Welcome to the Resource Development Council’s 30th Annual Conference. That’s pretty impressive – 30 years of promoting and supporting responsible development of Alaska’s resources.

You know, this is the third time in six months that I’ve been before members of the Resource Development Council. Not very many groups get that kind of attention. So why do I keep coming back? The reason is the ‘r’ and the ‘d’ in R-D-C.

Resource development is the life blood of this state, and I will keep coming back to the people who are making it happen.

Mining, oil and gas, timber, tourism, fisheries and Alaska Native Corporations- you provide jobs for Alaskans - and that means everything.

What you do every day means that I can focus on my No. 1 job: positioning Alaska’s economy for growth and her people for opportunity. Let’s do that together by continuing to focus on what’s working and working hard for new opportunities.

So, what’s working? Clearly the exploration and development of our oil and gas resources are fueling our economy. But TAPS throughput is on the decline.

As we continue our quest for renewable resources, our job is to keep the oil flowing through TAPS.

Let’s look at the opportunities.

The potential for exploration and production in Alaska’s Outer Continental Shelf is huge: We’re estimating 35,000 direct and indirect jobs and a $72 billion payroll. Companies have put years of work and billions of dollars into offshore leases, and exploration.

The state strongly supports OCS jobs and opportunities. I met with Interior Secretary Salazar, White House staff, federal agencies, industry leaders and regulators to press our case. Just last week I sent a letter to John Goll, the Alaska director for the Mineral Management Service (MMS), supporting Shell’s 2010 exploration drilling plan for the Chukchi lease blocks. While much work remains to secure OCS development, we’ve seen some positive signs. MMS recently approved Shell Oil’s drilling plan for the Beaufort Sea and accepted as complete the company’s application to drill exploratory wells in the Chukchi Sea.

We’re pushing against political forces that seem to want to stop resource development in Alaska all together.

Now, take a look at the screen: What do you see? I see a polar bear – a species whose numbers are thriving.

Powerful interest groups see something different – the opportunity to use the Endangered Species Act as a land use planning tool to complicate, delay and ultimately halt energy exploration and production in Alaska.

RDC has fought hard against these efforts. The State of Alaska is with you. A few weeks ago we filed two legal briefs urging the U.S. District Court in Washington, D.C., to reject the listing of the polar bear as “threatened.”

While the attorney general and I were holding a press conference to announce the filing of the briefs, one environmental group was issuing a press release identifying 30 Alaska species allegedly threatened by climate change.

The threat to Alaska is real. If the legal theory underlying the polar bear listing gains traction, then environmental groups could potentially obtain “threatened” listings for almost any of these 30 species, no matter how healthy their populations, bringing resource development to a halt.

So we have been proactive -- joining ESA litigation to protect and promote Alaska jobs. And soon we’ll intervene to oppose environmental groups’ lawsuit to list the ribbon seal as threatened.

As we ramp up our ESA efforts, I believe it is time to dedicate more resources to the cause. In my operating budget, I’m including a new position at the Department of Law – an attorney whose singular focus will be to work on Endangered Species Act issues. We’re also including $800,000 for the expertise of outside counsel to help with the effort.

The misuse of the Endangered Species Act is drawing lots of national media attention, such as on a recent Neil Cavuto program on the Fox network.

We’ll take Alaska’s fight to the mat to make sure the ESA is used to truly protect species threatened with extinction and not used as a tool to lock up our land.

Let’s go back to our job of keeping Alaska’s oil and gas flowing. Another boost for TAPS could be natural gas liquids from new gas fields being developed at Point Thomson. Those leases are starting to pay off and construction at Point Thomson, which began during the summer of 2008, remains abuzz.

And then there’s Liberty, BP’s oilfield and the drilling rig that was built to develop the field -- said to be the world’s most powerful onshore drill rig. An on-shore rig, drilling the longest wells ever drilled to reach the offshore field, setting new standards for Arctic oilfield engineering and development. Liberty’s oil will help offset the decline in North Slope oilfields and keep oil flowing through TAPS.

Now let’s talk gasline. There are those who say we are on the wrong track. That progress on the gas line is stalled. I would ask you to consider the evidence.

Today we have four major international companies working on commercializing Alaska’s North Slope gas – whereas, just two years ago, we were at a standstill. Never before has Alaska seen this level of participation from the major North Slope producers and a pipeline company.

For the first time, we have an open season scheduled for North Slope gas. Producers and shippers are adding staff and offices here in Alaska. Fieldwork continues. Number crunchers are hard at work behind the scenes.

