Admiral Barrett, as the President of Alyeska Pipeline, I think, has been a very strong proponent for continuing the life of the Trans-Alaska Pipeline. The best way to do it is not engineering technologies to reheat the oil at certain points. It's to fill up the pipe. When we think about ways to fill up the pipe, in my view, the answer that is most direct and clear is through ANWR, accessing a small portion of ANWR. ANWR is relatively close to the main pipeline on land. It is, in my view, one of those opportunities that we have been foreclosed on by the Federal Government. Yet it is something that can stand as the solution and when we are talking about creating jobs and the incumbent benefits that are associated that ANWR is clearly a part of that answer. We also recognize that there are many of your folks that are engaged not only in oil and gas opportunities, but they are participating in alternative and renewable energy projects around the state whether it is wind, we look at Fire Island as you came flying in, whether it is hydro power, extraordinary hydropower resources, or some of our other abundant renewable resources. This will be last question to each of you. In terms of our energy opportunities as a state and how you see the workforce and the job opportunities for them, talk to me a little bit about greater access to our oil resources, ANWR, offshore, NPRA, renewables. Where do you see that future? Mr. Beltrami. I am trying to remember the year but I think it was in the 90's. I was in DC, your Dad was the Senator with Senator Stevens and Congressman Young, and we had a gigantic building trades convention in DC. We did a march, basically walked up to the Capitol steps. We had 1,000 people there. The stars were aligned allegedly, and we are still hoping for that opportunity. I think the building trades unions in general have always been extremely supportive. I have had conversations with folks that had no idea really what the true situation is up there. It could be done, as I think, very safely, that it is the best opportunity to access, like you said, convenient to the pipeline's location, etcetera. And there is a lot of mis-information, education out there. I think we still have to never leave that opportunity to weigh in against anyone or, with all due respect to anyone that objects to it, of drilling in ANWR or not. I do think it is probably one of the most safe places that we could access safely and do this right that does not have to worry about a lot of the worst conditions in the offshore which I still think we can do most of these things safely. We cannot give up on pushing that. You mentioned renewables. I was Chair of the State's Renewable Energy Fund Advisory Committee that was doing about $50 million a year in renewable projects all around the state. Of course right now we cannot add to that because of the state's situation. It would be great if there were any federal dollars to push on expanding renewable opportunities. One of the concrete things I would like to see, Chad alluded to it a little bit, is recently Governor Walker put in an Executive Order that beefed up apprenticeship utilization on anything that the state contracts. I would suggest that the Federal Government could do something similar if you want to always have a pipeline, if you will, of workers available and in projects if there could be some kind of a specific apprenticeship utilization language associated with any bids that are put out for work on federal jobs whether it is on military bases or anything else. That is one way to keep folks in the training pipeline. Short of that we just, like I said, we stand ready to plug people in. We have outreach efforts everywhere, local hire that we can implement in villages and everywhere else that any communities that would be, you know, have a project being done nearby. So, like I said, we stand ready, and we will do all that we can to help in forming a long range plan to put Alaskans to work for the future. The Chairman. Other comments on energy job opportunities? Ms. Herbert. I think we have a tremendous asset just up on the hill here, our university research and development. You know, we need to be able to leverage what they do up there. For every dollar they bring in they are able to leverage that in dollars back into the economy. I know that we are facing unprecedented budget issues right now, but we really need to get that fiscal house in order. The military is fortunate to have serious dollars coming to us by the way of military construction. They, kind of, ride that bubble a little bit. But we have tremendous assets up on the hill and here in this building. I have always loved saying, we are all in the oil industry because we truly are. I think when people say close ANWR and NPRA and you look at the turmoil that is happening in the Middle East, we have our resources right here on American soil, and the fact that we are not able to produce them is shameful. I think there is so much more that we could do for that. I am not an expert in that industry at all, but what I do know is when people are working, the economy is thriving and these guys have Alaskans working and the private sector is thriving as well. Alaskans have done it best. We have a track record of producing resources responsibly, oil and gas and into mining. I know that just for every oil and gas direct job, 20 jobs are created indirectly. And those are in the nonprofit world, in the private sector. Those are the restaurants. Those are the schools. Those are everything. Everything is touched by the oil and gas industry, and to not recognize that hurts us. I think there is lots more that we can do. The Chairman. Great. Chad. Mr. Hutchinson. You mentioned ANWR. I can honestly say I have been there and spent a lot of time right in that vicinity. I spent five years at Point Thompson which borders ANWR and have also been to Camden Bay which is the beach right at ANWR. From 1991 from the time I started working