Legislature(2015 - 2016)BUTROVICH 205

03/26/2015 11:15 AM Senate SPECIAL CMTE ON THE ARCTIC

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as

Audio Topic
11:18:56 AM Start
11:19:48 AM Presentations: Arctic Business Opportunities and Developments and Port of Adak
12:04:29 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Agenda Change --
+ Dr. Mike Sfraga, Vice Chancellor of University of TELECONFERENCED
Alaska, Fairbanks, UAF
"Arctic Council, Alaska State Arctic Policy, UAF
Center for Arctic Policy"
<Above Item Removed from Agenda>
+ Greg Wolf, World Trade Alaska TELECONFERENCED
"Arctic Business Opportunities and Developments"
+ Thomas Mack, President Aleut Corporation TELECONFERENCED
"Port of Adak"
                    ALASKA STATE LEGISLATURE                                                                                  
             SENATE SPECIAL COMMITTEE ON THE ARCTIC                                                                           
                         March 26, 2015                                                                                         
                           11:18 a.m.                                                                                           
MEMBERS PRESENT                                                                                                               
Senator Lesil McGuire, Co-Chair                                                                                                 
Senator Lyman Hoffman                                                                                                           
Senator Gary Stevens                                                                                                            
Senator Donald Olson                                                                                                            
Senator John Coghill                                                                                                            
MEMBERS ABSENT                                                                                                                
Senator Cathy Giessel, Co-Chair                                                                                                 
Senator Click Bishop                                                                                                            
COMMITTEE CALENDAR                                                                                                            
PRESENTATIONS: ARCTIC BUSINESS OPPORTUNITIES AND DEVELOPMENTS                                                                   
AND PORT OF ADAK                                                                                                                
     - HEARD                                                                                                                    
PREVIOUS COMMITTEE ACTION                                                                                                     
No previous action to record                                                                                                    
WITNESS REGISTER                                                                                                              
GREG WOLF, Executive Director                                                                                                   
World Trade Center Alaska (WTCA)                                                                                                
Anchorage, Alaska                                                                                                             
POSITION STATEMENT: Presented "Arctic Business Opportunities and                                                              
THOMAS MACK, President                                                                                                          
Aleut Corporation                                                                                                               
Anchorage, Alaska                                                                                                             
POSITION STATEMENT:  Presented "The Port of Adak."                                                                            
LAYTON LOCKETTE, City Manager                                                                                                   
Adak, Alaska                                                                                                                  
POSITION STATEMENT: Presented information about the Port of                                                                   
ACTION NARRATIVE                                                                                                              
11:18:56 AM                                                                                                                   
CO-CHAIR LESIL MCGUIRE called the Senate Special Committee on                                                                 
the Arctic meeting to order at 11:18 a.m. Present at the call to                                                                
order were Senators Hoffman, Stevens, Olson, Coghill, and Co-                                                                   
Chair McGuire.                                                                                                                  
^PRESENTATIONS: Arctic Business Opportunities and Developments                                                                  
and Port of Adak                                                                                                                
 PRESENTATIONS: Arctic Business Opportunities and Developments                                                              
                        and Port of Adak                                                                                    
11:19:48 AM                                                                                                                   
CO-CHAIR MCGUIRE announced the presentation on Arctic Business                                                                  
Opportunities and Developments.                                                                                                 
GREG WOLF, Executive Director, World Trade Center Alaska (WTCA),                                                                
presented "Arctic Business Opportunities and Developments." He                                                                  
noted it was his 17th year talking about WTCA. He said Alaska is                                                                
facing a financial crisis and he used Chinese characters to say                                                                 
that a crisis can also be an opportunity.                                                                                       
He said that China is Alaska's largest trading partner, with                                                                    
trade totally $1.4 billion last year. China is followed by                                                                      
Japan, South Korea, and Canada, all long-standing international                                                                 
trade partners. He said for the year 2014, trade equaled $5.2                                                                   
billion, the second highest on record.                                                                                          
MR. WOLF showed a graph of China's trade over ten years,                                                                        
depicting why China is the number one customer. He opined that                                                                  
the next step for China is to become an investor. He discussed                                                                  
Alaska's exports to China by commodity during 2014. Half of the                                                                 
exports are seafood.                                                                                                            
He showed a graph of how trade has doubled over the past 20                                                                     
years. It has gone from about $2.5 billion to $5 billion in the                                                                 
Alaska economy. There were only two down years, in 1998 as a                                                                    
result of the Asian economic crisis, and in 2008-2009 the Great                                                                 
CO-CHAIR MCGUIRE asked about 2009.                                                                                              
MR. WOLF reiterated that it was when all economies slowed.                                                                      
11:24:57 AM                                                                                                                   
MR. WOLF described Alaska's top export commodities for 2014;                                                                    
seafood, minerals and metals, and energy - LNG and coal. The                                                                    
export of forest products has declined and fish meal is also                                                                    