Let’s put the gas line in football terms. For almost 30 years we were stuck deep in our own territory. But in the last few years we’ve finally begun moving the ball down the field. I would say we’re at about the 50-yard line, and steadily moving toward the end zone, which is that project sanction decision – then construction. Yet, now that we’re finally making progress, critics are saying that it’s time to punt – to give up and try something else.

My response to these armchair quarterbacks is this: We are making progress. We’ve chosen a game plan, and we’re moving the ball down the field. Why change strategies in the middle of a successful drive? As your governor, I’m going to stick with what’s working.

And on in-state gas, this is a hugely important topic, not just for Interior Alaska but also for Southcentral. The in-state gasline team has done much to identify and evaluate all options.

We are working to keep all of those options open for in-state gas -- for example, from Gubik and from the Nenana basin. We understand from the studies that North Slope gas would be incredibly costly to bring to the Interior at this point, given the conditioning required and the distance. But we are still working to keep all options open for the Interior.

Next, let me clarify my position on taxes. Tax stability attracts investment. Investment grows our economy and creates jobs.

Regarding resource development taxes, I don’t believe they should be used as a political football. Arbitrary changes don’t help anybody. If the state’s tax regime is not stable, companies can’t plan for the future.

I have always believed that tax stability is key. However, there are those who might say that we have the wrong mix of risk-sharing and incentives. If the evidence is there, we can take another look, but the benefits would have to be demonstrable and outweigh the long-term benefits of stability.

I’ve been governor for four months now, and I’ve placed a priority on listening. I want to hear from you, and I want to work with you. A project called LEGACY is one way we’re doing that. It’s an economic planning effort the state began earlier this year that required a report due back to the governor at year’s end. But rather than ending with a report, I restructured LEGACY to be an ongoing process – and an ongoing conversation and I am an active participant.

I am meeting with different industry groups -- and that includes oil and gas -- multiple times to hear about and discuss their issues. We’ll consider obstacles to economic development at the state level and address short-term issues as they come up.

I want these groups to be think tanks for how we grow our economy. LEGACY will be an on-going, cooperative partnership between industry and the state to move Alaska’s economy forward.

Now let me talk about another focus of my administration – infrastructure – and specifically Alaska’s sole ground transportation link to the oil and gas fields of the North Slope - the Dalton Highway. We’ll continue improving the safety and drivability of the Dalton by taking steps to bring it up to current construction standards. This project supports both our existing oil production and future gasline efforts.

And my capital budget will also include $900 million for highway and aviation projects. An investment of $50 million in state money will gain us over $700 million in federal highway and aviation dollars. We’ll target the Seward and Parks highways, continuing efforts to enhance resource development through access to the Umiat area and to build the road to Nome.

We’re also focused on workforce development and job training. I’ve got $3.5 million in my budget for Alaska Construction Academies, $2 million for the pipeline training facility in Fairbanks, and you’ll see funding for job training efforts in rural Alaska. I recently visited a job training facility called NACTEC, located in Nome. How many of you could use some well-educated, well-trained workers?

Mining is on a roll. We now have five large producing mines in the state and numerous small mines that generate nearly 5,500 direct and indirect jobs at some of the state’s highest wages. And those jobs are often in rural areas where high-paying jobs are prized.

Mining in Alaska has its ups and it has its downs - and we’ve had our battles. When certain groups sued to shut down Kensington, the state joined other great Alaskans, such as the RDC, and fought them all the way to the United States Supreme Court. We were close to losing that battle, but by bringing everyone together, we prevailed – thanks to the good people of Greens Creek for joining the fight for their sister mine.

Let me make one more point about that: Alaska’s permitting process is solid – and I will continue standing behind it 100 percent.

John Katz of our D.C. office tells us that, in all his years serving Alaska and working for Alaska governors, he has never seen us this busy fighting for Alaska’s resource jobs. We will continue weighing in on federal policies that block development of Alaska’s resources.

Beyond the Endangered Species Act, I’ve opposed current “cap and trade” legislation. We’ve distributed our outline of the many challenges posed by current federal legislation to two Senate committees, and we’re working next on an economic analysis of the legislation.

I’ve also transmitted letters on ocean policy, the potential for federal development of wilderness recommendations on BLM lands in Alaska, aquaculture issues, and I’ve encouraged the emergence of an Arctic doctrine. Alaska has a strong and visible presence on Capitol Hill.

I mentioned the use of the Endangered Species Act and litigation to shut down Alaska’s resource development – but there’s another tool being employed as well. Some take their cause to the ballot box.

The ballot initiative process is meant to provide a safety valve for the public if they think the legislature and executive branch fail to respond to public concerns. Unfortunately, the initiative process gets misused.

