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24–978 2017

S. HRG. 115–78 

THE POTENTIAL FOR INFRASTRUCTURE IMPROVEMENTS TO CREATE JOBS AND REDUCE THE 

COST OF LIVING THROUGH ALL-OF-THE-ABOVE 

ENERGY AND MINERAL PRODUCTION IN 

ALASKA 

HEARING 

BEFORE THE 

COMMITTEE ON 

ENERGY AND NATURAL RESOURCES 

UNITED STATES SENATE 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

MARCH 30, 2017 

( 

Printed for the use of the 

Committee on Energy and Natural Resources 

Available via the World Wide Web: http://www.fdsys.gov 
(II) 

COMMITTEE ON ENERGY AND NATURAL RESOURCES 

LISA MURKOWSKI, Alaska, Chairman 

JOHN BARRASSO, Wyoming 

JAMES E. RISCH, Idaho 

MIKE LEE, Utah 

JEFF FLAKE, Arizona 

STEVE DAINES, Montana 

CORY GARDNER, Colorado 

LAMAR ALEXANDER, Tennessee 

JOHN HOEVEN, North Dakota 

BILL CASSIDY, Louisiana 

ROB PORTMAN, Ohio 

LUTHER STRANGE, Alabama 

MARIA CANTWELL, Washington 

RON WYDEN, Oregon 

BERNARD SANDERS, Vermont 

DEBBIE STABENOW, Michigan 

AL FRANKEN, Minnesota 

JOE MANCHIN III, West Virginia 

MARTIN HEINRICH, New Mexico 

MAZIE K. HIRONO, Hawaii 

ANGUS S. KING, Jr., Maine 

TAMMY DUCKWORTH, Illinois 

CATHERINE CORTEZ MASTO, Nevada 

COLIN HAYES, Staff Director 

PATRICK J. MCCORMICK III, Chief Counsel 

CHUCK KLEESCHULTE, Senior Professional Staff Member 

ANNIE HOEFLER, Professional Staff Member 

ANGELA BECKER-DIPPMANN, Democratic Staff Director 

SAM E. FOWLER, Democratic Chief Counsel 

BRIE VAN CLEVE, Democratic Science & Technology Fellow 

DAVID BROOKS, Democratic General Counsel 
(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Murkowski, Hon. Lisa, Chairman and a U.S. Senator from Alaska ................... 1 

Cantwell, Hon. Maria, Ranking Member and a U.S. Senator from Washington .................................................................................................................... 4 

WITNESSES 

Masterman, Steve, State Geologist and Director, Division of Geological & 

Geophysical Surveys, Alaska Department of Natural Resources ..................... 5 

Potrzuski, Hon. Bob, Deputy Mayor, City of Sitka, Alaska ................................. 23 

Baker, Joy, Port Director, Nome, Alaska ............................................................... 31 

Moriarty, Kara, President and CEO, Alaska Oil and Gas Association ............... 170 

Rose, Chris, Executive Director, Renewable Energy for Alaska Project ............. 182 

Trumble, Della, Business Manager, King Cove Village Corporation .................. 216 

ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED 

Alaska Response Company, LLC and Aleutians Spill Control, Inc.: 

Letter for the Record ........................................................................................ 285 

Baker, Joy: 

Opening Statement ........................................................................................... 31 

Chart entitled ‘‘Port of Nome Vessel Calls, 1995–2016’’ ............................... 32 

Photo of a cruise ship in the Port of Nome .................................................... 34 

Photo of a vessel in the Port of Nome ............................................................. 36 

Photo of vessels in the Port of Nome .............................................................. 37 

Written Testimony ............................................................................................ 40 

Nome: Our Nation’s Arctic Port ...................................................................... 50 

State of Alaska Position Paper: Support for an Arctic Deep Draft Port 

at Nome to -36’ MLLW through $1.6M in Design Funds .......................... 52 

A Ten-Year Prioritization of Infrastructure Needs in the U.S. Arctic dated 

April 15, 2016 ................................................................................................ 56 

Report Card for Alaska’s Infrastructure: 2017 .............................................. 108 

Responses to Questions for the Record ........................................................... 247 

Bering Sea Alliance, LLC: 

Letter for the Record ........................................................................................ 288 

Bethel Native Corporation: 

Letter for the Record ........................................................................................ 290 

Cantwell, Hon. Maria: 

Opening Statement ........................................................................................... 4 

Cold Climate Housing Research Center: 

Letter for the Record ........................................................................................ 291 

Cook Inletkeeper: 

Letter for the Record ........................................................................................ 293 

Diesel Technology Forum: 

Letter for the Record ........................................................................................ 295 

Khadjinova, Rada: 

Statement for the Record ................................................................................. 299 

Kreiss-Tomkins, Hon. Jonathan: 

Statement for the Record ................................................................................. 303 

Masterman, Steve: 

Opening Statement ........................................................................................... 5 

Written Testimony ............................................................................................ 8 

Responses to Questions for the Record ........................................................... 236 
Page

IV 

Moriarty, Kara: 

Opening Statement ........................................................................................... 170 

Written Testimony ............................................................................................ 172 

Responses to Questions for the Record ........................................................... 249 

Murkowski, Hon. Lisa: 

Opening Statement ........................................................................................... 1 

National Wildlife Refuge Association: 

Letter for the Record ........................................................................................ 305 

Potrzuski, Hon. Bob: 

Opening Statement ........................................................................................... 23 

Written Testimony ............................................................................................ 25 

Responses to Questions for the Record ........................................................... 246 

Rose, Chris: 

Opening Statement ........................................................................................... 182 

Written Testimony ............................................................................................ 184 

Responses to Questions for the Record ........................................................... 251 

Sitnasuak Native Corporation: 

Letter for the Record ........................................................................................ 309 

St. Mary’s Native Corporation: 

Letter for the Record ........................................................................................ 313 

Trumble, Della: 

Opening Statement ........................................................................................... 216 

Written Testimony ............................................................................................ 219 
(1) 

THE POTENTIAL FOR INFRASTRUCTURE 

IMPROVEMENTS TO CREATE JOBS AND 

REDUCE THE COST OF LIVING THROUGH 

ALL-OF-THE-ABOVE ENERGY AND MINERAL 

PRODUCTION IN ALASKA 

THURSDAY, MARCH 30, 2017 

U.S. SENATE, COMMITTEE ON ENERGY AND NATURAL RESOURCES, Washington, DC. 

