ALASKA RESOURCE REVIEW INSIDE THIS ISSUE n New Battle Over NPR-A, D-1 Lands n Complete Convention 2024 Details n Rough Road for Haul Road Drivers n New Milestones for Alaska Miners VOLUME 1 | ISSUE 3 | FALL 2024 Magazine of the Resource Development Council for Alaska | www.AKRDC.org ROUGH SEAS AHEAD How Alaska’s Fisheries Tackle The Challenge Boom Continues on North Slope
Learn more Richfield Oil Co. drills the first well in the Swanson River field and strikes oil. 1957 Alaska becomes the 49th state. 1959 Sinclair Oil Co. discovers the Kuparuk River field. 1969 Alpine field production begins from wells drilled with horizontal well technology. 2000 ARCO discovers oil in the Prudhoe Bay field. 1968 Final Investment Decision is made to develop the Willow project. 2023 ConocoPhillips Alaska and the successes of its heritage companies date back to the greatest oil discoveries in Alaska history. Today we continue our tradition of developing, innovating and delivering value for Alaskans. Committed to Alaska for more than 50 years. © ConocoPhillips Company. 2024. All rights reserved. Western North Slope, Alaska
www.AKRDC.org 3 DEAR RDC MEMBERS & SUPPORTERS, As we welcome the changing seasons, I reflect not only on the beauty and renewal that our Alaskan fall brings, but also on the significant challenges and opportunities that lie ahead in our work of promoting responsible natural resource development. This time of year serves as a reminder of the cycles of nature — of growth and of regeneration. Just as the landscape transforms around us, so too must we continue to adapt our strategies to align with the evolving environment we operate within. In this category, Alaskans have a proud history of responsible resource development. With the arrival of fall, we often think about the fruits of our labor — the tangible results of our efforts in managing and developing our natural resources. This past year has been marked by remarkable achievements throughout all our industries, thanks to your hard work, commitment, and innovation. But even with that commitment to responsible resource development and innovation, some of our industries, particularly our fishing industries, saw challenges. Notwithstanding those challenges, we have made significant strides in promoting sustainable practices, embracing new technologies, collaborating with local communities, and advancing projects that respect both ecological integrity and economic viability. With the changing seasons, we can expect other changes this year as well: Election season! As we approach the November elections, we must recognize that our environment, and the policies governing natural resource development in Alaska, are also in a state of flux. The decisions made by our elected leaders will shape the future of our initiatives. It is our responsibility to remain engaged, to advocate for sound policies, and to ensure that the voices of those who depend on our resources are heard. During this election season, I encourage each of you to be informed and involved. Participate in discussions, engage with your communities, and advocate for the principles of sustainability and responsible stewardship that are inherent to our Alaskan way of life. Let’s not only ensure that our work continues to thrive, but also influence the broader policy landscape to support long-term environmental health and responsible resource development. As the days grow shorter, the air turns crisp, and we see the snow come down further on the mountains, I also want to take this opportunity to express my gratitude. Each of you plays an integral role in our success. Your dedication is the cornerstone of our achievements. Let’s use this season of reflection and change to not only celebrate our accomplishments, but also to set new goals for the coming year. Looking beyond the November elections, I’m excited to see many of you at our 45th annual Alaska Resources Conference. I hope you plan to join us Nov. 12-14 in Anchorage this year! We have an exciting agenda planned to provide timely updates on new opportunities, projects, and prospects, to address key state and federal public policy issues, and to feature the latest forecasts and updates on Alaska’s resource development industries. With nearly 1,000 registered last year, attendees included decision-makers from across all resource industries, support sectors, organized labor, Alaska Native corporations, federal, state, and local government agencies, as well as educators and students. As you read this edition of our Alaska Resource Review, you’ll see more updates about our conference but for the full information, including sponsorship and registration information, please visit our website at akrdc.org. You won’t want to miss it! I am optimistic about what we can continue to achieve together. Let’s harness the momentum of this season to drive forward our projects, engage with stakeholders, and advocate for policies that align with our vision of sustainable natural resource development. Together, we can ensure that our efforts today lay the groundwork for a resilient and thriving environment for future generations. In closing, I encourage you to embrace the changes that come with this season, both in nature and in our work. Let’s be proactive, stay connected and support one another as we face the challenges and opportunities ahead. Thank you for your hard work, your passion, and your commitment to our mission. Together, we will continue to “grow Alaska through responsible resource development!” Yours resourcefully, WE MUST REMAIN PROACTIVE TO SPREAD OUR MESSAGE “Let’s harness the momentum of this season to drive forward our projects, engage with stakeholders, and advocate for policies that align with our vision of sustainable natural resource development.” — Leila Kimbrell, Executive Director, RDC VOLUME 1 | ISSUE 3 | FALL 2024
PAGE 10 CONVENTION 2024! Join us Nov. 13-14 for our 45th Annual Alaska Resource Industry Conference in Anchorage! PAGE 20 HAUL ROAD PERILS The Dalton Highway, the lifeline to Prudhoe Bay and the North Slope, is becoming more difficult for truckers as maintenance lags. PAGE 24 DUTCH HARBOR FOCUS Our annual Outreach Trip spent several days in Dutch Harbor, learning about the critical role and major challenges facing America’s largest seafood port. PAGE 32 NEW BLM RESTRICTIONS A new attempt by the Bureau of Land Management to extend protected zones within the National Petroleum Reserve in Alaska (NPR-A) puts current and future oil production at risk. ALASKA RESOURCE REVIEW is published in partnership with the Resource Development Council for Alaska, Inc. by Fireweed Strategies LLC, 4849 Potter Crest Circle, Anchorage, AK 99516. For advertising information and story inquiries, email Lee.Leschper@FireweedStrategies.com. ALASKA RESOURCE REVIEW is mailed at no charge throughout Alaska. To subscribe, email Admin@FireweedStrategies.com. Publisher: Lee Leschper | Editor: Tim Bradner | Production, Design: Will Leschper | Contributing Photographer: Judy Patrick PLEASE NOTE: RDC HAS MOVED OFFICES! Please update your records with our new physical and mailing address: 301 W. Northern Lights Blvd., Ste. 406, Anchorage, AK 99503 VOLUME 1 | ISSUE 3 | FALL 2024 4 ALASKA RESOURCE REVIEW FALL 2024 10 30 16 20 24 32 INDEX
www.AKRDC.org 5 At Santos, we are proud to develop the world-class Pikka Project on the North Slope. Phase 1 will develop about 400 million barrels from a single drill site with first oil expected in 2026. And we are even prouder that our interest in Pikka will be net-zero on Scope 1 & 2 emissions!
