Legislature(2015 - 2016)BARNES 124

03/26/2015 11:30 AM ECON. DEV., TOURISM, & ARCTIC POLICY

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Audio Topic
11:41:51 AM Start
11:42:15 AM Presentation: Arctic Research
12:16:27 PM Presentation: World Trade Center Anchorage/alaska
12:49:23 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Overviews: TELECONFERENCED
- "World Trade Center" by Greg Wolf
- "University of Alaska: Fairbanks - Arctic
Research" by Dr. Mike Sfraga
                    ALASKA STATE LEGISLATURE                                                                                  
 HOUSE SPECIAL COMMITTEE ON ECONOMIC DEVELOPMENT, TOURISM, AND                                                                
                         ARCTIC POLICY                                                                                        
                         March 26, 2015                                                                                         
                           11:41 a.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Bob Herron, Chair                                                                                                
Representative Louise Stutes                                                                                                    
Representative Cathy Tilton                                                                                                     
Representative Adam Wool                                                                                                        
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Craig Johnson                                                                                                    
Representative Charisse Millett                                                                                                 
Representative Dan Ortiz                                                                                                        
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
PRESENTATION:  ARCTIC RESEARCH                                                                                                  
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PRESENTATION:  WORLD TRADE CENTER ANCHORAGE/ALASKA                                                                              
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
MICHAEL SFRAGA PhD, Vice Chancellor for University and Student                                                                  
Advancement                                                                                                                     
University of Alaska Fairbanks                                                                                                  
University of Alaska                                                                                                            
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT:  Provided a PowerPoint presentation on                                                                    
Arctic research.                                                                                                                
                                                                                                                                
GREG WOLF, Executive Director                                                                                                   
World Trade Center Anchorage/Alaska                                                                                             
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Provided  a PowerPoint presentation entitled                                                             
"Alaska's  Place  in  the  World:   How  Exports  Drive  Alaska's                                                               
Economy," and dated 3/26/15.                                                                                                    
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
11:41:51 AM                                                                                                                   
                                                                                                                                
CHAIR BOB HERRON  called the House Special  Committee on Economic                                                             
Development,  Tourism,  and Arctic  Policy  meeting  to order  at                                                               
11:41  a.m.    Representatives  Stutes,  Wool,  and  Herron  were                                                               
present at the  call to order.  Representative  Tilton arrived as                                                               
the meeting was in progress.                                                                                                    
                                                                                                                                
^PRESENTATION:  ARCTIC RESEARCH                                                                                                 
                 PRESENTATION:  ARCTIC RESEARCH                                                                             
                                                                                                                                
11:42:15 AM                                                                                                                   
                                                                                                                                
CHAIR HERRON announced that the  first order of business would be                                                               
a presentation on Arctic research by Dr. Michael Sfraga.                                                                        
                                                                                                                                
11:42:30 AM                                                                                                                   
                                                                                                                                
MICHAEL SFRAGA  PhD, Vice Chancellor  for University  and Student                                                               
Advancement, University of Alaska  Fairbanks (UAF), University of                                                               
Alaska (UA), said  his presentation would provide  an overview on                                                               
Arctic  research  and  related  policy  issues,  frameworks,  and                                                               
foundations for  the future, including  efforts by  UAF informing                                                               
and influencing Arctic  policy, its capacity to  serve the state,                                                               
and  recommendations  on  how legislators  can  influence  policy                                                               
discussions in Washington,  D.C.  The university is  aware of the                                                               
legislature's intent to shape, inform,  and influence policy; the                                                               
Alaska Arctic Policy Commission  (AAPC) recommendations have been                                                               
heard  by UAF  and his  colleagues, especially  the focus  on the                                                               
Arctic during the  U.S. chairmanship of the Arctic  Council.  Dr.                                                               
Sfraga  said  UAF  and  its  partners,  Carnegie  and  Dartmouth,                                                               
reviewed AAPC's  strategic recommendations and saw  many overlaps                                                               
with  those  of   the  federal  government,  and   of  the  eight                                                               
circumpolar nations (slide 3).   He advised that to advance these                                                               
recommendations the state must look  at social ecological systems                                                               
such as food, culture, energy,  security, and health, and UAF can                                                               
support the legislature in this regard (slide 4).                                                                               
                                                                                                                                