Today, initiatives are not just tools of last resort; they are also, at times, the first tools reached for by interest groups with an agenda.

We’ve seen dollars for initiative campaigns flooding in from both inside and outside our state, but Alaska law does not require individuals and groups involved in initiative campaigns to provide financial disclosure online. Last-minute donations and expenditures aren’t known until well after the votes have been cast.

Ballot initiatives are powerful tools to change public policy – and the campaigns behind them are super-funded and super-charged. Alaska’s voters deserve to know what interests and dollars are behind those campaigns.

For these reasons, you can count on my support for ballot initiative reform. In my view, that reform should focus on financial disclosure. The right to see the money behind the campaigns is the very least Alaskans should expect.

Now let’s talk about another industry that’s worked for Alaska. In Southeast, that industry is timber – and it’s time to get our timber industry on a sustainable track. I’ve said it loud and clear in Washington, D.C., that eliminating the timber industry in Alaska’s Southeast region is just not acceptable.

We’re working to maintain Alaska’s exemption to the national forest roadless rule and fighting to make it permanent; we’re working to maintain old-growth harvesting while young-growth forests mature; we’re pushing for the White House to implement the amendments to the Tongass land management plan; and we’ve been working on the Logjam timber sale as a bridge to keep the industry alive while more sales come on line.

I’ve written letters to and spoken with Agriculture Secretary Tom Vilsack about these issues in person and on the phone. I appreciate the importance of the timber industry to Alaska, and I will continue to defend it against those who would shut it down.

I understand, too, the importance of local power when it comes to putting the pieces in place to develop our resources. One of the challenges in developing resources in Alaska is getting access to power at the location. If we don’t plan and move together, the costs will be higher and growth will be limited.

I’d like to congratulate Chugach Electric Association, Matanuska Electric Association and the City of Seward for supporting legislation to create the Greater Railblet Energy and Transmission Corporation or GRETC.

With legislative approval, the bill will allow the utilities to come together to plan and finance the next generation of power supplies on the Railbelt.

My senior energy advisors and the Alaska Energy Authority have met repeatedly with Railbelt electric utilities to discuss the legislation and seek consensus on the issues. The State of Alaska stands ready to support or contribute to these jointly planned efforts.

Let me say a few words about tourism in Alaska. I’m working to get Alaska tourism moving again by putting my full support behind legislation to incentivize tourism marketing.

The legislation will allow for an income tax credit for tourism companies that contribute to the statewide marketing program that the Alaska Travel Industry Association implements on behalf of the state. The bill will incentivize companies to spend more on tourism marketing, enhancing Alaska’s competitive stance in the face-paced and savvy global tourism market.

There’s one more resource issue I’d like to talk to you about today – our most precious resource: Alaska’s youth.

Without an educated and trained workforce to jump into the resource jobs we’re focused on keeping and creating, where will we be?

Over a third of our youth - 34 percent – do not graduate from high school. And many of the students who do graduate are entering college or the work force unprepared. That means greater cost and lost opportunity for businesses. It means a greater drag on our economy because our workforce can’t think and move fast enough to keep pace with the global economy.

To position Alaska’s economy for growth and our people for opportunity, we must do more to make sure our youth stay in school, get their diplomas and move on to job training or the university.

That is the idea behind the Governor’s Performance Scholarship, or GPS – an education policy I’ll introduce this session to help students navigate their way to success.

To qualify for the scholarships, students must agree to a more rigorous high school curriculum: four years of math, not two; four years of science, not two; four years of language arts; and three years of social studies. Those who step up to this challenge will earn scholarships.

As grades improve, so do the scholarships. Students that get a C+ average with the more rigorous curriculum will get 50 percent of their in-state tuition paid; students with a B average students will get 75 percent and students who take the more rigorous curriculum and get an A average will get 100 percent of their tuition paid to an in-state university or job-training program.

Now how do we pay for GPS, without placing an endless burden on the state’s operating budget? Alaska has $8 billion in two reserve accounts, not counting the permanent fund. I propose that we fence $400 million of the $8 billion, invest it, and use the earnings to pay for these scholarships. Thirty years from now, we’ll still have the $400 million, but we’ll also have a better-prepared, better-trained workforce. That’s an investment worth making.

Our people resources and our natural resources are Alaska’s future. My administration will maintain a strong partnership with RDC and the resource development community. As we look to our future -- to Alaska’s next 50 years and beyond – we must walk together to promote and support responsible development of Alaska's resources. Only then can we be sure that Alaska’s next 50 years will be her best yet.