The Committee met, pursuant to notice, at 2:35 p.m. in Room 

SD–366, Dirksen Senate Office Building, Hon. Lisa Murkowski, 

Chairman of the Committee, presiding. 

OPENING STATEMENT OF HON. LISA MURKOWSKI, 

U.S. SENATOR FROM ALASKA 

The CHAIRMAN. Good afternoon, everyone. The committee will 

come to order. 

I am pleased to welcome a great panel of Alaskans on today’s 

sesquicentennial as we commemorate 150 years since the date Russia transferred to the United States the amazing place that we call 

Alaska. I had an opportunity to speak to this on the floor yesterday, and we just came from a lunch where we had further conversation, so it is only fitting and appropriate that we take a little 

bit of time this afternoon. 

As a committee, we have been focused on infrastructure as it relates to energy and natural resources, and we have had a broad 

and expansive discussion. I appreciate the partnership that we 

have with Senator Cantwell in looking at our nation’s energy infrastructure needs. 

I think we recognize in the State of Alaska that we come from 

a state where we have a great deal of resource to offer, but more 

often than not, our opportunity to access that resource is limited 

because our infrastructure is limited. So this is an opportunity to 

talk about how we can enhance our infrastructure and thus better 

not only Alaska’s position, but truly the position of our nation as 

a whole. 

So again, this is the fourth now in our ongoing series of hearings. 

Over the past few weeks we have focused on infrastructure needed 

for our electric grid, mineral development, federal land maintenance backlogs, western water supplies, and many of the other 

challenges within our jurisdiction. But today we are here to examine infrastructure through the lens of Alaska. The United States 

has had many reasons to be focused on Alaska, and as I noted in 
2 

the statement that I made on the floor last night, there were many, 

many reasons that we looked specifically to Alaska with this purchase from the Russian territory. It was about our fisheries. It was 

about our strategic location. It was about our mountains. It was 

about the land itself. It was just to recognize that the size and 

scope of Alaska offered so much. 

One of the best returns that Alaska continues to provide for all 

of America is really through our natural resource production. We 

have tremendous stores of all types of energy. We have now produced nearly 19 billion barrels of oil. We have at least twice that 

left untapped. We have tremendous reserves of natural gas, some 

255 trillion cubic feet, just waiting to be brought to market. We 

have vast amounts of coal, methane hydrates, and unconventional 

resources as well. 

Renewable energy is another hallmark of our state. We have it 

all. We have hydropower. We have wind. We have solar. We have 

geothermal. We have ocean energy. We have biomass. We have 

every renewable resource that you can think of. Many of our communities, especially in our remote areas, are developing hybrid 

microgrids that integrate these local resources to help them move 

away from expensive diesel generation. They are pioneering in 

these areas, and it is good to be a leader and have that be recognized. 

Alaska has also been the site of many mineral rushes over the 

years in Juneau, in the Klondike, in Nome, in Fairbanks. And 

again, there is plenty more of that where it came from. Today Alaska continues to have a world-class mineral base, ranging from gold, 

silver, copper, and zinc to rare earth elements, graphite, and platinum group metals, all of which serve as building blocks to our nation’s manufacturing sector. 

Finally, I often describe myself as a child from the Tongass, having been born in Ketchikan. But when you think about the 

Tongass, nearly 17 million acres, more than three times the State 

of Massachusetts, and when you think about our extraordinary 

timber potential, really greater than any other state in the nation, 

and yet right now it is just a shell of its former self. 

I bring all this up not to recite a litany, but to demonstrate that 

Alaska was always a resource-producing state. That is where our 

bounty has been. That was the promise we received at statehood 

and many times since then. Responsible resource production was 

how we would become a steady member of our Union, how we 

would build our economy, and how we would sustain ourselves 

across generations. 

In recent years, access to federal lands and waters has become 

an issue that threatens our future. We have endured years of seeing our lands and our waters, our best opportunities for economic 

development, systematically locked down. 

But I think that we have an opportunity in a new Administration. Even in the depths of an economic recession that we are clearly seeing now as Alaskans—we know that, and it is a recession 

with a capital R. We look at this fiscal crisis, but I think we have 

good reason to be optimistic. 

Alaska is truly an all-of-the-above state. We were a true bargain 

for the country at roughly two cents an acre when that deal was 
3 

inked 150 years ago, but it is also critical to remember that we are 

still a young state. We have very little infrastructure of any kind, 

especially compared to older states, and we know that new infrastructure is one of the best ways to address our major challenges, 

including our rural energy costs. 

So I look forward to hearing from our witnesses about the opportunities that we have to produce more of Alaska’s resources in an 

environmentally sound manner while maintaining the beauty and 

the wildlife that make Alaska a great place to call home. We have 

proven across decades now that that is possible. What we need 

more than anything is access, and we need a partner at the federal 

level. 

To help put federal policy for Alaska on a better track, today we 

are here to consider a number of questions. First, what policies 

should we implement to identify Alaska’s energy and mineral deposits, whether through mapping or mineral exploration? And it is 

great to have at the dais here the Renewable Energy Atlas of Alaska identifying some of our great opportunities there. What policies 

should we pursue to open more of Alaska’s resources to responsible 

exploration and development? And what types of infrastructure, 

from roads to ports to pipelines, will we need to bring these resources to market, and what is our federal system capable of in 

granting approvals on a timely basis? 