exported. He said he accounts for the steady growth in trade                                                                    
because of the current trends, calling them the "Three Rights" -                                                                
right place, right time, and right commodities. They include                                                                    
Alaska's geographic location as a neighbor to the fastest                                                                       
growing populations in the world. There is economic                                                                             
liberalization and modernization in large emerging markets like                                                                 
China that are experiencing migration to the cities and growth                                                                  
of the middle class. Also, Alaska has world-class reserves of                                                                   
natural resources.                                                                                                              
11:28:08 AM                                                                                                                   
CO-CHAIR MCGUIRE asked if China and India are both predominantly                                                                
dependent on hydrocarbons for their energy sources.                                                                             
MR. WOLF said yes. Some countries are moving away from coal use                                                                 
to natural gas.                                                                                                                 
SENATOR HOFFMAN asked how many years China has had the one-child                                                                
MR. WOLF said it has been at least 40 years.                                                                                    
SENATOR HOFFMAN noted that the kids have no siblings or aunts or                                                                
MR. WOLF termed them "little emperors."                                                                                         
He continued to say that natural resources are the building                                                                     
blocks of natural development. They are not short term trends -                                                                 
they are megatrends.                                                                                                            
11:30:17 AM                                                                                                                   
He addressed the fourth "right" - the right direction. Alaska                                                                   
and the world are heading north for access to natural resources,                                                                
transportation infrastructure, and maritime shipping                                                                            
opportunities, which is flowing from the commercial development                                                                 
of the Arctic.                                                                                                                  
He related the opportunities for Alaskan Companies. Resource                                                                    
development, infrastructure build-out, maritime logistics and                                                                   
support and trade and commerce. He provided examples of                                                                         
opportunities for companies.                                                                                                    
11:32:53 AM                                                                                                                   
He said international trade is big business for Alaska. Overseas                                                                
exports equaled $5.2 billion in 2014, which is about 10 percent                                                                 
of the state's economy. It provides thousands of direct and                                                                     
indirect jobs and results in a stronger, more diversified                                                                       
11:34:11 AM                                                                                                                   
He explained that Alaska rates 40th among the states by the                                                                     
value of exports. As a percent of GSP, Alaska ranks 14th and on                                                                 
a per capita basis, Alaska ranks 4th. According to the U.S.                                                                     
Department of Commerce, there are approximately 300 companies                                                                   
that export from locations in Alaska. Seventy-five percent of                                                                   
those are considered small or medium enterprises.                                                                               
MR. WOLF described why he is optimistic. Alaska has what the                                                                    
world needs and has fast-growing economics and populations in                                                                   
our back yard. There are new opportunities for commercial                                                                       
development of the Arctic. He listed the opportunities for                                                                      
minerals and metal.                                                                                                             
11:35:55 AM                                                                                                                   
He turned to the new business model in Alaska. There are an                                                                     
increasing number of companies adopting new business models for                                                                 
growth and success. With the new model there are 3 billion                                                                      
potential customers possible. This new mindset creates greater                                                                  
feasibility for Alaskan companies and projects.                                                                                 
He concluded that in a time of crisis, Alaska should rise to the                                                                
CO-CHAIR MCGUIRE thanked Mr. Wolf.                                                                                              
11:37:20 AM                                                                                                                   
CO-CHAIR MCGUIRE announced the presentation on the Port of Adak.                                                                
11:37:43 AM                                                                                                                   
At ease                                                                                                                         
11:38:12 AM                                                                                                                   
THOMAS MACK, President, Aleut Corporation, presented "The Port                                                                  
of Adak." He shared information about the Aleut Corporation. He                                                                 
described the Aleut Region and said that Adak is the largest                                                                    
land owner.                                                                                                                     
11:40:06 AM                                                                                                                   
MR. MACK said Alaska is the connection to the Arctic. He showed                                                                 
a map of the Arctic boundary as defined by the Arctic Research                                                                  
and Policy Act. He said the Aleutians are the gateway to the                                                                    
Arctic. He spoke of the vast amount of resources in the Arctic                                                                  
and that there is massive potential. Today, Adak is positioned                                                                  
to become the door to the Arctic.                                                                                               
11:42:53 AM                                                                                                                   
MR. MACK talked about shipping. The Port of Adak was built in                                                                   
1972. He showed an aerial map of the Port of Adak and spoke of                                                                  