6 ALASKA RESOURCE REVIEW FALL 2024 THE RESOURCE INDUSTRIES THAT MAKE UP ALASKA’S ECONOMY MADE GREAT PROGRESS THIS PAST SUMMER, ADVANCING PROJECTS AND INITIATIVES THAT WILL KEEP ALASKANS WORKING. As we enter fall, another of Alaska’s resources returns to the classroom to prepare to enter tomorrow’s job market. Alaska Resource Education (ARE) is right there, educating Alaska’s most valuable resource on the job opportunities our great state affords them. This past summer, ARE expanded their repertoire to include a Natural Resource Teacher Externship. The week-long field trip is designed to blend firsthand experiences and tours with in-classroom learning. This includes tours of both non-renewable and renewable energy, and minerals sites, to learn about the resources and the associated careers, as well as training locations and programs to help students move from high school into industry careers. Training teachers about the importance of Alaska’s natural resources, including oil and gas, mining, and renewable energy, is crucial in preparing the future workforce to understand and to value the state’s unique natural and economic assets. The Natural Resource Management Externship for teachers is a 3-credit University of Alaska continuing education course. This year, the teacher credits for the course were sponsored by Marathon Petroleum. ARE is working with Hilcorp to offer a future Natural Resource Teacher Externship to Prudhoe Bay and the heart of Alaska’s energy sector. Why does this matter so much to the future of our industries? Consider this: teachers are all college-educated practitioners of their content area. And teachers really do not get enough credit for the challenging work they do. But when it comes to advising students about their future, college is what they know and where they direct their students. That is wonderful, and I am not and never would downplay the power of a college education, but there are many paths to get there. I was a commercial pilot before I pursued a post-secondary education. Like me, many students need time for their passions to take hold. My passion for aviation led me to college. Many students don’t know what they want to do for the rest of their lives when they graduate. Perhaps knowing that they can get an excellent job in an industry they love may ignite their passion, while providing both perspective and money, and making a college education more purposeful and affordable. As part of the Anchorage School District’s progressive Academies of Anchorage this fall and next spring semester, ARE is teaching a portion of a natural resource management year-long course at Dimond High School. The class syllabus covers Alaska lands: rocks, minerals, and mining; electricity, renewable energy, non-renewable energy; economics; careers, and new technology. The spring semester will include oceans, fisheries, wildlife, the environment, maritime and mariculture, forestry, and a sustainable design challenge. The vision for the future is to offer this class for both the Dimond and West High School Natural Resource academy pathways. Dimond teacher Cat Walker, who is also Alaska’s Teacher of the year in 2024, is leading the charge. Cat is embracing the support of ARE to make her classes more hands-on and well rounded. Many other teachers will follow her as the pathway grows in her school and beyond. This collaboration is changing student perspectives on careers in Alaska’s resource-driven industries. ASD recently held its first Freshman Academy Career Expo. I went down to the Dena’ina Center to check out the Expo, and what I saw was incredible. Approximately 4,000 students were engaging with adults in their community about jobs that they find interesting. You could see relationships developing as students asked about the career paths of the hundreds of adults who volunteered their time. As we work to build Alaska’s future workforce, collaborations like these will surely pay huge dividends. More than that, students are seeing how much their community cares about them, about their success today and tomorrow. INNOVATIVE TRAINING KEEPS ALASKA’S FUTURE BRIGHT “Consider volunteering some of your time with the youth in your community. I encourage all of you to get engaged with this work. There is little that matters more!” — Scott Habberstad, RDC Board President
www.AKRDC.org 7 VOLUME 1 | ISSUE 3 | FALL 2024 The Natural Resource Management class at Dimond High School is changing student perspectives on careers in Alaska’s resource-driven industries.
