HJR 27-SUPPORTING STATE ENERGY DEVELOPMENT  1:17:41 PM CO-CHAIR DONNA MEARS announced that the only order of business would be HOUSE JOINT RESOLUTION NO. 27, Supporting a comprehensive energy and economic strategy for the state; urging the federal government to disburse previously appropriated funds for energy and infrastructure projects; affirming the principle of energy equity and committing to a future-oriented energy strategy for the state; encouraging state agencies to aggressively pursue opportunities to develop and process critical minerals; directing state agencies to coordinate energy and economic planning; and championing a unified voice in support of the state's full development potential. 1:18:24 PM CO-CHAIR HOLLAND, Alaska State Legislature, as prime sponsor, introduced HJR 27 and described the purpose of the legislation. He referenced the Alaska constitution and the legislature's role in developing natural resources for the maximum benefit of the people. He pointed out that those natural resources are not only the traditional fossil fuel resources and mining but are also the natural resources found in Alaska's immense wealth of renewable energy and tidal power. He emphasized that the assets are global in scope, have sizable potential markets, and include job potential and value-added opportunities. 1:22:10 PM TIMOTHY TREUER, Staff, Representative Ky Holland, Alaska State Legislature, on behalf of Representative Ky Holland, prime sponsor, presented a PowerPoint explaining the scope and purpose of HJR 27 [hard copy included in the committee file]. He showed the title slide, which read "House Joint Resolution 27: Supporting State Energy Development," and moved to slide 2 which presented the sponsor statement and read as follows [original punctuation provided]: Sponsor Statement • House Joint Resolution 27 builds on the first session hearings and opportunities offers a framework for Alaska's energy and economic future and meeting our responsibility in article VIII, sec. 2, of the Constitution of the State of Alaska, mandating that the state's natural resources be developed "for the maximum benefit of its people," • Alaska possesses extraordinary assetsabundant oil and gas resources, world-class renewable energy potential, and critical and strategic minerals essential to advanced manufacturing, national security, and next-generation energy systems. This resolution recognizes that Alaska's long-term prosperity depends on responsibly advancing these resources together within a coherent, forward-looking framework. • HJR 27 emphasizes the importance of preparing Alaska for emerging energy industries, including: • Development of comprehensive energy and economic strategy that includes exploration, development, and production of fossil fuels, renewables, rare earth and critical minerals, and value-added manufacturing. • The production, stimulation, storage, and processing of hydrogen into products and fuels. • Advancing Energy and Innovation goals and strategies in the Statewide CEDS and the Alaska Energy Security Taskforce • Creation of 1,200 new scalable ventures and associated jobs by 2025 with a $5B GDP/$400M UGF/30,000 Jobs impact. MR. TREUER showed slide 3, titled "Alaska is at an Inflection Point." He pointed out that HJR 27 outlined the context of both the challenges and the opportunities of this inflection point in the history of Alaska's energy economy. He explained that the challenges the state faced included 11 years of net outmigration as of 2023. This was balanced by the enormous untapped potential across both legacy sectors and in emerging growth areas in energy and critical minerals. 1:22:48 PM MR. TREUER moved to slides 4 and 5. He summarized slide 4, titled "Legacy and Emerging Economic Sectors," which read as follows [original punctuation provided]: Future growth will come from value-added support of existing economic engines and investment in emerging sectors and jobs Diversification and technology growth aligns with our CEDS, state and national economic development trends, and history MR. TREUER explained that slide 5, titled "Emerging Sectors," addressed the question of where to focus targeted investments, pointing to areas outlined by the "Alaska Statewide Comprehensive Economic Development Strategy for 2022-2027." He expanded on four key areas which read as follows [original punctuation provided]: 1. Expand Reliable and Affordable Energy Access 2. Support Renewable and Emerging Energy Technologies 3. Leverage Energy for Industry Growth 4. Integrate Energy Planning with Workforce and Infrastructure Development 1:24:10 PM MR. TREUER showed slide 6, titled "Alaska Energy Security Task Force" and explained that the task force provided guidance in how to achieve the objectives of energy costs and energy security going forward. HJR 27 was an attempt to take the next steps needed to turn the findings into policy. He called the committee's attention to the slide 7, titled "Hydrogen," pointing out the enormous potential of the production, use, and export of hydrogen. He referenced a report from the University of Alaska Fairbanks, the Department of Energy's Arctic Energy Office, and the National Renewable Energy Laboratory, stating that "hydrogen is a versatile molecule that can be used directly as a fuel, can be used as a chemical feedstock, or a medium for storing energy." He described several methods for producing hydrogen. 