Legislature(2025 - 2026)BUTROVICH 205
02/14/2025 03:30 PM Senate RESOURCES
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| Presentation(s): Investing in Alaskans – Aidea 2025 Annual Update | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE RESOURCES STANDING COMMITTEE
February 14, 2025
3:30 p.m.
DRAFT
MEMBERS PRESENT
Senator Cathy Giessel, Chair
Senator Bill Wielechowski, Vice Chair (via teleconference)
Senator Matt Claman
Senator Forrest Dunbar (via teleconference)
Senator Scott Kawasaki
Senator Shelley Hughes
MEMBERS ABSENT
Senator Robert Myers
COMMITTEE CALENDAR
PRESENTATION(S): INVESTING IN ALASKANS AIDEA 2025 ANNUAL
UPDATE
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
RANDY RUARO, Executive Director
Alaska Industrial Development and Export Authority (AIDEA)
Anchorage, Alaska
POSITION STATEMENT: Presented Investing in Alaskans: AIDEA 2025
Annual Update
ACTION NARRATIVE
3:30:37 PM
CHAIR GIESSEL called the Senate Resources Standing Committee
meeting to order at 3:30 p.m. Present at the call to order were
Senators Kawasaki, Hughes, Claman, Wielechowski (via
teleconference), Dunbar (via teleconference) and Chair Giessel.
^PRESENTATION(S): INVESTING IN ALASKANS AIDEA 2025 ANNUAL
UPDATE
PRESENTATION(S): INVESTING IN ALASKANS AIDEA 2025 ANNUAL
UPDATE
3:31:13 PM
CHAIR GIESSEL announced the presentation: Investing in Alaskans:
AIDEA 2025 Annual Update.
3:31:47 PM
RANDY RUARO, Executive Director, Alaska Industrial Development
and Export Authority (AIDEA), Anchorage, Alaska, presented
Investing in Alaskans: AIDEA 2025 Annual Update
3:32:15 PM
MR. RUARO moved to slide [2]. He explained that AIDEA's mission
and purpose were two-pronged: the unemployment-to-jobs component
and the financing/bank component. He emphasized AIDEA's
commitment to its mission and purpose.
[Original punctuation provided.]
Mission and Purpose of AIDEA
To promote, develop, and advance economic growth and
diversification in Alaska by providing various means
of financing and investment.
3:32:59 PM
MR. RUARO moved to and narrated slide 3. He noted that Senate
Bill 153, [1961] was one of the first bills passed after
statehood:
[Original punctuation provided.]
ABOUT AIDEA
ALASKA'S DEVELOPMENT FINANCE AUTHORITY
AIDEA, and the precursor to AIDEA, have been investing
in Alaskans since 1961 to strengthen employment
opportunities and economic development.
Be it enacted by the Legislature of the State of
Alaska:
Article I
Organization of Development Corporation
Section 1. Purpose. The purpose of this Act is to
create an instrumentality of the state to develop,
stimulate, and advance the business prosperity and
economic welfare of Alaska and its citizens. This
shall be accomplished by providing critically needed
investment capital for development loans to encourage
and assist the wholesome development of new business
and industry in Alaska and to rehabilitate and expand
existing business and industry. By providing
development loans to all types of business activity,
whether of an industrial, agricultural, or
recreational nature, the economic stability of the
state will be strengthened, the employment
opportunities of its citizens enlarged, and their
standard of living and general welfare enhanced.
Senate Bill 153
Enacted by the Alaska State Legislature
Because investment capital was "critically needed" to
enable jobs and enhance general welfare
Approved April 24, 1961
3:33:46 PM
MR. RUARO moved to slide 4 and explained that the legislature
revisited Senate Bill 153, and passed House Bill 14 in 1967.
House Bill 14 is where much of AIDEA's organic statute was
derived, policy established and much of it remains today.
AIDEA's assets and management were separated from the
legislature, allowing AIDEA's real and personal property to grow
through its activities and be allocated by its board. The
[AIDEA] operating budget, however, remained subject to
legislative review:
[Original punctuation provided.]
ABOUT AIDEA
ALASKA'S DEVELOPMENT FINANCE AUTHORITY
Be it enacted by the Legislature of the State of
Alaska:
Sec. 44.61.140
(a) The real and personal property of the authority
and its assets, income, and receipts are declared to
be property of a political subdivision of the state
and together with any project financed under this
chapter and a leasehold interest created in a project
occupant or other person under this chapter, devoted
to an essential public and governmental function and
purpose,
House Bill 14
(4) The establishment of industrial and manufacturing
plants in Alaska is essential to the development of
the natural resources and the long term economic
growth of the state, and will directly and indirectly
alleviate unemployment in the state,
Approved April 4, 1967
3:34:59 PM
MR. RUARO moved to slide 5 and noted that AIDEA's mission
statement reflected a long-standing commitment to job creation
and employment opportunities, emphasizing the importance of
actions that generate jobs. He said this focus remains relevant
today:
[Original punctuation provided.]
AIDEA's
PURPOSE
AS 44.88.010 states that:
"The legislature finds, determines, and declares
that ? there exist areas of the state in which
seasonal and nonseasonal unemployment exists ? this
unemployment is a serious menace to the health,
safety, and general welfare, not only to the people
in those areas, but also to the people of the entire
state. ? the state lacks basic manufacturing,
industrial, ? and business enterprises ? necessary
to permit adequate development of its natural
resources and the balanced growth of its economy.
establishment and expansion of [these entities] are
essential to the development of its natural
resources and the long-term economic growth of the
state, and will directly and indirectly alleviate
unemployment in the state."
3:35:39 PM
MR. RUARO moved to slide 6:
[Original punctuation provided.]
WHY WE DO
WHAT WE DO
"Jobs help.
Jobs help a lot."
-Fred Sun, Tribal President
Native Village of Shungnak
[Video: Village elders prioritize the well-being of
future generations. Advocating for the Ambler road as
an opportunity for jobs, opportunities and choices.]
3:37:44 PM
MR. RUARO said he spends a fair amount of time in Alaska
villages and hears the message that jobs are critical for the
mental health and well-being of rural Alaskans.
3:38:20 PM
MR. RUARO moved to slide 7 and said the research bears out the
observations of the village elders:
[Original punctuation provided.]
SOCIAL AND HEALTH BENEFITS
OF JOBS AND COMMUNITY ACCESS
Jobs and access to communities have positive social
and health benefits particularly in rural Alaska
communities.
• "Suicide prevention researchers working in rural
Alaska Native villages offer a number of
recommendations for intervention, including
enhanced occupational and educational
opportunities to alleviate poverty, greater
access to mental health treatment services,
• "Inadequate opportunities for socioeconomic
advancement were seen as major contributors to
suicide, especially among Alaska Native men. ?"
(Alaska Native men 400 percent higher suicide
rate than national average)
• "Many Alaska Native communities are off the road
system and often lack local providers for
counseling or psychiatry services, requiring
community members to travel by airplane to a
distant location in order to see a physician or
counselor. ? These barriers prevent people in
crisis from receiving the help they need at the
time they most need it."
Citing: Beliefs about Causal Factors for Suicide in
Rural Alaska Native Communities and Recommendations
for Prevention, Transcult Psychiatry, 2022 February;
59(1): 78-92. Doi: 10.1177/1363461520963869
3:39:12 PM
MR. RUARO moved to and narrated slide 8, emphasizing the
significant difference between the unemployment rate and the
rate that would include people who had given up on finding
employment, reflected by the labor participation rate:
[Original punctuation provided.]
WHAT IS THE STATUS OF
UNEMPLOYMENT IN THE UNITED STATES?
The formal measure of "unemployment" is misleading.
It does not measure persons who have given up looking
for work.
Using "labor participation" as a measure:
• The labor participation rate is 62.5 percent in
the United States. Meaning nearly 4 in 10
Americans have given up hope of finding a job.
