Legislature(2013 - 2014)BARNES 124
01/28/2014 11:15 AM House ECON. DEV., TRADE & TOURISM
| Audio | Topic |
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| Start | |
| Presentation(s): Arctic Policy Trends and New Developments by Institute of the North | |
| 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, TRADE AND
TOURISM
January 28, 2014
11:19 a.m.
MEMBERS PRESENT
Representative Shelley Hughes, Chair
Representative Lynn Gattis
Representative Bob Herron
Representative Harriet Drummond
Representative Geran Tarr
MEMBERS ABSENT
Representative Pete Higgins
Representative Craig Johnson
Representative Kurt Olson
Representative Lance Pruitt
COMMITTEE CALENDAR
PRESENTATION(S): ARCTIC POLICY TRENDS AND NEW DEVELOPMENTS BY
INSTITUTE OF THE NORTH
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
NILS ANDREASSEN, Executive Director
Institute of the North
Anchorage, Alaska
POSITION STATEMENT: Presented a report entitled, "Arctic Policy
Trends and New Developments."
ACTION NARRATIVE
11:19:42 AM
CHAIR SHELLEY HUGHES called the House Special Committee on
Economic Development, Trade and Tourism meeting to order at
11:19 a.m. Representatives Drummond, Tarr, Herron, and Hughes
were present at the call to order. Representative Gattis
arrived as the meeting was in progress.
11:20:28 AM
CHAIR HUGHES opened the meeting by observing that everyone on
the committee recognizes the importance of economic development
and growth to the state. In fact, almost all of the challenges
facing the state can be mitigated by economic growth, especially
now that state revenue is declining. She suggested the
following mission for the committee: To hear from private
industry, to better understand the barriers and opportunities,
and also to hear from government and other entities on how some
issues are - or are not - being addressed. She suggested the
following goal of the committee: To determine if there is an
appropriate role for the state to play in fostering an improved
"open for business" environment in Alaska. Chair Hughes
stressed that, as was the case last session, the committee will
find out from presenters what legislators need to address to
foster a business environment. Presentations to the committee
will focus on economic potential and opportunities, and she
invited members to submit suggestions for topics. Finally, she
reminded members that they are welcome to use personal
electronic devices at meetings.
^PRESENTATION(S): ARCTIC POLICY TRENDS AND NEW DEVELOPMENTS BY
INSTITUTE OF THE NORTH
PRESENTATION(S): ARCTIC POLICY TRENDS AND NEW DEVELOPMENTS BY
INSTITUTE OF THE NORTH
11:21:28 AM
CHAIR HUGHES announced that the only order of business would be
a presentation on Arctic Policy Trends and New Developments by
Nils Andreassen, Executive Director, Institute of the North.
11:24:28 AM
NILS ANDREASSEN, Executive Director, Institute of the North (the
Institute), said his report today will broaden listeners'
horizons when it comes to Arctic policy and economic
development, and will introduce to the committee a range of
priorities related to the Arctic, economic development, and
trade and commerce. He stated the mission of the Institute: To
inform public policy and cultivate and engage citizenry
consistent with its focus on the North and belief that commonly-
owned resources should be managed for individual and community
prosperity. The mission of the Institute comes from its
founder, former Governor Walter Hickel, and it is a nonprofit
organization governed by a board of directors. He began his
presentation by drawing attention to the fundamental challenges
facing the state- and the Arctic region of the state - beginning
with the infrastructure deficit, especially as it relates to
response capacity. In addition, the Arctic has significant
change taking place that is affected by the present national and
state environments of fiscal constraint. These changes include
increasing national and international attention on Arctic issues
and are coupled with local and regional anxiety about these
changes. The greatest challenge facing Alaska's Arctic region
is that of how local communities communicate on all issues with
the state, the nation, and international entities. Mr.