1:25:03 PM MR. TREUER continued with slide 8, titled "2035 Benchmarks Set by HJR 27," which directed state agencies to coordinate energy and economic planning in order to achieve 1,200 new scalable ventures and associated jobs with the result of retaining employees and attracting new workers. It would also lower household energy costs and build the grid and industrial base to support the state's role as an exporter of clean energy and value-added mineral products. He concluded the presentation with slide 9, titled "HJR 27 Supports," which reiterated key points of the legislation and read as follows [original punctuation provided]: • Commitment to a comprehensive energy and economic strategy • Urges the federal government to provide project and financial support • Investment in the goals of the 2022 - 2027 Alaska Statewide Comprehensive Economic Development Strategy • Energy investments providing direct benefits to underserved regions • State agencies to aggressively pursue opportunities to develop and process critical and rare earth elements • Directs state agencies to coordinate energy and economic planning to create, by 2035, 1,200 new scalable ventures • Champions a unified voice in support of the state's full development potential 1:28:39 PM CO-CHAIR HOLLAND responded to a question from Representative Edgmon regarding the primary audience for HJR 27. He explained it would include the President and federal agencies. It was also for the Alaska Industrial Development and Export Authority (AIDEA) as well as key commissioners who have been guiding investments such as Alyeschem. In addition, the resolution is a message to the University of Alaska regarding their programs, their work in developing new technologies, and their research findings in the geologic hydrogen stimulation. He acknowledged that the energy policy is on the books, but it had not been updated for ten years, and it had not been codified. He explained that the resolution would provide scope and perspective as well as help with policy decisions. With the emerging interest and research into hydrogen capture, stimulation, and storage, there will be a need to update policy or create new policy. 1:35:59 PM CO-CHAIR MEARS opened invited testimony. 1:36:20 PM PAUL CRAIG, CEO, GeoAlaska, LLC, testified in favor of HJR 27. 1:37:07 PM The committee took a brief at-ease at 1:37 p.m. 1:38:20 PM MR. CRAIG described his background and experience. He explained his commitment to the future of energy in Alaska. He stated that GeoAlaska was an Alaskan majority owned geothermal company. He described the contributions of individuals and organizations who have invested time in GeoAlaska and pointed to the research of Dr. John Eichelberger, one of the world's leading vulcanologists. He discussed the ten-year leases on Mt. Spurr and Mount Augustine and pointed out that, despite the set-backs for renewables in Alaska, the President's "Big Beautiful Bill" included 30 percent tax credits for geothermal. He described Chugach Electric's letter of intent to purchase GeoAlaska power between 2029 and 2031. He also discussed use of geothermal power on the Augustine Island for AI factories and sustainable aviation fuel. He stressed the importance of a magma chamber at 6,500 feet below the surface, pointing out the potential for generating electricity with cutting edge technology. In the short term, GeoAlaska would pursue the 200-megawatt power project on Augustine Island. 1:44:54 PM MR. CRAIG responded to a question from Representative Kopp regarding transmission from Augustine Island to tie into the grid. He explained that the grid at Anchor Point would not be able to accept 200 megawatts. However, with the right technology, the power could be taken to the Beluga Power Station. He briefly described a proposed High Voltage Direct Current (HVDC) submarine cable to the Beluga Power Station, emphasizing it made the most sense for Alaska to own the transmission "highways" rather than private companies. He would like to see financial support from Alaska Industrial Development and Export Authority (AIDEA) or other Alaska entities. As a side note, he explained that much of the technology comes from the oil industry. 1:48:33 PM MR. CRAIG, in response to a question from Co-Chair Mears, explained that, in addition to exporting electrons via HVDC, GeoAlaska could also export chemicals such as green ammonia, sustainable aviation fuel, manufactured carbon negative protein, and photons by fiber optic cable. 