Legislature(2017 - 2018)BARNES 124
03/28/2018 01:00 PM House RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| HB399 | |
| HB173 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 399 | TELECONFERENCED | |
| + | HB 173 | TELECONFERENCED | |
| + | TELECONFERENCED |
+
ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
March 28, 2018
1:03 p.m.
MEMBERS PRESENT
Representative Andy Josephson, Co-Chair
Representative Geran Tarr, Co-Chair
Representative John Lincoln, Vice Chair
Representative Harriet Drummond
Representative Justin Parish
Representative Chris Birch
Representative DeLena Johnson
Representative David Talerico
MEMBERS ABSENT
Representative Mike Chenault (alternate)
Representative Chris Tuck (alternate)
Representative George Rauscher
COMMITTEE CALENDAR
HOUSE BILL NO. 399
"An Act disallowing a federal tax credit as a credit against the
corporate net income tax; repealing a provision allowing the
exclusion of certain royalties accrued or received from foreign
corporations for purposes of the corporate net income tax;
repealing the reduced rate for the alternative tax on capital
gains for corporations; repealing an exemption from filing a
return under the corporate net income tax for a corporation
engaged in a contract under the Alaska Stranded Gas Development
Act; and providing for an effective date."
- HEARD & HELD
HOUSE BILL NO. 173
"An Act establishing the Alaska Climate Change Response
Commission; relating to the powers and duties of the Alaska
Climate Change Response Commission; establishing the climate
change response fund; and relating to the surcharge on oil
produced in the state."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 399
SHORT TITLE: CORP. TAX: REMOVE EXEMPTIONS/CREDITS
SPONSOR(s): FINANCE
02/23/18 (H) READ THE FIRST TIME - REFERRALS
02/23/18 (H) RES, FIN
03/28/18 (H) RES AT 1:00 PM BARNES 124
BILL: HB 173
SHORT TITLE: CLIMATE CHANGE COMMISSION
SPONSOR(s): JOSEPHSON
03/10/17 (H) READ THE FIRST TIME - REFERRALS
03/10/17 (H) STA, RES, FIN
04/11/17 (H) STA AT 5:30 PM BARNES 124
04/11/17 (H) Heard & Held
04/11/17 (H) MINUTE(STA)
05/04/17 (H) STA AT 3:00 PM GRUENBERG 120
05/04/17 (H) Heard & Held
05/04/17 (H) MINUTE(STA)
05/09/17 (H) STA AT 3:00 PM GRUENBERG 120
05/09/17 (H) Moved CSHB 173(STA) Out of Committee
05/09/17 (H) MINUTE(STA)
05/10/17 (H) STA RPT CS(STA) NT 2DP 3DNP 2NR
05/10/17 (H) DP: WOOL, KREISS-TOMKINS
05/10/17 (H) DNP: BIRCH, KNOPP, JOHNSON
05/10/17 (H) NR: TUCK, LEDOUX
05/15/17 (H) RES AT 1:00 PM BARNES 124
05/15/17 (H) -- MEETING CANCELED --
05/17/17 (H) RES AT 1:00 PM BARNES 124
05/17/17 (H) -- MEETING CANCELED --
05/31/17 (H) RES AT 1:00 PM BARNES 124
05/31/17 (H) -- MEETING CANCELED --
03/19/18 (H) RES AT 1:00 PM BARNES 124
03/19/18 (H) <Bill Hearing Canceled>
03/28/18 (H) RES AT 1:00 PM BARNES 124
WITNESS REGISTER
BRODIE ANDERSON, Staff
Representative Neal Foster
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced HB 399 on behalf of
Representative Foster, co-chair of the House Finance Committee,
sponsor.
BRANDON SPANOS, Deputy Director
Tax Division
Department of Revenue
Juneau, Alaska
POSITION STATEMENT: Answered questions relevant to HB 399.
MICHAEL WILLIAMS, Revenue Audit Supervisor
Tax Division
Department of Revenue
Anchorage, Alaska
POSITION STATEMENT: Answered a question relevant to HB 399.
JEREMY LITTELL, Research Ecologist
US Geological Survey (USGS)
Department of Interior Alaska Climate Science Center
Anchorage, Alaska
POSITION STATEMENT: During the hearing of HB 173, provided a
PowerPoint presentation entitled, "Climate 101 for Alaska."
MICHAEL BLACK, Director
Department of Community Infrastructure Development
Division of Environmental Health and Engineering
Alaska Native Tribal Health Consortium (ANTHC)
Anchorage, Alaska
POSITION STATEMENT: During the hearing of HB 173, provided a
PowerPoint presentation entitled, "Effects and Adaptation To
Climate Changes in Alaska."
JOEL NEIMEYER, P.E., Federal Co-Chair
Denali Commission
Anchorage, Alaska
POSITION STATEMENT: During the hearing of HB 173, provided a
PowerPoint presentation entitled, "Denali Commission."
JAY FARMWALD, Director of Programs
Denali Commission
Anchorage, Alaska
POSITION STATEMENT: Addressed a question during the hearing of
HB 173.
CHRIS ROSE, Executive Director
Renewable Energy Alaska Project (REAP)
Member, Climate Action for Alaska Leadership Team
Anchorage, Alaska
POSITION STATEMENT: Testified during the hearing of HB 173.
DAVIN HOLEN, PhD, Coastal Community Resilience Specialist
Alaska Sea Grant Marine Advisory Program
Assistant Professor, College of Fisheries and Ocean Sciences
University of Alaska Fairbanks (UAF)
Fairbanks, Alaska
POSITION STATEMENT: During the hearing of HB 173, provided a
PowerPoint presentation entitled, "Climate Impacts to
Subsistence Economies & Community and Regional Adaptation
Planning."
NIKOOSH CARLO, Senior Advisor
Climate and Arctic Policy
Office of the Governor
Juneau, Alaska
POSITION STATEMENT: Provided a PowerPoint presentation
entitled, "Alaska Climate Change Strategy," during the hearing
of HB 173.
ACTION NARRATIVE
1:03:23 PM
CO-CHAIR ANDY JOSEPHSON called the House Resources Standing
Committee meeting to order at 1:03 p.m. Representatives
Josephson, Tarr, Birch, Parish, Talerico, Johnson, and Lincoln
were present at the call to order. Representative Drummond
arrived as the meeting was in progress.
HB 399-CORP. TAX: REMOVE EXEMPTIONS/CREDITS
1:04:59 PM
CO-CHAIR JOSEPHSON announced that the first order of business
would be HOUSE BILL NO. 399, "An Act disallowing a federal tax
credit as a credit against the corporate net income tax;
repealing a provision allowing the exclusion of certain
royalties accrued or received from foreign corporations for
purposes of the corporate net income tax; repealing the reduced
rate for the alternative tax on capital gains for corporations;
repealing an exemption from filing a return under the corporate
net income tax for a corporation engaged in a contract under the
Alaska Stranded Gas Development Act; and providing for an
effective date."
1:05:02 PM
BRODIE ANDERSON, Staff, Representative Neal Foster, Alaska State
Legislature, introduced HB 399 on behalf of Representative
Foster, co-chair of the House Finance Committee, sponsor. He
said HB 399 is the culmination of work to address foregone
revenue and to provide the State of Alaska with the ability to
potentially capture new revenue. To provide a brief history on
how the bill came to be introduced, he noted that in 2014
legislation was passed that required both the Department of
Revenue (DOR) and the Legislative Finance Division, Legislative
Agencies and Offices, to create a report on indirect
expenditures and the amount of foregone revenue not captured by
the State of Alaska. The first indirect expenditure report was
submitted in 2015 [entitled, "2015 Legislative Finance Indirect
Expenditure Report"]. This report identified a list of indirect
expenditures within the Department of Revenue that should be
terminated. Last year during the fiscal year 2018 (FY18) budget
process the House Finance Subcommittee for the Department of
Revenue reviewed these indirect expenditures and recommended the
House Finance Committee offer legislation that eliminates these
indirect expenditures.
MR. ANDERSON explained HB 399 would repeal certain credits and
exemptions that are recommended for termination in both the 2015
indirect expenditure report and last year's FY18 budget
subcommittee. He said the indirect expenditures that would be
repealed in [HB] 399 were selected for repeal for the following
reasons: the indirect expenditures did not meet legislative
intent, had limited or no usage, or their conforming purpose has
changed. The following indirect expenditures would be repealed
by HB 399: federal tax credits, foreign royalty exclusions, a
reduced rate for capital gains, and credit associated with the
Alaska Stranded Gas Development Act. According to the fiscal
note before the committee, he continued, the combined total of
the potential new revenue is up to an estimated $6.9 million.
1:07:43 PM
MR. ANDERSON provided a sectional analysis of HB 399. He said
Section 1 would amend Alaska Statute (AS) 43.20.021(a) by
amending the current section with conforming language that
removes the list of federal credits as eligible items against
Alaska corporate income tax liability.
MR. ANDERSON stated Sections 2 and 3 would amend AS 43.20.145(c)
and (d), respectively, by amending those current sections with
conforming language in the Affiliated Groups section, removing
the reference to the subsection on foreign royalty payments as
eligible for Alaska corporate income tax liability.
MR. ANDERSON explained Section 4 is the repealer section of the
bill. He said this section would repeal the following statutes:
AS 43.20.021(c), which is the reduced rate in capital gains; AS
43.20.21(d), which is the eligibility of federal tax credits for
Alaska corporate income tax liability; AS 43.20.036(a), which is
the eligibility of federal foreign tax credit for Alaska
corporate income tax liability; AS 43.20.036(b), which is the
eligibility of federal investment credit for Alaska corporate
income tax liability; AS 43.20.042, which is the eligibility of
federal special industrial incentive investment credit for
Alaska corporate income tax liability; AS.43.20.144(g), which is
the exemption for Alaska corporate tax liability for entities
participating in contracts related to the Alaska Stranded Gas
Development Act; AS 43.20.145(g), which is the Stranded Gas Act
exclusion; and AS 43.20.145(b)(3), which is the foreign royalty
exclusion.
MR. ANDERSON said Section 5 is uncodified law, the applicability
clauses. Sections 1, 2, 3, and portions of 4 would be subject
to the effective date, which is Section 6, and which would add a
new section making the effective date for this legislation as
January 1, 2019.
1:11:46 PM
REPRESENTATIVE BIRCH offered his understanding that the genesis
of HB 399 is the indirect expenditure report assessment. He
asked what the net result is of this in addition to getting rid
of some tax credits. He further asked why [these tax credits]
were had in the first place - for example, whether they were
incentives or inducements for certain behavior and whether the
State of Alaska will lose something by eliminating them.
MR. ANDERSON replied that many of the indirect expenditures were
created at the time the tax code was created. Many of them were
legislative intent to create a specific behavior. Since their
creation they maybe haven't lived up to the expectation of
inciting that behavior for corporations within Alaska.
1:12:49 PM
BRANDON SPANOS, Deputy Director, Tax Division, DOR, stated the
2015 indirect expenditure report tried to answer that specific
question on each individual expenditure. The report tried to
detail whether the indirect expenditure was meeting what its
intent was, if DOR knew what the intent was. He explained the
federal tax credits were adopted by reference and they were
given a specific rate that was similar to the tax rate prior to
adopting [the state's] new structure in 1970. So, basically,
corporations were already getting that and [DOR] continued to
adopt it. He added he hasn't gone back and listened to those
hearings and therefore doesn't know if there were any other
specific reasons.
REPRESENTATIVE BIRCH inquired whether there has been any
consultation with those who would be impacted by this and
whether the feedback has been adverse.
MR. ANDERSON answered that at this time the only true outreach
would be the creation of the 2015 Legislative Finance Indirect
Expenditure Report and discussions throughout policy committees
and committees to discuss whether indirect expenditures should
be removed. Regarding who is impacted, he said DOR did submit a
letter. Particularly in 2016, he continued, 273 beneficiaries
for a total of $1.4 million participated in claiming federal tax
credits against their Alaska corporate income tax liability.
1:15:17 PM
REPRESENTATIVE PARISH observed the change in revenue anticipated
for the Alaska Stranded Gas Development Act is $0. He requested
this be spoken to.
MR. SPANOS responded the credits were sunset through statute.