DR. SFRAGA  observed that the state  has invested in UAF  for 100                                                               
years; all  of its institutes  have spent this time  building the                                                               
Arctic capacity  of the  university, and are  ready to  serve the                                                               
state effectively (slide  5).  He presented a  map that indicated                                                               
UAF Arctic  research and related  efforts happen in  every Arctic                                                               
nation and,  along with  collaborators across  the world,  UAF is                                                               
seen as  "the Arctic university"  studying land, sea,  space, and                                                               
air (slides 6 and 7).                                                                                                           
                                                                                                                                
11:45:47 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE  STUTES  asked why  the  School  of Fisheries  and                                                               
Ocean Sciences is in Fairbanks.                                                                                                 
                                                                                                                                
DR. SFRAGA explained  that UA originated at  the Fairbanks campus                                                               
and the  university's research engine began  there; subsequently,                                                               
the leadership at UAF has explored  ways to work closely with the                                                               
Juneau  campus and  with the  UAF  polar R/V  Sikuliaq, which  is                                                               
ported at Seward.   The UA Board of Regents seeks  to have all 16                                                               
campuses work closely together.                                                                                                 
                                                                                                                                
REPRESENTATIVE STUTES  recognized the  Kodiak Seafood  and Marine                                                               
Science Center, which is also part of the program.                                                                              
                                                                                                                                
11:46:59 AM                                                                                                                   
                                                                                                                                
DR. SFRAGA  said that UAF has  a world class data  system for the                                                               
legislature to  access supported by  its capacity in  the oceans,                                                               
with  research  by  underwater   drones,  the  R/V  Sikuliaq,  an                                                               
unmanned vehicle  fleet, and  satellites.  All  of the  issues of                                                               
healthy communities, food sources,  stream quality, and fisheries                                                               
will  benefit  from UAF's  data  infrastructure  that covers  the                                                               
oceans  to satellites  (slides 8  and  9).   Dr. Sfraga  directed                                                               
attention to the R/V Sikuliaq,  a world-class vessel available to                                                               
inform  the global  science  community, and  which  is docked  in                                                               
Seward (slide 10).   As "the globe's" Arctic  university, UAF has                                                               
more  publications about  the Arctic  than  any other  university                                                               
(slide  11).   Furthermore, UAF  has more  Arctic citations  than                                                               
others  (slide 12).    Also, UAF  is serving  all  of the  Arctic                                                               
Council  working groups  providing  science,  and informing,  and                                                               
influencing their  work (slide 13).   Dr. Sfraga pointed  out UAF                                                               
has  garnered global  recognition of  its capacity;  in fact,  in                                                               
2016, UAF will  host the largest science  organization meeting in                                                               
the world.   He said the Arctic world is  coming to Fairbanks and                                                               
there may be ways in which  the legislature should be involved in                                                               
the  meetings.    The  organizations   involved  are  focused  on                                                               
creating  capacity,  overlapping partnerships,  and  coordinating                                                               
Arctic   research,   which  fits   very   well   with  the   AAPC                                                               
recommendations   as  the   U.S.  assumes   the  Arctic   Council                                                               
chairmanship (slide 14).                                                                                                        
                                                                                                                                
