By: Margie Brown CIRI president and CEO
In 2009 we celebrated 50 years of statehood, and the Alaska Natives Claims Settlement Act turns 40 later this year. Both of these anniversaries commemorate a time before Alaska had much material wealth, when Alaskans were spirited, scrappy and excited to take on oversized challenges that people Outside said could not be done. They turned their territory into a state. They settled Alaska Native indigenous land claims and created Alaska Native corporations that do business around the world and create new wealth that is benefiting generations of Alaskans. And in only 38 months, they built an 800-mile-long pipeline that crosses three mountain ranges and more than 800 rivers and streams to supply oil to our nation.
It was not too many years ago when Alaskans saw opportunities where we see problems today. Maybe it was because the state was young and did not have a lot to lose, but Alaskans were adventurous entrepreneurs who were not afraid to take risks and bet that innovation and hard work would pay huge rewards.
Today, by contrast, Alaskans still like to talk big, but bold action is uncommon. Instead, as a group, I wonder — have we lost our can-do attitude?
CIRI is developing two significant energy projects, Fire Island Wind and Stone Horn Ridge underground coal gasification, that are showing me first-hand the obstacles to developing resources in Alaska today.
Should we care that Alaska resource development has become so difficult? Consider that Alaska has historically generated the vast majority of its revenue from resource development, primarily oil and gas, especially North Slope oil. In 2010, 85 percent of the state’s general fund came from oil, almost $5 billion. That is a lot of money, but known oil reserves are running out and there is little exploration on the horizon. In the natural gas-hungry Cook Inlet region, gas production decreased 40 percent between 2005 and 2010.
One need only look at the province of Alberta to see what Alaska once was. It is bustling and alive with activity, with business enterprises pursuing both traditional oil and gas development and innovative and cutting edge techniques to access previously unrecoverable reserves by a variety of means. Alberta oil is now one of our country’s most important imported energy resources.
In stark contrast to Alberta, Alaska’s energy industry is atrophying. Legacy reserves are in steep decline and little effort is being put into exploration and development of new oil and gas reserves. It is likely that there will be only one true exploration well drilled on the North Slope this season. There is also a chance that only one true exploration well will be drilled this season in the Cook Inlet basin, where residents need new energy sources to power and heat our homes.
Southcentral Alaska’s energy industry in particular is down to its bare bones. Foreign firms are looking to buy pieces of the shuttered Agrium fertilizer plant at Nikiski. ConocoPhillips recently announced it is closing its Nikiski LNG export plant — the one and only LNG export terminal to ever operate in the United States of America — this spring. Chevron, a company that has been in Cook Inlet since the discovery of commercial oil in Alaska, has its entire Cook Inlet portfolio on the market.
What can we do to get things moving again? Government can help some, not by just studying the problem, but by providing appropriate and timely regulatory regime that facilitates reasonable and responsible development. It should assure equitable access to energy infrastructure. More than anything else, our government needs to take immediate steps to support the entrepreneurial spirit by breaking down institutional barriers that needlessly inhibit new development. After that, it should be up to Alaskans.
How can Alaskans recapture a can-do spirit that will drive us to do the hard work it takes to develop new energy solutions? First, we need to stop making excuses. Too often I hear that development cannot happen because we are not completely sure of the outcome, or worse, because Alaska is too unique. We must put aside these excuses, and we must ask our political leaders to do so as well.
Many Alaskans are becoming increasingly alarmed at the prospect of the state slowly withering in the midst of all of the natural wealth that we have around us. Reacting to these concerns, grassroots coalitions, like Make Alaska Competitive (www.MakeAlaskaCompetitive.com), are forming to look at the long-term health of Alaska’s energy industry and business climate. These broad-based, citizen-led initiatives, characterized by creativity, ambition and bull-headed fortitude, will help ensure prudent development proceeds.
I am hopeful we can rediscover our can-do attitude — our old Alaska spirit — and in doing so, chart a course to a prosperous and fulfilling future for generations of Alaskans.