He said 1994 was the last date that [companies] could have an
expenditure that would create a credit and [companies] could
carry it forward no later than 1999. This is really just
cleanup language, he continued, in that it would remove credits
that no longer exist.
REPRESENTATIVE PARISH surmised this part of the bill is what
falls under the House Resources Standing Committee's purview.
Since this part is just conforming language, he said, he would
just as soon pass the bill on to the House Finance Committee.
MR. ANDERSON replied that because of the Alaska Stranded Gas
Development Act component in HB 399 he was not surprised the
bill received a House Resources Standing Committee referral to
answer that portion of the question.
REPRESENTATIVE PARISH noted the intended purpose of [the foreign
royalty exclusion] was to encourage foreign investment in
Alaska. However, he said, this exclusion has had the unintended
consequence of corporations transferring certain assets like
patents to overseas subsidiaries, paying royalties for their
use, and then excluding 80 percent of those expenses from
income. He asked how much of the total fiscal impact of this
portion would be captured by closing this troubling loophole.
MR. ANDERSON drew attention to the fiscal note, page 2, change
in revenue estimates, item 2 on foreign royalties, and said DOR
states it could be a potential of $1.7 million.
1:18:35 PM
REPRESENTATIVE PARISH inquired whether it is accurate to say
that that suggests the vast majority of these monies are
foregone by the state essentially to incentivize domestic
companies sending assets overseas or giving them to overseas
holding companies and then paying fees for their use.
MR. SPANOS responded they could be legitimate royalties and not
necessarily a transfer of U.S. assets to gain that benefit; it
could be some other asset that was already overseas. Is a
multi-national corporation, he said, the corporation pays
royalties to a foreign subsidiary or a foreign parent and would
receive a benefit of an exclusion of 80 percent of those
royalties. It's unusual for a state to take that position, he
added.
REPRESENTATIVE PARISH asked whether it would be correct to say
that it does create a positive incentive for sending such assets
overseas.
MR. SPANOS answered yes DOR has seen that happen.
REPRESENTATIVE BIRCH thanked Mr. Spanos and said he found the
information that Mr. Spanos referenced.
1:20:14 PM
CO-CHAIR JOSEPHSON opened public testimony on HB 399.
1:20:25 PM
MICHAEL WILLIAMS, Revenue Audit Supervisor, Tax Division,
Department of Revenue (DOR), at the request of Co-Chair
Josephson described his position at DOR. He said he specializes
in corporate income tax, so he is the principle party for
enforcement of these statutes as they currently exist and would
be the principle party for enforcement of these statutes should
they change.
1:21:27 PM
CO-CHAIR JOSEPHSON closed public testimony after ascertaining no
one wished to testify.
CO-CHAIR JOSEPHSON held over HB 399.
HB 173-CLIMATE CHANGE COMMISSION
1:22:10 PM
CO-CHAIR JOSEPHSON announced that the next order of business
would be CS FOR HOUSE BILL NO. 173(STA), "An Act establishing
the Alaska Climate Change Response Commission; and relating to
the powers and duties of the Alaska Climate Change Response
Commission."
1:22:19 PM
The committee took a brief at-ease.
1:23:00 PM
CO-CHAIR JOSEPHSON, speaking as the prime sponsor, explained it
is not his intent to advance HB 173, but he wants to talk to the
committee about the legislation. The bill before the committee
is a version from the House State Affairs Standing Committee
although he has prepared a [proposed] committee substitute (CS),
Version M. The reason he is disinclined to advance the bill is
that in October 2017, Governor Walker created a climate change
panel and he doesn't want to compete with that panel or distract
from that panel's good work. In reviewing HB 173, including
Version M, there are some things he would like to talk to the
administration about that are somewhat different. They are
different on the margins. The administration had several
hundred thousand dollars to operate its climate action team.
CO-CHAIR JOSEPHSON explained Version M, would add a 1 cent
conservation surcharge to the existing surcharge in the
prevention account, increasing that account to a full 5 cents.
There is an additional 1 cent [surcharge] in the response
account. The thinking behind the legislation was that a climate
change commission needed some source of funding to have an
office, and to establish itself, and to use seed money
effectively to then try to obtain other grants and other
additional funding.
CO-CHAIR JOSEPHSON stated that in addition to the financing
difference the other principle difference with the governor's
team is the makeup. Version M of HB 173 would include a number
of the governor's cabinet and that can be true under the
governor's plan as well. So, there are stylistic differences.
He said he wants to use Version M merely as a talking point on
the margins to talk about how this legislation is somewhat
different than what the governor has conceived. He would like
to adopt Version M as the working document to use it as a
talking point but not to move it forward.
1:26:15 PM
CO-CHAIR TARR moved to adopt the proposed committee substitute
(CS), Version 30-LS0163\M, Radford, 3/16/18, as the working
document.
1:26:34 PM
REPRESENTATIVE BIRCH objected.
CO-CHAIR JOSEPHSON noted the State Affairs version would create
a commission without any funding source. Version M would add a
funding source. Another significant difference is that at the
end of Version M, pages 8-9, there is transition language which
references the wish of the bill that in the event that the
governor's team was dissolved, primarily, for example, he didn't
wish it to continue or he was no longer governor, this bill
would come into effect. So, it is designed to keep a climate
change panel moving forward in the absence of a governor's
climate change strategy or [Climate Action for Alaska Leadership
Team].
1:27:44 PM
CO-CHAIR JOSEPHSON opened invited testimony related to HB 173.
REPRESENTATIVE BIRCH stated this is wrongheaded. He said the
billion-dollar issue on oil tax credits keeps being kicked down
the road. This climate change bill would add another penny per
barrel of oil, which is basically another tax, and the co-chair
has said he doesn't intend to act on this. Given the
committee's time is finite, he urged the committee focus on
something it intends to act on.
CO-CHAIR JOSEPHSON responded that the bill Representative Birch
wishes to hear is going to be heard in 48 hours. While he
doesn't intend to advance his bill, he continued, the committee
is about to hear experts testify on climate change and many
Alaskans do intend to act on the climate change problem.
REPRESENTATIVE JOHNSON inquired whether the committee is going
to vote on the objection.
1:29:55 PM
The committee took a brief at-ease.
REPRESENTATIVE DRUMMOND reminded committee members that the
village of Newtok just received $1 million from the federal
government to move the village. The federal government has
accepted that climate change is real and is impacting Alaskan
communities, she said. It is important to adopt the [proposed]
CS and get on with it.
1:30:51 PM
A roll call vote was taken. Representatives Drummond, Parish,
Lincoln, Tarr, and Josephson voted in favor of adopting the
proposed committee substitute for HB 173, Version 30-LS0163\M,
Radford, 3/16/18, as the working document. Representatives
Birch, Johnson, and Talerico voted against it. Therefore,
Version M was before the committee by a vote of 5-3.
1:31:53 PM
CO-CHAIR JOSEPHSON said committee members would use Version M to
the extent that members wish as a talking point with testifiers.
REPRESENTATIVE JOHNSON noted she is on the House State Affairs
Standing Committee which heard the bill's previous version. She
asked whether the funding provision of Version M is the only
difference between the two versions.
CO-CHAIR JOSEPHSON confirmed that is one difference and said the
other is the transitional language in Version M on pages 8-9.
REPRESENTATIVE TALERICO offered his understanding that what the
governor put together was done via administrative order (AO) in
October [2017].
CO-CHAIR JOSEPHSON answered correct. It is AO 289 signed on
October 31, 2017. He began the invited testimony.
1:33:15 PM
JEREMY LITTELL, Research Ecologist, US Geological Survey (USGS),
Department of Interior Alaska Climate Science Center, provided a
PowerPoint presentation entitled, "Climate 101 for Alaska." It
is the role of USGS to provide scientific information
underpinning climate change and make climate information more
available to those who might use it. He said he was asked to
provide the committee with a brief overview of current climate
st
change and expected changes in the 21 Century.
MR. LITTELL moved to slide 2 and said there are three main
messages to take away. First, weather observations/data over
the past 40-plus years show that Alaska has already warmed about
two and a half times faster than the average for the whole
planet roughly 7.5 degrees Fahrenheit (F) per century over the
last 45 years in contrast to about 3 degrees F for the planet as
a whole. So, the rate of warming in the high latitudes and in
the far north is greater than that in the rest of the U.S. and
the rest of the planet. Second, by the late 2080s the annual
average temperature in the state is projected to increase by 7
degrees F in Southeast Alaska and by 14 degrees F on the North
Slope. Third, precipitation is likely to increase over the
entire state and in all seasons, but those increases won't be
sufficient to offset the temperature increases, resulting in
much increased permafrost thaw, shorter snow season, and longer
fire seasons.
1:35:41 PM
MR. LITTELL, responding to Co-Chair Josephson, provided his
background. He said his background and training is in climate
science and the way that climate impacts terrestrial ecosystems
like forests and other vegetation. He has spent the last 15
years working on problems of climate impacts, usually those that
are relevant to some set of stakeholders, for example climate
effects on forests and working with the U.S. Forest Service
(USFS) to better understand what that might look like or species
of concern to the U.S. Fish and Wildlife Service (USFWS). He
deals with a lot of climate data and spends lots of time working
with climate projections and how to make them more robust.
MR. LITTELL addressed slide 3 depicting a temperature graph by
Rick Thoman of the National Weather Service. He said the graph
includes the station data over the entire state of Alaska. The
graph shows the changes in temperature from 1925-2016, the most
recent completed year for which the data has been verified.
Each black dot on the graph, he explained, represents a year
average annual temperature for the state as a whole. From 1925
to the mid-1970s there is a considerable amount of variability
year to year, which is also the case going forward from there.
The red line on the graph, he further explained, indicates the
trend that is statistically detectable during that period. From
1925-1976 there is no statistically significant trend, but after
the mid-1970s the trend becomes increasingly evident and is
statistically significant for any period of time for which the
data justify that analysis. The rate of change is roughly
seven-tenths of a degree F per decade since the mid-1970s, which
is twice the global average. He noted the graph depicts
observations, not modeled data. It is an aggregate or an
average over all of the stations in the state for which the
quality control procedures have justified the work.
1:38:57 PM
REPRESENTATIVE TALERICO pointed out that today's technology is
different than that of 1925. He therefore asked whether all of
the measurements are taken from consistent points over the time
frame of 1925-2016.
MR. LITTELL replied the number of stations increased in the late
1940s to early 1950s and there were decreases later as older
stations were decommissioned. But, for the most part, over this
period of record, this analysis relies on the subset of stations
that have the best record. There are more of them in the latter
period and there are differences in the instrumentation that has
been used over time, so the technology used to measure these has
changed. The U.S. historic climate network from which a lot of
these stations are taken goes through quite a controlled
process. For example, sometimes stations in the past would get
moved and that is only detected if someone wrote down that the
station was moved or increasingly now it is detected more by
looking at comparisons to other stations. Most of this
information is consistent to the time period, but more stations
did come on line in the middle of the century.
1:40:47 PM
MR. LITTELL turned to slide 4 and stated there are other lines
of evidence in Alaska, we don't have to rely just on temperature
to understand that things are changing around us. It is evident
that glacier area and volume are decreasing, particularly in
Southeast and Southcentral Alaska, but also in the far north.
Sea ice extent seasonally is decreasing, with this year being an
example of that in Western Alaska in the Bering Sea. Permafrost
is thawing, and the seasonal active layer is deeper. Fire area
burned is also increasing. All of these have robust science
underpinning them and have been concluded repeatedly in the
published literature. He further stated that the global and
th
regional historical 20 Century temperature record cannot be
explained without considering both human drivers, (primarily
increases in greenhouse gasses in the atmosphere) and natural
variability. These impacts can therefore be expected to
continue as greenhouse gas concentration continues to increase
in the atmosphere.
MR. LITTELL brought attention to slide 5, a map of Alaska
showing the rate of temperature change for each of the state's
climate divisions from 1970-1999 relative to the global average.
For example, the North Slope rate of change is 2.6, which means
this area is warming at 2.6 times the global average for the
period 1970-2016. In Southeast, Southcentral, and the Aleutians
the rates of change are slower. The Interior rate of change is
in between. But averaged over the state it is over 2 degrees F
change relative to the global average. The rate of change is
much faster in Northwestern and Northern Alaska than it is in
Southcentral and Southeast.