DR. SFRAGA presented slide 15 that  was a list of participants in                                                               
meetings  ancillary to  the Arctic  Science Summit  Week meeting,                                                               
and said  the work done  at UAF will inspire  further discussion,                                                               
and sharing  with others the work  of AAPC and this  committee is                                                               
important.  Dr. Sfraga  turned to  issues of  the Arctic  and the                                                               
North  Pacific  such  as  the   Bering  Strait  bottleneck,  port                                                               
information, and oil  spill response (slide 16).   The university                                                               
tries to  address these issues  by partnering; for  instance, the                                                               
University  of the  Arctic consists  of  over 160  organizational                                                               
members from  universities around the  globe that are  focused on                                                               
the  Arctic.     As  a  member,  UAF  helps  lead   many  of  the                                                               
organization's efforts.   The University of  the Arctic Institute                                                               
for  Arctic  Policy  (IAP)  was created  to  explore  the  issues                                                               
recognized by  AAPC and its  priorities.   This has been  done in                                                               
partnership  with  Dartmouth  and   the  Carnegie  Endowment  for                                                               
International Peace.  Carnegie has  influence in Washington, D.C.                                                               
and for the last eight  years IAP has convened representatives of                                                               
governments and  others to  explore issues  of importance  to the                                                               
North.   He  invited the  committee to  consider how  to leverage                                                               
these relationships, perhaps by  holding a collaborative workshop                                                               
in Washington,  D.C.  Along  with Dartmouth and Carnegie,  IAP is                                                               
powerful  because it  acts like  a  think tank  and issues  white                                                               
papers (slide 17).  White papers  by IAP are found in departments                                                               
of  state and  embassies; a  list  of documents  provided to  the                                                               
global  scientific   community,  policymakers,  and   others  was                                                               
illustrated (slide 18 and 19).   Dr. Sfraga directed attention to                                                               
a  meeting related  to the  transfer of  the chairmanship  of the                                                               
Arctic Council  from Canada  to the U.S.,  and to  other meetings                                                               
hosted by  IAP (slide 19).   In February 2015, IAP  had reached a                                                               
level  of  interest  from  ambassadors   and  embassies  thus  in                                                               
attendance at  its meetings were  representatives from  China and                                                               
Singapore  (slide 20).   He  offered to  provide the  committee a                                                               
copy  of the  report prepared  for U.S.  Secretary of  State John                                                               
Kerry,  which includes  recommendations to  inform and  influence                                                               
the agenda  during the U.S.  chairmanship of the  Arctic Council,                                                               
and   afterward    (slides   22-29).      He    highlighted   the                                                               
recommendations to create a training  center in the North for oil                                                               
spill response and  search and rescue, additional  mapping of the                                                               
Arctic Ocean,  healthy communities, energy, and  the relationship                                                               
between the Arctic  Economic Council and the Arctic  Council.  He                                                               
questioned  whether   the  Arctic  Economic  Council   should  be                                                               
influenced by  big industry  - or  community-level focused  - and                                                               
who will  set its agenda,  and take action  on its agenda.   This                                                               
will be  a very  important discussion for  the Arctic  Council in                                                               
the next two years.                                                                                                             
                                                                                                                                
11:55:16 AM                                                                                                                   
                                                                                                                                
CHAIR  HERRON advised  that legislation  is  forthcoming on  this                                                               
matter.                                                                                                                         
                                                                                                                                
REPRESENTATIVE  STUTES  returned  attention   to  slide  25,  and                                                               
observed  that each  of the  issues and  recommendations ask  for                                                               
further studies.   She expressed concern that a lot  of effort is                                                               
spent on studies, and urged for more action on Arctic policy.                                                                   
                                                                                                                                
DR.  SFRAGA agreed,  and  added that  all  of the  aforementioned                                                               
meetings started with  actionable recommendations because changes                                                               
to the  North are real  and rapid; therefore, the  final document                                                               
will require practical steps.                                                                                                   
                                                                                                                                
REPRESENTATIVE STUTES  said she  would like  slide 25  to reflect                                                               
the foregoing statement.                                                                                                        
                                                                                                                                
11:58:25 AM                                                                                                                   
                                                                                                                                
DR. SFRAGA  said duly noted.   The  Alaska Center for  Energy and                                                               
Power  (ACEP), UAF,  is a  global  leader on  micro-grids and  is                                                               
implementing their use; UAF is  working to determine whether ACEP                                                               
is  a  framework for  other  Arctic  nations  to follow,  and  is                                                               
working to  determine whether micro-grids  can be used  in Alaska                                                               
in the  near future.   This is an actionable  recommendation high                                                               
on the priority  list that will be submitted  to Secretary Kerry.                                                               
Additional  actionable  items are  the  link  between the  Arctic                                                               
Council  and  the  Arctic  Economic  Council,  and  the  role  of                                                               
education, science, and diplomacy;  in fact, the committee should                                                               
be  involved  in  the  Joint  Oceans  Commissions  Initiative  in                                                               
Fairbanks, the  Singapore Delegation  in Fairbanks in  April, and                                                               
the  Fulbright Arctic  Initiative,  funded by  the Department  of                                                               
State, which will allow 17  scholars to study the issues revealed                                                               
by  AAPC.    He  opined  the  Fulbright  Arctic  Initiative  will                                                               
"elevate  the  discussion" and  touted  the  efforts of  UAF  and                                                               
Dartmouth (slide 31).   Dr. Sfraga expressed his  desire that the                                                               
"Dynamic  Arctic"  will  become  known  through  radio  vignettes                                                               
produced  by UAF  and  KUAC,  and made  available  to the  Public                                                               
Broadcasting  System.    This  represents  the  Alaska  diplomacy                                                               
effort that UAF  is providing for the state in  order to convince                                                               
the  rest  of  the  country   that  Alaska  and  the  Arctic  are                                                               
important.                                                                                                                      
                                                                                                                                