• This rate is just 2.4 percent better than "the
labor participation" during COVID years of 2020
and 2021.
[Graph titled: Civilian labor force participation
rate, seasonally adjusted, for the years 2004 through
2024.]
3:39:47 PM
MR. RUARO moved to slide 9. He noted that Alaska rates were
similar to nationwide rates and there had been some recovery
since covid:
[Original punctuation provided.]
UNEMPLOYMENT &
LABOR FORCE PARTICIPATION IN ALASKA
Labor Participation Rate for Alaska
• Labor participation rate in Alaska is a little
better than national average at 65 percent.
• Job scarcity is one reason rates are so high in
rural areas.
[Graph: illustrating the Labor Participation Rate for
Alaska, 1980 through the present.]
3:40:11 PM
SENATOR KAWASAKI noted the recent report by the Department of
Labor and Workforce Development highlighting increases across
the economy in non-resident hiring. He expressed concern about
the trend and asked whether AIDEA could offer insight or
suggestions.
3:41:01 PM
MR. RUARO concurred with the concern and emphasized the need for
better connections to the workforce, especially for youth. He
highlighted a successful project in Hughes where a local chief
organized 20 kids from three villages into a road crew,
showcasing the importance of leadership and community
engagement. He suggested partnerships with tribes, the State
Department of Labor, and the Workforce Investment Board to
engage youth in the workforce earlier, possibly even from middle
school. He acknowledged the complexity of the problem but
stressed the urgency of finding solutions to integrate local
youth into the workforce.
3:43:30 PM
SENATOR HUGHES asked whether AIDEA was looking at hiring
Alaskans for AIDEA projects.
3:43:56 PM
MR. RUARO noted that historic and cultural respect led AIDEA to
seek local residents to work as bear guards on the Ambler Road
He affirmed that as AIDEA developed projects they were always
considering the supply of workers and would always make the
effort [to hire Alaskans].
3:44:26 PM
SENATOR HUGHES asked whether the ability to hire Alaskans for a
project influenced the attractiveness of a project for AIDEA.
3:44:47 PM
MR. RUARO said [Alaska hire] was not a criterion that was
applied when deciding whether to fund a project. Financial
criteria and the merits of a project were the main
considerations, but AIDEA would look to include people near a
project and interested in it.
3:45:20 PM
SENATOR CLAMAN noted that [AIDEA] projects often involved
creation of infrastructure. He observed that the Alaska
workforce often lacked training to participate. He asked whether
AIDEA invested in job training programs to prepare the workforce
for opportunities other entities might create.
3:45:54 PM
MR. RUARO said AIDEA partnered with Department of Transportation
and Public Facilities (DOTPF) to use Statewide Transportation
Improvement (STIP) funds designated for job training and job
readiness.
3:46:39 PM
MR. RUARO moved through slide 10 and narrated slide 11:
[Original punctuation provided.]
AIDEA FISCAL YEAR 2024
FINANCIAL HIGHLIGHTS
$1.49 B NET POSITION
$52.8 M INCREASE IN NET POSITION
$65 M HIGHEST STATUTORY NET INCOME IN AIDEA HISTORY
$495 M AIDEA DIVIDENDS APPROVED CUMMULATIVE TOTAL
$20 M AIDEA DIVIDEND APPROVED FOR PAYMENT IN FY2026
[Bar Graph "AIDEA NET POSITION" for Fiscal Years 2020
- 2024]
[Bar Graph "AIDEA DIVIDENDS DECLARED" for Fiscal Years
2022 - 2026]
3:48:07 PM
MR. RUARO moved to and narrated slide 12:
[Original punctuation provided.]
AIDEA FINANCIAL
FY2024 HIGHLIGHTS
AIDEA Asset Balance
as of December 31, 2024 ($ Millions)
[Pie Chart: $1,719.1m divided as follows:
$532 Balance of Loans Financed
$178 Capital Assets & Construction Work in
Progress
$192 Accounts Receivable
$12 Other Assets
$345 Cash on Hand
$200* Pending Commitments by AIDEA Board of
Directors
$145 Net Amount
*Committed Projects
Loan Participation Program
• Alaska Hotel Group - $25m
• Stoneridge Shop LLC - $1.35m
• JT Investments Alaska LLC - $3.6m
Direct Finance
• Alyeschem LL - $70m
• HEX Cook Inlet - $50m
• AGDC - $50m
$46 Program Restricted Funds
$57 Project Reserve Funds
$357 Investment Funds
3:51:02 PM
SENATOR KAWASAKI noted that AGDC previously testified before the
committee that they were applying for $50 million from AIDEA and
did not need the funds from the current budget. He asked whether
AGDC had already approached AIDEA.
3:51:20 PM
MR. RUARO affirmed that AGDC had approached AIDEA about six
months ago for a backstop/guarantee for [front end engineering
and design] (FEED) work [for Phase One of the Alaska LNG
project]. He said an appropriation was submitted by the governor
in his December [2024] budget. However, based on work by AIDEA
staff, it was discovered the $50 million [general fund] was not
needed and there was a credit facility that will allow AIDEA to
keep the funds in-house rather than leave the hands of AIDEA. He
expressed confidence that AIDEA could handle [the backstop loan]
without an appropriation.
3:52:05 PM
SENATOR KAWASAKI asked whether Mr. Ruaro served on the AGDC
board.
MR. RUARO said he did not.
SENATOR KAWASAKI asked for confirmation that AGDC did not need a
direct $50 million appropriation [from the legislature] because
they were applying for the funds from AIDEA. He asked whether
that would be cash.
3:52:24 PM
MR. RUARO said the credit facility formulated by AIDEA was a
corporate guarantee, which, he explained, was simply a contract
saying that if [final investment decision] FID was not taken,
AIDEA would backstop the costs for FEED [for Phase One of the
Alaska LNG project] up to the amount expended. He clarified that
there was not a hard $50 million figure, for example, if FEED
costs are $20 million, that would be the maximum liability for
AIDEA.
3:53:09 PM
SENATOR HUGHES noted discussion about whether legislative
approval would be required [for the backstop loan to AGDC]. She
acknowledged that AIDEA had the authority to proceed with the
corporate guarantee. She asked whether that would show up in the
budget as receipt authority or in some other way or not at all.
3:53:43 PM
MR. RUARO said the backstop loan funds would not show up in the
state budget because the source of the funds would be AIDEA
receipts and revenue which were, according to statutes
describing AIDEA's authority, separate from state assets.
3:54:33 PM
SENATOR HUGHES stated that the backstop funds would come from
AIDEA's assets and not from AIDEA's operating budget, which, she
recalled, was under legislative authority.
3:54:55 PM
MR. RUARO affirmed.
3:55:00 PM
CHAIR GIESSEL observed AIDEA reported $345 million cash on hand
and that it appeared they had committed [all] those funds
according to the pending commitments. She asked whether that was
AIDEA's normal approach and if so, she asked where the
commitment of the dividend owed to the state was reflected [in
the pie chart].
3:55:29 PM
MR. RUARO said AIDEA had that account as cash on hand. He said
he could move funds from matured investment accounts to
supplement the cash on hand account and AIDEA had funds maturing
each month.
3:56:01 PM
CHAIR GIESSEL asked for confirmation that the dividend to the
state would be paid out of the re-infusion to the cash on hand
account.
3:56:09 PM
MR. RUARO affirmed and said AIDEA had approximately $140 million
on hand and that they prefer to keep $100 million in reserve for
bonding and other things. He said they have some margin and
would be adding maturing cash balances from the investments to
the revolving fund. He said the dividend [to the state] would
come from there.
3:56:37 PM
SENATOR WIELECHOWSKI recalled that AIDEA expected to pay a
dividend of $20 million [slide 11], on assets of $1.2 billion.