there until 2005 when I left, the difference in environmental policies and the safety policies is tremendous. I do not think a lot of people understand that from what it was when the Navy was up in the North Slope in the 1940's and 1950's and what they left behind to where it is today with virtually zero footprint left behind. I mean, that the companies are going out, the contractor has to go out, and he's accountable for every little thing, not only is the project done in the wintertime, but they go back out in the summertime to clean up after those projects. It is a huge thing. It is a huge difference. Developing our resources, renewable energy, oils, mining, we need to do something. We need to move forward. Somewhere we have got to have the people to do it. Like Ms. Herbert said, it is not just the construction, oil and gas industry. It is everybody this is going to affect. If the gas line comes into play, you are going to need people in restaurants. You are going to need people selling ATVs and boats and repairing cars. Across the street there is a help-wanted sign that has been up over there for three to four years that has not been taken down. They are going to have to put up a bigger sign is what it boils down to. We need to start developing these people. We do not want to train just to train. We have got to have places for them to go. Thank you. The Chairman. Kevin, do you have a final word here? Mr. Pomeroy. Senator, I would agree with you that ANWR should be something to take a look at. I mean, you are looking at a development that has been compared to a postage stamp sitting on a football field. That would be the type of acreage and impact it would do. You know, I have noticed as I have come through construction, my construction career, you know, I used to be the young guy on the field or on the spread. It has been a lot of years since I have been the young guy in this field. [Laughter.] But one thing I have noticed as I visited some of the job sites up there as an agent is there is a younger workforce that by it being indoctrinated into their training, they just have a higher level of awareness for the environment. Not to say that, you know, Chad and myself when we were up there working on the oil field that it was not there, it is just that environmental component is something that is put into training as we go through the apprenticeship programs. You cannot go from one contractor to the next without seeing some impact of that, like the safety record. Alyeska is, and ConocoPhillips and BP, I mean, in Alaska, they kind of pioneered and led the charge, if you will, on safety records. It is when it becomes part of the culture that you know you are there. I truly believe that we have got young men and women in the apprenticeship programs and within just the skilled trades that have that same sense of environmental stewardship that has become who they are, that they are going to be the workforce that is up there working on those projects. Do they want to see a catastrophe? No. I truly believe that they will do everything they can to minimize it. I would love to think that Alaska could rely on renewables, but I was just down in Juneau here a couple of weeks ago and with the low snow pack there were a couple of folks wondering if they were going to have enough snow melt in their reservoir to run their hydro. It does not take an Einstein to know that after one o'clock in the afternoon in Fairbanks, Alaska, solar is not going to do you any good. So you have got to try to develop those renewable and more environmentally-friendly energies. Here in Alaska, particularly in the Interior and in some of the rural communities, you still are reliant on natural gas and hydrocarbons. And so, I think the best, the future is to continue to develop the safest way to access it, and that is through your workforce. The Chairman. Great. We have heard great comments all around. I think it really helped to round out the conversation today, so thank you for the time that you have given us and really the thought and for men and women and the families that you represent because at the end of the day this is about Alaska. This is about our homes. So thank you very much. Thank you for that. [Applause.] For the benefit of those here we are just about to the four o'clock hour, but we made arrangements with the Committee to allow for some limited public comments to come before the Committee for the record. As I mentioned at the outset we would ask that those who wish to provide an oral comment, please try to keep your comments to just two minutes, and anything that you might provide in writing will be incorporated as part of the full Committee record. That will not be limited to a two-minute statement. You certainly have greater flexibility with your written statement. I am told there is a list. What I will do is call the first three people to be on deck. We will be led off by Bernie Karl. He will be followed by Susan Todd, and then Princess Lucaj, and I don't know if I am pronouncing the last name correctly. If you would just come to the microphone. I would ask that you state your name. What else do they need for the record? Okay, if you can provide your name, spell your last name so that it is included correctly as part of the record, and a business affiliation, if you have one. Mr. Karl. Bernie Karl, K, A, R, L. Chena Hot Springs Resort. And what else did you want? K, A, R, L. I did spell that. The Chairman. Good. Mr. Karl. Alright. Senator, thank you for this opportunity. It seems to me there is more opportunity now than there has ever been in the history of man, but it is not business as usual. I did not hear one speaker talk about the opportunities in a smoke stack or the opportunities in a landfill. It is insane that we have smoke stacks. You know why we have them? Because the solution to pollution is dilution. Why do we have a landfill? Nature has no waste. It is insane that we do not take charge of what we have. I am