12:02:10 PM                                                                                                                   
                                                                                                                                
CHAIR  HERRON  asked  for  more   information  on  the  Fulbright                                                               
positions.                                                                                                                      
                                                                                                                                
DR. SFRAGA responded that over  120 highly qualified applications                                                               
were  received, including  some  from each  of  the eight  Arctic                                                               
nations, which was  an indication that interest in  the Arctic is                                                               
very high.   In  further response  to Chair  Herron, he  said the                                                               
monetary  value  of a  Fulbright  award  ranges from  $20,000  to                                                               
$40,000, and pays for transportation  and support during a period                                                               
of  research  in  a  foreign   country.    The  Fulbright  Arctic                                                               
Initiative research  themes are:  healthy  communities, including                                                               
infrastructure to  health issues; all  facets of energy;  and all                                                               
facets  of water,  including  ocean  acidification and  streambed                                                               
quality.   The scholars  will be  named in April  at an  event in                                                               
Ottawa, Canada,  and the  final work  product from  the Fulbright                                                               
scholars  will be  reported in  2017 in  Washington, D.C.  (slide                                                               
32).                                                                                                                            
                                                                                                                                
DR.  SFRAGA  directed attention  to  the  UAF Center  for  Arctic                                                               
Policy Studies  which has been  proposed by UAF  Chancellor Brian                                                               
Rogers.  University  of Alaska President Pat  Gamble has approved                                                               
a framework which  he characterized as a consolidation  of all of                                                               
UAF's efforts  to inform and  influence policy.  He  advised that                                                               
institutes and  think tanks related  to universities  become part                                                               
of the narrative  that drives issues, thus the  state should have                                                               
its own center to inform  and influence its policy, together with                                                               
partners such  as Institute  of the North,  to provide  an Alaska                                                               
perspective.   In fact,  if UAF  is the  global leader  in Arctic                                                               
research, its research should inform  policy and provide services                                                               
to  the  state, the  legislature,  and  the Alaska  Congressional                                                               
delegation (slide 33).                                                                                                          
                                                                                                                                
12:09:23 PM                                                                                                                   
                                                                                                                                
DR. SFRAGA  presented a  final proposal  that would  leverage the                                                               
university's  expertise with  the  recommendations  from AAPC  by                                                               
creating  graduate  fellowships  to  investigate  the  identified                                                               
issues.  This  could be done in a way  to align research projects                                                               
that  will achieve  the aforementioned  actionable items,  and to                                                               
follow up on  recommendations (slide 34).  He  closed, urging the                                                               
legislature to  use the 16  UA campuses in  any way to  serve the                                                               
state because they all have expertise.                                                                                          
                                                                                                                                
CHAIR HERRON acknowledged  that it is not well known  that UAF is                                                               
the leading Arctic university.                                                                                                  
                                                                                                                                
DR.  SFRAGA  confirmed  that the  collective  University  of  the                                                               
Arctic has more than 160 participants.                                                                                          
                                                                                                                                
CHAIR HERRON informed  the committee of his intent  to take every                                                               
opportunity to promote Alaska and the Arctic during interim.                                                                    
                                                                                                                                
REPRESENTATIVE  WOOL has  heard concerns  that other  nations are                                                               
staking  out their  territory in  the Arctic,  and asked  for Dr.                                                               
Sfraga's opinion on  the United Nations Convention on  the Law of                                                               
the Sea (UNCLOS).                                                                                                               
                                                                                                                                
DR. SFRAGA  said it  is hard  to separate work  being done  on an                                                               
international level from the political  arena.  The fact that the                                                               
U.S. has not ratified UNCLOS is  almost always raised as a factor                                                               
that hurts the  U.S. position during negotiations,  because it is                                                               
hard to exert influence when  the U.S. does not recognize UNCLOS.                                                               
Many nations have signed on,  although he said he understands the                                                               
political challenges related to  the United Nations.  Practically                                                               
speaking, he  opined the  U.S and other  countries that  have not                                                               
signed UNCLOS lose credibility,  and their influence is mitigated                                                               
by this situation.                                                                                                              
                                                                                                                                