We are going to hear testimony this afternoon regarding the Port 

of Nome and all that that opportunity presents. But we know that 

we need more than one port between Unalaska and the North, so 

we look to opportunities at Port Spencer, in Wainwright and Barrow, all the way along the coast, a system of ports and recognizing 

the need that we will have going into the future here, and what 

can be done to fulfill our state’s goal of harnessing more of our renewable resources, especially to help our rural villages reduce the 

highest energy costs in the nation? 

Finally, understanding the status of the state and federal budgets, what are our low-cost options and how can we attract more private sector investment to Alaska? 

To help us understand these issues, we have a great panel of witnesses. We have Steve Masterman, who is Alaska’s State Geologist. 

We have Mr. Bob Potrzuski, who is the Deputy Mayor in Sitka, a 

beautiful community in Southeast. We have Joy Baker from up 

north, the Executive Director for the Port of Nome. We have Kara 

Moriarty, who is the President and CEO of the Alaska Oil and Gas 

Association. We also have Chris Rose. Chris has been before the 

committee on several occasions. He is the Executive Director of the 

Renewable Energy Alaska Project. And finally, we have Della 

Trumble, also not a stranger to this committee, the Business Manager for the King Cove Native Corporation. 

This is a good day to be talking about Alaska and a great group 

of Alaskans to have here. I welcome all of you, and I thank you for 

traveling such a long distance to be with us. 

I am going to turn to Senator Cantwell for her opening remarks 

and thank her for the partnership that we have had as we have 

worked, again, not only on national infrastructure issues but her 

interest in helping us with the Alaska infrastructure piece. 

Senator Cantwell. 
4 

STATEMENT OF HON. MARIA CANTWELL, U.S. SENATOR FROM 

WASHINGTON 

Senator CANTWELL. Thank you, Chairman Murkowski, for holding this oversight hearing. 

As you know, I went to Bethel last February, along with several 

members of the Energy Committee, to learn about innovative solutions that Alaskans are coming up with. So today I am sure we are 

going to hear more from our local leaders here about the challenges 

that you face in Alaska’s communities, not the least of which is the 

high cost of energy. 

Alaskans are used to goods and services being more expensive 

than the Lower 48, anywhere from two to ten times more expensive. And as the Chair reminds us, for households in rural Alaska, 

half of the total expenses can go to paying energy bills. Nearly 90 

percent of rural communities are dependent on diesel fuel for their 

primary energy needs, which can cost over $8 a gallon. So I do not 

need to tell anyone here in this room that oil price fluctuation can 

hurt Alaska communities, and that is why diversification and new 

solutions are being deployed across Alaska to help reduce the cost 

of energy and moderate the impact on these fluctuations. 

Dozens of Alaskan communities are already diversifying their 

diesel microgrids with renewable sources of energy. The City of Kodiak combines wind turbines, fly wheels, battery storage, and hydropower. The cost of wind energy is $0.11 per kilowatt hour there 

compared to diesel generation, which is $0.29 per kilowatt hour. 

Weatherization of homes is also critically important in Alaska, 

especially in communities where home heating oil costs $8 per gallon. So I argue that it is time to make sure that the weatherization 

program helps all citizens of our country, but particularly the Alaskans. In my home State of Washington, the Weatherization Assistance Program helps 2,700 homes every year, and makes a big difference to those families. 

So transitioning electricity generation to renewable energy and 

improving our energy efficiency in Alaska’s homes and buildings 

not only saves Alaskan communities millions of dollars, but it also 

helps mitigate the contribution to global climate change. As we all 

know, Alaska is disproportionately impacted by the devastating impacts of climate change. Alaska is warming at twice the rate of the 

rest of the country, which has a big infrastructure implication for 

a state 80 percent covered in permafrost. 

Communities faced with melting sea ice or permafrost are being 

forced to decide between relocating or staying put in harsh storms 

and rising sea levels. And I can tell you, Madam Chair, that we 

have the same issue in Washington along our coast as it relates to 

several of our Native American tribes who are in the very process 

of moving to higher ground because of various challenging situations. 

We know this too—cookie cutter solutions do not work in Alaska. 

The geographic isolation and limited local economies, cold climate, 

small and isolated grids present complicated challenges. The solutions that can be adopted in Alaska are not necessarily the exact 

same ones that are in other parts of the country, so we need to 

work on energy solutions developed by Alaskans for Alaskans with 
5 

the technical assistance and robust networks of our national labs, 

academia, and the private sector. 

Now, I would say in closing, this is not of interest just to the 

Chair of this committee. A 2015 study showed that the Puget 

Sound area benefited from our Alaska trade relation with 113,000 

jobs and $6.2 billion in wages. That is in freight and cargo, seafood, 

maritime, and health care. The report is titled, ‘‘The Ties that Bind 

Puget Sound and Alaska.’’ We have been bound for a long time, 

and we plan to be bound for a long time in the future. In my opinion, helping Alaska work through its energy solutions is good for 

all of the economy of the Pacific Northwest. 

I look forward to hearing from the witnesses about what your 

ideas are on how we can best help. Thank you for traveling to be 

here with us in our nation’s capital. 

The CHAIRMAN. Thank you, Senator Cantwell, and I appreciate 

the recognition at the end about the economic ties that our two 

states have. I can tell you that whether you are from King Cove 

or Anchorage or Nome or Sitka, all of these communities rely on 

goods that come through Washington. They are either coming out 

of the Port of Tacoma or the Port of Seattle or they are coming 

through by air out of Sea-Tac. So when you talk about ties that 

bind, our economies are inextricably tied. I appreciate you noting 

that as well. 