telling you that there should never be a landfill, there should never be a smoke stack, and we are smart enough to do something about it. The reason we do not do anything about it is because we are addicted to oil in one arm, and are addicted to greed in the other. Do we need oil? Absolutely. There is more opportunity on the North Slope than there has ever been. C-One through C-Six are the building blocks for most all chemicals in the world. Our government wants to build a pipeline and ship it out of here and take 30 pieces of silver. Shame on us. Those are the building blocks for the world. We sit on the world's largest gas field, world's second largest gas field. We should develop that. All the highest and best paid jobs should be in Alaska. For $4 billion in four years with Alaskan help, which happens to be some of the best help in the world, we could put one million barrels a day of methanol into that pipeline. You take CH4. You take out the four molecules of hydrogen and you bond that with nitrogen and you bond that with CO2. Yeah, CO2. Twelve and a half percent of that field is CO2. Now you make a liquid fuel. And that fuel is 100,000 BTUs per gallon. You burn it in any engine and store it in any tank that is already here. Alaska should lead this energy parade. We are following. Shame on us. We need to lead. We have the brightest people here. Our indigenous people have the highest IQ of any indigenous people on the Earth. They own a lot of this land and resources, as you heard. So if you want to look at the high, the top 14 corporations in Alaska, number four is Lynden. The other 13 are all Native Corporations, and so that proves my point. I only have just a second left but thank you for the opportunity. It is shameful what we are doing. The only thing we need is zero federal oversight and zero federal help. We want to make your job easy. We have got to stop taking your help, and we damn sure do not need any more federal oversight and this state could grow. The Chairman. Thank you, Mr. Karl. Susan Todd. Ms. Todd. Now that's a hard act to follow. The Chairman. Yes, it is. [Laughter.] Ms. Todd. Okay, thank you, Senator, for the opportunity to testify. I am Susan Todd. T, O, D, D. I am a mother of two, and I have been a professor of Natural Resource Management at the University for 26 years. I have been in Alaska 41 years. I came up for the pipeline boom which was a hell of a lot of fun. I have always felt development can be done responsibly, and I used to get a kick out of bumper stickers that said, ``Alaskans for Global Warming.'' But with the increasing evidence of climate change in 1999, I started including a unit on global warming in my courses. Every year I updated my lectures with the latest statistics. Every year they were scarier. I went from being unconcerned to being deeply worried. All ten of the hottest years on record have been since 1998. The top four records have been since 2010 with 2015 breaking them by a shocking margin. 2015 is now the warmest year on record by far. The scariest thing about climate change is that warming creates more warming. After a tipping point, global warming will fuel itself and it will be unstoppable. The sea level is rising exponentially. Instead of moving ten villages we could be moving 50. The economic and social cost of losing coastal cities is incalculable. China alone anticipates 350 million refugees from their coastline. The world is having trouble absorbing just two million refugees from Syria. What will happen when we have one billion coastal refugees on the move? These are just a few of the impacts we face. The primary cause is CO2 emissions. There is an overwhelming scientific consensus on climate change and a recent article, scientific article, by James Hansen and 18 other globally recognized scientists had this to say, ``There is a real danger that we will hand young people a climate system that is out of control. . .'' It is hard. ``We conclude that the message our climate science delivers to society and policy makers is this--we have a global emergency.'' Scientific journals do not usually say things like that. Innovative technologies and renewable energy sources are the answer, and time is of the essence. Americans, as Bernie said, are the most innovative people on the planet. We entered World War II flying wooden biplanes, and within just five years we had jet fighters. When we decide to solve tough problems, we do it. To stop climate change we must transition off fossil fuels as soon as possible with new sources of energy and new technology. I urge you to do all you can to reduce our dependence on fossil fuels and to develop renewable energy sources. The question is not can we afford to do this; the question is can we afford not to. Thank you. [Applause.] The Chairman. Thank you. Princess, welcome. Ms. Lucaj. Hi. Quickly my last name, L, U, C, A, J. You'll have to excuse me, because I'm a little nervous right now. But I am standing before you as an Alaskan Native woman, mother, and what I'm most concerned about is maintaining the ecological wellness, integrity of our natural resources. I am also wary of the erosion of the public voice in decisions that have to do with the destruction and privatization and commodification of our precious life-giving resources such as our crystal waters and riverways. When you talk about streamlining processes for mining and oil and gas development it frightens me, quite frankly, because EPA regulations are there for a reason, to protect you and me, to protect the public. I am sure that if we had not had public protests long ago we would have seen development on the coastal plain of the Arctic National Wildlife Refuge or at Pebble Mine or seen HB77 go through last year. So the real threat to our national security is the devastating effects of climate change. The real threat to our overall well-being is to our wildlife. It is what is happening to the chinook, to our marine life and to our caribou, moose and