1:43:19 PM
REPRESENTATIVE LINCOLN asked why the Arctic is warming faster
than the rest of the globe.
MR. LITTELL replied there are two main reasons and many little
reasons, but to answer the question he will address only the two
main reasons. The first main reason is that going northward,
the length of the snow cover season is longer. As snow cover is
decreased the rate of heat transfer to the ground is increased.
Snow reflects light in the visible spectrum so there is less
surface warming. Without snow it is darker so there is more
absorption of heat and it warms faster than would otherwise be
expected. The second main reason is that with the mechanisms of
climate change and how they influence the planet and the
atmosphere as a whole, there is a greater rate of heat transfer
from the equator to the poles. Energy is basically moved more
efficiently from the equator to the poles, which results in a
faster rate of change at the high latitudes than at low or mid
latitudes.
1:44:52 PM
MR. LITTELL displayed slide 6, a map of Alaska showing the
expected change in annual average temperature in F for each of
the state's climate divisions for the years 2070-2099 as
compared to the years 1970-1999. These numbers are lower in the
lower latitudes and higher in the higher latitudes. An increase
st
of 14 degrees F [in Northern Alaska] is expected by the late 21
Century. This is from five different global climate models that
have been shown to perform well over the Arctic and Alaska.
This is work on projections has been done in conjunction with
partners at the University of Alaska Fairbanks (UAF). The
changes for all of Alaska's climate divisions are quite large
relative to the historical averages.
MR. LITTELL moved to slide 7 and discussed the percent increase
in precipitation that is expected for the years 2070-2099. He
noted that the darker the blue on the map, the larger the
expected percent increase in precipitation. He pointed out that
there is a larger percent increase in precipitation is expected
in Northern and Interior Alaska than in Southcentral, the
Aleutians, or Southeast. With a warming climate in Alaska the
precipitation increases are projected in all seasons on average.
The increase in summer is not enough to offset the increased
evaporation that is driven by the temperature increases. So,
for example, despite the increase in precipitation the fuels
available to fires will likely not be any less available than
they are now, and evidence indicates they will likely be more
available.
MR. LITTELL displayed slide 8, a map of Alaska depicting the
[expected] changes in April 1 snowpack for the years 2070-2099.
He explained the colors on the map represent decreases (reds) or
increases (blues) in the April 1 snowpack as a function of the
temperature and precipitation that occur between October and
March. A pronounced decrease in the snow cover season [is
expected], he noted, even as snow cover in the middle of spring
is increasing. In some of the highest parts of the Arctic, [the
expectation is for] a longer snow-free season and more snow due
to the increased precipitation. However, he continued, [the
expectation for] Southeast, Southcentral, and Western Alaska is
for substantial decreases [in the snowpack] from as small as
10-20 percent to as great as 60-80 percent in Southeast and
Southcentral coastal areas.
1:47:55 PM
REPRESENTATIVE DRUMMOND inquired about the meaning of "PAS
above the color key on slide 8.
MR. LITTELL responded "PAS" stands for "precipitation as snow,
which is a percentage of the fraction of water that comes out of
the sky as snow. This depicts [the change] in PAS as a percent,
he explained. A 100 percent decline in PAS means it all becomes
rain; a 60 percent increase in PAS is assumed to be available in
snowpack in April. No accounting is made for melting, he noted,
it is just the maximum potential snowpack.
REPRESENTATIVE PARISH drew attention to slide 3 depicting the
increase in Alaska temperature and asked what the probability
value (p-value) is that this trend is chance.
MR. LITTELL answered there are two different probabilities - one
for the flat red line and the other for the rising red line that
starts in 1976. He said the flat line indicates a very small
probability that it is anything other than a flat line; a
statistically significant trend cannot be fit through that, so
it is flat. For the rising red line, he stated, the probability
is less than 5 percent that it is not a positive trend.
REPRESENTATIVE PARISH noted villages in Alaska are falling into
the ocean and Alaska is losing a great deal of coastline every
year. He inquired what the likelihood is that will increase and
whether the trend will move north.
MR. LITTELL replied that the rate of thaw on the coastal margins
of Alaska, and particularly Western Alaska and Northwestern
Alaska, would very likely continue under these projected
scenarios. As coastal areas that previously had very little
thaw experience increased temperatures and increased seasons
during which they can thaw, that can be expected to increase as
well so it would move up the coast.
1:51:29 PM
REPRESENTATIVE PARISH asked how far north Mr. Littell thinks
that that will extend by 2070.
MR. LITTELL responded he is not an expert in permafrost and
coastal erosion and would have to get back to the committee with
an answer.
REPRESENTATIVE PARISH [said that wasn't necessary.]
1:52:58 PM
MICHAEL BLACK, Director, Department of Community Infrastructure
Development, Division of Environmental Health and Engineering,
Alaska Native Tribal Health Consortium (ANTHC), said ANTHC has
been looking at climate change as it relates to communities,
community health, and community infrastructure, and in this
presentation, he will discuss the highlights of that
involvement.
MR. BLACK turned to slide 4 and said ANTHC is first trying to
increase its ability to observe the changes that are going on
and the consortium has seen those that have been mentioned. The
consortium is attempting to respond to those changes because its
interest is the health of rural residents, in particular, and of
Alaska Natives, and the changing of the environment is impacting
them. He said the consortium is also concerned because it has
built infrastructure to support communities, such as health
clinics, water and sewer principally, and other types of
infrastructure to improve the public health, and those are being
impacted as well. The consortium hopes to adapt some of its
designs and construction techniques to improve the resiliency of
that infrastructure.
MR. BLACK moved to slide 5 and stated ANTHC is aware things are
changing in Alaska. As seen by [the pictures] on the slide, he
continued, these changes include increased numbers of fires in
the Interior; permafrost melt, which is impacting lots of
different infrastructure and increasing erosion rates along the
western coast; flooding; and a general change in vegetation and
in the nature of the natural world.
MR. BLACK displayed slide 6 and said ANTHC's first action was
taken in 2009 when it established the Center for Climate and
Health. The center's purpose is to observe the connections
between climate changes, food security, disease, behavioral
health, injuries, and water security in rural Alaska, all of
which impact public health.
MR. BLACK addressed slide 7, noting that over just a few years
the Center for Climate and Health has identified a number of
changes and impacts on individual Alaskans and households as the
climate warms, especially in certain regions of the state. He
said the changes greatly involve the subsistence foods that most
individual households within communities depend on. Changes and
impacts also include contagious diseases, respiratory health
issues, food safety, infrastructure, and allergies.
1:58:05 PM
MR. BLACK turned to slide 8 and related that ANTHC has created a
local environmental observer (LEO) network to better observe
those changes. A computer network allows individuals at various
locations around the state to report observations of what they
believe to be anomalies, something out of the usual. These
observations are put together to try to take a comprehensive
look at how Alaska is changing.
MR. BLACK moved to slide 9 and stated that the photograph is of
a massive thermokarst along the Selawik River in Northwest
Alaska and is an example of what is being seen. He said this
thermokarst resulted when the ice failed to bind the soil
together and when it warmed to a critical point a mass of soil
was released that ended up in the river. Thermokarsts are being
seen all across Northwestern Alaska, he added, not just along
the Selawik River. This impacts health in large part because
people depend upon surface waters for a source of drinking water
as well as for navigation, he explained. It is becoming
increasingly difficult to get barges up rivers and consequently
trade costs are increasing because of having to rely on more air
transport of freight material and food items.
MR. BLACK displayed slide 10 and pointed out that changes are
also being seen within the environment of houses. To save money
homeowners have tightened up their houses [which keeps] airborne
particulates and other pollutants in the house, which is
exacerbated by bad stoves. He allowed this cannot be tied to
climate change because a warming environment would suggest that
not as much heat is needed. However, he said, all these houses
are being impacted by melting of the permafrost. Houses are
starting to tilt, cock, and in some cases lose their integrity.
Showing slide 11, he noted that a typical connection for a water
and sewer system is through an arctic box that is attached to
the home. Because of differential settling from the permafrost,
the pipes are pulling away from the buildings themselves,
ripping open the insulation and allowing the pipes to freeze.
MR. BLACK turned to slide 12 and described the impacts to
structural health, such as the tilting of water tanks. In some
cases, he said, thermosiphons have been installed in an attempt
to keep the ground frozen, one example being the Trans-Alaska
Pipeline System (TAPS). However, the thermosiphons are not
performing as well as they were originally designed to perform,
and failures are being seen in foundations, he continued.
Displaying slide 13, he stated that the broken [foundation] slab
is at the Noorvik water plant and that the pipes themselves are
being stressed because of the tilting of the foundation. Moving
to slide 14, he said the destruction is in Kotlik where an
October storm washed partially formed sea ice into the
community, which devastated the water and sewer systems.
Normally the sea ice would have been [fully] formed.
2:01:30 PM
REPRESENTATIVE DRUMMOND inquired whether the picture on slide 14
of damage in Kotlik includes a broken utilidor, which has the
utility lines running through it.
MR. BLACK confirmed the [broken] metal box in the picture is a
utilidor that carries water and sewer lines. He explained that
when the ice intercepted the utilidor it bulldozed it into the
community and tore apart all the piping.
MR. BLACK resumed his presentation. He moved to slide 15 and
said infrastructure must be adapted to the changing environment
or it will need to be replaced more frequently, so adaptation is
ANTHC's main concern. Extending the life of water and sewer
infrastructure will save billions of dollars, he continued. He
displayed slide 16 and explained the drawing depicts an
adaptation engineered and developed by ANTHC - a flexible pipe
that attaches to the home. Turning to slide 17, he said the
picture shows this flexible pipe as it attaches to a home in
Savoonga. The blue portion of the pipe is flexible, allowing
the pipe to move, within limits, independently of the house.
This is one way to avoid the damage seen in the Kotlik arctic
box picture, he added. This is being done increasingly in areas
where it is known that permafrost is going to be an issue -
Yukon-Kuskokwim (YK) Delta, Norton Sound, and Northwest Alaska.
2:03:24 PM
CO-CHAIR JOSEPHSON asked where this flexible pipe was found.
MR. BLACK answered that ANTHC itself engineered this by using a
plastic form of pipe as opposed to rigid metal. It allows for a
limited amount of flexibility and has performed much better than
ductile iron pipe, also known as arctic pipe, which has no flex.
The plastic pipe also allows the house to be approached in a
different way as opposed to perpendicular into the wall. As
seen [on slide 17], he continued, the pipe runs parallel to the
house, which increases its ability to move with the house.
MR. BLACK returned to his presentation. He drew attention to
slide 18 depicting another adaptation that ANTHC is currently
engineering. He said solar energy, the enemy of permafrost,
would be used as an electric source to run a chiller to keep the
ground below a water plant frozen. This has never been done
before but ANTHC is hoping to build this within the next couple
years. If this can be done, it would save many buildings that
will fail because of permafrost warming to the point where
foundations are lost.
2:05:08 PM
REPRESENTATIVE LINCOLN inquired whether current structures could
be modified with this or whether the structures would have to be
constructed new.
MR. BLACK replied it is designed to use existing thermopiles and
modify them simply by using the refrigeration from the chiller
to cool glycol lines that are wrapped around those thermopiles.
Adding more cold into the glycol going below the building allows
for refreezing of the ground as opposed to letting it warm up.
This modification, he noted, will be much cheaper than complete
re-building.
REPRESENTATIVE DRUMMOND surmised the thermopiles are labeled as
thermosiphons on slide 18.
MR. BLACK responded yes.
REPRESENTATIVE DRUMMOND further surmised they already exist.
MR. BLACK answered correct.
REPRESENTATIVE DRUMMOND offered her understanding that Mr. Black
is saying they would be powered by the solar energy that is
available in a community.
MR. BLACK replied yes. By using active chilling and by wrapping
the thermosiphons with a refrigerant tube, he explained, more
cold can be induced into the ground.
REPRESENTATIVE DRUMMOND returned to slide 17 and asked what
utilities are running inside that pipe.
MR. BLACK responded it is a water line only. He explained the
pipe size looks big, but that this is because of the insulation
and it is called an arctic pipe.