8 ALASKA RESOURCE REVIEW FALL 2024 IT’S NO SECRET THAT FOR MORE THAN A DECADE, THERE HAS BEEN A TREND OF OUTMIGRATION IN WORKING AGE ALASKANS. The Alaska Department of Labor and Workforce Development reported a 0.2 percent drop last year, marking the 11th year in a row of net population outflow. To put a finer point on it, according to the same study we currently have two job openings for every one unemployed person. Alaskan leaders have taken notice. This last legislative session we saw the state legislature putting a heavy focus on trying to quell outmigration and maintain a vibrant workforce in the state. Though this issue has been topical recently, it is obviously not a new problem, nor is it a problem that can be solved easily or quickly. Economists have cited many factors contributing to outmigration including a competitive national labor market, rising housing costs, high cost of energy, and aging infrastructure in the state. These statistics paint a bleak picture for our state’s future, but we will never stop our youth from wanting to experience life outside of Alaska, nor should we discourage them from doing so. No one can blame young people for wanting to experience life outside of our somewhat isolated state, but how do we make sure young Alaskans are returning with newfound passion and experience? The economists would say we need to provide access to good-paying jobs, options for career advancement, and build more modern housing. These are all solutions that we should absolutely continue to work on. In fact, the industries RDC represents — mining, oil and gas, fisheries, tourism, and forestry — do a great job of providing solutions to these economic problems by providing some of the highest wages, diverse career paths, and interesting work in the state. That said, there are also other ways to inspire the next generation to come back to Alaska. Beyond these economic barriers, there is a frame of mind that makes people want to work and live in Alaska. Is Alaska cold, dark, and isolated from the outside world, or is it a vibrant and exciting last frontier filled with work that matters and people who value community and time in the outdoors? I personally embraced the latter message wholeheartedly when I decided to move back to Alaska. Perspective matters more than ever in the digital world we live in where young people are spending their time daydreaming about extravagant lifestyles and gaining relevance through 15 minutes of online fame. Messaging what Alaska can provide our young and returning professionals can be just as important as the economic benefit, sometimes more so. For RDC’s part in changing young perspectives, you’ll see our organization supporting a number of groups that are engaging positively with the younger generation of Alaskans. RDC partners closely with Alaska Resource Education (ARE) who are doing an excellent job teaching Alaska’s youth about the exciting opportunities in Alaska’s resource developing industries and ensuring that young Alaskans are aware of the career paths available in our state. The Anchorage School District Academies of Anchorage initiative is also a bright spot in changing perspectives, getting kids thinking about in-state career options early in their schooling. Velocity is another organization seeking to break the typical mold by providing an honest and constructive voice for resource developing industries to the current and future workforce. I’ve also seen RDC and its members partner with local schools and universities to provide career fairs, internships, workshops and more, to highlight the skills needed in Alaska’s job market. As part of RDC’s commitment to engaging with the next generation of Alaskans, we are putting on our second annual Emerging Leaders and Established Professionals opening reception at our 45th Annual Resources Conference where our members are encouraged to invite their company’s young professionals and new faces to engage with our board members and industry leaders. We hope to see you there! SELLING ALASKA TO THE NEXT GENERATION “Messaging what Alaska can provide our young and returning professionals can be just as important as the economic benefit, sometimes more so.” — Connor Hajdukovich, RDC External Affairs and Policy Coordinator
ConocoPhillips buys most remaining Chevron oil holdings on North Slope ConocoPhillips has signed a $300 million deal to buy portions of the Kuparuk and Prudhoe Bay oil fields owned by Chevron USA. ConocoPhillips announced the deal, which is expected to close by the end of the year, Oct. 3. Chevron has been seeking to sell its North Slope assets since at least 2022, and reporting by Northern Journal earlier this year showed that the company had been considering a sale to a small, independent Texas firm. Pontem Alaska Midstream, the firm in question, failed to close that deal, records show. ConocoPhillips’ purchase doesn’t include Chevron’s stake in the Endicott oil field, the company confirmed, and the status of that holding isn’t clear. ConocoPhillips’ purchase comes amid a general withdrawal from the North Slope by other large oil companies, including BP — which sold to Hilcorp in 2020 — and Chevron. The trend on the North Slope has been toward smaller, privately held oil companies like Hilcorp, but ConocoPhillips is a notable exception. It has invested heavily in the Willow oil project within the National Petroleum Reserve and this week completed delivery of a large oil production unit to Kuparuk. — James Brooks, Alaska Beacon Hilcorp again eyes Interior Alaska for oil exploration Oil and gas company Hilcorp appears to be moving toward new oil and gas exploration work in Alaska’s Interior, according to public documents released by state land managers. Hilcorp on Sept. 19 applied to the Alaska Department of Natural Resources to install water level gauges in Birch Creek, not far from the Yukon River, “in support of oil and gas operations.” Hilcorp has previously explored in the area in a partnership with Doyon, the Native-owned regional corporation for Interior Alaska. The original agreement covered exploration of 1.6 million acres; just 3% of that area was selected by Hilcorp for further exploration this year, Doyon says on an informational web page. “Plans for specific activities for the remainder of 2024 and 2025 are still in progress, but Hilcorp and Doyon will continue providing regular status updates to leaders in the region,” the page says. The area is relatively close to the Trans-Alaska pipeline, but it’s also near the Yukon Flats National Wildlife Refuge, which could complicate any plans for development. — Nathaniel Herz, Northern Journal www.AKRDC.org 9 VOLUME 1 | ISSUE 3 | FALL 2024 ALASKA OIL AND GAS UPDATES
Tuesday, November 12th | 4:30 p.m. – 6:30 p.m. Wednesday, November 13th | 8:00 a.m. – 5:00 p.m. Wednesday, November 13th | 5:00 p.m. – 6:30 p.m. Thursday, November 14th | 8:00 a.m. – 2:00 p.m. Stay tuned—our online agenda is coming soon! 45th Annual Alaska Resources Conference Schedule Event: Emerging Leaders Opening Reception Location: Williwaw Social, Downtown Anchorage Details: Kick off the conference by celebrating Alaska’s future in resource industries! Join us for an exciting evening of networking with industry leaders, RDC board members and emerging leaders in resource industries. Enjoy light appetizers and beverages. Event: Alaska Resources Conference – Day 1 Location: Dena’ina Center, Downtown Anchorage, 3rd floor Details: The premier event for Alaska’s resource industries begins! Hear from industry experts and leaders about key topics shaping the future of Alaska’s resource sectors. Event: Opening VIP Reception Location: Dena’ina Center, Atrium Details: Wrap up Day 1 with our exclusive VIP Reception hosted by Santos. Mingle with industry professionals while enjoying light appetizers and beverages. (Open to all attendees) Event: Alaska Resources Conference – Day 2 Location: Dena’ina Center, Downtown Anchorage, 3rd floor Details: The conference continues with engaging presentations and discussions, concluding at 2:00 p.m.