migratory birds. We are not the only species that lives and dreams on this planet. What right does the Porcupine caribou herd have to return to its early nesting ground on the coastal plain of Arctic National Wildlife Refuge? We cannot drill our way out of this predicament we find ourselves in as human species. We must begin looking elsewhere to create jobs. We are suffering today because we did not do a good job of diversifying our economy. When I was 17 years old at Lathrop High School a New York Times article dated May 29, 1990 read, ``As oil bounty drains Alaska becomes uneasy.'' In the article then-Governor, Steve Cowper, speaks of his optimism about our ability to diversify our economy and that taxes could make up from where we are not able to expand. That was 15 years ago. Fifteen years ago and I feel very, very strongly that the problem of Alaska's socioeconomic and ecological environmental sustainability has been put off on my generation. Why did we not do anything 20 years ago when we knew that this was coming down the pipeline, literally. It was going to drain out eventually because it has been a one-pony show, a one-stop-shop. Why are we still having this conversation? It is just business as usual. To me it feels like business as usual. It is time for us to stretch our minds and hearts in innovation and work together to transition our economy to one that is truly sustainable and logically sound. We need to fund renewables and to transition our workforce up to then to work in that field. We need to encourage and incentivize our local economies and we need every Alaskan to engage in this process of transitioning our economy off of fossil fuels. We should really think about what these words mean. Progress. Prosperity. Development. [Applause.] The Chairman. The next three names we have are Erik Schaetzle, Tristan Glowa and Odin Miller. So if Erik is here, welcome. Mr. Schaetzle. Thank you, Senator Murkowski, members of the Committee. The Chairman. You are going to have to get just a little closer so that they can pick you up on the mic for the record. Mr. Schaetzle. Thank you, Senator Murkowski, members of the Committee. Our state has a goal of 50 percent electric---- The Chairman. Erik, I need you to spell your last name because it is a little challenging. Mr. Schaetzle. My last name is Schaetzle. S, C, H, A, E, T, Z, L, E. Our state has a goal of 50 percent electric generation from renewable sources by 2025. As a whole, Alaska already produces over 20 percent of electricity with water, wind and other renewable energy sources and has seen a 20-fold increase in wind power generation since 2007. Kodiak generates over 99 percent of its power from renewable energy resources. They are now switching from oil to electric heat pumps to heat their homes as they are in Seward and in Juneau as well. Solar energy has grown considerably across the state in the Northwest part of Coral to Copper Valley. In Fairbanks the Golden Valley Electric Association is exploring community solar projects. This is where the world is headed, and Alaska is extremely well-positioned to lead it with abundant renewable resources. The Chairman. Hang on just one second. Can he keep talking or no? It is all about storage. [Laughter.] There we go. Mr. Schaetzle. Alaska is extremely well-positioned to lead it with abundant renewable resources, a skilled workforce and splendid northern engineering know-how to develop the technologies that can lead America toward a low pollution future and energy independence. Last year Mark Jacobson of Stanford created a 100 percent renewable road map for Alaska. We have the solar resource comparable to Germany, geothermal resources suitable for geothermal power projects, over 90 percent of the nation's river current and tidal energy resources and outstanding wind resources. Our Arctic neighbors are already doing this. Finland has a 100 percent renewable energy plan. Russia recently completed renewable energy system modeling. It is one of the most energy competitive regions. Canada created a transition pathway for its low carbon future. One hundred forty four countries currently have renewable energy policy targets. Refocusing investment on renewable energy providers would shift oil and pipeline workers to building energy production systems that take advantage of Alaska's renewable energy potential. The transition to a low-carbon society and economy will enhance prosperity and well-being, modernize infrastructure, develop regional, renewable energy sources and create new business and new jobs in a diversified, innovative, knowledge based economy. But according to research published just this last Thursday, the 24th of March, in Global Trends and Renewable Energy Investment 2016, 2015 produced a new record for global investment in renewable energy. [The information refered to follows:] [GRAPHIC] [TIFF OMITTED] T1970A.240 [GRAPHIC] [TIFF OMITTED] T1970A.241 The amount of the money committed to renewables excluding large hydroelectric projects rose to $285.9 billion. That was more than double that of new coal and gas generation. Thank you for your attention. The Chairman. Erik, thank you very much. [Applause.] Tristan Glowa, welcome. Mr. Glowa. Thank you, Senator. My name is Tristan Glowa. G, L, O, W, A. So I grew up and continue to love living in Fairbanks, and I am currently a student at Yale University taking a semester or two to be here at UAF taking classes on Arctic issues. I have been an active community organizer for several years here and currently organized with the Fairbanks Climate Action Coalition. So we represent a large number of and growing number of individuals in the community here, faith groups, students, Alaska Native leaders, scientists across the board. And as someone who plans to continue living in Fairbanks and working for this community for the rest of my life, I have to say that I am concerned about the future that you are envisioning here of expanded fossil fuel production as our