REPRESENTATIVE DRUMMOND observed that in addition to flexing the
blue section of the pipe looks like it can expand. She asked
whether it can also lengthen.
MR. BLACK confirmed the blue section can expand as well as flex.
As to whether it can lengthen, he said it will naturally [change
length] with warming and cooling and is designed to do that.
REPRESENTATIVE DRUMMOND surmised the inside pipe is much smaller
than the outside pipe so there is space for it to flex, stretch,
and shrink as well.
MR. BLACK answered correct.
CO-CHAIR JOSEPHSON inquired whether this is being done by Mr.
Black or by a team of engineers.
MR. BLACK replied ANTHC has a team of engineers. The chief of
engineering is responsible for research and development so that
ANTHC is innovating its engineering techniques instead of
remaining with how things have been done for the last 30 or 40
years. He said ANTHC realizes that under this changing
environment it has to rethink, redesign, and use different
materials in order to keep these systems functioning.
2:08:19 PM
CO-CHAIR JOSEPHSON asked whether there are patent opportunities
for ANTHC.
MR. BLACK responded yes.
CO-CHAIR JOSEPHSON further asked whether ANTHC is pursuing these
patent opportunities.
MR. BLACK answered yes, in various cases, with this case being
one case in which ANTHC is pursuing patents on that technology.
CO-CHAIR JOSEPHSON surmised that is an industry of sorts.
MR. BLACK replied ANTHC has used patents in the past, mainly
with the innovations in the health field, while this is
innovations in the built infrastructure field.
REPRESENTATIVE PARISH brought attention to the third bullet on
slide 15 regarding adapting infrastructure to climate change,
which states: "Compounding this shortened life over decades
adds Billions of dollars to preserving the sanitation utility.
Estimated to add $3-6 B (rebuilding) by 2030 for Alaskan
villages." He inquired whether this statement is in public
savings.
MR. BLACK responded correct. He noted the aforementioned
numbers come from a 2007 report by the Institute of Social and
Economic Research (ISER) for the University of Alaska.
REPRESENTATIVE PARISH presumed that if these same innovations
were to be used for private structures the overall savings
realized could be considerably higher.
MR. BLACK answered correct.
REPRESENTATIVE PARISH asked what the capital costs would be to
realize the $3-6 billion in savings.
MR. BLACK replied he cannot answer the question although he can
answer it on individual projects. He said he doesn't know that
there is a clear assessment of how much infrastructure is at
risk. While some examples are in his presentation, there hasn't
been a comprehensive look at the nature of infrastructure in
Alaska and how much of it is in a threatened situation. He said
he believes the estimates provided by [ISER] at that time were
of the total built water and sewer infrastructure in villages
and communities around the state.
2:11:17 PM
REPRESENTATIVE DRUMMOND pointed out that the $3-6 billion on
slide 15 is not a savings but is the cost of rebuilding these
utilities.
MR. BLACK responded correct.
REPRESENTATIVE DRUMMOND further pointed out that Anchorage has a
sewage treatment plant that may be in danger of needing to be
moved and will cost Anchorage upwards of $1 billion. She urged
people to keep in mind the cost of utilities in Alaska because
they aren't cheap, and they aren't free.
MR. BLACK returned to his presentation. Addressing slide 19, he
said modular water treatment plants are another adaptation that
ANTHC thinks has merit. The water treatment plant is built off-
site, he explained, and then taken to the community where it
remains moveable. Unlike traditional ways of building water
treatment plants where concrete is poured, and anchors put in,
these modular plants could be moved and, as such, would avoid
erosion and flooding issues that might otherwise jeopardize a
static asset. It also reduces the cost of producing these types
of plants, he added.
MR. BLACK turned to slide 20 depicting a portable alternative
sanitation system (PASS) being used in Kivalina. He stated
ANTHC has been pioneering this system and believes it has merit
for very small communities and communities threated by imminent
flooding and erosion. He said ANTHC is attempting to develop
this system as a way of providing a much-needed improvement for
un-served homes, those homes that are relying on honey buckets.
This would allow treated water to be brought to the home and
sanitation taken care of in a much healthier and easier way than
a honey bucket represents. Also, from the standpoint of climate
change, it allows for moving the system and doesn't require
attaching pipes to the home. He related that ANTHC believes
this system can be used in coastal communities threatened by
erosion and flooding. He further noted that last winter ANTHC
put in a few of these systems in the Interior. This system is
still being studied, he added, but it looks promising.
MR. BLACK moved to slide 21 and concluded his presentation by
noting that ANTHC is working with the Denali Commission on
helping the community of Newtok with some of its issues on how
to move to its new site.
2:14:51 PM
CO-CHAIR JOSEPHSON inquired where ANTHC gets its resources.
MR. BLACK answered ANTHC gets its funding resources primarily
from the Indian Health Service (IHS), the Environmental
Protection Agency (EPA), and the U.S. Department of Agriculture
(USDA). Those are the three primary funding federal agencies in
putting water, sewer, and other health facilities in to Alaska.
REPRESENTATIVE BIRCH thanked Mr. Black for his presentation and
said there is a lot to be proud of. He offered his agreement
with the principles of flexible, light, and moveable when
possible. The innovations are tremendous, he added.
REPRESENTATIVE LINCOLN brought attention to slide 18 regarding
thermosiphons pulling heat. He said it sounds like a heat pump,
which can function down to sub-freezing temperatures. He asked
whether there is any opportunity to capture some of that heat
out of the ground and pump it into the building.
MR. BLACK replied ANTHC uses heat pumps in some cases, but in
this situation not enough heat would be derived to justify it.
The beauty of this system is to pump as much cold as possible,
he continued, and he is unsure how much heat could be recovered.
In Southeast Alaska, ANTHC is using heat recovery from the
ocean. Further, ANTHC uses heat recovery quite a bit from the
power plants. Capturing heat from the power plant itself and
putting it into the water system, saves the local residents lots
of money in their water and sewer bills because 30-40 percent of
the cost of water and sewer has to do with heat, especially in
very cold regions like Representative Lincoln's.
REPRESENTATIVE PARISH asked how useful HB 173 would be to the
Alaska Native Tribal Health Consortium.
MR. BLACK responded that a dedicated revenue source that allows
these types of innovations would be quite useful because to pay
for this ANTHC must seek grants or use ANTHC revenue. There is
no specific place that can be gone to that says, "let's
innovate," so ANTHC must apply for each project independently.
For example, ANTHC is attempting to get community block grant
funding for the soil chilling innovation seen on slide 18. Most
times it is unknown whether ANTHC will be successful in getting
that money, he noted.
2:19:22 PM
JOEL NEIMEYER, P.E., Federal Co-Chair, Denali Commission, noted
he worked for the Indian Health Service (IHS) for 25 years,
mostly in rural Alaska, and for the last 8 years he has worked
as a civil servant with the Denali Commission. He applauded the
committee for taking up HB 173, and said not included in [a
letter from the Denali Commission to Representative Josephson,
dated 3/26/18, and signed by Mr. Neimeyer as Federal Co-Chair],
or the PowerPoint presentation, is that the U.S. Government
Accountability Office (GAO), a part of the legislative arm of
Congress and a federal agency he thinks is outstanding, released
a report on nation states that are addressing climate change.
In this report the GAO found that those nation states doing the
best and most good in responding to climate change were those
that had alignment between the executive branch and the
legislative branch. So, he said, he sees HB 173 in partnership
with the governor's office as a critical first step for the
State of Alaska to respond to climate change.
MR. NEIMEYER began his PowerPoint presentation entitled, "Denali
Commission." Turning to slide 2, he said the mission of the
Denali Commission is to identify gaps where other agencies are
not operating and try to fill them, and the commission tries to
complement, but not duplicate, the work of other agencies. For
example, he pointed out, Mr. Black talked about how IHS, EPA,
and USDA fund sanitation; therefore, the Denali Commission does
not work there. However, the commission found that other
agencies aren't working on sanitation energy efficiency and so
the commission stepped in and has been funding that. He related
that the late U.S. Senator Ted Stevens envisioned the Denali
Commission as being nimble and able to respond to issues of the
day. The commission has six commissioners who are non-federal
employees and Alaskans and they define where the commission's
investments will go. To date the Denali Commission has over
$1.2 billion in investments in rural Alaska matched by another
$900 million from other agencies and over 1,500 projects.
Virtually every community in rural Alaska has been touched in
one way or another by the Denali Commission.
MR. NEIMEYER moved to slide 3 and related that on 9/2/15 former
President Obama assigned the commission as lead coordinating
federal agency for village relocations and protect in place
solutions. "Coordinating" is a very important distinction, he
noted. The commission wasn't given any extra money, other
federal agencies were meant to implement. The commission has
invested several million dollars of its own funds to coordinate
activities such as plans and designs, pre-construction
activities that take time but don't cost much money. The
assignment was specific to the built infrastructure in rural
Alaska, he continued, how to address erosion, flooding, and
permafrost degradation that is occurring. The assignment also
was that the commission was supposed to follow under the Arctic
Executive Steering Committee, which was made up of many cabinet
level agencies and that was supposed to provide a whole of
government approach.
MR. NEIMEYER displayed slide 4 and provided a summary of
environmental threats. Regarding [coastal] flooding and wave
run-up, he stated that according to scientists the change is not
an increase in the magnitude of storms but that shore bound ice
is no longer occurring in the fall. Shore bound ice prevents
wave run-up and doesn't now occur until much later, and in some
communities not until January. Regarding river flooding, which
has been historic in rural Alaska, he said the difference is
permafrost degradation in some places and communities are
settling, so [during ice breakup] the threat of damming the
river is more imminent. Regarding erosion driven by permafrost
melting, he related that the Denali Commission sees this as
probably the largest risk in the western part of the state.
There are longer periods of time in which no freezing is
occurring and that accelerates the erosion.
2:26:05 PM
MR. NEIMEYER addressed slide 5 depicting a map of Alaska with 31
environmentally threatened communities. He noted the map comes
from two sources an erosion analysis of threatened communities
completed in 2008 by the U.S. Army Corps of Engineers (USACE)
followed by a GAO analysis that identified these 31 as having
the largest threat. Of those 31, four communities are facing
relocation: Shishmaref, Shaktoolik, Kivalina, and Newtok. Of
importance, he pointed out, is the way the Denali Commission
carries out its business. The commissioners from the beginning
gave the assignment to staff to work on the highest need
projects. If administrative capacity issues were preventing a
community from moving forward, staff's job was to figure out how
to remove those administrative capacity issues and address
highest need, not just issue funding to those who had the best
grant writer. In September 2015 the commissioners gave staff
very clear instruction to focus attention and resources on
flooding, erosion, and permafrost degradation in these 31
communities. Having said that, Mr. Neimeyer continued, the
commission is interested beyond that and has provided funding to
the University of Alaska Fairbanks (UAF) and USACE to do further
analysis on flooding and permafrost degradation; that work
should be done in summer 2018. He stated the commission sees it
as complementary to the erosion work done by the USACE and the
commission anticipates that after those three threats are
incorporated the number of communities will increase beyond 31.
MR. NEIMEYER turned to slide 6, depicting photographs of winter
storms with no shoreline ice in the villages of Kivalina and
Shishmaref. No shoreline ice is an issue because flooding can
occur, he reiterated. The commission is looking at studying
Kivalina and Shishmaref similar to a study done in Shaktoolik in
2008 or 2009 by the USACE, he said. In that study [slide 7],
the USACE analyzed a 100-year storm event and found that
virtually every building would be inundated by 2-3 feet of
water. Imagine if a storm washed in during the night at high
tide in November - virtually every one of the community's 200
people would be immersed in cold water. It is a very dangerous
situation, he continued, and this is what the signs are telling
will happen one day in Shaktoolik. Perhaps one day it will also
happen in Shishmaref and Kivalina, but unknown right now is what
the magnitude of run-up will be in those two communities.
2:29:31 PM
R. NEIMEYER moved to slide 8 which portrayed photographs of
river flooding and ice jams in Galena in May 2013. He then
displayed slide 9 with photographs of permafrost degradation.
He noted the movement of power poles, roads, and boardwalks in
the pictures caused by discontinuous permafrost or discontinuous
permafrost melting. He also reminded members of the structure
movement discussed by Mr. Black.