VOLUME 1 | ISSUE 3 | FALL 2024 DENALI SPONSORS w ConocoPhillips Alaska, Inc. w GCI w Hilcorp Alaska w Kinross Alaska w NANA w Northrim Bank w Trident Seafoods COSPONSORS w Alaska Frontier Constructors w ASRC Energy Services w Cook Inlet Region, Inc. w ENSTAR w Ice Services, Inc. w Lynden w Matson w NANA Construction w Pebble Limited Partnership w Petroleum News w Sealaska Corporation w Teck Alaska w Van Ness Feldman LLP w Westward Fishing Company w Westward Seafoods, Inc. GENERAL SPONSORS w Alaska Business w Alaska Journal of Commerce w Alaska Petroleum Joint Crafts Council w Alaska Railroad w Aleut Corporation w Alyeska Pipeline Service Company w Avanza Alaska, Inc. w Bering Straits Native Corporation w Chugach Alaska Corporation w Chugach Electric Association w Crowley Fuels Alaska, Inc. w Cruz Construction, Inc. w Donlin Gold w DOWL w Doyon, Ltd. w Graphite One w Hotel Captain Cook w Judy Patrick Photography w Marathon Petroleum w North of 60 Mining News w Northern Star Resources (Pogo) LLC w Petro 49, Inc./Petro Marine Services w Petrotechnical Resources of Alaska w RESPEC w Ruen Drilling, Inc. w Saltchuk w Teamsters Local 959 w TEMSCO Helicopters, Inc. w TrailerCraft UNDERWRITERS w Afognak Leasing, LLC w AIDEA w Alaska Communications w Alaska Earth Sciences w Alaska Housing Finance Corporation w Alaska Pollock Fisheries Alliance w Ambler Metals w Anvil Corporation w Arctic Slope Regional Corporation w Aspen Hotels of Alaska w Associated General Contractors (AGC) w Boreal Environmental Services w Brilliant Media Strategies w Bristol Bay Native Corporation w CLIA w Coeur Alaska - Kensington Mine w Conam Construction Company w Delta Constructors, LLC w Eklutna, Inc. w The Eyak Corporation w First National Bank Alaska w Flowline Alaska, Inc. w Granite Construction w HDR w Homer Electric Association w Meridian Management, Inc. w Michael Baker International w MTA Business w North Star Equipment Services w Northern Economics, Inc. w NV5 Geospatial w Owl Ridge Natural Resource Consultants, Inc. w Pacific Seafood Processors Assocation w Papé Kenworth Alaska w Perkins Coie w Petro Star, Inc. w Price Gregroy International w Sheet Metal, Inc. w SRK Consulting w Taku Engineering w TOTE Maritime Alaska w Tower Hill Mines, Inc. w Trust Land Office w Tyonek Native Corporation w Usibelli Coal Mine, Inc. SPECIALTY SPONSORS LUNCH w Holland America Line w Northrim Bank BREAKFAST w ExxonMobil w Wells Fargo LET’S MAKE A DEAL w Hecla Greens Creek CHARGING STATION w GCI VIP RECEPTION w Santos CENTERPIECE w Alaska Airlines ESPRESSO STAND w ASRC Energy w Hecla Greens Creek w Stoel Rives NAME BADGES w MTA Business HYDRATION STATION w ConocoPhillips EMERGING LEADERS RECEPTION w Alaska Forest Association w Alaska Airlines w Alaska Railroad w Energy & Resource Economics w Koncor Forest Products w Pacific NorthWest Economic Region w RESPEC THANK YOU TO OUR 2024 SPONSORS!
12 ALASKA RESOURCE REVIEW FALL 2024 ConocoPhillips, Santos on track to achieve milestones on projects BY TIM BRADNER IT WILL BE ANOTHER BUSY WINTER ON ALASKA’S NORTH SLOPE. ConocoPhillips and Santos are continuing construction of their new Willow and Pikka fields. Santos aims to complete all pipeline installation this winter and is commissioning its new seawater treatment plant delivered this summer to Oklitok Point, where it will operate on a shore-fast barge. ConocoPhillips will also finish installation and commissioning of a new production module for its small Nuna project, which will produce an undeveloped deposit in the Kuparuk River field. Nuna is to begin production in 2025 with a peak rate of 20,000 barrels per day. Santos is still on track to begin production at Pikka in mid-2026, with a first phase peak rate of 80,000 barrels per day. Phase two development at Pikka is expected to follow the start of phase one, Santos has said. ConocoPhillips’ Willow development is expected to start up in 2029 with a peak rate of 180,000 barrels per day. All three projects will add new oil to North Slope production, which has been declining for years. The pace of work on Willow and Pikka ANOTHER BUSY WINTER SET FOR NORTH SLOPE ConocoPhillips’ production module for its Nuna project being delivered to Oliktok dock.