community here is seriously at risk for our global and domestic fossil fuel dependence. In Alaska we are on the front lines of fossil fuel-induced climate change. This is indisputable. The worst things, wildfires, permafrost melt, unpredictable winters, are already affecting this community. Climate change is an existential threat to my generation and all future generations. In an immediate sense oil dependency is also hurting this community as our lack of revenue diversification has resulted in a harsh program of austerity being proposed for our schools and universities. This seriously concerns me as we cannot afford to cut back our investment in the human capital. We need to look past these tough times. The solution that we need for the well-being of my generation and future generations is not to double down on fossil fuel extraction. It is not to drill from the Arctic refuge against the wills of the Gwich'in Steering Committee. We need to immediately work to diversify our economy and transition away from the fossil fuel economy. We should be focusing on green jobs building clean energy systems, energy efficiency, sustainable infrastructure and a resilient local food system. We need you to lead on this. This is leadership that we need. Thank you. The Chairman. Thank you, Tristan. [Applause.] Odin Miller, go ahead. Mr. Miller. Good afternoon. Thank you for allowing me the opportunity to comment. As a lifelong Alaskan I would like to invite Senator Murkowski and the members of these panels to fully embrace climate science. Its implications for Alaska are abundantly clear. Climate change is a grave threat to our state's future. The economic consequences of climate change are also very clear. It is going to cost Alaska billions and billions of dollars to adapt. There are currently four villages needing relocation, and our state has yet to find funding for even one of those relocations. Dozens more communities are threatened by climate change and will likely eventually need to be moved. Referring to Alaska's economy Ms. Herbert recently said, ``Everything is touched by the oil and gas industry.'' I would point out that everything is touched by the climate crisis we are in. If we keep putting all our economic drivers in oil and gas and mining, these climate adaptation costs are going to get much, much worse and overwhelm our state's capacity. Large new oil projects may bring temporary wealth and high paying jobs, but they are robbing younger Alaskans like me of our future. As long as Alaska makes no effort to look beyond oil and gas it will keep advocating at a federal level against any measures that would meaningfully mitigate climate change. Keeping federal fossil fuel subsidies in place, for example, makes it difficult for sustainable sources of economic development to become competitive in our state. I acknowledge that it will not be easy to shift away from our state's dependence on oil development, but I think we need to start having serious conversations at all institutional levels about how to diversify our economy in ways that would still create high paying jobs. As a start I would like to urge you, Senator Murkowski, to vote against the Trans Pacific Partnership which would shift many of our jobs overseas, drive down wages and impede our government's ability to enact policies needed to sustainably develop our economy. Thank you. The Chairman. Thank you, Odin. [Applause.] The next three on the list are Darlene Herbert, Enei Peter and Anna Godin. Welcome, Darlene. Ms. Herbert. Thank you. My name is Darlene Herbert, and I am from Fort Yukon. I was born in Fort Yukon, about 50 miles south of Fort Yukon, and my first language was Gwich'in. I had to learn to speak English when I was in seventh grade. I mean I made this goal in first grade and we were not allowed to speak our language and anytime we spoke our language in the school we had our hands beaten by a ruler. To this day I speak my language--because of my grandmother. My grandmother did not know how to speak the English. I retired from Local 942. I had been up on the Slope for about 28 years and after that I did about eight years at Clear Air Force Base. I would like to tell you a little story my grandmother told me. The story came down from generation after generations for thousands of years and the story is all over Alaska, even the Eskimos and Tlingit and everybody knows this. There is starvation coming. We know there is starvation coming, and if people heed this story in the land there will be nothing. There will be no animals to eat, no fish to eat. We have to be very careful and protect our land for the generations to come to survive. We, as Alaskan Natives, have survived on this land for thousands and thousands of years. The reason we survive on this land is because we live off the land. We did not destroy the land. I know you people have a different way of seeing things. You guys think about money. We do not think about money. We do not think about oil. We do not think about gold. How we survive is because of the land. We have to keep our water clean and our air clean and also keep our animals safe. We only take what we need to survive. And if we do not do this your kids and our kids will not survive. It will be survival of the fittest because when starvation comes you cannot eat money or eat or drink oil. I have two granddaughters. I have one going to college to be a pharmacist. I have another one that is going to be a lawyer. I have two younger great grandkids that are going to be lawyers also. I understand that we have to learn your language. I understand we have to learn your laws which are a lot different from ours. When my mother and their parents lived, we all did not have a piece of paper to tell us where we belong or where our land was. We knew where our land was. We did not need a piece of paper. Everybody knew where their land was, and we did not need a piece of paper to tell us. I think what you guys do is you guys make too much