Andreassen opined important considerations for this committee
are the future goals and opportunities for the Arctic, and the
challenges to be met. The state legislature must be an active
champion for economic development, jobs, and commerce, as this
is an Arctic agenda not found presently at the national or
international level.
11:29:38 AM
MR. ANDREASSEN turned to international activity in the Arctic.
The Arctic Council (the Council) is comprised of eight nations
in the circumpolar north who are working to assess change and
develop recommendations on policy. The Council has six
permanent participants, four that are located in Alaska,
including the Inuit Circumpolar Council-Alaska (ICC-AK) and the
Aleut International Association (AIA). Each working group of
the Council has a work plan that it initiates; for example, one
Council project was the Arctic Marine Shipping Assessment
(AMSA), which is considered to be the highest guideline for
Arctic shipping, and which was edited by the Institute. Other
notable organizations engaged in Arctic policy are the
International Maritime Organization (IMO) which will release an
influential draft Polar Code this year to set different levels
of vessel classification and operations, and the United Nations
Convention on the Law of the Sea (UNCLOS) treaty. At this time,
the U.S. has not ratified the UNCLOS treaty, although the seven
other Arctic nations have. He suggested that the committee
review the impact non-ratification has had, in that other
nations are claiming parts of the Arctic and potentially
affecting U.S. sovereignty, businesses, and regulatory
certainty.
11:32:56 AM
REPRESENTATIVE DRUMMOND asked whether the claims for territory
by other nations are for areas that potentially belong to the
U.S., but of which the U.S. has lost its opportunity to lay
claim due to non-ratification.
11:33:25 AM
MR. ANDREASSEN said, "I think that's the case." As part of the
UNCLOS treaty each nation maps its seabed and makes claims to
the Outer Continental Shelf. Russia and Canada will claim as
much as allowed by the rules of the treaty; furthermore, the
marine boundary with Canada is not settled and he said, "So I
think there are huge ramifications for not ratifying the Law of
the Sea." International activity in the Arctic also included
the Pacific Northwest Economic Region (PNWER) Arctic Caucus, - a
regional collaboration between Alaska, Yukon Territory, and the
Northwest Territories (NWT) - which he described as a great
effort between sub-national jurisdictions. Important to the
three stated jurisdictions are economic development, resource
development, transportation, and trade, and he urged the
committee to maintain awareness of all of the aforementioned
organizations and their impact on Alaska.
11:35:14 AM
CHAIR HUGHES assured the presenter that the committee will focus
on the Arctic at this and other meetings, and will do more than
maintain awareness.
MR. ANDREASSEN returned to the status of the implementation of
AMSA. One of the Arctic Council working groups is the
Protection of the Arctic Marine Environment (PAME) Working Group
which is tasked with following-up on AMSA. Slide 3 of the
PowerPoint presentation entitled, "Institute of the North
Alaska's Arctic Think-and-do Tank" listed issues related to the
implementation of the assessment, such as Automatic
Identification System (AIS) reporting, black carbon, tourism,
and oil spill response. The PAME Working Group is especially
important to economic development in Alaska, and the Institute
is coordinating its next meeting which will be held in Alaska
for the first time. In response to a question from
Representative Drummond, he said black carbon is air-borne oil
pollution from emissions. He continued to explain that although
the issues listed - for instance, ballast water management and
waste management - are not often discussed, AMSA is a huge
federal and international priority, thus the state may want to
have a role because of the services that will be needed to
support the increasing activity in the Arctic, especially in
coastal communities. For example, there is movement across the
Arctic towards satellite vessel tracking by AIS reporting which
uses beacons on ships. Alaska is leading the way in land-based
AIS systems through the tracking done by the Marine Exchange of
Alaska in conjunction with the U.S. Coast Guard. The Marine
Exchange can provide up-to-date information about vessels that
are located off the coast of Alaska, and will be an increasingly
important resource if it continues to receive state and
committee support.