He asked whether that was accurate.
3:57:01 PM
MR. RUARO affirmed that the $20 million dividend declared by the
board was based not on total assets, but on statutory net
income.
3:57:15 PM
SENATOR WIELECHOWSKI noted that the dividend equated to a return
of about 1.6 percent. He asked if that was accurate.
3:57:26 PM
MR. RUARO said he wasn't sure that the math was exactly correct.
He said the dividend was based on the $66 million in statutory
net income and according to statute, would be set between 25 and
50 percent of the statutory net income. He said he thought it
was roughly a 37.5 percent dividend.
3:57:52 PM
CHAIR GIESSEL noted AIDEA's Chief Financial Officer was
available online.
3:58:02 PM
SENATOR WIELECHOWSKI asked about the terms of the $50 million
backstop [loan to AGDC]. He noted that contracts require that
something of value be exchanged. He understood the value that
Glenfarne or AGDC would be receiving in the backstop loan and
asked what AIDEA would receive in exchange and suggested they
might receive an equity stake in the [Alaska LNG] project or
interest payments or some sort of back-end payment.
3:58:47 PM
MR. RUARO said there was no final agreement with AGDC or
Glenfarne. He said the terms were still under negotiation,
however, he said there was significant positive consideration
and significant benefit for AIDEA and therefore to the state
through its dividend, to step forward.
3:59:29 PM
SENATOR WIELECHOWSKI asked for further information about those
benefits, and he asked whether AGDC would be subject to
penalties if they didn't follow through with the agreement. He
asked for insight.
3:59:50 PM
MR. RUARO said he wasn't aware of any details between AGDC and
Glenfarne and wasn't aware of penalties.
4:00:11 PM
SENATOR WIELECHOWSKI clarified that he was curious about
penalties [for AGDC].
MR. RUARO reiterated that he was not aware of the details of
contracts between AGDC and Glenfarne.
4:00:26 PM
SENATOR WIELECHOWSKI asked for further details on the nature of
the potential substantial benefit to the state, for example,
monetary payments, jobs etc.
4:00:46 PM
MR. RUARO answered that it would be both, jobs for Alaskans
resulting from the [Alaska LNG] project and a return of funds to
AIDEA for taking the risk of the backstop.
4:01:10 PM
SENATOR WIELECHOWSKI asked that AIDEA provide the terms of the
contract to the committee when it is signed.
4:01:19 PM
MR. RUARO noted that he would check with legal counsel. He said
he was constrained by non-disclosure agreements (NDAs) and would
have to clarify what he could and could not share.
4:01:47 PM
SENATOR DUNBAR asked for details about reserve-based lending
AIDEA was engaged in with HEX or Blue Crest or other gas
development in Cook Inlet.
4:02:20 PM
MR. RUARO said AIDEA committed to a $50 million revolving loan
for HEX. He said it was the type of loan that could be re-
charged as payments are made. He said that would provide
HEX/Furie with working capital to produce more gas from [Cook]
Inlet. He said AIDEA had applications pending with BlueCrest but
had not reached agreement or commitment.
4:02:54 PM
SENATOR DUNBAR noted discussion about the lack of jackup rigs
as a limiting factor on gas production in Cook Inlet. He asked
whether AIDEA had considered bringing a jack-up rig [to Cook
Inlet]. He noted that HEX/Furie testified that they could keep a
jack-up rig busy for two or three continuous years.
4:03:37 PM
MR. RUARO said AIDEA had been in discussions about jack-up rigs
with several companies. He said there was not yet a final
agreement to report. He said AIDEA was aware of the benefits a
rig would provide.
4:04:01 PM
SENATOR CLAMAN asked whether the $50 million backstop had been
paid out yet.
4:04:08 PM
MR. RUARO said there was not yet a final agreement with AGDC. He
explained that when there is a final agreement, the company
performing the FEED work would pay that and it wouldn't draw on
any AIDEA funds. It's only after FEED is complete and if the
company chooses not to go forward with FID that there would be
any risk to AIDEA funds. Until then, the company [performing the
FEED work] would be spending its own money.
4:04:44 PM
SENATOR CLAMAN asked whether the commitment to make [pay] the
backup loan had occurred.
4:04:58 PM
MR. RUARO said the [AIDEA] board met and heard testimony from
AGDC and Glenfarne and passed a resolution in December [2024]
authorizing negotiation. He said final documents had not yet
been signed.
4:05:19 PM
SENATOR CLAMAN summarized his understanding that when an
agreement is signed, AIDEA will not be required to pay anything,
but the $50 million will be encumbered, meaning that it can't be
spent elsewhere.
4:05:41 PM
MR. RUARO affirmed the summary.
4:05:47 PM
SENATOR CLAMAN asked whether AIDEA would be able to identify the
specific considerations AIDEA would receive in exchange for
encumbering the $50 million.
4:06:02 PM
MR. RUARO said he would ask for legal guidance regarding his
ability to share specifics.
4:06:20 PM
CHAIR GIESSEL asked that his findings be sent to her office to
distribute to committee members.
4:06:29 PM
SENATOR CLAMAN commented that he would prefer more specific and
concrete consideration regarding employment opportunities for
the state in exchange for encumbering $50 million.
4:06:52 PM
CHAIR GIESSEL noted that work like [the Alaska LNG project]
generally brings up outsiders and does not provide jobs for
Alaskans.
4:07:00 PM
SENATOR HUGHES noted that AIDEA expected monetary benefits in
addition to jobs and suggested that expectation was specific.
She asked what the expected timeline for [front end engineering
and design] FEED would be and how long the $50 million would be
encumbered.
4:07:25 PM
MR. RUARO said it would depend on the scope of work determined
by the company to complete FEED. He said, according to AGDC and
other sources it could take one and a half to two years.
4:07:55 PM
SENATOR KAWASAKI asked whether AIDEA was currently rated and
whether bond ratings were going up or down for AIDEA
specifically.
4:08:09 PM
MR. RUARO said AIDEA was not currently bond rated.
4:08:14 PM
SENATOR KAWASAKI noted the $532 million in loans financed [by
AIDEA]. He asked whether those loans were rejected by banks
because the banks did not have enough money or because the loans
were high risk.
4:08:43 PM
MR. RUARO said it was a combination of both, [high] risk in the
loans and a shortage of available equity. He said AIDEA could
come in with a six or six and one half percent interest loan,
take on some of the risk and allow a loan to go forward. He
noted that AIDEA had a zero-default rate. He said the
underwriting from the initiating bank was still strong and that
there was also underwriting for AIDEA's participation.
4:09:52 PM
SENATOR HUGHES said she was asking a question on behalf of
Senator Myers. She noted that small miners found it difficult to
secure financing, especially for unconventional, but important
minerals such as antimony. She noted that funding seemed
available for larger mining companies, including international
companies. She mentioned that a revolving loan fund for miners
was reportedly being discontinued. She noted the support for
reducing mineral reliance on China and asked whether AIDEA would
provide support for smaller Alaskan miners.
4:11:21 PM
MR. RUARO said AIDEA transferred administration of two small
loan programs to Department of Commerce, though they weren't the
programs mentioned. He expressed interest in the [revolving
loan] fund. He said the miner would be required to report their
mineral findings to build the government mineral database. He
suggested that he could talk to Commissioner Sande [Department
of Commerce, Community and Economic Development (DCCED)] about
the [revolving loan] program.
4:12:13 PM
CHAIR GIESSEL asked that findings be forwarded to her office for
distribution to the committee.
4:12:27 PM
MR. RUARO moved to slide 13:
[Original punctuation provided.]
AIDEA's
Financial Toolbox
AIDEA is a catalyst for economic development with a
track record for success, utilizing a variety of
financial tools such as:
Loan Participation
The Loan Participation program provides long-term
fixed and variable rate financing to Alaska's
commercial businesses.