MR. NEIMEYER addressed an earlier question from a committee
member about what the savings would be if disaster mitigation
were done in advance. He said many studies done in the Lower 48
show a savings ratio of about 1:4 or 1:6. So, he continued, if
mitigation were done in advance instead of allowing the disaster
to occur, there would be about a 1:4 savings ratio.
MR. NEIMEYER discussed the table on slide 10 showing the Denali
Commission's investments to date. He stated that in 2016 and
2017 the commissioners put $7 million and $5 million,
respectively, into the Village Infrastructure Protection (VIP)
Program, for a total of $12 million in the two years prior to
this fiscal year. The Denali Commission was given no extra
funds by the previous administration to carry forward the VIP
Program, he pointed out, these funds were taken from the
commission's other programs, such as the energy, transportation,
and clinic programs. In 2018 the Alaska Delegation successfully
increased the commission's budget from $15 million to $30
million, he related, with the additional $15 million specific
for implementing solutions in the highest-need communities. In
his discussions with commissioners at a 1/29/18 meeting, he
continued, there was agreement that that meant Newtok and the
development of Mertarvik. Between 9/2/15 and 3/22/18 the Denali
Commission was acting as a lead coordinating agency, but as of
now the commission is an implementing agency with the community
of Newtok in the development of Mertarvik. The commission
remains a coordinating agency with all the other villages. In
2018, he added, a total of $21.34 million of federal investment
will be made into this issue.
2:32:37 PM
MR. NEIMEYER turned to slide 11 and provided specific comments
about HB 173. He said the slide depicts a flowchart in essence
[from climate change science to applied science to engineered
solutions and prioritized projects to funding and
implementation]. Regarding climate change science in Alaska, he
stated that the three threats of interest to the Denali
Commission are erosion, flooding, and permafrost degradation.
He reminded committee members of his earlier statements that the
USACE has worked on erosion and that the Denali Commission has
been working on flooding and has UAF working on permafrost
degradation, all of which provide important information about
trends and what is happening in the local community. That
information is then applied to the local community through two
or more opportunities, he explained. One opportunity is the
Hazard Mitigation Plan, which is a Federal Emergency Management
Agency (FEMA) document that the [Alaska Department of Military
and Veterans' Affairs (DMVA)] uses in working with communities
to identify risks to each community, including the built
environment. Another opportunity is vulnerability assessments.
These are more specific, such as assessment of a specific
infrastructure or community asset, which then enables the
identification of relative risks to that built environment.
From there it goes into prioritized projects based upon what is
more risky than others and then engineered solutions. For
example, he continued, if in a community it is unknown what is
going to happen with wave run-up, an analysis of wave run-up
will be done to figure out whether the lift station is more at
risk than the airport and more at risk than the school. Through
that analysis the highest need can be identified and then
resources assigned to that highest need. From there things move
into funding and implementation. As talked about by Mr. Black,
he added, adaptation is the key here and adaptations start at
the engineered solutions and prioritized projects.
2:35:07 PM
EPRESENTATIVE DRUMMOND inquired whether she is correct in
understanding that Hazard Mitigation Plans are a FEMA document
that is used by the Alaska Department of Military and Veterans
Affairs (DMVA).
MR. NEIMEYER replied correct, part of the DMVA is the Division
of Homeland Security and Emergency Management (DHSEM). The
staffs at FEMA and DHSEM are dedicated professionals who excel
at disaster response after the disaster comes in. However, he
said, the two agencies are not given many funds or authorities
on disaster mitigation, which is the up-front issue. The Denali
Commission sees that lots of effort should be placed on that up-
front disaster mitigation and strongly urges that consideration
be given to formally including the DHSEM in the [Alaska Climate
Change Response Commission (ACCRC) proposed in HB 173].
2:40:06 PM
MR. NEIMEYER returned to his presentation. He drew attention to
slide 12 and discussed the six comments about HB 173. Regarding
the first comment to enhance the federal to state relationship,
he said the federal government is late to this issue. He
applauded Governor Palin for standing up a climate sub-cabinet.
Many good things were accomplished by the state and there was
partnership with many federal agencies on that work. From his
observations, however, local federal employees stationed in
Alaska who understood the issues in play here did much of the
federal work. Perhaps there was some engagement with the
federal employees at the regional level, he continued, but from
his conversations with folks who work on those matters, the
policy makers and funders in Washington DC were not included in
the discussions. Therefore, when he says enhance the federal to
state relationship, he is saying there needs to be a clear
policy statement from the State of Alaska that says the state
wants a clear and intentional relationship with all branches of
the federal government in Alaska as well as regional offices and
headquarter offices in Washington, DC.
MR. NEIMEYER addressed the second comment on slide 12 to
articulate a village relocation policy. He said nowhere on the
state or federal level is there an express policy that moving
villages in rural Alaska is the policy. Many times, in
conversations in Washington, DC, [the Denali Commission] has
found the lack of this express policy to be a problem because
agencies that have existing authority to do work oftentimes
expect to be working in established communities that already
have [infrastructure], for example, a water and sewer
department. When moving an entire village, all these different
agencies are trying to work together at one time and the
authorities often do not match well. It is key in both Juneau
and Washington, DC, to articulate that it is important to
relocate the villages and if done timely, it can be done
efficiently, effectively, and at reduced cost.
MR. NEIMEYER moved to the third comment on slide 12, which asks
why FEMA and DHSEM are not engaged. He stated that in his
opinion climate change response is centered about disaster
mitigation, disaster response, and disaster recovery. Not much
funding and authority is extended to FEMA and therefore provided
downstream to the State of Alaska through the DHSEM on disaster
mitigation. He urged that strong consideration be given to
including the DHSEM in the [Alaska Climate Change Response
Commission (ACCRC) proposed in HB 173].
MR. NEIMEYER discussed the fourth comment on slide 12 to focus
on responding to climate change, not stopping climate change.
Often seen, he noted, are well-intentioned efforts to address
greenhouse gas emissions in rural Alaska. The Arctic is warming
at four times the rate as other locations, but the greenhouse
gas causing this warming is generated from high population
areas, not the Arctic. Stopping climate change is not something
Alaska can have an impact on, he said. It's a federal issue
that must be taken care of in Washington, DC. He advised that
including renewable energy or greenhouse gases in HB 173 would
be a distraction for the staff working on this. It invites
folks who are interested in those sectors to come in and make an
appeal for both time and resources when the real issue here is
disaster mitigation - how to respond in advance of a disaster.
MR. NEIMEYER spoke to the fifth comment on slide 12 that the
Denali Commission stands ready to collaborate on complementary
work with the [Alaska Climate Change Response Commission (ACCRC)
proposed in HB 173]. He urged consideration be given to that
and to specifically naming that in the bill. Prior to this
federal administration, he noted, senators and congressmen
identified the Denali Commission to be zeroed out and to go
away, but the Alaska Delegation has thwarted those proposals and
kept the Denali Commission in place. He said the reason given
by this administration for shutting down the Denali Commission
for 2018 and 2019 is any state that can give its citizens a
permanent fund dividend (PFD) doesn't need additional federal
resources. He offered his belief that the Denali Commission is
needed for complementing the work of the other federal agencies
in communicating back to the Climate Change Commission on what
the federal agencies can and cannot do. Therefore, he
continued, he encourages consideration of naming the Denali
Commission as part of the [ACCRC proposed in HB 173][sixth
comment on slide 12]. The commission doesn't have to be named
as a voting member, he added, it could be an advisory member.
The point is that the State of Alaska recognizes the Denali
Commission's work and wants to hear one-on-one what the
commission is doing and how the commission can coordinate the
federal government to State of Alaska activities. Mr. Neimeyer
concluded his presentation by directing committee members to the
aforementioned 3/26/18 letter, which provides additional
information.
2:44:18 PM
CO-CHAIR JOSEPHSON asked whether Mr. Neimeyer is in
communication with the new Climate Action for Alaska Leadership
Team and other groups such as ANTHC. He further asked whether
these groups are speaking to each other so that the work is
complementary.
MR. NEIMEYER replied a copy of his 3/26/18 letter was sent to
Nikoosh Carlo, [Office of the Governor]. The Denali Commission
has been collaborating with that group when invited. He said he
sees this as an opportunity for an intentional relationship
between the federal and state government. The Denali Commission
is very much coordinating with ANTHC. The work being done in
Newtok by ANTHC has been fully funded by the Denali Commission.
There are other efforts that ANTHC is working on as agent of the
Denali Commission and more will be forthcoming. The Denali
Commission anticipates that they will have a larger
responsibility with respect to the $15 million on implementing
solutions in Mertarvik community development. The Denali
Commission is aware of many of the folks and is collaborating as
best it can.
REPRESENTATIVE BIRCH recalled an effort 35-40 years to move the
larger part of Nulato up the hillside to higher ground above the
Yukon River and inquired whether that was successful. In regard
to how much energy, effort, and investment is put into areas
that are frequently subject to flooding, he further inquired
whether the Denali Commission has a policy for not investing in
areas that are subject to flooding and how the Denali Commission
looks at that from an investment standpoint.
MR. NEIMEYER responded that the cases of Nulato and Koyukuk are
similar in that it is known that during spring break-up and the
formation of ice dams, flooding will occur in the community. In
Nulato's case, he said, the Denali Commission was aware of that
issue when it funded a new clinic about 11-12 years ago - that
clinic had to be built up on the hillside. As the risk profile
is understood in communities, funders like Denali Commission and
others start making investments out of that floodplain and up
higher. That is where the local Hazard Mitigation Plans and the
vulnerability assessments are very important, he continued, and
it is also important to use that applied science. In the case
of Nulato, the Denali Commission has not worked on moving any of
the housing structures up the hillside. He recommended that if,
in time, the Denali Commission and the federal agencies along
with the State of Alaska decide there is a need to start moving
existing homes out of the floodplain, it be done by need. Those
communities with the greatest need/risk would be assigned
resources first, he explained, and from there resources would be
assigned sequentially to other communities by level of
need/risk. The Denali Commission hasn't gotten there yet in its
programming, he added, because most of the commission's work has
been focused on the relocation villages.
2:49:21 PM
CO-CHAIR JOSEPHSON recalled that when he lived in Kalskag for
three years during the early 1990s spring breakup would
typically flood parts of the village and would sometimes flood
into the dump. He noted that climate change wasn't talked about
as much back then and asked how to distinguish between spring
breakups that are not aggravated by climate change and are just
how things happen and have happened in the past.
MR. NEIMEYER answered that whenever the issue of flooding is
posed in Washington, DC, it just goes by everyone; they don't
catch the nuance of what Co-Chair Josephson just asked about.
He explained that the Denali Commission views this issue of
erosion, flooding, and permafrost degradation as more the
question of disaster mitigation. So, even though the spring
breakup and ice damming has been historical and will continue,
and even though it is not really driven by climate change, it is
a climate event. And when looking at climate events, he
continued, the Denali Commission believes that that should be
part of the portfolio of work that it does.
REPRESENTATIVE DRUMMOND noted that Mr. Neimeyer's 3/26/18 letter
is not in her committee packet or on BASIS and requested that it
be provided to members.
CO-CHAIR JOSEPHSON agreed to do so.
CO-CHAIR JOSEPHSON addressed Mr. Neimeyer's comment about
mitigation versus reduction relative to the carbon footprint in
Alaska. He agreed the comment is true given there are only
730,000 Alaska residents, but stated what strikes him as sad
about it is that there are Alaskans who want to reduce their
carbon footprint. He said he takes Mr. Neimeyer's point that
the 7 billion people outside of Alaska are more impactful by
far. He asked whether Mr. Neimeyer would like to add anything
about Alaskans' own behavior outside of the mitigation issue.
MR. NEIMEYER replied he stands by his comment that the impact on
climate change by Alaskans is miniscule. He said he encourages
Alaskans choosing to try to reduce their use of fossil fuels and
other drivers of climate change. But, he continued, that is an
individual commitment and while the state should encourage it,
it is not necessarily something that the State of Alaska should
assign resources and time to when it is a miniscule thing. If
that door is opened to the Alaska Climate Change Response
Commission, there will be a lot of time and effort and perhaps
even resources assigned to something that doesn't impact the
increasing temperatures in Alaska.