11:39:18 AM
MR. ANDREASSEN further advised of the value garnered by the
state when leveraging federal support, and encouraged the
committee to be aware of federal priorities such as research and
mitigation efforts on black carbon, oil spill response, search
and rescue, and ballast water management. He observed that the
Marine Protected Areas designation, which is part of AMSA, is
currently being addressed by the PAME Working Group because it
will have huge implications on Alaska, depending on Alaska's
ability to influence the parameters of the designation. The
protected area designation will put additional use restrictions
on portions of coastal marine areas that are environmentally or
culturally sensitive, and he remarked, "... I just am using this
as an example of one of the things that [is] going on in the
international sphere that's going to have direct impact on
Alaska economic development." At the national level, the U.S.
released several reports and strategies on the Arctic last year.
The National Strategy report includes the following key
elements: advancing U.S. security interests; pursuing
responsible Arctic region stewardship; strengthening
international cooperation. As part of the stewardship aspect,
the report promoted Integrated Arctic Management (IAM) as a way
to balance development with the environment and cultural values.
Facets of IAM should be monitored as to how it affects Alaska's
interests by its "whole-of-government approach" to challenges
and opportunities. He suggested contacting the Alaska Arctic
Policy Commission (AAPC) for guidance on this issue. Also of
interest, the national strategy seeks a strong collaboration
with the State of Alaska on this and other matters.
11:43:03 AM
REPRESENTATIVE HERRON informed the committee the national
implementation plan for the national strategy was due 12/20/13.
The AAPC preliminary report will be delivered to the legislature
1/30/14 and there will be a presentation shortly afterward. He
said it is critical that all of the legislative committees
"think Arctic." Members of AAPC, and its commissioner, Mr.
Andreassen, are confident that because of the commission's six-
month long conversation with the [seat of the administration of
the federal government] in developing the implementation plan,
the plan will have "Alaska residents' flavor in it. And so we
think that's why the delay has been, is that they've taken to
heart some of our comments and hopefully, it made it through the
filters and the screens in the ... White House."
11:44:17 AM
MR. ANDREASSEN mentioned another facet of national activity, the
U.S. Coast Guard Arctic Strategy which is: Improving Awareness;
Modernizing Governance; Broadening Partnerships. In the realm
of economic development, this means a greater opportunity to
leverage existing national interest to support the state's
priorities, because the Coast Guard is a great ally for Alaska
and understands the challenges, the infrastructure deficit, and
the importance of the state. However, the Coast Guard needs
support on the national stage. He turned from national to local
activities, which are activities that can be instigated by
communities and boroughs. He said he was encouraged by the
movement between communities and regions from competition to
collaboration, especially in the Arctic; in fact, boroughs and
communities have begun to come together for their regional
mutual benefit. The North Slope Borough (NSB) and the Northwest
Arctic Borough (NAB) are working together on economic issues
and, along with the Bering Straits communities, are
collaborating on the search for more affordable energy. The
state has a role in supporting local and regional governments,
and additional Arctic policies are expected from each region
with the goal of connecting local and state priorities to the
national interest.
11:47:19 AM
CHAIR HUGHES asked how many Arctic economic summits have been
held by NSB and NAB.
MR. ANDREASSEN said at least one so far, and another is planned
by the leadership team communicating between the two boroughs.
WHPacific [engineering firm] may be participating in the energy
planning component. As an aside, he mentioned that the
Institute is working on the Bering Strait Communications Network
which will connect Alaskans with Russia and strengthen cross-
border communication. He returned attention to the Alaska
Arctic Policy Commission, noting that it was formed last year
and restated that it will issue its first report on 1/30/14
followed by a full briefing. There are certain broad themes
expected from the report; however, speaking as the commissioner
of AAPC, he suggested that AAPC can do more in the area of
economic development and opportunity; as a matter of fact, the
theme of economic development in the Arctic is a huge gap in
Arctic policy discussions, therefore, the state should continue
to emphasize this topic. In addition to support for AAPC and
its report, the state should prepare for the U.S. chairmanship
of the Arctic Council. The chairmanship rotates every two years
between Arctic nations and the U.S. will take the chair
beginning in May, 2015. U. S. Department of State Assistant
Secretary of State for Oceans and International Environmental
and Scientific Affairs Kerri-Ann Jones will be in Alaska in
February to meet with stakeholders in Anchorage, Juneau, and
Barrow, looking for "the themes of the U.S. chairmanship ...."