www.AKRDC.org 13 VOLUME 1 | ISSUE 3 | FALL 2024 has pushed up employment in the state’s employment and construction industries. Construction was up almost 15 percent in July and 13 percent in August, year-over-year, while oil and gas jobs were up about 7 percent in both months compared with the same periods of 2023. In other North Slope developments, there’s not a lot of information yet on three exploration wells drilled last winter east of Prudhoe Bay, in the eastern North Slope, by Armstrong Oil and Gas and Apache, its partner. Armstrong did tell Petroleum News that it found oil in two of the wells, but also that weather prevented completion of the third well. Presumably, that will be completed this winter, during which Armstrong also plans three more wells. No details were released on what Armstrong found earlier this year. Developments at two discoveries in the central North Slope south of Prudhoe Bay includes one by U.K.-based Pantheon Resources and a second by 88 Energy, an Australian explorer. Pantheon, working through its Alaska subsidiary Great Bear Petroleum, has been drilling and evaluating its “Ahpun” discovery for some time and is now working on permits for a “hot tap” connection to the Trans Alaska Pipeline System, which is nearby. If the project proceeds, the company will be working on its first four production wells and a water/gas injection well. An existing production facility used in a long-term flow test of the Alkaid 2 well will be upgraded to handle natural gas liquids, Pantheon said on its website. The oil Pantheon will produce is of a higher quality than the current crude oil moving through TAPS, so the effect will be to upgrade the overall value of TAPS throughput when the new oil is blended in. Pantheon expects to make a Final Investment Decision on its project in late 2025 or 2026, it said. 88 Energy is meanwhile still evaluating its Hickory 1 discovery well in the same area as Pantheon’s finds and also near TAPS and the Dalton Highway. Hickory 1 was drilled in early 2023, with flow tests conducted that spring from two reservoir intervals where oil was found. The company is now working on plans for a long-term production test. The oil found at Hickory 1 is also of high quality, similar to that discovered by Pantheon. In another development, Finnex Operating, now the owner of the small Mustang field, is expanding the operations pad by five acres to allow for new facilities. This signals intent by Finnex to move Mustang to production, Mustang is between the Kuparuk River and Alpine fields and is adjacent to a pipeline connecting the two larger fields, an advantage for Finnex. Mustang was discovered and partly developed by Brooks Range Petroleum, a small Alaska independent. Brooks Range hit financial difficulties when the state of Alaska reneged on promised exploration tax credit payments. The Alaska Industrial Development and Export Authority, or AIDEA, had helped Brooks Range in financing and had to foreclose on loans. AIDEA, the state development corporation, then sold Mustang to Finnex.
NEW MINING PROJECTS GAINING MOMENTUM 14 ALASKA RESOURCE REVIEW FALL 2024 Donlin Gold, Graphite One moving ahead with efforts BY TIM BRADNER WORK IS CONTINUING ON IMPORTANT NEW ALASKA MINERALS PROJECTS INCLUDING THE LARGE DONLIN GOLD PROJECT NEAR THE KUSKOKWIM RIVER AND GRAPHITE ONE’S PLANNED NATURAL GRAPHITE MINE ON THE SEWARD PENINSULA NORTH OF NOME. Donlin Gold has submitted preliminary engineering for its Large Dam Permit to the state Department of Natural Resources and the agency plans to have an initial review of the application by mid-2025, the DNR said. The project is a joint-venture of Barrick Gold, a major mining company, and NovaGold Resources, a junior explorer. With an estimated 39 million ounces of gold resources, Donlin Gold is one of the world’s largest known gold deposits. Donlin has been in exploration and advanced development planning for years and has secured all of its major federal permits. The Large Dam Permit, issued by the state of Alaska under federal laws, is the last remaining major permit for the project. However, the U.S. Army Corps of Engineers may have to revisit part of its environmental analysis of the project. In a lawsuit brought by tribal groups, Alaska U.S. District Court Judge Sharon Gleason said the Army Corps failed to adequately consider the risk of a large release of mining waste in its 2018 Environmental Impact Statement for Donlin Gold. Tribes fear the effects of the mine on salmon streams. The project is on lands owned by Alaska Native corporations. Graphite One, meanwhile, says it will start work on a feasibility study of its planned graphite mine on Alaska’s Seward Peninsula early next year with plans to permitting the project in mid-2025. If permits and financing are secured Core samples from minerals drilling. Graphite One to begin permitting mid-2025.