CHAIR  HERRON agreed,  but urged  that  the issue  not become  an                                                               
overwhelming distraction.                                                                                                       
                                                                                                                                
^PRESENTATION:  WORLD TRADE CENTER ANCHORAGE/ALASKA                                                                             
       PRESENTATION:  WORLD TRADE CENTER ANCHORAGE/ALASKA                                                                   
                                                                                                                                
12:16:27 PM                                                                                                                   
                                                                                                                                
CHAIR HERRON announced that the  final order of business would be                                                               
a presentation by World Trade Center Anchorage/Alaska.                                                                          
                                                                                                                                
12:16:43 PM                                                                                                                   
                                                                                                                                
GREG    WOLF,   Executive    Director,    World   Trade    Center                                                               
Anchorage/Alaska,  noted  that  this  is the  17th  year  he  has                                                               
presented   information  before   the  legislature   on  Alaska's                                                               
international trade economy.  He  said he would provide an update                                                               
on Alaska's export economy and  the Arctic, and answer questions.                                                               
Mr.  Wolf referred  to  Alaska's current  fiscal  crisis and  the                                                               
possible  opportunities that  may, over  the long-term,  overcome                                                               
the crisis.  He began his  presentation and stated that China has                                                               
become  Alaska's  single largest  export  market  and its  single                                                               
largest trading partner.   Last year, exports to  China were over                                                               
$1.4 billion,  followed by  Japan, South Korea,  and Canada.   He                                                               
explained that South  Africa ranked tenth due  to a one-time-only                                                               
sale of a drilling rig (slide 3).                                                                                               
                                                                                                                                
CHAIR  HERRON  asked  for  the  most  common  commodity  that  is                                                               
exported to China.                                                                                                              
                                                                                                                                
MR. WOLF said  from 2000 to 2011, Alaska's exports  to China grew                                                               
from  $100  million  to $1.4  billion,  which  was  unprecedented                                                               
growth.   After  two  years  of less  growth  in  2012 and  2013,                                                               
exports  to China  are now  at their  second highest  level, thus                                                               
trade with  China remains strong.   He opined that China  will be                                                               
Alaska's best customer  for a long time; however,  the next phase                                                               
will see  China as an investor  or a partner in  natural resource                                                               
projects,  and  in  the  expansion of  current  projects.    This                                                               
movement  has been  proven in  other  jurisdictions with  natural                                                               
resources (slide 4).  The  largest commodity exported to China is                                                               
seafood at  53 percent,  followed by mineral  ores such  as zinc,                                                               
lead,  and gold.   He  noted that  there are  state-owned Chinese                                                               
corporations  operating   in  partnership  with   several  mining                                                               
operations in  Alaska.   Other exports are  whole round  logs and                                                               
other  forest  products, and  fish  meal  (slide  5).   Mr.  Wolf                                                               
continued  to explain  that overall,  Alaska's  exports over  the                                                               
last 20  years have increased  from $2.5  billion per year  to $5                                                               
billion  per  year, and  have  been  steadily growing,  with  the                                                               
exception of two  periods (slide 6).  Top  export commodities are                                                               
seafood at 44  percent, followed by minerals and  ores, and third                                                               
is  energy,  including liquefied  natural  gas  (LNG), coal,  and                                                               
refined fuel products.   Forest products continue  to decline due                                                               
to  a lack  of access.   He  concluded that  Alaska is  a natural                                                               
resource exporting state (slide 7).                                                                                             
                                                                                                                                