MR. RUARO said the Loan Participation Program was the main
generator for the block of loans illustrated in the pie chart
[on slide 12] and for which banks approached AIDEA for
financing.
Project Finance
AIDEA can finance projects (whole or partial) through
its ability to develop & own assets within the State.
MR. RUARO said an example of Project Finance was AIDEA's funding
for individual projects like Red Dog Mine.
Conduit Revenue Bonds
AIDEA is one of the State's Principal issuers of
taxable & tax-exempt Conduit Revenue Bonds.
MR. RUARO said AIDEA used Conduit Revenue Bonds for the Alaska
Native Medical center and for hospitals which have Medicaid
funds that can be used as revenue.
Energy & Resource Development
The Alaska Sustainable Energy Transmission Supply
Fund, Arctic Infrastructure Development Fund, & Cook
Inlet Reserve-Based Lending Program are programs
within AIDEA to meet Alaska's energy resource needs.
MR. RUARO said Energy and Resource Development presents options
such as the new program - Cook Inlet Reserve-Based Lending.
Asset Ownership
In addition to traditional financing, AIDEA can
directly own assets that generate revenue or enable
economic development.
MR. RUARO noted that AIDEA owned assets such as the Red Dog Mine
road and port and the FedEx hangar, etc.
AIDEA Bonds
AIDEA has the authority to issue tax-exempt and
taxable bonds.
MR. RUARO said AIDEA did have authority to bond but was pursuing
their rating.
Strong Investment Relationships & Financial Expertise
AIDEA provides financial expertise and information to
assist with projects, job creation, and infrastructure
development.
4:13:41 PM
SENATOR CLAMAN asked how much it would cost and how long it
would take to get a bond rating back in place.
4:13:49 PM
MR. RUARO said he was not sure. He said there was a new employee
who had experience with bond ratings. He expected they would
work with Department of Revenue (DOR)'s deputy commissioner. He
opined that AIDEA would not incur high costs.
CHAIR GIESSEL requested AIDEA to provide follow-up information
[for bond rating] expectations.
4:14:28 PM
MR. RUARO moved to slide 14, AIDEA's Assets and Projects, Bonds
and Loans, pinpointing their locations on an outline map of
Alaska. He noted that AIDEA was involved with projects spread
widely across the state.
4:14:56 PM
MR. RUARO moved through slide 15 to page 16 and narrated:
[Original punctuation provided.]
INNOVATIVE UTILIZATION
OF NATURAL RESOURCES
Financing Approved for Alyeschem North Slope Project
• Project goal Utilize Alaska's natural gas for
economic and environmental benefits.
• Facility to produce methanol & ultra-low sulfur
diesel from North Slope gas.
• Economic impact:
• 80 construction jobs and 15 permanent jobs.
• Estimated $5M+ in annual tax & royalty
revenue for the state.
• Increased demand for North Slope natural gas
supports local producers.
• Environmental benefits: Cleaner-burning
fuels align with global emission reduction
efforts.
• Public-private partnership drives economic
growth and sustainability.
• Project to break ground soon, marking a step
toward energy innovation in Alaska
MR. RUARO said Alyeschem would be one of the first chemical
plants in the state, replacing import shipments that come from
as far away as Trinidad.
4:15:45 PM
MR. RUARO moved to slide 17 and said the Cook Inlet Cook Inlet
revolving loan and line of credit would help HEX produce Cook
Inlet gas for years to come. He noted that the line of credit
was rechargeable as HEX continues to pay the loan down:
[Original punctuation provided.]
RAILBELT ENERGY SOLUTIONS
HEX COOK INLET LLC LEADS THE WAY
HEX CI's Financial Milestone & Strategic Investment
• Repaid its $7.5 million AIDEA loan eight months
early in 2023.
• Enabled HEX LLC's acquisition of the Kitchen Lights
Unit (KLU).
• Secured energy delivery and created nearly 40 local
jobs.
Meeting Alaska's Energy Needs
• AIDEA approved a $50 million revolving credit line
in late 2024.
• Plans include sidetracking underperforming wells,
drilling new wells, and expanding production.
• Expected to create up to 100 temporary construction
jobs and five permanent positions.
4:16:17 PM
MR. RUARO moved to and narrated slide 18:
[Original punctuation provided.]
INTERIOR ENERGY PROJECT
OPERATED BY IGU
• Trailer Deployment: All 15 large -capacity LNG
trailers have been received and are now in
operation.
• LNG Plant Construction: Harvest Midstream North
Slope LNG Plant is advancing as planned and is
expected to ensure a reliable gas supply for
Interior Alaska.
• Future Commitment: IGU remains dedicated to
providing affordable, clean energy while
strengthening long -term operational capabilities.
• Financial Performance: Strong financial health with
credit rating improvement through sound fiscal
management and operational efficiency.
• Operational Progress: Steady growth in operations,
financial stability, and project execution.
4:16:55 PM
MR. RUARO moved to and narrated slide 20:
[Original punctuation provided.]
AUTHORITY OF AIDEA TO ISSUE A
"CORPORATE GUARANTEE" TO ALASKA GASLINE DEVELOPMENT
CORPORATION (AGDC) GDC / 8-STAR
• The type of credit facility AIDEA is offering is a
"Corporate Guarantee". A promise in writing in a
contract with 8-Star / AGDC.
• The Corporate Guarantee in this particular case that
is being discussed is both "limited" and
"conditional."
• It is "limited" to an amount "up to" a sum certain.
In this case, "up to" $50 million but really "up to"
the amount and cost for Front End Engineering Design
(FEED) work actually performed when a Final
Investment Decision (FID) decision is made. Reason
to believe significantly less, due to contingency.
• It is "conditional" because the obligation to make a
payment only comes into effect if there is a
decision by Glenfarne not to proceed with a go
forward on the FID.
• If Glenfarne chooses to go forward with the project
and a positive FID, then AIDEA pays nothing for the
FEED work.
• Multiple statutes give AIDEA the legal authority to
enter into a corporate guarantee contract with 8-
Star / AGDC. AS 44.88.080(5); AS 44.88.080(9); AS
44.88.080(11); AS 44.88.080(13) and AS 44.88.080(17)
4:18:36 PM
SENATOR KAWASAKI asked that contracts between AGDC and AIDEA be
shared with the committee. He pointed out that [funding for
AGDC] was part of the [State] operating budget and that AGDC
funding from AIDEA was off the books. He asserted that this was
a change to the operating budget and noted that the decision to
provide the $50 million for AGDC was [previously] a legislative
decision to make, and now was not. He asked whether there was
any comment.
4:19:30 PM
MR. RUARO said AIDEA initially requested legislative
appropriation for the AGDC project. However, they found an
alternative in a conditional guarantee that would keep the funds
with AIDEA. He said, given the altered circumstances and the
[state's] budget constraints, AIDEA decided not to burden the
legislature with the appropriation request, opting to manage
without it.
4:20:38 PM
CHAIR GIESSEL noted that AIDEA must have made the decision [to
withdraw the request for a legislative appropriation] after
December 15th.
MR. RUARO concurred.
4:20:45 PM
SENATOR CLAMAN asked whether the logic [for withdrawing the
request for a legislative appropriation] was that the funds
would not be disbursed immediately; AIDEA would only have to
encumber the funds, not immediately spend them.
4:21:19 PM
MR. RUARO said statutory policy decisions made by previous
legislatures directed that assets and funds earned by AIDEA
would be separate from the state and the state's credit vs.
"state funds" that are subject to the executive budget act. He
said those decisions were made decades ago and the authority to
make decisions over AIDEA assets would vest in the board,
subject to reporting, except for [AIDEA's] operating budget
which continues to be subject to legislative review.
