I am excited and honored to help lead the Resource Development Council in its critical mission to advocate and educate on matters important to the very foundation of Alaska’s economy: responsible resource development. In my 30 years of practicing forestry and natural resource management in Alaska, I’ve had my share of roadblocks including stalled permits, obstructed access across federal lands, ESA listings, activist litigation, and even some eco-terrorism.
Unfortunately such challenges are all too familiar to Alaska natural resource-based businesses working to create jobs and opportunities. Over the course of my career I’ve waded deeper into the arena of public resource policy from the ground up, not as a student of public policy or political science, but as someone trying to get a job done.
I was recently asked what I thought was the single most important issue facing Alaska today. Clearly it’s the seven percent annual Trans-Alaska Pipeline (TAPS) throughput decline, which is reaching critical levels, creating compounding operational challenges of this critical infrastructure and undermining the future of our oil dependent economy.
This isn’t to diminish the importance of the other resource industries or the many other issues facing Alaska. TAPS throughput is the ten thousand pound gorilla, given the size of the oil and gas engine driving our economy. A recent McDowell group economic study concludes there are 44,800 jobs related to Alaska’s oil and gas industry and some 60,000 additional jobs are linked to the oil and gas industry. With 89% of state unrestricted revenues coming from oil and gas royalties and taxes, reversing the TAPS decline is critical for Alaska’s future.
We only need to look to Southeast Alaska for a preview of the economic havoc and hardship declining resource production can have on the economic fabric of our State and communities. The decline in timber available from the Tongass Nation Forest is a stark example. In 1990, 472 million board feet of timber were harvested from federal lands in Southeast, with the forest product sector providing 3,543 jobs. By 2010, the federal timber harvest had declined to just 28 million board feet, and employment was 200. The Department of Labor projects the Prince of Wales Island-Outer Ketchikan area will experience a 33.9% population decline by 2034.
Could the entire State be facing a similar fate? While the reasons behind the TAPS throughput decline and the demise of a robust forest products sector differ, they have a lot in common. Th e TAPS decline is exceeding seven percent per annum, slightly over half the pace of the 13% Tongass timber harvest decline rate from its peak in 1990. In both cases the declines are not the result of a resource shortage, but a result of failing public policies. The North Slope of Alaska has over five billion barrels of proven reserves and three to six billion barrels of undiscovered potential on state lands, and nearly 40 billion of undiscovered resource potential on federal lands, including the outer continental shelf (OCS). The Tongass National Forest is 16.8 million acres, of which 5.5 million are commercial forestland. Since 1907, less than 0.4 million acres have been harvested, and when properly managed, the harvested areas are ready to harvest again in 60 to 80 years. There is no shortage of timber or oil and yet both industries are experiencing precipitous production declines.
Alaska has incredible opportunities. Our natural resources are the envy of the world. Mineral exploration and development is vibrant, and our renewable fisheries management programs are a model for others to follow. Will we allow the combination of punitive state oil production tax policies, a cumbersome regulatory climate, a plethora of ESA listings, shifting federal priorities, and a judicial system that encourages litigation to strangle the life blood from our resourcebased economy?
The challenges to building on our strong resource-based economy in Alaska are many. RDC is a strong, credible and relevant organization focused on addressing the many issues threatening the foundation of Alaska’s economy. Our effectiveness is in direct proportion to the willingness of our members to get involved, to answer the calls to action, to reach across industry boundaries to aff ect positive change. In 1990 there were about 20 times more timber jobs in Alaska than there are today and TAPS throughput was three times the current throughput. Our actions today will directly shape what opportunities we have in another two decades. Please consider that responsibility when that next “RDC Action Alert” lands in your inbox.
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