With that, we will begin comments from each of you. I would ask 

that you try to keep your comments to about five minutes or a little 

bit less, if possible. Your full statements will be included as part 

of the record, but that will allow for an opportunity for us to go 

through the full panel and then be able to ask questions at the end. 

Mr. Masterman, if you would like to kick off the panel here this 

afternoon. Welcome and thank you for being with us. I am looking 

forward to your perspective as our state’s Geologist. 

STATEMENT OF STEVEN MASTERMAN, STATE GEOLOGIST AND 

DIRECTOR, DIVISION OF GEOLOGICAL & GEOPHYSICAL SURVEYS, ALASKA DEPARTMENT OF NATURAL RESOURCES 

Mr. MASTERMAN. Thank you for that. Chairwoman Murkowski, 

Ranking Member Cantwell, honorable members of the Senate Committee on Energy and Natural Resources, as you noted, my name 

is Steven Masterman. I am Alaska’s State Geologist and Director 

of the Alaska Division of Geological and Geophysical Surveys. On 

behalf of Governor Bill Walker and DNR Commissioner Andy 

Mack, I thank you for this opportunity to testify today. 

Today I will highlight the vast potential for energy and mineral 

development in Alaska, summarize the current state of infrastructure and resource information, and identify some of the areas in 

need of investment to spur development. 

As you know, Alaska holds some of the world’s most prospective 

areas for hydrocarbon and mineral discovery on the planet. Infrastructure needed to increase resource development is critical to 

supporting Alaska’s future economy, and there is an important federal role to be played. 

The focus of my testimony today is Alaska’s mineral potential 

and its infrastructure needs. But before focusing on Alaska’s mineral development needs, I want to stress the need to support devel-
6 

opment of Alaska’s oil and gas resources as they remain our economically most important natural resources. 

Alaska has been working hard to develop what may be the largest infrastructure project in our nation’s history, a large diameter 

natural gas line from Prudhoe Bay to south central and associated 

gas treatment and export facilities. This project would create thousands of jobs domestically supplying equipment, materials, and personnel and would inject billions of dollars into the state and national economy. The sale of this volume of gas would also meaningfully improve the United States balance of trade. 

In addition to this project, new east-west roads on Alaska’s North 

Slope would facilitate exploration and production, connect communities, and reduce the cost of living in the region. 

Following recent North Slope oil discoveries, there is a need to 

improve knowledge of the region’s petroleum geology and update oil 

and gas resource assessments. 

Finally, federal investment in high-risk, high-reward research 

into Alaska’s unconventional gas hydrates, heavy oil, and shale 

should be a national focus because these represent undeveloped national scale resources. 

While there is no question that Alaska’s mineral potential is immense, this potential is not yet realized. Alaska currently has five 

large operating metal mines. Western Australia, which is not even 

twice as large as Alaska, has 192. This underdevelopment can be 

measured in dollars. Mineral production in 2015 in western Australia was about $100,000 a square mile. In Alaska, it was less 

than $5,000. 

Alaska has very little road access. While the state has 17 percent 

of the nation’s land mass, we have less than one percent of the nation’s roads. All the large mines in Alaska are located within 50 

miles of existing roads or the coastline, and the majority of advanced projects and half of the state’s 7,400 mineral prospects also 

fall within 50 miles of a road. Simply put, infrastructure facilitates 

mineral discovery and production. 

For natural resource development, infrastructure not only means 

roads but also the foundation for all of development: information. 

Every step of the discovery and development of an oil or gas facility 

or a mine necessitates a comprehensive understanding of the geology and the surrounding environment to ensure that a project is 

executed in a safe and environmentally sound fashion. 

The fundamental information required is mapping, the simple 

understanding of where things are. Unfortunately, Alaska’s geological, geophysical, geochemical, topographic, and hazard maps are incomplete at a scale usable for mineral or infrastructure development. At the current rate, many of these map sets will take centuries to complete. There has never been a better time to acquire 

this information because satellite computing and communication 

technologies allow for rapid data acquisition and distribution. 

There are numerous advanced mining projects that would benefit 

from physical infrastructure development in the form of roads, 

pipelines, ports, or processing facilities. These are detailed in my 

written testimony. Federal participation in these projects would 

move many toward development. 
7 

At a time when domestic infrastructure investment is a national 

priority, the United States is becoming more than ever dependent 

on foreign supplies of minerals. With infrastructure support, Alaska’s storehouse of mineral wealth could be key to reversing this 

trend. 

The potential national benefits from infrastructure development 

in Alaska are significant, increasing the domestic supply of minerals, increasing our competitiveness, strengthening America’s position in the Arctic, boosting our economy, and improving our balance of trade. Through a federal partnership, we can build an information and infrastructure base that will promote Alaska’s potential 

to lead the nation in mineral production and safeguard our economy and military from reliance on foreign supplies of minerals. 

In summary, the more we provide access to Alaska’s natural resources, the more employment, economic, and security benefits we 

expect to accrue to Alaska and the nation. With solid federal support, we look forward to filling Alaska’s role as a storehouse for our 

nation’s energy and mineral resources. 

Thank you again for the opportunity to testify today. 

[The prepared statement of Mr. Masterman follows:] 
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The CHAIRMAN. Thank you, Mr. Masterman. 

Mr. Potrzuski. 

STATEMENT OF HON. BOB POTRZUSKI, DEPUTY MAYOR, CITY 

OF SITKA, ALASKA 

Mr. POTRZUSKI. Good afternoon, Chairman Murkowski, Ranking 

Member Cantwell, and members of the committee. My name is Bob 

Potrzuski, and I am fortunate enough to be the Deputy Mayor for 

the City and Borough of Sitka, Alaska. I have served on the assembly since 2015, and as a retired social studies teacher, I am beyond 

thrilled to be testifying today. 