construction could begin in 2027 and production in 2029. The company’s state mining claims cover the largest natural graphite deposit in the U.S. The site is 18 miles north of Nome, a historic gold mining community. In production, Graphite One would produce 175,000 tons or natural graphite ore per year, enough to supply 8 percent of U.S. needs. It will be the first domestic mine producing graphite mine in the U.S. since the last mine closed in 1995, America is now dependent on China for natural graphite, which is used in variety of computer, military and other technologies including batteries for electric vehicles. Graphite One was formed in 2012 when it acquired rights to the graphite deposit, which was discovered in 1902 and saw limited production during World War I. The company completed a pre-feasibility study in 2022 that considered a smaller mine, but the company said potential customers advised it to revise its plan and develop a larger project. With that advice, Graphite One scaled the plan to up to 175,000 tons per year and completed a summer, 2024 exploration program as part of a feasibility study for a larger mine. The U.S. Department of Defense had awarded a $37.5 million grant to the company to help finance the feasibility study, which will pay for 50 percent of the feasibility study cost and will speed development of the project by five years. The defense department program is part of the federal government’s effort to aid development of minerals important for defense. There will be new estimates of measured and indicated resources developed in the feasibility study needed for a 20-year mine life, but Graphite One Vice President Mike Schaffner said the known graphite resources in the area are much larger. The feasibility study estimate will be based on the drilling done to date at the ore body, he said. Graphite ore will be concentrated at the site to a 95 percent purity and transported in containers by truck to 18 miles Nome, which is also engaged in an expansion of its port. The ore will be further concentrated to a 99 percent purity to be shipped to a manufacturing facility Graphite One is also developing in the Lower 48. Graphite One would manufacture materials for anodes used in batteries. The company also plans a battery recycling unit as part of the project. www.AKRDC.org 15 VOLUVMOLEU1M| IESS1 |UIESS2U| ESU3 |MFMAELRL 2024
16 ALASKA RESOURCE REVIEW FALL 2024 ‘The War Below’ author brings wealth of resource development experience BY LEE LESCHPER ERNEST SCHEYDER IS THE KEYNOTE SPEAKER FOR THE 45TH ANNUAL RDC ALASKA RESOURCE CONFERENCE. He is the author of “The War Below,” the just-released book chronicling the gulf between the need for critical minerals to fuel the green energy transition, and the many tradeoffs to launching new mines in the United States. Scheyder has made a career reporting on resource development, telling stories seldom getting told. He is a senior correspondent for Reuters, covering the green energy transition and the minerals that it requires. He previously covered the U.S. shale oil revolution, politics, and the environment, and held roles at the Associated Press and the Bangor Daily News. A native of Maine, Scheyder is a graduate of the University of Maine and Columbia Journalism School. He works now in Houston and this will be his first trip to Alaska. Growing up in Maine, he says he has always appreciated the outdoors including hunting and fishing. Scheyder spent a few minutes talking with us about his work and the book, which looks through the lens of rare earth projects in the U.S. “What I wanted to do with the book was help audiences across the United States and really the world to explore the complex supply chain that is part of this critical minerals revolution that is taking shape right now,” he said. “The book for me is an outreach of my job at Reuters where I write about critical minerals. Before I wrote about critical minerals, I wrote about oil and gas for a long time. I spent about two years in North Dakota writing about the Bakken Shale oil revolution that really changed that state’s economy. “And, for me, the linchpin really was that this is so much more than just the energy transition. It is all the electronic devices we use every single day — cellphones, laptops, televisions — they’re all built with these critical minerals as well. So where, and how, we get the building blocks for these devices matters. “And so, what I wanted to do with the book was to bring this idea of choice to the reader, because I don’t think we are having these broad conversations right now, about what are the choices we are willing to make.” Americans have to choose, if they want these energy transition devices, and want an electronic based future, where and how those critical minerals, as well as more common metals like copper, are mined, he said. But it’s not just mining, but the complete supply chain, that matters, he added. “The more I reported these issues in my day job, the more I realized the average consumer is not considering these issues or even fully aware. But I realized during the covid pandemic that the issue of supply chains was one that the average person was aware of and was thinking through. “As an example, masks. It was a shock four years ago to learn that the United States does not make masks. And they say, how could this be, how could the U.S. export manufacturing of these simple yet essential articles of medical equipment to another country?” “I argue in the book that really indecision is a decision. And so that was my goal with the book.” Scheyder devotes chapters to a number of different rare earth projects, most still in development. He looks at broad issues from Indigenous rights to local community interaction and transparency with mining neighbors. “For example, what does a mining company owe a neighbor community? And the entire narrative thread is around the tensions between biodiversity and climate change.” He does not draw conclusions for the readers, instead in the tradition of good journalism, provides facts on all sides of the complex issue, and challenges readers to draw their own conclusions. His keynote address at the RDC annual conference should continue that goal. MEET ERNEST SCHEYDER: KEYNOTE SPEAKER 45TH ANNUAL RDC ALASKA RESOURCE CONFERENCE
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18 ALASKA RESOURCE REVIEW FALL 2024 Alaska Native Corporations currently in carbon offset market BY TIM BRADNER THE STATE OF ALASKA HOPES TO LAUNCH A NEW FOREST INDUSTRY. But instead of selling logs, the state will sell carbon credits, certificates that encourage landowners to protect standing forests, so they will continue absorbing and storing carbon. Trees absorb and store carbon dioxide and also release oxygen through photosynthesis, a chemical process. The concept is simple. Carbon dioxide stored in state forests can be reliably estimated. Companies engaged in industries that release emissions, such as oil and gas firms, can purchase certificate, also known as carbon credits, to offset their emissions with carbon dioxide stored in trees. One credit equal one ton of carbon reduced or removed from the atmosphere. The landowner, the state in this case, guarantees that the forests will sequester more carbon year over year. The carbon credits are registered with one of several carbon registries that have been formed in recent years . The registries have standards. Landowners, or their agents, must be able to demonstrate that trees on given lands are capable of storing the carbon. There is also an ongoing inspection process to verify that the forests remain intact. Carbon credit sales from forests is a new industry in the U.S. and it is in the initial stages of development. Some companies, working under requirements by state or federal regulators, register their carbon credits under a compliance carbon program, like California’s Cap-and-Trade or Washington’s Cap-and-Invest programs, where emissions reductions are mandated. Alternatively, credits can be sold into the “voluntary” market, where the purchases are made by companies to meet corporate goals for reducing emissions. When Alaska’s program begins, it will sell credits on the voluntary carbon market, according to Trevor Fulton, manager of the state’s new Carbon Offset Program in the state Department of Natural Resources, or DNR. Carbon credits are now being sold on exchanges by Alaska Native corporations, which are private landowners. Since these are private contracts, the details including the sales prices, are confidential. One oil and gas operator, Santos Ltd., has signed up to purchase credits from an Alaska Native corporation so that it can meet corporate “zero emissions” goals for its new Pikka oil project on the North Slope. The state’s program, which will sell carbon credits for forests on state lands, was authorized by the Legislature in 2023. DNR has developed regulations under which the program will be implemented and a Request for Proposals was recently published for a developer who will help the state to: n select the appropriate forest lands n deal with technical aspects like how carbon adsorption rates can be estimated and verified, and n choose a carbon registry in the voluntary market where the state’s credits can be offered. DNR is considering forest tracts in the Tanana Valley State Forest in Interior Alaska and the Haines State Forest in Southeast, but forested state-owned lands in the Matanuska-Susitna and Kenai areas will also be considered. The program will also allow continued commercial timber harvests such as those now done on the state forests. Once it is operating, Alaska will have the largest or one of the largest forest carbon offset programs in the nation. Gov. Mike Dunleavy, who sponsored the legislation creating the program, said new revenues paid to the state can help support forest remediation and improvement, such as removal of timber damaged by spruce bark beetles and reduction of fire hazards near communities. The revenue potential is uncertain, but consultants to the DNR estimated that they could be in the $80 million per year range based on three potential pilot programs. Fulton, of DNR, also said carbon credit programs are helping support new industries in other states and nations, such as the manufacture of carbon “bio-char” from damaged or waste wood that is sold for agricultural or industrial purposes. ALASKA SEEKS SALES OF CARBON OFFSET CREDITS Carbon dioxide stored in state forests can be reliably estimated. Companies engaged in industries that release emissions, such as oil and gas firms, can purchase certificates, also known as carbon credits, to offset their emissions with carbon dioxide stored in trees. One credit equals one ton of carbon reduced or removed from the atmosphere.