4:22:09 PM
SENATOR CLAMAN described a contract directing that the $50
million [back-up loan] be placed in a third party, controlled
investment account. He asked whether that would be an
appropriation the legislature would have to approve.
4:22:45 PM
MR. RUARO said it would not because AIDEA assets placed in that
holding account would be AIDEA funds and earnings, not state
funds. He explained that there are statutes that clearly and
completely separate AIDEA funds and earnings from state funds
and state bond ratings.
4:23:21 PM
SENATOR CLAMAN asked how $50 million was determined to be the
appropriate amount for the back-stop loan.
4:23:29 PM
MR. RUARO said the $50 million figure was provided by AGDC. He
said there was not yet a final number and emphasized that
AIDEA's liability would be limited to the actual value of the
FEED work completed and that could be far less.
4:23:55 PM
SENATOR CLAMAN commented that the slide indicated the FEED may
be considerably less than $50 million and suggested that AIDEA's
share of risk for the project was low.
4:24:19 PM
CHAIR GIESSEL noted that the [AIDEA] board authorized [the $50
million backstop loan]. She asked where the board members came
from.
4:24:34 PM
MR. RUARO said there were seven board members. Chairman Pruhs
lived in Anchorage, Vice-Chair Kendig lived in [Mat-Su] Valley,
member Fogel lived in Anchorage, member Vivlamore lived in
Fairbanks, Commissioner Sande and Commissioner Crum [locations
not specified], member Eledge lived in Anchorage.
CHAIR GIESSEL stated that the board members were appointed by
the governor.
MR. RUARO affirmed that was correct.
CHAIR GIESSEL asked whether the legislature affirmed the
appointments.
4:25:12 PM
MR. RUARO said they did not.
4:25:17 PM
CHAIR GIESSEL noted none of the board members were from rural
Alaska.
MR. RUARO affirmed that there was not currently an AIDEA board
member from a rural Alaska region.
4:25:27 PM
CHAIR GIESSEL asked for the current qualifications to serve on
the AIDEA board.
MR. RUARO said he did not know if there were specific
qualifications in statute, but that board members with
experience in energy, business, finance, etc. were generally
sought.
4:25:53 PM
MR. RUARO moved to slide 21, describing the legal authority of
AIDEA to take action with its assets and the strict separation
of AIDEA assets from state [of Alaska] funds or real property:
[Original punctuation provided.]
AUTHORITY OF AIDEA TO
COMMIT AIDEA ASSETS
• Art. III, sec. 22, of the Alaska Constitution gives
the Legislature the authority to create separate
entities from the State of Alaska and grant these
entities the authority to act and make decisions
using their own resources.
• The ability of the Legislature to create AIDEA and
give it an existence separate and apart from the
State of Alaska and to manage and use its own
assets, which are not considered assets of the State
of Alaska, was decided in favor of the Legislature
and AIDEA in 1962. DeArmond v. Alaska State
Development Corporation, 376 P.2d 717 (1962)
• AIDEA statutes were rewritten in 1967 to expressly
set out its authority and powers, including the
authority to contract, spend, and use its own
assets.
• AS 44.88.190(a removes AIDEA's funds from the
Executive udget Act, except for the operating budget
AS 44.88.205.
4:26:35 PM
MR. RUARO moved to and narrated slide 22. He noted that AIDEA
was focused on Phase I of the pipeline project and reviewed that
Phase I included the pipeline that would run south from the
North Slope and provide domestic gas only for southcentral
[Alaska]:
[Original punctuation provided.]
WHY NOW?
WHAT IS DIFFERENT?
• Legislature Supports "Working Toward" FEED for Phase
I of a Pipeline Project "It is the further intent of
the legislature that if analysis shows a positive
economic value to the state, all parties would work
toward Front End Engineering and Design for Phase I
of a pipeline project."
• Wood Mackenzie Report Shows a Positive Economic
Value for Phase I Alaska LNG can predictably deliver
natural gas in a range between $8.97 - $12.80 per
mmbtu; Alaska LNG will dramatically lower long-term
energy prices; and Alaska LNG Phase I will deliver
up to $16 billion in additional economic benefits as
compared to other options.
• AIDEA Board (After Multiple Meetings) Passes
Resolution G24-17 Board authorized AIDEA staff and
the Executive Director to perform due diligence and
if satisfied, to execute a "credit instrument,
guaranty, or other form of debt issuance" to provide
a backstop and allow FEED to advance.
• President Trump We are now in a completely
"transactional" trade world. "If X, then Y". For
Japan, the "X" is a defense security agreement with
the United States that does not change, protection
from China, and avoiding U.S. trade tariffs. If
Japan wants "X" then it must give "Y". What is "Y"?
Y is new Japanese investment in the United States
which Prime Minister Ishiba said would be $1
trillion dollars. Also, increased LNG purchases from
the U.S., and a joint venture linked to Alaskan oil
and gas. (Note: Since the meeting, six (6) more
countries in Asia have come forward to offer to buy
more LNG from the U.S. to fend off tariffs)
4:28:46 PM
CHAIR GIESSEL noted that the [Senate Resources] Committee
identified several cost drivers that were not considered in the
Wood MacKenzie (WM) report, including questions about the source
of the gas and that Pantheon alleged they could produce gas for
one dollar per Mcf. She asked whether the [AIDEA] board had
taken all those issues into account when they examined the WM
report for credibility.
4:29:36 PM
MR. RUARO said AIDEA looked at Pantheon's publicly available
reports, including gas sales contracts and well reports and said
they were satisfied with the findings, noting that Pantheon was
not yet in production, but moving toward that.
4:30:12 PM
CHAIR GIESSEL asked about the pieces missing from the WM report
that would have been financial drivers for the cost.
4:30:21 PM
MR. RUARO asked which items were of concern.
4:30:28 PM
CHAIR GIESSEL said the pipeline to Fairbanks was not included;
the pipeline described by the WM report for Phase I went
directly [from the North Slope] to southcentral [Alaska] and
would not, in fact supply [gas to] Alaska because it would
bypass Fairbanks.
4:30:49 PM
MR. RUARO said he was aware of that issue and noted that there
were solutions described in AIDEA board meetings. He said the
AIDEA board expressed awareness and interest and would support
gas to Fairbanks. He said there were opportunities for that to
occur but was not sure he could speak about it.
4:31:21 PM
CHAIR GIESSEL expressed aware ness of opportunities and that
they would change the calculation of the cost of the gas.
4:31:30 PM
SENATOR KAWASAKI said AGDC presented to the committee before
President Trump's announcement [of foreign interest in Alaska
LNG] and after. He noted the characterization of the
announcement as "good news" and asked whether AIDEA had
information that legislators did not.
4:32:07 PM
MR. RUARO said The Japan Times and Japanese news media reported
that Japan's interest was secured by US [commitment to] Japanese
defense and avoiding 25 percent tariff. Japan committed to
investing $ one trillion in the United States and to purchase AK
liquid natural gas. He offered to provide the news resources for
the committee.
4:33:02 PM
MR. RUARO moved to and narrated slide 23:
[Original punctuation provided.]
WHY NOW?
WHAT IS DIFFERENT? CONTINUED
• Crisis with Gas Supply for Railbelt According to
Enstar at the recent RCA meeting (Jan. 15, 2025) and
in other meetings, Alaska will experience a gas
shortage. Enstar has studied all project options,
and has decided to go forward with Glenfarne with an
onshore import terminal. There is no way for
imported gas or Cook Inlet gas likely to be sold
at a rate near the price for imported gas ($13.72)
to get to the low $2.32 per mmbtu price that Alaska
LNG could provide via a pipeline. (Page 8, AGDC
Presentation, January 28, 2025)
• Cheap and Clean Gas from Great Bear Publicly filed
information from Great Bear shows certified
contingent oil resources at 1.6 billion barrels
(management thinks they can get to 3.5 billion) 6.6
TCF of gas from Kodiak, Ahpun, and Ahpun Western
Topsets. And separately a possible 3.3 TCF of gas
from the Magrez-1 Well and drilling. All gas
available at up to 500 million cfd at a maximum
price of $1 per million btu. 20 years. Gas Sales
Purchase Agreement with AGDC.