Besides this amazing opportunity to personally be involved in our 

democracy, I am here to encourage Congress and the Trump Administration not to forget the funding of renewable energy projects 

in the development of any national infrastructure package. 

Located in southeast Alaska, Sitka is the United States’ largest 

city, comprising 4,811 square miles of land and water. The city exists on approximately 14 miles of road on the western side of Baranof Island, completely surrounded by the beautiful Tongass National Forest. Accessible only by boat or plane, Sitka is certainly 

rural Alaska. Our town is home to the largest commercial fishing 

port in southeast Alaska and ranks as the 11th largest seafood port 

in the entire United States. 

Sitka has also found a niche as the regional hub for health care, 

and as with many southeast communities, cruise ships visit our 

port between the months of May and September. In addition, we 

are proud to be home to Coast Guard Station Sitka, with over 200 

personnel stationed locally. Sitka is a robust, hardworking, and 

independent community. 

Sitka also has an extremely mild climate. With our oceanfront 

proximity, we receive abundant rainfall. The average annual precipitation is over 131 inches, making hydroelectric power an obvious solution for our community. 

However, at the turn of the century, demand for electricity was 

outstripping our generating capacity, affecting our ability to diversify and develop our economy. The Blue Lake Hydroelectric Project 

was originally licensed in 1958 and operates in conjunction with 

the Green Lake hydroelectric licensed in 1979. 

Between 2002 and 2008, fuel prices in Sitka skyrocketed from 

$0.71 a gallon to $3.24 per gallon. Electric power became cheaper 

than fuel, and many residences and businesses switched to electric 

heating. In 2006 and 2007, Sitka experienced significant load increases. About half of this growth resulted from increased use of 

electricity for heating, the other half from expansion of Sitka’s seafood processing industry. Annual hydro generation shortages as 

great as 10,000 megawatts were projected by 2012, and with the 

then-cost of diesel fuel, this would have cost taxpayers and ratepayers an additional $3.3 million per year, equivalent to an electric 

rate increase of 30 percent. 

In 2007, the city began feasibility studies to determine how to 

meet these dramatic load increases. The studies evaluated hydro, 

diesel, wind, tidal, and geothermal energy. Generally, hydroelectric 

generation was considered the best alternative. It is great for the 

environment as hydro produces no carbon, does not contribute to 
24 

ocean acidification, a leading concern of our fishermen, and is clean 

with no negative impacts on wildlife. 

In October 2010, the public voted in favor of the Blue Lake Expansion and Modernization Project. In late 2012, general construction bid costs came in at $145 million, which was shockingly higher 

than the $49 million engineers had estimated in 2008. As with 

many capital projects, the original estimate likely did not adequately consider the cost of work in southeast Alaska or the difficult access, constraints, and unique construction methods required for the project. 

Thankfully, the State of Alaska did provide grants to lower the 

debt service, but there was no federal assistance for the project. 

Construction crews raised the dam by 83 feet and built a new powerhouse. In total, this project increased electrical capacity by over 

27 percent. Construction of the largest public works project in the 

city’s history was completed in November 2014. 

Now Sitka is faced with other electrical needs: rebuilding an electric substation, rebuilding a major transmission line, overhauling 

the Green Lake Hydro Project, and rebuilding our emergency diesel 

backup system. These necessary projects come with a price tag of 

over $14 million, all at a time when Sitkans are paying for a new 

dam. 

The support of the community has been tested as electrical rates 

continue to rise; however, the significant community investment 

has ensured an environmentally responsible and renewable energy 

source for Sitka’s future. 

Sitka and other Alaska communities are currently similarly 

placed as many rural communities in the Lower 48 were in the 

1930s and 1940s when the TVA brought electricity to Appalachia 

and the Bonneville Project helped electrify the Northwest. Though 

we are blessed with abundant natural resources such as rain and 

wind, the barriers to harnessing these sustainable energy sources 

are the staggering upfront capital costs. Federal assistance investing in renewable energy infrastructure or adding energy to the national infrastructure package is essential for future economic development and the success of our small rural communities. 

Thank you so much. 

[The prepared statement of Mr. Potrzuski follows:] 
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The CHAIRMAN. Thank you. I so appreciate that testimony. 

Joy Baker, welcome. 

STATEMENT OF JOY BAKER, PORT DIRECTOR, NOME, ALASKA 

Ms. BAKER. Thank you, Chairman Murkowski, Ranking Member 

Cantwell, and members of the committee. My name is Joy Baker, 

and I want to thank you for the opportunity to appear before you 

today. I am the Port Director in Nome, Alaska, where I have 

worked for the past 25 years. My testimony today is based on the 

experience I have gained while working to expand the port’s capabilities to meet increased vessel traffic and support economic development in the region. 

There are really only three ways to get to Nome, to quote our illustrious Mayor Beneville: by boat, by plane, and of course, by dogsled. Today I will focus on Alaska’s ports and highlight the opportunities specifically presented in Nome for the near-term development of an Arctic deep draft port. 

[The information referred to follows:] 
32 
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Ports are the lifeblood of Alaska. It is that simple. There are no 

statewide major land transportation links to the Lower 48, and it 

cannot all come in by air. It is the 125 ports scattered along 44,000 

miles of Alaska’s coastline that provide the lifeline for commodities 

coming in from the outside or for resource exports from the state. 

The vast majority of cargo coming into Alaska flows through the 

Port of Anchorage, with significant exports moving through ports 

in Valdez, oil; Seward, coal; Unalaska, seafood; Nikiski, LNG; and 

of course, Red Dog, minerals. The network of ports in Southeast 

and South Central also make it possible for the cruise ship industry to bring more than one million tourists a year to Alaska’s 

shores. 