2:53:57 PM
JAY FARMWALD, Director of Programs, Denali Commission, stated
his belief that decreasing the carbon footprint in rural Alaska
in particular is certainly related to the cost of energy and
that is the key for rural Alaska. However, he said, that is a
different subject than climate change in his view. Other state
and federal agencies are working on trying to reduce the cost of
energy and hence improve the quality of life in rural Alaska.
These include the Alaska Energy Authority, Alaska Industrial
Development and Export Authority (AIDEA), and U.S. Department of
Energy. He offered his belief that Mr. Neimeyer is saying that
the issue of carbon footprint, also known as cost of energy,
should be addressed in a different forum versus the Alaska
Climate Change Response Commission at the risk of diluting the
true primary goals, mitigation primarily, of the new commission.
2:55:28 PM
CO-CHAIR JOSEPHSON recessed the House Resources Standing
Committee meeting to 5:55 p.m.
5:57:16 PM
CO-CHAIR JOSEPHSON called the House Resources Standing Committee
meeting back to order at 5:57 p.m. Representatives Josephson,
Tarr, Talerico, Johnson, and Lincoln were present at the call
back to order. Representatives Birch and Rauscher arrived as
the meeting was in progress.
CO-CHAIR JOSEPHSON resumed invited testimony related to HB 173.
5:58:05 PM
CHRIS ROSE, Executive Director, Renewable Energy Alaska Project
(REAP), Member, Climate Action for Alaska Leadership Team, noted
he is testifying on behalf of REAP, a statewide nonprofit
education and advocacy group for renewable energy and energy
efficiency, as well as on behalf of the governor's Climate
Action for Alaska Leadership Team. He stated climate change is
an issue that will be around for centuries and it is just the
beginning. Adaptation to what is changing, mitigation, and
research are all going to be a part of that.
MR. ROSE said REAP's role has been on the mitigation side. He
related that in 2007 REAP asked the legislature to consider
financing renewable energy projects in 2008 and a unanimous vote
created the Renewable Energy Fund. That fund has since used
about $259 million of state money to leverage more than $250
million of private and federal money to build more than 70
projects around the state, mostly in rural Alaska. The Alaska
Energy Authority estimates these projects are saving about 30
million gallons of diesel every year, he further related.
MR. ROSE stated REAP also worked hard in 2010 for passage of
House Bill 306 and Senate Bill 220. House Bill 306 set a goal
of getting 50 percent of the state's electricity by 2025 from
renewable resources. House Bill 306 also set a goal of
decreasing the per capita energy use in the state by 15 percent
by 2020. He said Senate Bill 220 included a provision to create
the Emerging Energy Technology Fund, which REAP help put
together with many different players, including the Denali
Commission, Alaska Energy Authority, the university, and others.
He said U.S. Senator Lisa Murkowski calls Alaska's remote
communities a natural laboratory for energy innovation. The
technology and adaptations to climate change being developed in
rural Alaska could be important to the billion people on the
planet with no electricity and 500 million who are on diesel.
MR. ROSE emphasized there is no more financing; the grant money
is over. While the governor has some money in his budget for
the Renewable Energy Fund, he said, in general the forward
movement of projects has to be financed. It has already been
seen that energy efficiency can be privately financed. In 2008
REAP asked the legislature to consider putting more money into
energy efficiency. That resulted in the legislature
appropriating over $600 million over the course of several years
to the Alaska Housing Finance Corporation (AHFC) to support
weatherization and rebate programs. More than 45,000 households
in the state took advantage of those programs, he reported. The
average savings for those 45,000 households, mostly on thermal,
has been 30 percent, a tremendous payback for the state, except
the state used grant money to do that.
6:02:02 PM
MR. ROSE stated REAP has been investigating the financing idea
for some time. Over the last year and a half REAP has been
particularly interested in the green bank concept that is now
being used by other states and nations to finance clean energy,
which is essentially energy efficiency and renewable energy. In
the green bank concept, he explained, a little bit of state
money is used to leverage as much private money into investments
as possible.
MR. ROSE outlined why the green bank concept is important. For
example, he said, if someone went to Wells Fargo today asking to
borrow $10,000 to do weatherization, like what was done by those
45,000 households, Wells Fargo would say it doesn't understand
how those work. And, if Wells Fargo did give a loan, it would
probably say 10 percent interest to be repaid in 5 years. But
that doesn't work, he advised. Green banks would educate those
other bankers in the private sector that if they would just flip
these terms and allow people to pay back a 5 percent loan over
10 years the bank would still make money and would have a super
secure loan because people are going to be saving more money
every month.
MR. ROSE pointed out that other states have developed programs
to allow for unsecured loans for energy efficiency that are
through programs the green bank has developed. Most of the
money is coming from private banks, he said, because the private
banks now have been educated about how to do this. And, if the
private banker feels there is any risk, the state would de-risk
the project for the banker by putting a little bit of state
money into a loan loss reserve fund or by guaranteeing a portion
of the loan.
MR. ROSE specified that Connecticut has been very successful in
doing this. Connecticut's average leverage ratio in the first
six years has been 8:1, he reported, meaning that for every $1
Connecticut loaned, $8 was loaned from the private sector.
Within those first six years there was over a billion dollar's
worth of clean energy financing, mostly in energy efficiency.
He said REAP is hoping to develop this model and has flown the
vice president of the Connecticut green bank to Alaska a couple
times to testify before committees and meet with the mayor of
Anchorage and the governor. Mr. Rose added that he travelled to
Washington, DC, a couple weeks ago to meet with the Connecticut
green bank's vice president and that he is also working with the
New York green bank and the Coalition for Green Capital, both of
which are interested in these kinds of things and ensuring that
more green banks are developed.
MR. ROSE stated he agrees that the financing part must be done.
While a climate action team can talk about this and make
recommendations to the governor by September, this is an ongoing
problem, he stressed. Establishing the [Alaska Climate Change
Response Commission] makes sense because there must be a body
that takes this on and actually handles these issues.
Recommendations can be made, but there must be follow through
with action. Ten years ago, he said, he was on Governor Palin's
team and the team spent two years coming up with great
recommendations that got put on the shelf. Now 10 years later
the state is still in the position of having to act, so the
[Alaska Climate Change Response Commission] is really important
for that.
MR. ROSE related that REAP has over 80 organizational members,
including utilities, Native associations, Native corporations,
independent power producers, and businesses. He explained that
before this wide array of folks takes a stand to support a bill
it typically goes through a policy committee process and a board
vote. But, he continued, REAP hasn't done that on the element
of HB 173 that he thinks many of the committee members are
concerned with, which is the [proposed] per barrel surcharge.
He said REAP would have to discuss this provision of the bill as
an organization before saying it supports the provision.
However, he continued, the state needs to put money in this from
somewhere because the cost of adaptation is going to be far
greater than the cost of mitigation.
MR. ROSE said REAP sees a huge opportunity in renewable energy.
For perspective, he noted that in 1990 the average cost of wind
power in the U.S. was $.65 per kilowatt-hour, while in 2017 the
average cost of unsubsidized wind power is $.05. The cost of
solar is also about $.05 per kilowatt-hour, he continued, which
means both wind and solar in the Lower 48 are now competitive,
without subsidy, with coal and natural gas. The price of wind
power and solar keeps going down, he added, and is going to keep
going down [with] technology that is already happening. For
instance, electric vehicles are something to be aware of and
talking about. Right now, a Chevy Volt or Tesla Model 3 can be
purchased for about $35,000 before the $7,500 federal tax
credit, making them about the same price as any other car. This
is because the price of lithium ion batteries that fuel these
cars has come down fast, he explained, and the price is going to
keep coming down, so the price of those cars is going to keep
going down, which is a big deal.
6:08:13 PM
MR. ROSE advised the aforementioned is significant for Alaska
because there are nations and companies, such as Volvo, saying
that after 2018 they are no longer going to produce cars with an
internal combustion engine only; after 2018 they are going to be
making only hybrids and electric vehicles (EVs). Nations are
phasing out internal combustion engines and so are investors.
The reason is economics, he stated. When the same car can be
purchased for $35,000 in electric versus gas, it's a no-brainer
because even with high electric prices in the Railbelt the gas
car costs twice as much to operate. Mr. Rose outlined the math:
To go 200 miles, the range of an electric car, takes about 60
kilowatt-hours; at $.20 per kilowatt-hour the cost is $12.00.
For a gas car at 25 miles per gallon at $3.00 per gallon the
cost to go 200 miles is $24.00 or twice the cost. Many people,
he related, are expecting a real transformation in the
transportation sector very, very quickly. That will decrease
the demand for oil on the planet by about 30 percent, as oil
will still be used for ships and airplanes. A collapse in the
market for gasoline-powered cars could be seen within 5-10
years, he said. That will impact the State of Alaska and is
something to think about.
MR. ROSE spoke to mitigation, noting that he will be testifying
tomorrow before the House Special Committee on Energy on HB 382.
He said HB 382 is another attempt for the Railbelt utilities to
start working together on a consistent basis. There are six
independent utilities, which made sense when they were formed.
But now, with transmission lines and the Internet, there are six
utilities that are not planning together on a regional basis.
This is important for the whole state to consider, he counseled,
because overbuilding generation impacts everyone in the state.
Many experts believe overbuilding has been done in the Railbelt
due to the lack of planning. It means consumers in the Railbelt
are paying more for unnecessary generation and a lack of
transmission, he said. It also means that everyone who is on
power cost equalization (PCE) is going to get less support
because the idea of PCE is to equalize what it costs people in
the regions outside of the Railbelt for electricity with the
people who live in Juneau, Anchorage, and Fairbanks. Mr. Rose
stated HB 382 would create a system of regional planning, which
is commonsense for generation and transmission, [and would
create] region-wide reliability standards and interconnection
standards. That will go a long way to mitigating on the
electric side some of the greenhouse gas emissions in the state,
he continued, and, more importantly, it would save the State of
Alaska money.
MR. ROSE concluded by saying he is glad the committee is
bringing forth the idea of a commission that can act into the
future on all these things that are before the state.
6:12:05 PM
REPRESENTATIVE RAUSCHER asked where the number of 45,000 homes
comes from.
MR. ROSE replied it comes from the Alaska Housing Finance
Corporation (AHFC), which runs both the weatherization and the
rebate programs.
REPRESENTATIVE RAUSCHER asked if AHFC has published this number.
MR. Rose responded yes, it is in AHFC's reports on those
combined programs.
REPRESENTATIVE RAUSCHER inquired where Mr. Rose obtained the
figures for his statement that there will be a collapse in the
gas vehicle market in 5-10 years.
MR. ROSE responded it is an analysis many experts are looking at
and he would refer members to a PowerPoint presentation by
analyst Tony Seba. In this presentation, he related, Mr. Seba
points out that the cost curve of lithium ion batteries is
coming down so fast that it is driving along with it the price
of electric cars. Once [the price of] an electric car is on par
with an internal combustion engine car, and the cost to operate
the electric car is half or less than half that of a gas car,
consumers will go that direction. It will be an economic
decision to buy electric cars because it is cheaper.
Additionally, Mr. Rose noted, there are 2,000 moving parts in an
internal combustion engine car compared to 20 moving parts in an
electric car, which means electric cars are going to last a lot
longer and be easier and cheaper to maintain. Being said by Mr.
Seba and others, including the car companies that have announced
they are going to stop building combustion vehicles, is that
everything is pointing in this direction. If the business model
disruption of ridesharing like Uber and Lift is added on, it is
a perfect confluence because these cars with only 20 moving
parts are going to last 500,000 to 1,000,000 miles and so will
be used on a constant basis, unlike gas cars that are parked an
average of 95 percent of the time. With electric cars that will
be constantly used it will move toward a total transformation of
the transportation infrastructure, he continued, and it will be
so transformative that it will collapse the market.
6:15:01 PM
REPRESENTATIVE RAUSCHER asked why Mr. Rose used Connecticut.