www.AKRDC.org 17 This year, TOTE Maritime Alaska celebrates 49 years in the 49th State! TOTE is proud to have served Alaska since 1975, connecting communities with dedicated, reliable service from Tacoma, WA to Anchorage, Alaska. With our “built for Alaska” vessels and roll-on/roll-off operations, our service and operations were designed to meet the unique needs of the customers and communities of Alaska. Join us in commemorating nearly half a century of excellence in shipping to the Last Frontier. 49 IN THE 49TH
20 ALASKA RESOURCE REVIEW FALL 2024 Rough conditions slow delivery times, add costs for truckers, producers BY TIM BRADNER TRUCKERS ARE COMPLAINING ABOUT THE CONDITION OF THE DALTON HIGHWAY, THE NORTH-SOUTH STATE ROAD THAT CONNECTS NORTH SLOPE OIL FIELDS WITH INTERIOR ALASKA. It isn’t just a trucking issue: It’s a big problem for the oil and gas industry, and for the state. The Dalton is a critical surface transportation link that supports shipments of equipment and supplies to the North Slope oil fields and northern sections of the Trans Alaska Pipeline System, or TAPS. The 414mile road was built in the mid-1970s to support construction of TAPS. Here’s the issue: The highway is in poor shape for a number of reasons. Changing weather, which is related to climate change, has brought a lot more summer rain, north of the Atigun Pass. This creates big potholes, rough “washboard” road conditions and erosion along road shoulders. Permafrost thaw problems are increasing, particularly in the Coldfoot area south of Atigun Pass. “The discontinuous permafrost areas where there is differential settling and melting are the biggest problem areas. Unfortunately, they stretch from where you come down off the Chandalar Shelf (south of Atigun) at about Mile Post 234 on south to Fairbanks,” said John Perreault, northern region spokesperson for the state transportation agency. Because of these changes, the spring and fall “transition” periods from winter are also getting longer, which means the winter driving season, when roads are frozen and more stable, are shorter. Sen. Robert Myers, R-North Pole, who chairs the transportation committee in the state Senate and is a Dalton Highway trucker himself, said problems ironically occur more frequently on parts of the Dalton now paved than on gravel sections. That’s because pavement deteriorates quickly when exposed to tough weather and climate conditions. Driving is good for a few years on new pavement, Myers said, but then pot-holes and frost heaves appear, creating problems for truckers. A gravel road is actually easier to maintain in the long run, because it just takes more gravel laid down periodically, along with grading, he said. Myers said he is sometimes slowed to 10 miles per hour when driving the road to navigate obstacles safely. Jamie Benson, executive director of the Alaska Trucking Association, said wear and tear on equipment and breakdowns, from flat tires to broken air bags, slows truckers’ DALTON HIGHWAY, LINK TO SLOPE, IN TOUGH SHAPE Dalton Highway in the Brooks Range. Permafrost thaw is creating problems for the roadbed. CONTINUED ON PAGE 22
www.AKRDC.org 21 OIL & GAS CONSTRUCTION SERVICES | MINING CONSTRUCTION & MAINTENANCE | POWERPLANT CONSTRUCTION | PIPELINE CONSTRUCTION | REMOTE VILLAGE INFRASTRUCTURE TELECOMMUNICATIONS | DESIGN BUILD & EPC | GENERAL CONTRACTING & MANAGEMENT | PROFESSIONAL PLACEMENT & STAFFING Commitment to Safety & Quality | Anchorage · Kenai · Deadhorse | www.conamco.com | 907-278-6600 BUILDING ALASKA ONE OUNCE AT A TIME CONAM’s track record of successful projects has proven that resource development can be done responsibly while protecting Alaska’s fragile environment. Our firm understanding of Alaska’s unique challenges and commitment to HSSE and planning have translated into satisfied mining clients across the state. We get dirty so you get the pay dirt. VOLUME 1 | ISSUE 3 | FALL 2024 State Sen. Robert Myers, R-North Pole, (right) discusses Dalton Highway at Alaska Industry Support Alliance conference in Fairbanks last summer.