laws for each other. You should keep it quite simple and look at how many books that guy had. I mean, do you really honestly sit there and read every word out of these? Keep your laws simple. You know, you do not need too many words. I do not understand. But anyways, I work for Local 942, and I get a very good retirement check. And I am very thankful for that. But with the starvation which is going to come, I think that you should tread very quietly and not try to destroy everything. I understand your need for money, but I have to do this to save my children behind me. I hope you take this into consideration when you make your laws to not destroy our animals, our fish, our water, our land, our air. If we do not change that then we will all die, and so will you. Your money cannot save you then. Your oil cannot save you. Your minerals cannot save you. It is going to be very hard times. My grandmother said it is going to be so hard there will not be any water. There will not be any animals. But we have to know how to live off the Earth because everything on Earth has a name and a language, everything. I think that you make too many laws and try to take everything out of the Earth. Your kids will have a very hard time which will make my kids have a very hard time. But if you are going to do all of this make sure that you make laws to protect the land and the water and the air for the generation behind us. Thank you. The Chairman. Thank you, Darlene. [Applause.] Enei, I am going to have you spell your full name. Ms. Peter. Sure. The Chairman. Thank you. Ms. Peter. My name is Enei. E, N, E, I. And then Peter is the last name. P, E, T, E, R. I just have a few quick comments to say and I would really like to give most of my time to an expert here in the room, who did not get a chance to sign up yet. But very quickly I just want to echo for the record officially that not all of your constituents want to continue Alaska down the path of fossil fuel economic development and mining. I am a resident here in Fairbanks. I also have lived in Arctic Village, Alaska. A mother, a Native woman, mother of three Alaska Native children who I really feel we, you, we are all doing a disservice to, if we do not begin transitioning our economy now, begin finding other jobs, sources, training our workforce towards a different economy. This, I heard on this panel over and over, the uncertainty that exists right now on that path of economic development. And so my question is, why are we continuing to put billions of dollars into supporting that path when that path has brought us to this economic decline? When, like so many before me have said, Princess said, this has been a forecast for so long. Now we really need to look to our leaders to take very clear steps away from that economy. We need to invest more into renewables. We need to provide whatever those subsidies are to the renewable energy sector as well as other green businesses. So with that I want to ask if I can, I do not know if I have any time left actually. The Chairman. I would like to get through those who are on the list before we add any others, if we could do that? Mr. Egan. May I be added? The Chairman. Yes. Mr. Egan. Thank you so much. Ms. Peter. Sorry. Thank you. The Chairman. Thank you, Enei. The next three are Anna Gadoon, Pamela Miller and Lois Epstein. So is Anna not here? Ms. Gadoon. I am going to pass my time tonight. The Chairman. Okay, alright. Let's go to Pamela Miller. There are just a couple more. Just out of respect. Ms. Miller. Hello. My name is Pam Miller. Thank you for allowing me to testify here today. I am here representing myself and my small business, Arctic Connections. I depend on the wildlands, our tourists and the remarkable resources that we have in the State of Alaska. Alaska is at an exciting time. It is a work to transform our economy away from oil and gas, and other fossil fuels makes a strapped based economy. I do not know that I heard the words climate change or global warming from a single one of the 12 panelists today. I do not think that they represent the views adequately of the people of Fairbanks or of the State of Alaska and where we are in our economy. I will make a quote from one of our quite well-known oil experts in this state, Larry Persily, from a recent press article on the radio. ``We have to accept we are not the oil and gas state that we once thought we were and we are never going to be the oil and gas state that we once were.'' Because this is not just prices. This is production. We are down three-quarters from the peak, and no one out there thinks we have another Prudhoe Bay in our back pocket. So it is going to be an adjustment for Alaska. In crisis there is opportunity, and I think there is incredible opportunity in Alaska. And I believe this hearing and the 12 testifiers very narrowly looked at what it is a resource of Alaska and of what is their wealth? People have been living in the heart of Alaska for over 12,000 years riding on salmon. It did not come a final solution. They have been here. We have been here. When I look out right now at the transforming economy I am looking out 50 years. Where are we going to be? We can get there. We have incredible people. We have resources, clean air, clean water, a world class conservation system of life that people culture from all over the world because we have something no one else has. Folks talked about the small footprint of development in Arctic National Wildlife Refuge. I remember one of our great Republican champions for the Refuge talking about the so-called 2,000 acres. Well, there is a small tumor in your lungs. Are you going to be worried about the greater cancer that happens? That is just a metaphor, but there is a very real difference between an intact, functioning land that is set aside for the fish and wildlife wilderness from the oil and gas industrialization. I think as a state we need to look at our powerful imagination, and I think that is what we