1:50:20 PM MR. CRAIG addressed a series of questions posed by Representative Ruffridge regarding the economics of the project. He explained that, first, to get launched, they needed approximately $12 million. To get to the point where they could deliver 200 plus megawatts of power, they would need approximately $850 million in capital expenditures. After it was launched, it was estimated that it would cost 3 cents per kilowatt-hour (KWh), possibly less with potential value-added products. He described the project as an inexpensive and sustainable power source, characterizing geothermal as the most efficient way to produce renewable, sustainable energy. He explained that even under several scenarios, GeoAlaska would be competitive with gas-fired power whether it came from Cook Inlet, the North Slope, or was imported. 1:54:03 PM MR. CRAIG, in response to a question from Co-Chair Mears, stated that geothermal is not a depletable source of energy but rather exists in perpetuity. 1:55:14 PM MR. CRAIG responded to a question from Representative Ruffridge regarding eruptions which had primarily been pyroclastic rather than magma. He explained that the island is heavily monitored for risk, and the facilities would be "bunkerized." During periods of high risk, no one would be on the island. 1:57:38 PM MR. CRAIG, in response to a question from Co-Chair Holland, emphasized that there was lots of room for geothermal growth in Alaska. He pointed out that there were at least 50 volcanoes on the Aleutian Chain as well as possible geothermal activity near Nome and in Southeast Alaska. He said Alaska could be a leader in cutting edge geothermal technology. 2:00:46 PM PAUL FUHS, former Alaska Commissioner of Commerce and Economic Development and former Chairman of Board for the Alaska Industrial Development and Export Authority (AIDEA), testified in support of HJR 27. He presented a PowerPoint, titled "HJR 27 Blueprint for Alaska's Economy." He explained he could provide context for how Alaska's economy actually works. He showed slide 2, which read as follows [original punctuation provided]: HJR27 points to the future What is current status? -37% oil and gas -13% fish, timber mining tourism -29% federal money -20% retirement money -1% Entrepot MR. FUHS pointed out that Alaska's gross domestic product for the previous year was about $54 billion, and of that approximately $40 billion was oil and gas. He called attention to the significant contribution native corporations make to the Alaska economy. He moved to slide 3, titled "Downstream effects," explaining that productively managed resources drove the service economy, the hospitality economy, the health industry, and the education industry. 2:05:34 PM MR. FUHS moved to slide 4, titled "Leakage." He explained that the term "leakage" addressed the question of how much money came into the Alaska economy and actually stayed. He discussed each of the categories outlined on slide 4, which read as follows [original punctuation provided]: -Out of State workforce, 49% North Slope, 42% mining -Village energy costs, renewables -Fishing and tourism seasonal hire -Services and retail, health and internet sales -Industry multiplier effect 2:10:25 PM MR. FUHS moved to slides 5 and 6, titled "State funding structure" and "Future Outlook." He pointed to statistics showing that Alaska's oil revenues continued to be the primary source of funding for the state. He described the details on the two slides, emphasizing that the President's "Big Beautiful Bill" will have positive effects on Alaska's economy because of its emphasis on oil, gas, and mining. The slides read as follows [original punctuation provided]: State funding structure -Oil Revenue $2.5 bn -Oil based permanent fund draw -Oil contribution to PFD 2024 $630mn -Federal medicaid match $634mn -User fees $1 bn -Oil pays the bills Future Outloook -Oil, gas and mining -Trump executive order, Drue Pearce -Big beautiful bill, leases and process -Supreme court cases, Chevron, 7 counties infrastructure -Fish struggling -Tourism growing MR. FUHS showed slides 7 and slide 8. Slide 7, titled, "World Energy Consumption," showed a line graph of world energy consumption from 1990 projected to 2040. The graph estimated the use of five types of energy over time: petroleum and other liquids, natural gas, coal, renewables, and nuclear. He explained that renewable energy is not a threat to the oil industry due to the increasing demand for energy. He discussed the importance of international trade for Alaska gas and showed slide 8, titled "International Trade Perspective," which read as follows [original punctuation provided]: -China #1 Trade partner $1.6bn/yr -Gasline, sales commitments -Negative impact of Ukraine sanctions -Impact of tariff wars -Rise of BRICS The international trade issues included the importance of China as a trade partner, the Northern Trade Route, the need for oil spill response systems in the Arctic Ocean, and the concerns about Russia sending oil by the Northern Sea Route. 