[The information referred to follows:] 
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The Port of Nome is located just below the Arctic Circle, and it 

is a regional transshipment hub for more than 54 western Alaska 

communities. These communities rely on the port for movement of 

heating oil and gasoline, construction supplies, nonperishable foods, 

gravel, and other cargo. It is also the staging ground for operations 

north of the Bering Strait, as vessels prepare for the ice-free season 

and consequently serves as their demobilization center in the fall. 

[The information referred to follows:] 
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Despite the overall importance of ports to the state, the American Society of Civil Engineers 2017 Infrastructure Report gave 

Alaska’s ports a grade of D. This is a sobering message and underscores the need for action. 

As this hearing is focused on energy and mineral production opportunities, I will highlight how Nome is well positioned to support 

both. Mining has played a vital role in Nome’s development and 

will continue to do so in the years to come. The world-class Graphite Creek prospect near Nome has been characterized as the best 

graphite deposit in the country. The Port of Nome will play a key 

role in supporting its development and exporting the raw material. 

According to the USGS, the area north of the Arctic Circle has 

an estimated 90 billion barrels of undiscovered, technically recoverable oil and more than 1.6 trillion cubic feet of technically recoverable natural gas. 

While Shell’s exploration of the Burger Prospect led to a spike in 

vessel activity in the Chukchi Sea region, the reality is that vessel 

traffic at the Port of Nome continues to grow significantly postShell. The bulk of the 2016 increase is directly related to more foreign fuel tankers, research vessels, domestic and foreign government vessels, gravel, and cargo. Nome also hosted the largest 

cruise ship to transit the Northwest Passage for a very successful 

port call last August. 

The increased maritime activity brings much needed economic 

opportunity to the region, but also great risks without the infrastructure to support the needs of the larger vessels. We need to expand our port facilities to minimize the number of ship-to-ship fuel 

transfers and reduce waste discharge in Arctic waters capable of 

harming cultural subsistence hunting and fishing. 

The time is now to move ahead with the development of an Arctic deep draft port in Nome, and Nome stands ready. 

After extensive evaluation of numerous sites in 2015, the Army 

Corps selected the Port of Nome as the preferred site. This decision 

was based on the Port of Nome’s overall ability to meet the mission 

operations criteria, the geographical advantages, and the presence 

of active commercial port operations, as well as existing shorebased infrastructure, including a fuel tank farm, a fuel service hospital, and an airport with two 6,000-foot runways. 

The development of an Arctic deep draft port in Nome is critical 

to the long-term viability of the community, the region, and the 

Arctic. Yes, there is need for development of additional port capacity in northwest Alaska, and Nome will be the first step of many. 

In conclusion, here are my recommendations: secure strong federal funding for Alaska’s ports, including dredging, maintenance, 

and construction; support the timely development of an Arctic deep 

draft port in Nome; accelerate hydrographic charting in Alaska, especially in the Arctic; and support the designation of Nome as an 

Arctic strategic port. 

While Alaska has made significant progress since statehood, the 

next few years will make a big difference, and support from Congress is absolutely necessary to achieve that goal. 

Thank you again for the opportunity to appear before the committee, and I am happy to answer any questions you may have 

later. And I would like to request that my full written statement 
39 

be included as part of the record, along with several supporting 

documents. 

[The prepared statement of Ms. Baker follows:] 
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The CHAIRMAN. They will be incorporated as part of the record. 

Thank you, Joy. 

Kara Moriarty, welcome. 

STATEMENT OF KARA MORIARTY, PRESIDENT AND CEO, 

ALASKA OIL AND GAS ASSOCIATION 

Ms. MORIARTY. Good afternoon, Chair Murkowski and other 

members of the committee. My name is Kara Moriarty, and I am 

the President and CEO of the Alaska Oil and Gas Association. It 

is truly an honor to be here today, and I thank you for the opportunity to testify. 

To truly evaluate the potential infrastructure needs and benefits 

relating to oil and gas in our state, it is important to put in context 

our state’s resource potential, which you mentioned at the beginning of the hearing, as well as our nation’s resource demands. 

It is important to note the significance of the industry on the 

economy. Mr. Masterman mentioned that, and the reason we say 

that is one-third of all jobs in the state can be attributed back to 

the oil and gas industry. And revenues from the industry have 

dominated the state revenues. To put it bluntly, the oil and gas industry is the state’s largest economic driver. 

On this very day 150 years ago, the United States purchased 

Alaska from Russia. And I doubt that little did Americans know 

what other vast resources were yet to be discovered beyond what 

they knew was already there. 

The first oil was discovered early in the 20th century, but the 

first commercial discovery happened 60 years ago in the Cook Inlet 

Basin. But what truly changed the landscape for Alaska was the 

giant discovery on the North Slope. At the time, the Prudhoe Bay 

field was the largest discovery in North America, with estimates of 

9.6 billion barrels of oil and 26 trillion cubic feet of natural gas. It 

was during this time in the 1960s that Congress enacted a series 

of significant environmental legislation and the Trans-Alaska Pipeline System was constructed. 

This summer will mark the 40th anniversary of production from 

the North Slope. And since that time, over 17 billion barrels of oil 

have been produced. Production peaked at just over two million 

barrels a day and, at the time, represented a quarter of our domestic production. But today production now averages around 500,000 

barrels a day, which represents less than six percent of the nation’s 

domestic supply. 

But there is reason for great optimism for Alaska, that we can 

continue to assist this nation in meeting its energy demands for future generations. Just last year, production increased in Alaska for 

the first time from the previous year, and stable and increased production is not only important for the upstream side of the industry, 

but also for the downstream side. In-state refineries not only supply Alaska families and businesses with much important fuels, but 

they also provide—the refineries provide—a crucial role in supporting our military forces as well. 