MR. ROSE answered Connecticut is universally seen as the most
successful green bank due to its program uptake. For instance,
it is one thing to set up a green bank and set up these esoteric
programs and it is another to have lots and lots of people take
advantage of them and then pay the loans back. So [REAP] has
been very interested in how Connecticut has done that. They are
very interested in helping us. Bert Hunter, who is vice
president of the Connecticut green bank and who was in Alaska
last year, is willing to come back in another month at which
time conversations will be continued with folks in Alaska about
how something like that might be set up.
REPRESENTATIVE RAUSCHER inquired about the prediction for a 30
percent decline in oil demand in 5-10 years and whether this is
figurative or a guesstimate.
MR. ROSE replied they are international energy figures that are
based on what percentage of the oil market is used for small
cars and individual transportation, which is 30 percent. So, if
30 percent of the oil market goes to electric vehicles, that is
what would happen.
6:16:50 PM
REPRESENTATIVE BIRCH asked how long the batteries last.
MR. ROSE said that is a good question because it determines the
economics. He provided some anecdotes. He related that Kodiak
Electric Association (KEA) is 100 percent renewable electricity,
80 percent hydro and 20 percent wind. Darron Scott, [KEA's
[President/CEO], recently chose to replace the wind farm's acid
batteries with lithium ion batteries. In a conversation, Mr.
Scott said he now looks at batteries like he looks at oil
filters they filter the electricity and are a cost of doing
business and when they wear out, he recycles them. Mr. Scott
said he saves so much on the backend by not burning diesel with
the wind farm that it makes total [economic] sense. Mr. Rose
further related that the lithium ion battery in his personal
car, a 2002 Prius, was warranted for 100,000 miles at the time
of purchase and that battery is now at 250,000 miles. For the
new Chevrolet Volts and Tesla Model 3s coming out this year, he
continued, the life of the battery is not yet known. A lot of
smart people are betting on the technology lasting long enough
for it to be worth it. In a car where the drive train and
everything else lasts for 1 million miles, he added, it might be
worth replacing the battery one or two times if needed, just
like batteries are replaced in flashlights.
6:18:58 PM
CO-CHAIR TARR noted the issue of emissions from idling cars.
She shared her experience of attending a conference where the
participants were able to test drive electric cars that had no
emissions. She remarked about the big impact of no emissions on
climate issues.
MR. ROSE agreed and noted his Prius shuts down when stopped at a
red light. He related that Mr. Sepa talks in his presentation
about how much economically viable space is taken up in cities
by parking lots. For example, the amount of parking space taken
up in Los Angeles is the equivalent of three San Francisco's,
space that could be taken up with economic activity from
businesses that could be located in that space. Mr. Sepa states
in his presentation that this parking space won't be needed with
the ride sharing and constant moving of cars that will take
place with electric cars.
6:21:01 PM
CO-CHAIR JOSEPHSON inquired about other legislation that Mr.
Rose is tracking.
MR. ROSE replied [HB 347] for on-bill financing would be another
financing tool that would allow people to borrow money through
their utility to do [energy improvements] and then pay back
through their utility bill. Another way for financing energy
efficiency, but still in the implementing phase, is [HB 80,
Municipal Property Assessed Clean Energy Act (PACE), signed into
law 10/6/17]. He said SB 190 and SB 191, both energy efficiency
bills, would keep the momentum going particularly with the state
owning 5,000 buildings, because the state should be leading
here. In 2012, AHFC estimated the state's annual utility bill
to be $642 million, which was during high oil prices. Assuming
the state's annual utility bill for heating and electricity is
now $500 million, he continued, that is a significant portion of
the operating budget. The state taking the lead by making all
its buildings as energy efficient as possible would do several
things, he advised. It would create a ton of jobs and would
attract people to places that might not otherwise be attractive
[due to high energy costs]. It is very difficult to consider
doing any kind of business enterprise in rural Alaska when it
costs $.40 cents per kilowatt-hour after PCE and heating oil
costs $8.00 a gallon. He related that a question he likes to
ask people rhetorically to hear what they will say is, Why
wouldn't the State of Alaska have as its goal to be the most
energy efficient place on the planet?
6:23:37 PM
DAVIN HOLEN, PhD, Coastal Community Resilience Specialist,
Alaska Sea Grant Marine Advisory Program, Assistant Professor,
College of Fisheries and Ocean Sciences, University of Alaska
Fairbanks (UAF), began with slide 1 of his PowerPoint
presentation entitled, "Climate Impacts to Subsistence Economies
& Community and Regional Adaptation Planning." He noted he is
an anthropologist by training and has researched subsistence
economies in Alaska for over 20 years. In addition to working
for the College of Fisheries and Ocean Sciences, he said he
works with the Alaska Center for Climate Assessment and Policy
at the International Arctic Research Center, both of which are
collaborations between UAF and the National Oceanic and
Atmospheric Administration (NOAA). Dr. Holen explained he is
testifying via teleconference because he is in Nome attending
the UAF-sponsored Western Alaska Interdisciplinary Science
Conference where scientists and local residents are talking
about the same pressing issues that the committee is now
discussing.
DR. HOLEN turned to slide 2 and stated that wild resources are
important to all Alaskans, especially those living in rural
communities. He related that he came to the Alaska Sea Grant
Marine Advisory Program from the Alaska Department of Fish and
Game (ADF&G) where he was a research and regional manager in the
Division of Subsistence. He has worked with communities from
the Arctic to Southeast Alaska over his career and has found
there are many subsistence economies in Alaska, not just one.
Salmon are important statewide, he continued, as well as other
marine and riverine fish. The large land mammals and marine
mammals are also very important and in some areas of the state,
especially Western Alaska and the Arctic, marine mammals
constitute a high portion of the subsistence economy and come in
big packages. Small packages include birds and wild plants,
especially berries which residents spend considerable time and
effort harvesting.
DR. HOLEN moved to slide 3 and said that for his dissertation
work on the importance of fisheries to rural communities,
culture, and economies, he asked residents why they remained in
their communities. This simple question had complex answers, he
noted. Reasons to remain included family being important
because it is home as well as having access to subsistence foods
and the subsistence way of life. He pointed out that the slide
shows a subset of three of the thirteen communities in which he
asked the questions, but the overall the responses in all
communities were similar.
DR. HOLEN stated there are significant challenges to rural
lifestyles. Addressing slide 4, he explained that to understand
some of these challenges related especially to climate change is
part of a larger effort over the course of 18 months or so. A
collaboration of federal, state, university, and nonprofits held
coastal resilience workshops in communities in Western Alaska
and he did a similar workshop in Southeast Alaska. In Western
Alaska the latest climate science for the region was provided to
representatives of area tribes and communities, he said. The
conversation was turned around to get feedback on the greatest
issues impacting communities in the region.
6:27:29 PM
DR. HOLEN displayed slide 5 and outlined the key issues that
were identified by both scientists and residents: ocean
acidification, changes in seasonality, changes in hydrology,
permafrost thaw, and reduction of sea ice. Ocean acidification
is a looming threat, he said. Alaskan waters are cold and old
and make great carbon sinks affecting ocean chemistry. In
Alaska all the potential impacts of ocean acidification on
individual fish species are not understood. Residents face
challenges of seasonality for hunting large animals as well as
the shift in fisheries he pointed out. Weather impacts fish
drying times and if fish are harvested during prolonged periods
of rain the fish may spoil on the racks. Hydrology, or the
change of the water in terms of abundance, timing, and
temperature is a major issue and can be coupled with permafrost
thaw in the region. Permafrost thaw means that pan lakes found
throughout Western Alaska and the Interior are drying out and
steams are also lower in some areas. Residents worry about
streams for salmon migration and subsistence, he related. They
worry about waterfowl habitat from loss of marshlands. They
worry that freezing rain is creating ice cover over the lichen-
rich tundra that caribou may be unable to break through in the
winter. Travel on the landscape is difficult, he continued, too
little snow for snow machines and too much for all terrain
vehicles (ATVs). Further, he noted, lack of sea ice is a major
factor because it means lack of a buffer for late fall and
winter storms with wave action inundating communities, making it
unsafe for travel, and the loss of ice to hunt seals and walrus.
DR. HOLEN moved to slide 6 and stated that the International
Arctic Research Center in collaboration with the Arctic Research
Consortium of the U.S., and the National Weather Service have
been working on a project to observe sea ice changes using
satellites and local observations. He said the image on the
right of the slide shows wave action along the shore at
Shishmaref in February 2018 and pointed out that it should be
sea ice. The graph in the center, he noted, shows the ice-over
date of the Chukchi Sea, an area important for hunting walrus.
DR. HOLEN addressed the poster depicted on slide 7 and noted the
poster is a product of the Coastal Resilience Workshops in the
Bering Sea region to which 200 authors contributed. He
explained walrus are an important food source for the region and
residents are greatly concerned about accessing walrus. [One]
walrus equals around 800 meals, providing nutritious protein,
not to mention the benefits of passing on a cultural knowledge
that occurs during a walrus hunt. The poster also shows other
factors affecting food security in Western Alaska, such as
changes in habitat for large land mammals. This poster and two
others can be downloaded at adaptalaska.org, he pointed out.
DR. HOLEN displayed slide 8 and said Southeast Alaska issues
include warming air temperatures, snowfall variation, ocean
acidification, warming ocean temperatures, harmful algae blooms,
and changes in the forest environment. He noted these issues
are not as visible as they are in Western Alaska. Warming air
temperatures mean more rain and less snow in the winter.
Projections at the University of Alaska Southeast (UAS) show an
increase in precipitation in the winter in the future and this
impacts the forest environment. Already large areas of yellow
cedar are dying off, a species that is important for cultural
elaboration. Less snowpack also means less cold water available
in the spring and summer for salmon, he explained. Southeast
Alaska has rich shellfish resources, providing residents with
both subsistence and commercial fishing opportunities for crab
and other marine invertebrates. Warming water leads to harmful
algae blooms that spurt toxins that shellfish like clams absorb
and then humans absorb them.
6:31:08 PM
DR. HOLEN discussed slide 9. He said in September 2016 the
Central Council Tlingit and Haida Indian Tribes of Alaska in
cooperation with six tribes and Alaska Sea Grant held a workshop
in Ketchikan to discuss the latest science, mainly focusing on
the key cultural resources of salmon, shellfish, berries, and
yellow cedar. In this two-day workshop partnerships were formed
between state and federal agencies, nonprofits, and university
to initiate monitoring activities. He said Central Council is
now working on a region-wide adaptation plan that can act as a
template for communities in Southeast to devise their own plan
based on locally identified needs.
DR. HOLEN showed slide 10 and related that workshops like the
aforementioned have been taking place statewide leading to
vulnerability studies and adaptation planning efforts. He noted
that a recent report details the efforts that have occurred
statewide identifying climate data needs and barriers
communities face to facilitate their efforts and the map on the
slide depicts where some of these activities are occurring.
DR. HOLEN turned to slide 11 and reviewed efforts to address
some of the most pressing issues. He said a recent Alaska Sea
Grant funded project is covering some of the needs identified in
the Southeast workshop. The project will take existing stream
monitoring data collected by ADF&G and others, establish new
data collection sites in collaboration with tribes, and create a
model of potential climate impacts to salmon lifecycles in
Southeast Alaska streams. Two networks are building
collaborations to monitor and better understand harmful algae
blooms and ocean acidification, he added.
DR. HOLEN moved to slide 12 and said the coastal resilience
workshops in Western Alaska and the adaptation planning efforts
in Southeast Alaska led to Adapt Alaska collaborations. This is
headlined by a website launched in November [2017], which
articulates major challenges occurring in coastal Alaska, he
continued. It pairs these issues with innovative adaptation
solutions and provides links to resources specific to Alaska,
such as databases and tools. All the materials from the
workshops are housed here and efforts continue with planning
additional workshops in the Yukon-Kuskokwim (YK) Delta as well
as Kodiak. Most importantly, he stated, the website provides a
location for Alaskans to tell their stories of innovative
adaptation solutions and allowing Alaskans working on similar
issues to learn from each other. This component is under
development right now, he noted, and should be out shortly.
DR. HOLEN discussed the recommendations outlined on slide 13.
He related that from his experience working at ADF&G and the
university, one of the key challenges researchers have is
obtaining funding for their projects to match federal funding.