2:18:08 PM MR. FUHS showed slide 9, titled "Workforce Development." He explained that Department of Labor economists consider training and employing Alaskans to be of primary importance for the Alaska economy. He emphasized the importance of vocational training and discussed the following points from the slide [original punctuation provided]: -#1 economic development opportunity -Replace outside labor and increase multiplier effect on service economy -Provide hopeful future for our youth -Responsible school curriculum and vocational/technical needed 2:20:19 PM LORNA ORTIZ, PHD, Co-Founder and Chief Commercial Officer (CCO), GeoKiln Energy Innovation, testified in support of HJR 27. She described her background and how she became a co-founder of GeoKiln. She explained that she grew up in Puerto Rico and compared the energy issues of rural Alaska and Puerto Rico. She presented a PowerPoint, titled "The Next Energy Revolution: Clean Hydrogen Directly from Rock." She introduced the technology of thermally stimulated geologic hydrogen, or manufactured subsurface hydrogen (MSSH). She described it as low-cost and scalable. She moved to slide 2, titled "$1.5 Trillion Market Supply is the Constraint" and discussed the graph which projected the market value and the global hydrogen market from 2025 to 2050. She elaborated on the following points from the slide [original punctuation provided]: -Current methods: too costly or carbon-intensive -Geologic H2: huge promise but hard to find -GeoKiln: unlocks H2 with the right rock - reliably and at scale 2:25:31 PM DR. ORTIZ moved to the slide 3 and slide 4. Slide 3 illustrated the differences between natural or white hydrogen and stimulated hydrogen, also known as manufactured or engineered hydrogen. She discussed Slide 4, titled "Unlocking Scalable, Net-Positive Hydrogen with Subsurface Heat," illustrating the MSSH process and captioned "GeoKiln's Manufactured Subsurface Hydrogen (MSSHTM) Process places electric heaters into iron-rich rock to trigger a natural reaction that releases hydrogen." She described the points on the slide which read as follows [original punctuation provided]: -Validated chemistry -Proven oil & gas process -No Water Injection -Intermittent Power -Proprietary subsurface simulation & engineering 1M times faster production! -Energy Positive Process -Off-the-shelf hardware -Patent filing in process 2:32:42 PM DR. ORTIZ showed slide 5, introducing the team that invented the GeoKiln process. She moved to slide 6, titled "De-Risking Geologic Hydrogen Through a Phased Early Production System (EPS)," which described the three phases for retiring specific subsurface risks for thermal production. These included validating the geology, validating the productivity, and monetizing the production. She described a phase 1 project in Kansas and discussed other potential hydrogen production sites. She showed slide 7, titled "GeoKiln's Global Partnerships," and advanced to slide 8, titled "GeoKiln + Alaska: A H2 Opportunity Built for the Arctic." She emphasized the opportunity for hydrogen production in Alaska, pointing out the hydrogen-rich geologic formations, existing infrastructure, extensive well networks, and a workforce with the applicable skills. 2:39:06 PM DR. ORTIZ moved to slide 9, titled "For Alaska, In Alaska, With Alaska," adding context to the details which read as follows [original punctuation provided]: Proposed Statutory Framework for Hydrogen and Critical Mineral Development Permitting Classification Authorize hydrogen-dominant projects to be permitted under existing oil and gas regulatory frameworks, with resource classification and reserves reporting aligned to SPE Petroleum Resource Management System (PRMS) standards for in-situ manufacturing processes; require projects co-producing hydrogen and critical minerals to proceed under the Application for Permits to Mine in Alaska (APMA). Royalties and State Revenue Treatment Establish a reduced royalty structure for hydrogen- dominant production, with state revenue participation aligned to the Alaska Mining License Tax (7% of net income), reflecting hydrogen's low environmental impact; require coproduced hydrogen and critical minerals to be taxed under AMLT for both production streams. State Participation in Appraisal and Demonstration Authorize state-funded or royalty-offset appraisal programs to develop shared subsurface maps for hydrogen and associated iron mineral systems, validated through drilling; provide cost-sharing and surface access for early demonstration projects to accelerate commercial validation and responsible development. DR. ORTIZ completed her presentation by pointing out the benefits of hydrogen development and describing how it could benefit Alaska. She referred to details on slides 11 and 12 which emphasized the economics, global reach, and high returns of a GeoKiln investment in Alaska. 2:44:43 PM DR. ORTIZ responded to a question from Representative Holland regarding the potential uses of hydrogen energy in Alaska. She explained that among its many uses, it had maritime uses; it could be used for ammonia production; and it could be used to produce electricity and heat. 2:47:48 PM CO-CHAIR HOLLAND highlighted the increased knowledge and interest in hydrogen. He described the need to address gaps in the regulatory framework to enable hydrogen development. He also pointed out the challenges of energy policy management. 2:49:42 PM HJR 27 was held over.