are lacking a little bit as we were looking back instead of forward with the speakers here today. I have a vision that we can get to a very much different Alaska. We do not need to sacrifice our great lands like our National Wildlife Refuge, some of our parks and other places. We can get there with a renewable energy economy. We can adapt, first mitigate and adapt to climate change. We do not know how we are going to get through that door. We can go through the door without knowing exactly what we are getting, where, how we are going to get there. But we need to have conversations that are not one-sided, that are not biased, that fully represent the great wealth we have here in Alaska. Thank you very much. The Chairman. Thank you, Pam. [Applause.] Lois Epstein, welcome. Ms. Epstein. Thank you, Senator. Thank you for having Alaskans participate in this hearing. The Chairman. I am going to have you spell your last name too. Ms. Epstein. Okay, It's E, P, S, T, E, I, N. And hopefully we all get back to Anchorage at some point. [Laughter.] So I am an Alaska-licensed engineer. I am also the Arctic Program Director for the Wilderness Society. What many people do not know is that the Wilderness Society has been operating in Alaska since the 1930s and we have had our scientists working on Arctic-related issues, identifying important places and the ecology there since the early days of the organization. As an organization and as a member of the public we are greatly disappointed by the lack of important perspectives at this hearing. Key missing perspectives include federal officials, conservationists, tribal members, renewable energy developers, guides and outfitters, economists and others in support of a diversified economy in the state. Alaskans deserve to have this great state treated as more than just a resource development economy. Alaska is a land of intact ecosystems with some of the cleanest and most scenic lands and waters on Earth. There is a thriving consistent way of life in these parts of the state that it is our obligation to maintain for future generations. Finally, I would like to add that as many others have said that we cannot drill or mine our way to a sustainable state budget. Our elected officials should be working towards diversifying and reorganizing our economy now to prepare for the post oil future. I recognize there is a federal role involved as well as a state role in that, but we are clearly at a very important time for the state to figuring out where we are going for the next few decades. So thank you, appreciate this opportunity to speak. The Chairman. Thank you, Lois. [Applause.] The next person that we have on the list is Art Nash, and then by popular acclaim, this gentleman will be invited once Mr. Nash has spoken. Welcome. Mr. Nash. Thank you, Senator. That's Art Nash, N, A, S, H, like the old rambler, and I am with the School of Natural Resources, an extension at UAF. And I just wanted to, I guess, bring attention to our food situation in the state and food security. The other issues that have been talked about are high flying. I look more at, kind of, the direct season-to-season. I see that 95 percent, according to the State Department of Ag, of our food comes from the lower 48. That is disconcerting. Sometimes, you know, we will have different types of disruptions. It might be 9/11. Possibly in the past we have had volcanoes that have gone off that have interrupted traffic and then people, kind of, feel the pinch or a barge does not make it up. The people start to think about food. I think one of the key components of having affordable food in Alaska is energy. And whether it comes from coal, oil, natural gas or wood, I think that a continued work in policy and assistance on trying to figure out how to have energy lengthen our season, our growing season, is just a good investment for the state. Right now a lot of growers will tell you that they are not going to plant until it is 46 degrees which is usually, even in a season like last year, where we had a lot of water and the snow evacuated with a bit of a break up. They start in June, and then they pretty much end at first frost in September in the Interior. With using the energy wisely, again regardless of the source, it would be good to try to figure out ways to lengthen the season to go ahead and get another month after frost, a couple of months early. I think that energy, obviously, and the cost of energy has a lot to do with when we can extend those seasons and how. But I also think that with some of the things that have been talked about there are also opportunities that people may see as failures or disasters that may benefit us. The fact that when we do have now a very strong source of water that we can draw on for Ag and start to, hopefully, figure out how to tap, whether it be from, you know, various natural sources such as last year when we had in Delucia that we've never had a different type of weather events that are new. Let us take them on as opportunities and figure out how to put in new traps. How to, maybe, go ahead and ride on the back of some invasive species that are going to come anyway, figure out which types of foods grow best and learn from other states. So I know that food has not been the tenor of most of the discussion, but it is linked with energy. And I think that with the permafrost melting there are going to be some opportunities for maybe more crop land and trying to figure things out. And these are things that, like I say, may seem to be on the fringe of what most of today's discussion was about. But I think it is worth, as you go back to Washington and maybe as you work with other Committees and such, it is worth trying to kick around and kick the can down the road a little bit and trying to figure out how we can get more food grown in the state. Thank you. The Chairman. Thank you, Mr. Nash. [Applause.] Greg Egan, welcome to the Committee. Mr. Egan. Well, thank you so much for the opportunity. I