So billions and billions of oil and natural gas remain, and estimates show that one-third of the nation’s reserves are in the Arctic. 

My written testimony goes into detail about the potential nearterm and long-term projects. 
171 

But as we talk about infrastructure, the U.S. Department of 

Transportation released a report prioritizing the infrastructure 

needs in the Arctic. Conservative estimates predict that vessel traffic in the Arctic will more than double by 2023. Obviously, identifying infrastructure projects that have multiple benefits to multiple 

stakeholders is vital. The report focused on five core components: 

navigable waterways, physical infrastructure, information infrastructure, response services, and vessels. Progress in those areas 

will invariably support both offshore and onshore oil and gas development. 

The report offered a litany of recommendations, some of which 

you just heard about today such as an Arctic port, coordination 

with stakeholders to coordinate research efforts and to continue to 

allow for subsistence activities, charting maritime waters, improving weather and climate predictions, and supporting development 

of response equipment. 

The industry does not desire federal infrastructure projects that 

would serve to merely subsidize one particular energy project over 

the other. Rather, efforts should focus on coordinating with stakeholders to identify infrastructure corridors, which could mean 

shared roads and pipelines, to not only aid the industry, but also 

local communities, and other aspects of the public and private sector. 

Frankly, the federal agencies could do more to help build an environment so that private industry will build the infrastructure by 

working together to assist in permitting and regulatory cooperation. 

The North Slope needs basic infrastructure projects that will 

meet the most basic needs. And of course, those would lead to benefits to the industry, but what really leads to delay in infrastructure 

from our perspective is often the cost and the delays. We just ask 

for reasonable, rational, and timely permitting and a regulatory 

framework to allow the private industry to invest in the infrastructure to support the communities and ourselves. 

So, again, we thank you for the opportunity to be here today, and 

I, again, appreciate and will take any questions that you may have. 

[The prepared statement of Ms. Moriarty follows:] 
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The CHAIRMAN. Thank you, Kara. 

Chris, welcome. 

STATEMENT OF CHRIS ROSE, EXECUTIVE DIRECTOR, 

RENEWABLE ENERGY ALASKA PROJECT (REAP) 

Mr. ROSE. Thank you, Madam Chairwoman and members of the 

committee. It is a great honor to be here. I appreciate the opportunity to speak. 

I am the Executive Director of Renewable Energy Alaska Project, 

which is a statewide coalition of more than 80 organizations that 

have a mission of promoting renewable energy and energy efficiency in Alaska. And we typically do not focus in on specific 

projects. Instead, we promote policies and programs that will develop renewable energy projects and energy efficiency projects 

across the state. 

In 2008, we were instrumental in getting a state law passed to 

create the renewable energy fund, which has set up a great vetting 

system to look at how projects should be developed and score them. 

That resulted in $257 million of state money going into renewable 

energy projects and leveraging about another $130 million in private and federal money. 

Sixty-six projects have been built so far, mostly in rural areas, 

and we have talked about how expensive it is to operate in these 

communities where the cost of energy often takes 50 percent of a 

person’s take-home pay. Those 66 projects so far are displacing 30 

million gallons of diesel today, and we believe that we can continue 

to optimize those projects. We know that we can continue to build 

more projects, but as you know, the State of Alaska’s budget crisis 

has got us to the point we do not have a lot of grant money right 

now. 

So one of the things that we are looking at is we are at a crossroads and we need to find ways to bring in public-private investments. I spent the last three days in Juneau with Bert Hunter, 

who is the Chief Investment Officer of the Connecticut Green 

Bank. That is the second time he has come to Alaska graciously 

this year. We met with legislators, members of the Administration, 

the Mayor of Anchorage, and bankers yesterday. 

Essentially what Connecticut has done has been really interesting for us to see. They had a renewable energy fund like we did 

for about 11 years, from 2000 to 2011, and during that time, they 

had about a one to one leverage. They put in about $350 million 

in incentives, and they got about $350 million back out in matching 

money. In the five years since they have had the Green Bank, since 

2011, they have done a billion dollars worth of clean energy financing, almost all with private money. They are getting 11 to 1 ratios 

now on private money. Some of the biggest banks in the world are 

now part of the Connecticut Green Bank, and essentially what they 

have been able to do is leverage very small amounts of public dollars and de-risk these projects and educate the private banking 

community on how this works. We believe this is a real opportunity 

for the State of Alaska. 

And Connecticut has really benefited from the fact that there are 

federal programs out there like USDA, like other loan guarantees, 

and the things that are supporting people all around the country 
183 

are also supporting the people in Connecticut indirectly when the 

Connecticut Green Bank can use that to de-leverage or to de-risk 

projects. 

We are here to talk about infrastructure, and of course, one of 

the biggest infrastructures we have got here in the country is our 

buildings. We have 120 million buildings across the country. It uses 

42 percent of our primary energy and about 72 percent of our electricity. And in Alaska, we have evidence now that we can do a lot 

better. We have an inefficient building stock. The state’s housing 

authority has administered a program over the last ten years or so 

that has served over 40,000 homes, and the average savings has 

been 30 percent. 

We are spending, in the State of Alaska, collectively, we esti- mate, about $5 billion a year on energy. That is transportation, 

heating, and electricity. And just from our experience in seeing how 

inefficiently some of this energy is being used, we believe we could 

save 20 percent of that. That is a billion dollars that we could keep 

in our economy every year if we invest. And those investments, of 

course, are going to bring all kinds of jobs. 

There are three million people working in the renewable energy 

industry right now in the United States. Last year globally the renewable energy industry grew by seven percent. It is surging. It is 

one of the biggest industries in the world, and Alaska has an opportunity to be a world leader in these microgrids, which is a huge 

opportunity. There are 700 million people around the planet, we estimate, on diesel. We have about 50,000 or 60,000, and we are concerned about them. But there are 700 million people on diesel, and 

there is another 1.5 billion people who do not have any electricity 

at all. So we have a huge first mover advantage. 