• Gas Suppliers Proceed Without Fiscal Certainty
Current suppliers of gas such as Great Bear are not
making a constitutional amendment or contract for
"fiscal certainty" on gas taxes a precondition for
providing gas.
• Prudhoe Oil Loss Declining Yearly Loss of oil
production from Prudhoe as a result of gas offtake
for a gas project is significantly reduced each year
by the passage of time. It has been eight years
since the AOGCC decision by Cathy Forrester that
enough oil production had occurred, and enough gas
reinjected and available for a gas project that gas
offtake could occur.
4:35:37 PM
CHAIR GIESSEL noted the assertion that AOGCC would not have to
be involved in the gas off-take from the Pantheon leases.
4:35:48 PM
MR. RUARO said a hearing with AOGCC may still be required, but
it does not appear that there would be large volumes of oil lost
to produce gas.
4:36:05 PM
CHAIR GIESSEL noted her concern about getting to the $2.32 per
MMBtu figure in the last bullet point on slide 23. She said that
number would require the full [AKLNG] project, including
treatment and export. She emphasized that was not what AGDC was
presenting at this time. She said the entire project would cost
$44 billion, plus. She expressed concern about the public
perception of the proposal in the current presentation, and said
it was deceptive in her view.
4:36:50 PM
MR. RUARO said the figures were from previous presentations by
AGDC. He acknowledged that AIDEA was not involved in the larger
scale project.
CHAIR GIESSEL emphasized that she understood that, but the
public may not understand that the gas prices quoted would
require the entire $44 billion project to be completed.
4:37:18 PM
SENATOR HUGHES noted that in 2021 AIDEA bid on leases that had
become tied up. She asked whether there was interest by major
producers to explore and develop leases in [Alaska National
Wildlife Refuge] ANWR when the leases are no longer in limbo.
4:37:54 PM
MR. RUARO said the Biden administration cancelled the leases,
but AIDEA used the time to review geologic data and complete a
new report, which indicated significant recoverable oil and gas
reserves. He anticipated regaining control of the leases and was
optimistic about attracting interest for lease sales or
partnerships for development. He said AIDEA planned to conduct
3D seismic surveys to enhance the precision of oil reserves
estimation.
4:39:11 PM
SENATOR HUGHES asked that the committee be kept up to date with
developments [in ANWR].
MR. RUARO concurred.
4:39:22 PM
SENATOR KAWASAKI noted that most of the leases on shore in ANWR
had been taken up by the state through AIDEA. He asked whether
the costs of performing 3D seismic surveys would be built in to
developers' costs.
4:40:06 PM
MR. RUARO said AIDEA would seek to recover all their expenses
and more.
4:40:15 PM
CHAIR GIESSEL asked to return to slide 22. She quoted from the
slide "Also, increased LNG purchases from the U.S., and a joint
venture linked to Alaskan oil and gas." She asked whether the
joint venture mentioned was between the US and Japan. She asked
whether the Japan was somehow engaged in paying for some of the
[AKLNG] project.
4:40:47 PM
MR. RUARO said that note in slide 22 originated with the news in
Japanese media. He said he was not aware of any details
regarding a joint venture.
4:41:00 PM
CHAIR GIESSEL repeated that these words were from Japanese
media.
MR. RUARO affirmed that they were.
4:41:14 PM
MR. RUARO moved to and narrated slide 25:
[Original punctuation provided.]
AIDEA SMALL BUSINESS LOANS
DCCED MANAGED PROGRAMS
$1.86 MILLION FUNDED IN FY 2024
37 JOBS CREATED IN FY 2024
$46.3 MILLION APPROVED SINCE INCEPTION
2,392 JOBS CREATED SINCE INCEPTION
RURAL DEVELOPMENT INITIATIVE FUND (RDIF) PROGRAM
HIGHLIGHT
STONY CREEK CANOPY ADVENTURES
Owner Mark Wildermuth describes their RDIF loan as
"the best loan I have ever received" praising its
favorable terms and long-term benefits, which made
excellent business sense. With the funding in hand,
the Wildermuths launched Denali Zipline Tours with a
bang, employing 15 people. The DCCED, impressed by the
significant impact of the loan, noted the exceptional
return on investment. Their loan created 15 Alaskan
jobs, demonstrating the program's value to the state
and its residents.
SMALL BUSINESS ECONOMIC DEVELOPMENT (SBED) PROGRAM
HIGHLIGHT
ALASKAN OUTLAW ADVENTURES
Dream of Alaskan Adventure, Now A Reality
Benefiting from a low-interest, long-term Small
Business Economic Development Loan helped turn
Brandon's childhood dream into a reality. Funding that
was made possible with the SBED Program was
instrumental in his ability to develop operations and
create local jobs. The loan not only helps to provide
exceptional experiences for visitors but also ensures
that local talent and resources are utilized,
fostering a thriving local economy.
4:41:57 PM
SENATOR HUGHES asked what percentage of loans through these
programs went to Alaskan companies, based on the number and
total value.
4:42:12 PM
MR. RUARO said he was not aware of any loan through these
programs going to a non-Alaskan company.
4:42:21 PM
SENATOR HUGHES appreciated that and asked whether loans through
other AIDEA programs were awarded to Alaska vs. non-Alaska
entities.
4:42:34 PM
MR. RUARO said he was not aware of any loans going to non-Alaska
companies.
4:42:47 PM
SENATOR HUGHES revisited earlier discussion of jobs. She noted a
Northern Economics report on the return on investment for jobs
and a commitment in a Senate Finance committee meeting by AIDEA
to commission a study. She asked whether the study was underway
and when it would be available to the legislature.
4:43:13 PM
MR. RUARO affirmed that the study was underway and that there
had been some delays due to personnel turnover in the company
that was writing the report.
4:43:37 PM
SENATOR HUGHES expressed anticipation for the completed review,
noting that it was part of AIDEA's mission.
4:43:47 PM
MR. RUARO moved to and narrated slide 26. He said these were
loans for which banks approached AIDEA asking for assistance to
support projects:
[Original punctuation provided.]
LOAN PARTICIPATION PROGRAM
HIGHLIGHTS & REGIONAL DIVERSITY
FY2024 PROGRAM HIGHLIGHTS
$21.1 M with AIDEA's participation of $18.3 M
60 construction jobs 79 permanent jobs supported
813 loans funded since 1992 with AIDEA's participation
of $1.2 B
11,579 construction jobs since 1992 with 9,998
permanent jobs supported
[Table illustrating: Regional Diversity of
Participation Loans and Outstanding Balances as of
12.31.2024]
4:44:34 PM
MR. RUARO moved to and narrated slide 27:
[Original punctuation provided.]
ALASKA WILDBIRCH HOTEL
Downtown Anchorage
Project Highlights:
• 70 percent AIDEA Participation
• 147 Construction Jobs
• 245 New Jobs
• $25 million AIDEA Funding Commitment
• Loan Closing in Early 2025
Slated to open in the spring of 2025 in the heart of
Anchorage's downtown Mushing District, The Wildbirch
Hotel will usher in a new era for the city's
hospitality scene as its first Hyatt JdV boutique
property and the most significant lodging addition in
two decades.
"When you work with AIDEA, it's not just another bank
loan. Our efforts to redevelop downtown matched
AIDEA's goal of economic revitalization, job creation,
and making downtown Anchorage a better place for
tourists and locals alike. We are grateful AIDEA was
willing to work with us to make the Wildbirch Hotel a
reality and improve downtown Anchorage for generations
to come." - Former U.S. Senator Mark Begich
4:45:00 PM
MR. RUARO moved to and narrated slide 28:
[Original punctuation provided.]