did not think that you were going to go past four, so I thought my odds were really low for signing up. So I did not. The Chairman. You get to bring up the end here, so thank you. Mr. Egan. My name is Greg Egan. My company is Remote Power, Inc. I have a small company here in Fairbanks. The Chairman. Could you spell your last name? Mr. Egan. E, G, A, N. I have a company here in Fairbanks, and we have designed and installed solar and wind power systems for a couple of decades, mostly small stuff. And so I think a lot of people think that is what I want to talk about and that was really it, but I will mention that there is and I am sure you are aware of this in the lower Kuskokwim area. I want to say Quinhagak, Togiak and two other villages, they have systems in place now where they are turning the diesel engines off and running off of wind and they are using thermal storage. They look like little pellet stoves only they are electric and they fire brick in them. The Chairman. I have seen them. Mr. Egan. Yeah, I know you have. And there was a nice article on Alaska News Nightly maybe a month or so ago that talked about it that I was lucky enough to hear. So anyway, there is some things that are not pie in the sky. They are not far off in the distance. They are actually happening now and they are happening--with renewable energy. So I think that it is okay that we focus on that. We do not have to try to reinvent the wheel. What I really wanted to, what I was thinking of speaking about, was a little bit about climate change and trying to explain something. I think this is really important, okay. I am an old refrigeration mechanic. I am not a scientist. James Hansen has a recent paper, and one of the things he says here is he is talking about climate change. ``The economic cost of losing functionality of all coastal cities is practically uncalculable.'' This is a guy that talked to Congress in 1988. He's a NASA scientist. He and 18 other co-authors, you know, had this study done recently, a couple of weeks ago now. We suggest that a strategy reliant on adaptation to such consequences will be unacceptable to most of humanity. So it is important to understand this threat as soon as possible. So and to try and help with that, okay? I was a refrigerator mechanic. I learned a long time ago that in order to melt a pound of ice, changing from ice to water. So just a phase change, not temperature. This is 16 ounces. This is about a pound of ice. It takes 144 BTUs. Okay? It takes the same 144 BTUs to warm over 17 gallons of water, one degree. So the reason this is important to understand is that there is, when you read papers from these geoscientists and such, who talk about how many gigatons of ice have been melted and so on and so forth. You have got about--there used to be. All that heat combined with that ice is huge. And if you think about it as a hunter if you have a serious freezer, 18 cubic foot, 20 cubic foot, you shoot a moose. You drag it home and you throw that moose in the freezer and you think it is going to freeze? You know, you find out that except for when the engine is frozen, the stuff in the middle died because it takes so much heat to change the state of liquid to ice or ice to liquid. It takes one BTU is what is needed to raise one pound of water, one degree Fahrenheit. That is just a definition. Okay? One hundred forty-four BTUs could change a pound of ice to a pound of water at 32 degrees, not change the temperature at all. So it just takes something into exponential thing and it is hard for us to wrap our minds around that. It is hard for us to wrap our minds around compound interest. But anyway, whether it is hard to wrap around or not, that is what is going on. And it is going to cause everyone big problems, be they Alaskans, be they one of the billion coastal refugees in the future. That, I think, is an important point. And I think it makes sense. This is a pound of water compared to 17, over 17 gallons of water. To melt this, you could heat 17 gallons of water, you know, from 33 degrees to 34. Hope that makes sense. Thank you so much for letting me, allowing me to speak. The Chairman. Thank you, Mr. Egan. [Applause.] I would like to thank the 12 people who provided public testimony. We appreciate your comments as well as that of the panel of 12 Alaskans that we had heard from. As I mentioned at the outset for those who might wish to submit written testimony to be incorporated as part of the record, it will be held open for two weeks from today. You may submit that testimony by talking to Annie Hoefler right over here. Annie will make sure that we have the right way to communicate any additional input that you may have. I mentioned my thanks to Chad Hutchinson and those here at the Training Center for opening their doors, but I also want to give a specific shout out to Michelle Foley. I do not know if Michelle is still here. There she is over there. Michelle, thank you. You have made this happen very effortlessly and easily and working with my staff on the Energy Committee. We appreciate that as well. Again, the intention for today's hearing, in addition to hearing from those who provided testimony, was really to provide a base for examination of those ways and methods that we can help facilitate opportunities for Alaskans wherever they may be, whether they are down in Ketchikan, Barrow or places in between and recognizing our full potential as Alaskans. But also the opportunities and the challenges that present themselves in a place that is as unique and remarkable and filled with human resources as well as God-given resources and our responsibility to one another in that. So thank you for the opportunity to be with you. We have overextended thanks to Mount Pavlof today. With that, the Energy and Natural Resources Committee is adjourned. [Whereupon, at 4:42 p.m. the hearing was adjourned.] APPENDIX MATERIAL SUBMITTED ---------- [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] [all]