12:23:33 PM                                                                                                                   
                                                                                                                                
MR. WOLF  said the  rise in  exports can  be explained  by "three                                                               
rights."  The  first is that Alaska is  geographically located in                                                               
the  right  place, the  Pacific  Rim,  which holds  the  fastest-                                                               
growing economies  and populations in  the world.  The  second is                                                               
the right  time in history,  because economic  liberalization and                                                               
modernization have  created emerging markets in  China and India;                                                               
in  fact, capitalization  is alive  and  well due  to a  historic                                                               
migration  of  people  moving from  rural  countryside  to  major                                                               
cities.   It is  estimated that  by 2025,  400 million  people in                                                               
China and  over 200 million people  in India will move  to cities                                                               
seeking economic  opportunities.   The third  right is  the right                                                               
commodities,  as Alaska  is selling  natural resources  which are                                                               
the economic  building blocks  of economic  development necessary                                                               
for  growing economies.   Mr.  Wolf stressed  that these  are not                                                               
passing  trends,  but  are  long-term   mega  trends  (slide  8).                                                               
Additionally,  Alaska and  the  world are  heading  in the  right                                                               
direction,  which  is  north,  and  will  lead  to  opportunities                                                               
through new  access to previously  stranded natural  resources, a                                                               
need for transportation infrastructure,  and maritime shipping in                                                               
the  Arctic  (slide  9).   World  Trade  Center  Anchorage/Alaska                                                               
(WTCAK)   completed   its   fourth  annual   "Arctic   Ambitions"                                                               
Conference  which  looked  at  business,  investment,  and  trade                                                               
opportunities for Alaska companies,  such as onshore and offshore                                                               
resource development.  The question  of timing always arises, and                                                               
he  opined infrastructure  in the  Arctic will  be built  by oil,                                                               
gas, and mining industries, thus  the catalyst to business in the                                                               
Arctic will  be developing  natural resources  and the  fields of                                                               
engineering, design,  permitting, construction,  and maintenance,                                                               
all of which can be supplied by Alaska companies.                                                                               
                                                                                                                                
12:29:49 PM                                                                                                                   
                                                                                                                                
MR. WOLF turned to the  subject of maritime logistics and support                                                               
and  noted  that  modern  mapping  is  needed,  along  with  fuel                                                               
supplies  for  shipping,  spill   prevention  and  response,  and                                                               
communications.   He pointed  out that although  China is  not an                                                               
Arctic  nation, it  became  an observer  to  the Arctic  Council,                                                               
which suggests that  China's exports may travel  the Northern Sea                                                               
Route in the future.  The role  of WTCAK is to ensure that Alaska                                                               
companies participate  in exchanges,  trade, and commerce  in the                                                               
Arctic  (slide  10).    Mr. Wolf  returned  attention  to  trade,                                                               
stating  that  overseas exports  represent  about  10 percent  of                                                               
Alaska's total  economy.  The  state's gross state  product (GSP)                                                               
is about $54  billion.  Exports bring new money  into the economy                                                               
and  support thousands  of jobs,  resulting in  a stronger,  more                                                               
diversified economy  (slide 11).   He  added that  service sector                                                               
exports are  not reported,  even though  he estimated  they total                                                               
about another  $1 billion.   In fact, for some  Alaska companies,                                                               
growth will  be in overseas markets  (slide 12).  More  good news                                                               
about trade  is that  it directly supports  15,000 jobs,  many in                                                               
rural areas  where resources  are located.   In  addition, 10,000                                                               
jobs are indirect and induced by  those in support roles.  Export                                                               
jobs typically  pay 13 percent  to 16 percent higher  than others                                                               
(slide 13).   In gross  exports, Alaska ranks fortieth  among all                                                               
states by  the value  of its  exports, and does  so with  a small                                                               
population  and  without   major  manufacturing  or  agriculture.                                                               
Measuring  exports   as  a  percentage   of  GSP,   Alaska  ranks                                                               
fourteenth; on  a per capita basis,  Alaska ranks fourth.   It is                                                               
estimated that  300 companies in  Alaska export products,  and 75                                                               
percent are  considered by  the federal  government to  be small-                                                               
and medium-size  enterprises, which are those  with 500 employees                                                               
or fewer (slide 14).                                                                                                            
                                                                                                                                