SUN MOUNTAIN DEVELOPMENT
Wasilla, Alaska
Project Highlights:
• 90 percent AIDEA Participation
• 554 Construction Jobs
• 284 Permanent Jobs
• Over $15 million in AIDEA Funding
Sun Mountain is site condominium project and a
significant development in the retail sector. The
Shoppes at Sun Mountain are located on the Parks
Highway. The development opened in August 2019, and
has since attracted small businesses, larger Alaska
companies, and national franchises.
4:45:23 PM
SENATOR CLAMAN asked for clarification of "90 percent AIDEA
Participation" noted on slide 28. He asked for a comparison with
the bank participation.
4:45:37 PM
MR. RUARO said 90 percent meant the bank provided ten percent of
the loan and AIDEA provided 90 percent of the loan at the banks
request.
4:45:53 PM
SENATOR CLAMAN concluded from slide 27 the downtown [Wildbirch]
hotel project received 30 percent bank funding and 70 percent
AIDEA funding.
MR. RUARO affirmed his observation.
4:46:07 PM
MR. RUARO moved to and narrated slide 29:
[Original punctuation provided.]
GOLDEN HEART WASTE MANAGEMENT
Fairbanks, Alaska
Project Highlights:
• 90 percent AIDEA Participation
• 10 New Jobs
• 12 Jobs Retained
• $3.6 Million Loan Funding Commitment
• Closing in early 2025
With services that extend beyond Fairbanks, Golden
Heart Waste Management has been covering areas such as
Delta Junction, Tok, Ft. Greely, and Coldfoot since
2019. This investment not only strengthens the local
economy but also underscores the importance of
supporting environmentally conscious businesses in
Alaska.
4:46:33 PM
MR. RUARO moved to and narrated slide 31 and said the
presentation was shifting away from [AIDEA] loan programs and
projects to resource development projects:
[Original punctuation provided.]
DELONG MOUNTAIN TRANSPORTATION SYSTEM
RED DOG MINE (NORTHWEST ARCTIC BOROUGH)
AIDEA-owned asset.
In 1985, Alaska Legislature, Governor, and AIDEA agree
some public support is needed to make Red Dog go
forward. After many hearings, SB 279 and SB 280 are
passed by the Legislature and signed into law.
In 1986, AIDEA funds mine, road, and port with $160
million.
AIDEA keeps mine operating in 1990's by funding $85
million for expansion.
Project provides significant economic benefits.
Project continues to yield significant dividends for
NANA (royalty of $255 million in 2021 and shares ~60
percent of the royalty with other Regional
Corporations).
Future opportunities also exist (Aktigiruq prospect
could be one of the largest undeveloped zinc deposits
in the world).
Benefits from AIDEA's Investment to the NWAB Economy
Tax Revenue (thru '18) $1.3 Billion
NWAB PILT (thru '21) $269 Million
7(i) Payments (through '21) $1.6 Billion
FY20 Employment 1,500 Jobs
FY20 Wages $120 million
4:47:18 PM
SENATOR KAWASAKI noted that AIDEA owned the road and the port
[at the Red Dog Mine]. He asked what would happen with the road
and the port when the mining company chose to leave.
4:47:31 PM
MR. RUARO said AIDEA was diving into the different land
ownership agreements [regarding the road]. He said there were
agreements prior to AIDEA required different parties to
remediate the road. The large tailings pond [remediation] and
other environmental work that would be needed after the mine
closes will require that the road stay in place to allow access
for environmental remediation activity.
4:48:15 PM
SENATOR KAWASAKI noted that private mines own the responsibility
for [decommissioning, remediation and reclamation] DR and R. He
asked whether the state owned that responsibility for the Red
Dog Mine and where that was spelled out.
4:48:38 PM
MR. RUARO said the obligation to remediate the mine remained
with NANA and Teck. The mine is on NANA land and Teck operates
the mine. He said two-thirds of the road is on Cape Krusenstern
[National Park] land. He said agreements with the federal
government require NANA and Teck to remediate the road if and
when it becomes advisable to take the road out. He reiterated
that the tailings pond would require monitoring and maintenance
for some time to come.
4:49:24 PM
MR. RUARO moved to slide 32. He said AIDEA had seven leases in
ANWR and asserted that they had a valid right to those leases.
He said the Trump administration issued an executive order to
transfer the leases back to AIDEA. When the leases are returned,
AIDEA will move forward with 3D seismic surveys to obtain data
necessary to develop or sell the leases:
[Original punctuation provided.]
ARCTIC NATIONAL WILDLIFE REFUGE
SECTION 1002
[Arctic National Wildlife Refuge Map
ANWR Map - Plate 1
Map prepared at the request of the Senate Energy and
Natural Resources Committee 10/24/2017]
"Kaktovik is the only community in the 1002 Coastal
Plain . . . We are not an exhibit in a museum. Nor is
the land that we have survived and thrived on for
centuries to be locked away for the peace of mind of
those from faraway places. This school of thought
amounts to nothing more than green colonialism land-
grabbing in the name of the environment."
from the testimony by Fenton Rexford of Kaktovik
before the House Resource Committee, March 6, 2019,
1:57 p.m
SECTION 1002 AREA LEASES
In 2017, Congress passed the "Tax Cuts and Jobs Act,"
which directed the Department of the Interior (DOI) to
establish and manage a competitive oil and gas leasing
program in the Arctic National Wildlife Refuge (ANWR).
The Coastal Plain, often referred to as the 1002 Area,
comprises 1.56 million acres within the 19.64 million-
acre ANWR. AIDEA's leases cover 0.37 acres.
Development of the 1002 Coastal Plain holds
significant potential for economic growth. According
to the Final Supplemental Environmental Impact
Statement (SEIS), leasing and development could
generate billions of dollars in revenue for local,
state, and federal governments while creating
thousands of jobs.
4:49:58 PM
MR. RUARO moved to and narrated slide 33:
[Original punctuation provided.]
ARCTIC NATIONAL WILDLIFE REFUGE
SECTION 1002
ESTIMATED STATE ANNUAL TAX AND ROYALTY REVENUE
$2,002,000,000
[Tables comparing current government revenue from
taxes and royalties with projected revenues and jobs
resulting from ANWR oil and gas development.]
Table C-8 of the Coastal Plain Oil and Gas Leasing
Program Final Supplemental Environmental Impact
Statemen, Volume 3t. (Source: Northern Economics, Inc.
2023 estimates based on IMPLAN 2021 data year and
assumptions listed in Section 3.4.10 Economy of the
Supplemental EIS for the Coastal Plain Oil and Gas
Leasing Program.)
RECOVERABLE OIL ON AIDEA LEASES HAS AN ESTIMATED
VOLUME OF 4 TO 6 BILLION BARRELS
4:50:35 PM
MR. RUARO moved to and narrated slide 34. He explained that the
Ambler Access Project was a road into the Ambler mining
district, an area known to have rich deposits and which Congress
in 1980 said Alaska should be allowed to access. He said the
Trump administration issued an executive order similar to the
one for ANWR to issue the Ambler right of way:
[Original punctuation provided.]
AMBLER ACCESS PROJECT
ACCESS TO OPPORTUNITIES
DENIED BY BIDEN ADMINISTRATION
ESTIMATED TOTAL TAX AND ROYALTY REVENUE $1,144,785,127
[Map of the proposed Ambler Access Project with color-
coded sections illustrating the estimated value of
extractions.]
This 211-mile road project will provide access to
almost 600,000 acres of active State mining claims.
Starting from the Dalton Highway, it would stretch
east towards the Ambler Mining District.