its convenient location and great facilities. He gave examples                                                                  
of shipping companies that use the Port of Adak and the time                                                                    
they save. He noted that Adak is an international transshipment                                                                 
hub that will save money for world trade route companies. He                                                                    
described the trade possibilities and alternative energy                                                                        
He concluded that Alaska has to take on the leadership role. He                                                                 
stressed the sense of urgency in response to opening of the                                                                     
Arctic. He concluded that Adak is ready to work on opening up                                                                   
the Port of Adak.                                                                                                               
11:49:07 AM                                                                                                                   
CO-CHAIR MCGUIRE thanked Mr. Mack for his presentation. She                                                                     
suggested that he contact the Alaska delegation. She hoped to                                                                   
change the federal government's view of the Arctic.                                                                             
SENATOR STEVENS said he was surprised that the Navy left Adak.                                                                  
He asked how the Port of Adak compares to other ports.                                                                          
11:51:02 AM                                                                                                                   
LAYTON LOCKETTE,  City Manager,  presented information  about the                                                               
Port  of Adak.  He noted  that  Adak has  significant assets  and                                                               
showed  images  that  highlight  them. He  showed  how  Adak  has                                                               
changed since the military was there  and that there is flat land                                                               
available and untold resources.                                                                                                 
He highlighted the  infrastructure that is available  in Adak. He                                                               
said many  resources have been utilized  for government purposes.                                                               
He discussed the small boat harbor master improvement plan.                                                                     
11:55:12 AM                                                                                                                   
MR. LOCKETTE described the Lake  Bonnie Rose Reservoir, the water                                                               
source for the community. He  said the Lake DeMarie Reservoir has                                                               
the potential for wind energy and hydroelectric power.                                                                          
11:57:08 AM                                                                                                                   
MR.  LOCKETTE  highlighted  the essential  air  service  and  the                                                               
excellent  airport with  military and  international traffic.  He                                                               
addressed  telecommunications  opportunities, including  a  fiber                                                               
optic network. He  talked about the fish  processing industry and                                                               
the potential  medical facility and  hospital. He  concluded that                                                               
Adak's motto is onward and upward.                                                                                              
11:59:30 AM                                                                                                                   
MR. MACK  said Adak is  trying hard  to market its  community and                                                               
make  it work  for  all of  Alaska. The  board  just passed  four                                                               
goals: for Adak  to become an oil fuel service  center, to become                                                               
a world-class  shipment hub,  to optimize  fishery opportunities,                                                               
and  to   recognize  that   Adak  has   a  unique   location  and                                                               
opportunities. Management  is tasked  to come up  with strategies                                                               
to work with the city to fulfill those goals.                                                                                   
12:00:49 PM                                                                                                                   
CO-CHAIR MCGUIRE asked if Adak has a fuel marketing plan.                                                                       
MR. LOCKETTE  said he  thought that  the subsidiary  that handles                                                               
fuel has a marketing plan. He said  Adak has been asked to have a                                                               
customs office and delegation as  an international airport. It is                                                               
looking  into  local  options  first   before  asking  for  state                                                               
SENATOR HOFFMAN asked about the  population and the potential for                                                               
MR. LOCKETTE  said the base  populations is about 120.  There are                                                               
an extra  200 people on the  island when the processing  plant is                                                               
in full  gear. They  expect to start  processing Pollock  soon as                                                               
part of  the Corporation Allocation  for Small Boats,  which will                                                               
bring in more  people. Also, an explosion  ordinance cleanup will                                                               
occur next  month and bring  in another  50 people. At  any given                                                               
time there are between 200-300 people on the island.                                                                            
CO-CHAIR MCGUIRE asked about free housing for shareholders.                                                                     
MR. MACK said now the houses are for sale.                                                                                      
SENATOR OLSON asked who owns the airport.                                                                                       
MR. LOCKETT said state does.                                                                                                    
MR. MACK said when the  corporation came in, it transferred lands                                                               
to the city and to the state, which included the airport.                                                                       
SENATOR OLSON asked what the alternative airport is.                                                                            
MR. LOCKETT said it is Cold Bay.                                                                                                
SENATOR HOFFMAN asked what the flying time between Anchorage and                                                                
MR. LOCKETT said 2 hours and 48 minutes.                                                                                        
CHAIR MCGUIRE thanked the presenters.                                                                                           
12:04:29 PM                                                                                                                   
There being nothing further to come before the committee, Co-                                                                   
Chair McGuire adjourned the Senate Special Committee on the                                                                     
Arctic at 12:04 p.m.                                                                                                            

Document Name Date/Time Subjects
Presentation- Greg Wolf, Alaska's Place in the World.pptx SARC 3/26/2015 11:15:00 AM
Presentation- Thomas Mack, Port of Adak.pdf SARC 3/26/2015 11:15:00 AM
Presentation- City of Adak.pptx SARC 3/26/2015 11:15:00 AM