12:36:05 PM                                                                                                                   
                                                                                                                                
MR. WOLF  expressed optimism  because Alaska  has what  the world                                                               
needs for neighboring fast-growing  economies and population, and                                                               
new  opportunities  are  upcoming   in  the  Arctic  (slide  15).                                                               
Furthermore, an asset review by  Commonwealth North revealed that                                                               
Alaska has  the second largest  coal reserve  in the world  at 17                                                               
percent, the third largest copper  reserve, and the sixth largest                                                               
lead reserve.   However, reserves  do not equate to  the existing                                                               
industry, and he suggested that  there are many opportunities for                                                               
expansion  and  new businesses  in  coal  and  natural gas.    He                                                               
observed that the Alaska LNG  Project would be the largest single                                                               
investment  and the  largest single  export  project in  Alaska's                                                               
history.  Other opportunities in  rare earth elements and service                                                               
sector exports await (slide 16).   Finally, in his experience, he                                                               
noted  that new  businesses  are  now planning  to  do a  certain                                                               
amount of  business overseas,  which expands  their market  to "a                                                               
couple billion new consumers who  have money ... to spend" (slide                                                               
17).   In  this time  of crisis,  during a  period of  danger and                                                               
opportunity,   Mr.  Wolf   urged  the   committee  to   focus  on                                                               
opportunities (slide 18).                                                                                                       
                                                                                                                                
CHAIR HERRON inquired as to WTCAK's next event in Alaska.                                                                       
                                                                                                                                
MR.  WOLF answered  that next  major event  is Mat-Su  Rising! on                                                               
4/29/15 in  Anchorage.  There  will be speakers  representing the                                                               
Matanuska-Susitna  (Mat-Su)  Borough  and the  region,  who  will                                                               
discuss the  amazing story of growth  in the Mat-Su Valley.   For                                                               
Southcentral  Alaska,   resource  and  economic   development  is                                                               
happening in the  Mat-Su Valley and about 400  people will attend                                                               
the  event.    The  next   Arctic  Ambitions  event  will  be  an                                                               
international  conference held  in March  and will  focus on  the                                                               
business and investment  side of Arctic development.   In further                                                               
response to  Chair Herron, he  said his organization  will return                                                               
to Asia for  a trade mission to China and  perhaps Singapore.  He                                                               
encouraged  the  committee to  join  the  mission because  it  is                                                               
important  that policymakers  and  government leaders  understand                                                               
the economic  markets and opportunities  relevant to  Alaska, and                                                               
also that business leaders in Asia meet them.                                                                                   
                                                                                                                                
12:44:42 PM                                                                                                                   
                                                                                                                                
CHAIR HERRON agreed  and recalled his experience  in the Republic                                                               
of the Philippines.                                                                                                             
                                                                                                                                
MR. WOLF  pointed out that some  companies in China are  owned by                                                               
the  government,  thus  government participation  "gives  them  a                                                               
level of confidence ...."                                                                                                       
                                                                                                                                
REPRESENTATIVE WOOL asked how much LNG is exported to Japan.                                                                    
                                                                                                                                
MR. WOLF  reported that in the  past LNG shipments to  Japan were                                                               
about $300 million;  last year, exports to Japan  were down about                                                               
$200 million  to $300 million,  thus this amount is  reflected in                                                               
LNG sales.                                                                                                                      
                                                                                                                                
REPRESENTATIVE WOOL  surmised the  remainder are  seafood exports                                                               
to Japan.                                                                                                                       
                                                                                                                                
MR.  WOLF answered  that  Japan is  now  Alaska's second  largest                                                               
seafood market.                                                                                                                 
                                                                                                                                
REPRESENTATIVE   WOOL  returned   attention  to   slide  3,   and                                                               
questioned whether emerging Asian markets have been explored.                                                                   
                                                                                                                                
MR.  WOLF   answered  that  WTCAK   has  a  program   called  New                                                               
Markets/New Customers which searches  for new markets for Alaska.                                                               
For  example,  India  has  a  billion  people  and  its  economic                                                               
development is  several years behind  China, but it has  the same                                                               
needs.    During a  trade  mission  there, there  was  heightened                                                               
interest  in  expanding  trade   with  the  U.S.,  especially  in                                                               
supplies  of oil  and  gas to  meet India's  growth  rate of  7-8                                                               
percent, and also in order to replace coal with LNG.                                                                            
                                                                                                                                
12:49:23 PM                                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Special Committee  on Economic  Development, Tourism,  and Arctic                                                               
Policy meeting was adjourned at 12:49 p.m.                                                                                      

Document Name Date/Time Subjects
Greg Wolf 2015 Juneau Legislative Presentation (March 26).pdf HEDA 3/26/2015 11:30:00 AM
UAF Arctic Policy LegislativeBriefingMarch262015MS.pdf HEDA 3/26/2015 11:30:00 AM