Such funding could lead to more research and collaborative
projects that involve communities and researchers working
together to tackle the challenges related to subsistence
economies and other climate topics. More tools are needed for
community specific climate data, he advised. Efforts are
ongoing at the university through the Scenarios Network for
Alaska + Arctic Planning (SNAP) at the International Arctic
Research Center, but this only covers a few communities as a
test case. Having spent many years involved in the regulatory
process, he continued, he knows the challenges many resource
managers face in amending hunting and fishing opportunities to
allow for residents to participate in subsistence activities
when the climate and weather are not cooperating with the
scheduled regulatory seasons. Perhaps there are some innovative
regulatory tools that could be developed, he suggested. The
Sitka Tribe and Alutiiq Pride Hatchery in Seward are working on
monitoring ocean acidification in the near-shore environment in
Southeast Alaska, lower Cook Inlet, and Prince William Sound.
The programs need long-term funding to understand trends and
should be expanded to areas such as Kodiak and the Arctic, he
stated. For salmon, more research and resources are needed,
especially in understanding stress on Chinook and other salmon
resources in the marine environment, something that local
residents often bring up in workshops. Finally, Dr. Holen said,
communities are taking great strides to increase their
resiliency and build food security for an uncertain future.
Everyone knows the cost of bringing food into rural communities.
Promoting local production, whether it is through greenhouses
and farms or habitat amelioration for wild resources will
provide for food security in communities across Alaska.
DR. HOLEN turned to slide 14 and concluded his presentation. He
said the Tyonek community garden project is a real model in that
it produces fresh produce through the summer for elder meals.
Produce is for sale in the community at much lower cost than
shipping it in and it produces jobs for students, he continued.
It involves the school and makes the kids proud of their work.
So much is produced that it is sent out of the community for
sale in Anchorage to help support the program, he added, and
more can be learned by going to the adaptalaska.org website.
6:36:56 PM
CO-CHAIR TARR requested Dr. Nolen to talk further about general
funds for state agencies and university faculty to match federal
funds. She offered her understanding that due to budget cuts at
the University of Alaska Anchorage (UAA), folks are no longer
seeking some of these grant opportunities, faculty has left, and
climate change research is being done by universities in North
Carolina, Iowa, and other states.
DR. HOLEN replied it is a real challenge because the university
has lost a significant amount of faculty. For example, his
program, the Alaska Sea Grant Marine Advisory Program, has lost
half its faculty in the last five years. This is continuing and
is causing a brain drain in which these researchers are moving
to other institutions. But, he noted, they still want to work
in Alaska and in many cases, they continue to work in Alaska
from other locations. To fill some of these gaps the university
has hired research faculty that almost entirely work on grant
funding. They are provided one or two months of funding from
the university and then they must seek additional funding. It
is quite the challenge to find that match, he added, it is often
50 percent of what the researcher is asking for. Dr. Holen
noted that he and his colleagues have passed over grants because
of this. Alaska is a big state, but also a very small state, he
continued, and many of the people working on these issues know
each other well and have created unique collaborations. He said
he has learned that in many places if an agency or university
couldn't get a grant, they would just pass it up. Often done in
Alaska to address these issues, he advised, is to put together
collaborations of very large teams to apply even for small
amounts of funding and everybody throws in a little bit.
6:40:46 PM
NIKOOSH CARLO, Senior Advisor, Climate and Arctic Policy, Office
of the Governor, informed the committee her role as a senior
advisor in the governor's office is to lead the development of a
climate policy that incorporates the expertise of state
departments and agencies, and to serve as a liaison to the
Climate Action for Alaska Leadership Team. Slide 1 pictured
climate change impacts such as increased wildfires, erosion,
melting glaciers, and ocean acidification, which she said
collectively threaten the social and cultural fabric of Alaska's
communities and the health, safety, and economic future of its
residents. In October [2017] Governor Walker signed
Administrative Order 289 which established Alaska's Climate
Change Strategy and the Climate Action for Alaska Leadership
Team. The leadership team has 21 appointed members who first
met December [2017], and who are tasked to develop
recommendations that are due to the governor by September 2018.
Dr. Carlo said the team has formed two working groups to review
the topics of mitigation and adaptation (slide 2). The topic of
mitigation includes the use of renewable energy, energy
efficiency, and other actions to decrease the carbon footprint
of the state and other entities (slide 3). The topic of
adaptation will be studied to determine how Alaska communities
respond to climate impacts and how to increase social,
environmental, and economic resilience (slide 4). Further, the
leadership team will form panels, one on science and research,
and one to evaluate oil and gas technical data and the effect of
industry on climate (slide 5).
6:45:18 PM
DR. CARLO continued to explain another category the team will
study is response to the present threats facing 31 communities
in Alaska by gathering data, planning, adaptation measures,
diversification, and obtaining funding (slides 6 and 7). Slide
8 listed visions that would address threats facing Alaska in the
future such as a stable fiscal plan and improved food security.
6:48:19 PM
CO-CHAIR JOSEPHSON inquired as to Dr. Carlo's previous
experience in Arctic policy.
DR. CARLO said she is from Fairbanks and Tanana and worked for
the U.S. Department of State on Arctic policy during the U.S.
chairmanship of the Arctic Council; prior to that she served as
executive director of the Alaska Arctic Policy Commission.
CO-CHAIR JOSEPHSON asked whether Dr. Carlo agreed that the
Climate Action for Alaska Leadership Team should involve federal
agencies such as FEMA and DHSEM.
DR. CARLO said she has been in contact with federal agencies
that are working on climate change in order to ensure federal
agencies are aware that Alaskans are threatened by climate
change now and will be in the future. In further response to
Co-Chair Josephson, she said she also communicates closely with
the Denali Commission.
CO-CHAIR JOSEPHSON asked for assurance that all of the related
organizations collaborate.
DR. CARLO gave an example of the leadership team cohosting a
workshop during which information was exchanged between state
and federal agencies.
6:52:00 PM
CO-CHAIR TARR encouraged the leadership team to include complete
cost estimates with its recommendations to the governor. For
example, in addition to the costs of moving a community, there
are additional costs to oil and gas development projects in the
northern region due to thawing permafrost and shorter building
seasons; also, ocean acidification will be costly to the fishing
industry.
DR. CARLO agreed.
6:54:28 PM
CO-CHAIR JOSEPHSON read from an article found in the
[Alaska/Anchorage Daily News] noting the cost of climate change
on Alaska's public infrastructure is estimated to be $5.5
billion in 2099 [document not provided]. He pointed out costs
are difficult to determine and urged the leadership team to
produce a credible document that reflects the reality of the
cost of climate change. Co-Chair Josephson then questioned
whether the leadership team needs funding at this time.
DR. CARLO said the team has the funding needed to complete its
mandate within the administrative order; however, long-term
funding would be helpful. She added, "Conceptually, I like the
idea of having a commission that is there for the long term and
is something that ... we can work on to develop and ... see the
recommendations that come through the leadership team into
reality."
CO-CHAIR JOSEPHSON asked about the team's meeting schedule.
DR. CARLO advised the team holds monthly meetings by
teleconference and on April 12, [2018], will meet for one day in
Fairbanks. She described her other responsibilities in the
governor's office.
6:59:24 PM
CO-CHAIR JOSEPHSON opened public testimony on HB 173. After
ascertaining no one wished to testify, public testimony was
closed.
HB 173 was held over.
7:00:24 PM
ADJOURNMENT
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 7:00 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB173 Version M.pdf |
HRES 3/28/2018 1:00:00 PM |
HB 173 |
| HB 399 Sponsor Statement 3.26.18.pdf |
HRES 3/28/2018 1:00:00 PM HRES 3/30/2018 1:00:00 PM HRES 4/2/2018 1:00:00 PM HRES 4/4/2018 1:00:00 PM |
HB 399 |
| HB 399 O 3.26.18.pdf |
HRES 3/28/2018 1:00:00 PM HRES 3/30/2018 1:00:00 PM HRES 4/2/2018 1:00:00 PM HRES 4/4/2018 1:00:00 PM |
HB 399 |
| HB 399 Sectional Sectional Analysis ver O 3.26.18.pdf |
HRES 3/28/2018 1:00:00 PM HRES 3/30/2018 1:00:00 PM HRES 4/2/2018 1:00:00 PM HRES 4/4/2018 1:00:00 PM |
HB 399 |
| HB 399 Fiscal Note-DOR-TAX 3.24.18.pdf |
HRES 3/28/2018 1:00:00 PM HRES 3/30/2018 1:00:00 PM HRES 4/2/2018 1:00:00 PM HRES 4/4/2018 1:00:00 PM |
HB 399 |
| HB 399 Additional Documents DOR Letter 3.26.18.pdf |
HRES 3/28/2018 1:00:00 PM HRES 3/30/2018 1:00:00 PM HRES 4/2/2018 1:00:00 PM HRES 4/4/2018 1:00:00 PM |
HB 399 |
| HB 399 Additional Documents CIT Sector Report FY 2017 3.26.18.pdf |
HRES 3/28/2018 1:00:00 PM HRES 3/30/2018 1:00:00 PM HRES 4/2/2018 1:00:00 PM HRES 4/4/2018 1:00:00 PM |
HB 399 |
| HB 399 Additional Documents - Indirect Expenditure Report Reduced Rate Capital Gains.pdf |
HRES 3/28/2018 1:00:00 PM HRES 3/30/2018 1:00:00 PM HRES 4/2/2018 1:00:00 PM HRES 4/4/2018 1:00:00 PM |
HB 399 |
| HB 399 Additional Documents - Indirect Expenditure Report Foreign Royalty.pdf |
HRES 3/28/2018 1:00:00 PM HRES 3/30/2018 1:00:00 PM HRES 4/2/2018 1:00:00 PM HRES 4/4/2018 1:00:00 PM |
HB 399 |
| HB 399 Additional Documents - Indirect Expenditure Report Federal Credits.pdf |
HRES 3/28/2018 1:00:00 PM HRES 3/30/2018 1:00:00 PM HRES 4/2/2018 1:00:00 PM HRES 4/4/2018 1:00:00 PM |
HB 399 |
| HB 399 Additional Documents - Indirect Expenditure Report Stranded Gas.pdf |
HRES 3/28/2018 1:00:00 PM HRES 3/30/2018 1:00:00 PM HRES 4/2/2018 1:00:00 PM HRES 4/4/2018 1:00:00 PM |
HB 399 |
| HB173 Supporting Document - Davin Holen Presentation 3.28.18.pdf |
HRES 3/28/2018 1:00:00 PM |
HB 173 |
| HB173 Supporting Document - Jeremy Littell 3.28.18.pdf |
HRES 3/28/2018 1:00:00 PM |
HB 173 |
| HB173 Supporting Document - Joel Neimeyer - Denali Commission presentation 3.28.18.pdf |
HRES 3/28/2018 1:00:00 PM |
HB 173 |
| HB173 Supporting Document - Mike Black Presentation 3.28.18.pdf |
HRES 3/28/2018 1:00:00 PM |
HB 173 |
| HB173 Supporting Document - Nikoosh Carlo Presentation 3.28.18.pdf |
HRES 3/28/2018 1:00:00 PM |
HB 173 |
| SB173 Sponsor Statement.pdf |
HRES 3/28/2018 1:00:00 PM SRES 2/12/2018 3:30:00 PM |
SB 173 |
| HB173 Fiscal Note GOV-CCC 4.10.17.PDF |
HRES 3/28/2018 1:00:00 PM |
HB 173 |
| HB173 Fiscal Note DOR-TAX 3.26.18.pdf |
HRES 3/28/2018 1:00:00 PM |
HB 173 |
| HB 399 Opposing Document - Letter in Opposition 3.28.18.pdf |
HRES 3/28/2018 1:00:00 PM HRES 3/30/2018 1:00:00 PM HRES 4/2/2018 1:00:00 PM HRES 4/4/2018 1:00:00 PM |
HB 399 |
| HB173 Supporting Document - Letter in Support 3.28.18.pdf |
HRES 3/28/2018 1:00:00 PM |
HB 173 |
| HB173 WSJ_Climate_McAleer_Opinion 4.2.18.pdf |
HRES 3/28/2018 1:00:00 PM |
HB 173 |
| Denali Commish Neimeyer Ltrs to HRES re HB173.pdf |
HRES 3/28/2018 1:00:00 PM |
HB 173 |