Alaska should host meetings and provide activities for the
delegations and "be a good partner for the state department and
others ..." because the chairmanship will put a spotlight on
Alaska and Alaska's Arctic. Further, encouraging the state
department and the working group heads of delegation to invite
State of Alaska experts to provide testimony is something "we
struggle with right now."
11:51:51 AM
REPRESENTATIVE HERRON agreed. He added that working groups
under the Arctic Council are important because of the
collaborative process, and Alaska needs to be represented under
any and all circumstances.
11:52:40 AM
CHAIR HUGHES asked Representative Herron whether the Arctic
Council - under Canada's chairmanship - has included
participation by Alaska legislators in working groups.
11:52:47 AM
REPRESENTATIVE HERRON explained that there are six working
groups and the PAME Working Group is meeting for the first time
in Alaska in Girdwood. In the past, representatives of the
executive branch have attended other working group meetings;
Representative Herron said he has been invited to attend the
PAME meeting with the Aleut International Association Permanent
Participants delegation on 2/11/14. He was unaware of any other
legislators who have attended a working group meeting.
11:53:56 AM
MR. ANDREASSEN, returning to preparations for the U.S.
chairmanship, opined it is important to increase Alaskans'
understanding of Arctic issues, and of how the Arctic Council
works, in order to influence its discussions. More broadly, the
chairmanship provides greater opportunities for cross-border
collaboration with Canada and Russia, thus the committee may
want to explore cross-border trade relationships, especially
opportunities to expand trade east to west. Last year, the
Institute hosted a public opinion poll, the results of which
were shown on slide 9. Over 50 percent of Alaskans have never
heard of the Arctic Council and are confused about Arctic
issues. Importantly, Alaskans think the group best suited to
address environmental issues in the Arctic is the state;
therefore, state agencies should use this opportunity to take a
strong leadership role. Finally, Alaskans felt the most
important issues in Alaska's Arctic are the environment and the
economy. Development and economic opportunity are needed, but
"we want it done right," so, as economic development is
broadened in the Arctic, there must be economic justification
for development activities. Mr. Andreassen turned to activities
hosted by the Institute, including the Circumpolar Policy Tours
to Norway and Iceland, and an upcoming tour to Finland to
further explore economic development and energy. The Institute
also hosted an Arctic Council project to create an inventory of
ports and airports in the eight Arctic nations, and hosted the
Arctic Energy Summit in Iceland. The Institute's experiences in
Iceland and Norway resulted in the following perspectives:
Iceland prioritized geothermal and hydroelectric (hydro) sources
of energy, and spent ten years to execute its comprehensive
plan. Iceland owns the energy infrastructure to ensure that all
of its residents have access to affordable energy, and that
industry in Iceland is able to export value-added products
because of the availability of affordable power. These are
lessons applicable to Alaska, especially those related to
affordable energy. In Norway, a similar investment and equity
interest was made in infrastructure and in development projects.
Norway exports its non-renewable oil and gas resources and
develops its renewable resources for domestic use. He concluded
that both nations have focused on building regulatory capacity
to make sure that development projects advance quickly.
11:59:54 AM
MR. ANDREASSEN returned to the Arctic Energy Summit, at which
eight nations discussed their similar Arctic energy challenges.