22 ALASKA RESOURCE REVIEW FALL 2024 transit times to the slope. This is also an unusual year for the Dalton because new industry activity on the North Slope has added a lot of traffic. There are also tourists that truckers have to watch for, from ordinary campers to hunters, motorcycles and even bicyclists, Benson said. Although the Dalton Highway is public, “the road does not lend itself to safe transit for the ordinary citizen,” pursuing recreation, she said. Dalton Highway and Elliot Highway maintenance budgets for the State Department of Transportation of Public Facilities, or DOTPF, have been holding steady, but there is an increase this year in projects, where parts of the road are being rebuilt. About $118.5 million is being spent this year on three projects on the Dalton and an additional $44 million on reconstruction and rehabilitation on the Elliot Highway, which trucks traverse from Fairbanks to the start of the Dalton near Livengood, Workforce issues, however, are a big problem for the DOTPF as in many industries, Perreault said. DOTPF is having trouble recruiting and retaining people, he said. Myers believes one third of the maintenance positions budgeted to the Dalton are vacant. Perreault said 18 positions are unfilled. Myers said the state transportation agency did hike maintenance and operators’ wages 14% this year but pay and benefits are still below what the City of Fairbanks pays for equivalent positions, he said, and much lower than private companies pay on the North Slope and even contractors working for DOTPF. Perreault agreed. “Pay is lopsided between what private industry and the state is currently offering. This affects both recruitment and retention,” he said. “There have also been statewide (state) payroll issues that have taken weeks to months to resolve, impacting individuals as well as morale. These are starting to be resolved but there is still a backlog,” he said. The cumulative effect of these problems is longer delivery times for equipment and supplies to the slope that will raise costs for North Slope companies. More wear and year, and repairs needed, adds costs for truckers, which will push up rates up. Driver fatigue because of longer trips is also a growing concern. There have also been reports of damage to sensitive equipment moved up the Dalton by truck, Excess vibration due to rough road conditions loosened some connections in modules that were trucked north that required repairs once on the slope, adding Winter brings better driving conditions on Dalton Highway. CONTINUED FROM PAGE 20
Work Smarter, Not Harder. Our Commercial Purchase Card program has an intuitive expense management tool making it easy for employees to submit expense reports, photos of receipts and notes for each transaction right from their phone. Call us today at (907) 562-0062 to speak to a member of our Treasury Management team about simplifying your credit card reconciliation. ACHIEVE MORE OUR BUSINESS IS TO HELP YOUR BUSINESS www.AKRDC.org 23 VOLUME 1 | ISSUE 3 | FALL 2024 costs and delays. Weather, climate change, workforce shortages and funding are all factors in Dalton Highway problems, but Myers said the internal procedures within DOTPF may play a role, along with broader political influences within the Legislature and public. It is a bit of a mystery, he said, how oil and gas companies can keep oil field roads well maintained on the slope in conditions that are similar to those along the Dalton. Myers said he can typically drive at 25 mph on oil field roads even in bad weather, which isn’t the case on the Dalton. No doubt budgets and better pay for personnel are important, but maintenance procedures and the equipment used may be factors too. There should be more communication and collaboration between oil producers and the DOTPF to share best practices, he said. There are also broader political influences at play. A problem is that the Dalton is far away and out of sight for most Alaskans, who are more familiar with the state’s major highways like the Parks, Richardson, and Seward Highways. There are also problems within the Legislature when it comes to transportation funding. The key decisions on spending are made by the Finance committees of the House and Senate and, more important, by transportation subcommittees of the Finance committees. Typically, the full Finance committees and the full House and Senate go along with the subcommittee recommendations, so legislators on the subcommittees play key roles. Another factor is that it’s usually popular to fund capital, or construction, projects because construction creates jobs for constituents and spending with local businesses. Yet another factor in highway transportation is that construction is funded mostly by the federal government at a 90 percent reimbursement, while operations and maintenance are mostly state-funded. That gives legislators a built-in bias toward highway construction over maintenance because it brings in more federal dollars with fewer state dollars spent. This year the Alaska Trucking Association, Alaska Support Industry Alliance and the Alaska Oil and Gas Association are working to educate candidates for legislative offices as well as current legislators on the importance of maintaining the Dalton. It’s important to help the public understand the connection between the Dalton and its upkeep and the state’s economy to which the North Slope petroleum industry is important. But now there’s another issue, the federal government. The U.S. Bureau of Land Management, which owns lands through which much of the Dalton is built, is now asking for more lengthy environmental assessments for gravel borrow pits along the road. The delays in permitting these means DOTPF crews and contractors have to move gravel greater distances from pits BLM had approved to sites where repairs are being done. That adds time and cost. This may be just a bureaucratic wrangle because the state does these assessments as part of its National Environmental Impact Statements for the Federal Highways Administration. However, BLM now wants its own assessments, according to sources familiar with the situation.
24 ALASKA RESOURCE REVIEW FALL 2024 Each year our RDC board of directors makes an Outreach Trip to one of our member cities. These trips give our board members a real first-hand look at the glory and challenges of our important Alaskan cities. This summer that destination was the City of Unalaska, Dutch Harbor! We got to tour the history of one of Alaska’s oldest ports, while learning about the seafood industry that makes this America’s biggest seafood port. That includes challenges this year with seafood harvests, as well as innovations the industry is making to be both more efficient and more sustainably sensitive to the marine environment. RDC BOARD OUTREACH TRIP 2024: DESTINATION DUTCH HARBOR!
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