Potential Benefits
Mine Construction
• 2,777 direct jobs with $286 million in wages
annually
• 2,034 additional indirect and induced jobs with $108
million in wages annually
Mining Operations
• 495 direct jobs with $72 million in wages annually
• 3,436 additional indirect and induced jobs with $228
million in wages annually
Road Construction and Operations
• An annual average of 360 direct jobs over the road
construction period
• Up to 81 direct annual jobs for road operations and
maintenance over the life of the road
Government Revenue Generation
• $393 million in mining license tax revenues
• $524 million in corporate income taxes
• $214 million in production royalties
• $13 million in claim rents
Source: UAA CED (Page 17)
4:51:26 PM
CHAIR GIESSEL noted that the [Ambler Acces] right of way was
through the Gates of the Arctic National Park and Preserve.
MR. RUARO concurred and said part of the right of way was Bureau
of Land Management (BLM) general land in PLO 5150.
4:51:48 PM
MR. RUARO moved to slide 35. He said [Ambler area village
elders] were acknowledging the issues and questions about
building mines and roads but were asking their tribal members
what would happen to their communities if they don't [build the
road]. He said the communities were losing their residents to
Fairbanks:
[Original punctuation provided.]
AMBLER ACCESS PROJECT
ACCESS TO OPPORTUNITIES
DENIED BY BIDEN ADMINISTRATION
"If not resource development, then what?"
-Fred Sun, Tribal President
Native Village of Shungnak
4:52:32 PM
SENATOR CLAMAN noted slide 33 included estimates based on
federal information about expected taxes and expected resources
[in ANWR]. He asked whether there was similar federal
information about the Ambler Access Project.
4:53:01 PM
MR. RUARO said there was a report that was not embedded in the
presentation, but that he could provide for the committee.
4:53:12 PM
SENATOR KAWASAKI asked whether the relatively new Mahn Cho mine,
owned by Kinross and located between Tok and Fairbanks, received
[financial] help from AIDEA.
4:53:36 PM
MR. RUARO said no.
SENATOR KAWASAKI asked whether Fort Knox, another Kinross mine,
required [support] from AIDEA.
4:53:57 PM
MR. RUARO said, to his knowledge it did not.
4:54:07 PM
SENATOR KAWASAKI asked why bigger projects like the Ambler
Access Project, required state help when other projects did not.
4:54:17 PM
MR. RUARO said the initial state involvement with the Ambler
Road came through the 1980 [Alaska National Interest Lands
Conservation Act] (ANILCA). The state was granted right-of-way
and funds were granted specifically for Ambler Access with the
purpose of reaching resources. He said Department of
Transportation and Public Facilities (DOTPF) pursued it for
several years before transitioning it to AIDEA.
4:54:51 PM
SENATOR KAWASAKI recalled a figure close to eight million
dollars for DOTPF [to develop the Ambler Road] compared with the
currently estimated half-billion-dollar project.
4:55:03 PM
MR. RUARO affirmed the current estimate.
4:55:07 PM
SENATOR KAWASAKI asked whether the companies currently
interested [in building roads and developing mines] and asking
for AIDEA assistance would be responsible for building, managing
and maintaining the roads or if AIDEA would be.
4:55:27 PM
MR. RUARO said AIDEA anticipated using the Red Dog model. The
mine would pay for the road and for the road maintenance. He
said AIDEA could own all or part of the asset but would not be
involved in either maintenance or paying for the road. He said
AIDEA may issue bonds.
4:55:49 PM
SENATOR KAWASAKI asked what would happen if AIDEA were to issue
bonds and the project was less economic than projected.
4:56:05 PM
MR. RUARO said AIDEA would not proceed until the mines are
secure enough to be able to pay for the road. He said the mine
would have to complete some additional drilling to determine its
security. He said there was a preliminary bornite economic
analysis recently completed that showed large amounts of copper
and was very positive for the economics of the project. He
offered to share the link to the study.
4:56:42 PM
SENATOR KAWASAKI asked whether the Pebble Mine had ever asked
for support from AIDEA.
4:56:55 PM
MR. RUARO said no.
4:57:01 PM
SENATOR CLAMAN echoed the concerns expressed. He mentioned the
Kennicott mine and noted that they did not ask for financial
assistance to build a road or a railroad. He invoked the analogy
of getting the cart before the horse and suggested that it would
be prudent to wait until a mine comes forward with high
confidence before building a road.
4:58:29 PM
MR. RUARO said economic analyses and drill results for the
arctic mine establish that there are 13 years of mine life at
that site. The bornite preliminary economic analysis indicates
another 20 to 25 years of mine life. He said there is a lot of
geologic information supporting continuing prospecting. He
offered to provide a summary of relevant reports for the
committee.
4:59:41 PM
CHAIR GIESSEL affirmed that the Ambler mining project area was
well-documented to have significant assets. She said the
Kennicott project was well before AIDEA existed and was built by
millionaires that owned railroads in the lower 48.
5:00:04 PM
MR. RUARO moved to slide 36. He explained that this was another
proposed road to mineral resources and mines, opening access to
recreation along the way:
[Original punctuation provided.]
West Susitna Access Project
Project update at the Skwentna Roadhouse
June 2024
Project supporters met to share an informative update
and great discussion with local property owners in the
project area at a gathering at the Skwentna Lodge.
[Photo as described.]
From left to right: Representative Kevin McCabe, Todd
Smoldon, Dana Pruhs, Robyn Reyes, Senator Mike Shower,
Randy Ruaro, Logan Boyce, Andrew Traxler, Josie
Wilson, Kurt Parkan, Hans Hoffman, Mike Brown, and
Cindi Herman (top)
The West Susitna Access Project is more than a
transportation initiative it is a cornerstone of
Alaska's future prosperity.
[Map illustrating the West Susitna Access Project.]
AIDEA West Susitna Access Project:
https://bit.ly/WSAPdev
This 78-mile road project is located north of
Anchorage and west of Wasilla and will provide access
to many desired resources.
Potential Benefits
• Gold, copper, silver, coal, antimony, and other
mineral resources.
• Opportunities for clean energy, including
geothermal, solar, wind, carbon capture and
sequestration, and biomass resources.
• More than 700,000 acres [of forest] available for
harvest.
• Active energy exploration in the areas of the
Susitna River, including Upper Cook Inlet, where
active oil and gas producing fields exist in the
study area.
• More than 65,000 acres of land has been
identified for potential agricultural uses.
• Many opportunities for recreational access
including snowmachining, fishing, hunting,
boating, recreational mining, and use of cabins.
5:00:39 PM
SENATOR KAWASAKI asked whether publicly funded roads like the
West Susitna Road and the Ambler Road would be accessible to the
public after development by AIDEA.
5:01:02 PM
MR. RUARO said the Ambler Road was intended to be limited access
for industrial haul, though medi-vacs and commercial use by
local communities would proceed. The West Susitna Road would
allow broader access by the public for recreation.
5:01:37 PM
MR. RUARO moved to and narrated slide 38. He said AIDEA was
following current trends and looking for opportunities to invest
in data centers, etc. He expressed optimism about future
investment returns:
[Original punctuation provided.]
AIDEA NEW ISSUES
AND OPPORTUNITIES
• Tech sector, Artificial Intelligence (AI) Data
Centers
• Chemical production from natural gas (Alyeschem,
etc.)
• Critical mineral/ore production refining
(Antimony, etc.)
5:03:58 PM
CHAIR GIESSEL said Cordova Electric Cooperative (CEC) recently
presented to the Resources Committee. They maximized their
energy production and invited a data center to their system. She
noted CEC did this without AIDEA's assistance.
5:04:39 PM
There being no further business to come before the committee,
Chair Giessel adjourned the Senate Resources Standing Committee
meeting at 5:04 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 02.14.25 AIDEA Presentation Senate Resource Committee.pdf |
SRES 2/14/2025 3:30:00 PM |