Two lessons pertinent to Alaska were the critical need to invest
in its infrastructure - and thereby in its people - and the need
to invest in value-added opportunities, as opposed to solely
continuing to export raw resources. Complete information on the
Institute's Arctic Council project to assess ports and airports
can be found on the web site, Arcticinfrastructure.org,
including the location of the marine and aviation infrastructure
in all eight nations within the Arctic, and a final report. Of
particular use to the committee is the map of Arctic
infrastructure [slide 15], which showed that Alaska has more
airports than any other nation in this jurisdiction. However,
he asked, "Do we have the right aviation infrastructure in the
right places to take advantage of the right opportunities?"
Looking at the marine infrastructure, he noted that none of the
ports are deep-water ports that are necessary for response
capacity. In comparison, at this time Russia has less, but is
currently building eight search and rescue stations along the
northern sea route as it is Russia's first priority to have a
northern trade route open and safe. In fact, the biggest
justification for projects that are challenging to develop
economically is to create [projects related to] search and
rescue and oil spill response. If Alaska can say that it can do
this safely, "I think it's a green light for anything from
offshore drilling to mining development to increased shipping,"
he said. Slide 16 was a short list of topics specifically
related to work by the committee, the first of which was
strengthening response capacity that, in turn, can act to create
jobs and increase community and social development. Further
topics were: workforce development, a review of UNCLOS, an
understanding of the proposed [binding international framework
known as the Polar Code] under consideration by the
International Maritime Organization, and discussion of the U.S.
federal statute Merchant Marine Act of 1920, known as the Jones
Act. Mr. Andreassen relayed that other Arctic nations,
including Finland, believe that the Jones Act is an impediment
to the development of Alaska's Arctic. Other challenges to
economic development are regulatory uncertainty, and the lack of
competitive advantages, with the exception of the state's
strategic location for defense and search and rescue. Although
there is increased activity in the Arctic, "a lot of it is going
to bypass the state. Our role is to make sure that it bypasses
the state safely, and I think that there's an opportunity for
investment ... to be the responders." Not to bypass the state
is increased resource development such as mining and offshore
and onshore oil and gas, and the opportunity for the export of
resources out of Alaska's Arctic.
12:06:46 PM
MR. ANDREASSEN then called attention to some of the Institute's
upcoming activities [slide 16]. He closed by encouraging the
committee to think about the workforce of the future and
economic development - in terms of jobs for Alaskans - related
to Arctic policy. The potential workforce needed in the Arctic
is not often discussed; however, workers will be needed in
careers from ice navigation to marine mammal observers, oil
spill prevention, emergency responders, and search and rescue.
In fact, Alaska's long experience working in the Arctic, the
University of Alaska (UA), and the Alaska Vocational Technical
Center (AVTEC) are assets with which to build a workforce.
12:08:09 PM
CHAIR HUGHES asked whether the Institute is in contact with UA
and AVTEC regarding workforce development on the aforementioned
careers.
MR. ANDREASSEN said UA has researched the needs of a marine
workforce, but not as a workforce related to the Arctic, and not
with enough focus on opportunities for coastal communities. In
further response to Chair Hughes, he said the Week of the Arctic
is 10/6-10/10, and is held in Nome, Kotzebue, and Barrow, and
the Promise of the Arctic focuses on maritime operations in
Alaska's Arctic. The latter event is held in Seattle in May and
is co-hosted by the Institute. As an aside, he acknowledged
that the Pacific Northwest could benefit more from Arctic
development than Alaska.
12:10:10 PM
REPRESENTATIVE DRUMMOND toured AVTEC last summer and was
fascinated by its marine industry section. She said AVTEC has
terrific instructors and extolled the realism of its ice
navigation training simulator system.
12:11:46 PM
CHAIR HUGHES said the Arctic is the next frontier for Alaska and
the nation.
12:13:16 PM
ADJOURNMENT
There being no further business before the committee, the House
Economic Development, Trade and Tourism meeting was adjourned at
12:13 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Jan 28_2014 - Institute_of_the_North_in_the_Arctic - House EDT.pdf |
HEDT 1/28/2014 11:15:00 AM |
Arctic Policy |