Legislature(2015 - 2016)BARNES 124
03/26/2015 11:30 AM House ECON. DEV., TOURISM, & ARCTIC POLICY
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Arctic Research | |
| Presentation: World Trade Center Anchorage/alaska | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
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 |