But Alaska’s opportunity to be that leader in large part depends 

on the U.S. continuing to be a leader. If the U.S. is not a leader 

in renewable energy, then China and Europe will rush in. There 

will be a vacuum, and we will not be able to continue to do the 

kinds of things we are doing in Alaska. It is very important for us 

to have the support of the federal agencies, of the federal programs, 

of the national laboratories. All that is super important for the 

ability for Alaskans to continue to be leaders. 

We think this could be a future part of our economy. We are 

working very hard on not only the financing, but the work force development part of making this stuff happen because it is not just 

technology. We have got to make sure that we can operate and 

maintain it. We are creating a new program now called the Alaska 

Network for Energy Education and Employment so we can link together the K through 12 and the vocational and the university programs we have got in the state and make them work synergistically and better. 

So I really appreciate the opportunity to talk a little bit about 

this today, and thank you very much. 

[The prepared statement of Mr. Rose follows:] 
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The CHAIRMAN. Thank you. 

Last up is Della Trumble. Welcome back to the committee. 

STATEMENT OF DELLA TRUMBLE, BUSINESS MANAGER, KING 

COVE VILLAGE CORPORATION 

Ms. TRUMBLE. Thank you. Good afternoon, Senator, Chair Murkowski, Ranking Member Cantwell, and members of the committee. My name is Della Trumble. I am an Aleut from King Cove, 

Alaska. I am the Business Manager for our village corporation that 

was created under the Alaska Native Claims Settlement Act 

(ANCSA). I am also a member of the Agdaagux Tribe of King Cove. 

And I would like to recognize Stanley Mack behind me, the Mayor 

of Aleutians East Borough, and Gary Henning, the City Manager 

for King Cove. 

I have lived in and around the Aleutian Islands and the Alaska 

Peninsula all my life and my ancestors have for 4,000 years. I am 

proud of my heritage and my connection to this part of the state. 

I am also pleased to testify here today since today marks the 

150th anniversary of the treaty between the United States and 

Russia to formally purchase what is now the State of Alaska from 

the Russian Empire. Residents of King Cove are proud Alaskans 

and Americans. We are also proud of our community, as we live in 

harmony with the nature of the seas, land, and resources that surround us. 

Together, the unique human and natural environment of rural 

Alaska brings many opportunities and challenges to improve our 

lives. I also realize the infrastructure needs in rural Alaska for energy, water, sewer, landfills, and transportation facilities have 

enormous costs that all levels of government are struggling to deal 

with these days. 

I would like to provide some examples of our forward thinking 

regarding infrastructure development in King Cove. My community 

has experienced the positive value of forming partnerships with the 

city government, the village corporation, and local tribes for developing renewable energy facilities. Since 1994, an environmentally 

friendly run-of-the-river hydro facility has been providing more 

than 50 percent of the community’s annual energy supply. This 

hydro facility, Delta Creek, has been the most productive, singlesite, renewable energy facility anywhere in rural Alaska. At $0.30 

a kilowatt hour, King Cove has the cheapest, a relative term, cost 

of electricity anywhere in rural Alaska from the more than 150 single-site utility grid communities. In Cold Bay, the closest community to King Cove, they are paying $0.67 a kilowatt hour, which is 

more than twice the cost that we pay in King Cove. There are 150 

single-site grid communities. The average cost is $0.45 a kilowatt 

hour. So we are very fortunate. 

Our Delta Creek Hydro Project was built on land owned by the 

King Cove Corporation and partially funded by the U.S. Department of Energy grant to the Agdaagux Tribe. The city also borrowed $2 million, one-third of the total project, from the U.S. Department of Agriculture. Since 1994, Delta Creek has displaced 

over 3.5 million gallons of diesel fuel and saved over $5.5 million 

in electric utility operation costs. These reductions have translated 

into an annual household savings of about $1,000 a year. There is 
217 

no comparison in rural Alaska where a community for the last two 

decades has so drastically reduced its dependency on diesel fuel. 

We are excited to report that in October 2017 the new Waterfall 

Creek facility will come online, and this will benefit and aid savings of over 75 percent of King Cove’s annual energy demand of 4.5 

megawatts. The annual energy production from these two hydro facilities will replace more than 300,000 gallons of diesel fuel a year. The Waterfall Creek hydro is costing $7 million. It was also built 

on land owned by the corporation. The city is incurring the debt for 

about 50 percent of this cost. This is considerable debt for our community to incur, but our experience with Delta Creek has instilled 

our thinking that the power of renewable energy is a key component to the sustainable future. 

I would also like to note that $1.5 million of costs for Waterfall 

Creek has incurred in the State of Washington with the fabrication 

of turbine, generator, penstock, and the shipping of this material 

and construction equipment from Seattle to King Cove. Given our 

geographic location, we depend on a strong business relationship 

with the Pacific Northwest, as you stated earlier. 

Finally, our hope is that our renewable energy accomplishments 

in King Cove will further encourage our neighbor communities to 

move forward with proposed tidal wave energy in False Pass, additional wind generation in Sand Point, and geothermal energy in 

Akutan. 

Madam Chair, this hearing is about infrastructure improvements 

needed to reduce the cost of living in Alaska. But for those of us 

in King Cove, the key infrastructure to reduce our cost of living is 

the 11-mile road connecting King Cove to the Cold Bay Airport. 

And how will this reduce our cost of living? If you had witnessed 

a crash at the King Cove Airport with your daughter on board, as 

I did a few years ago, you would understand my cost of living comment and that every resident in King Cove is an emotional cost of 

living with potential danger to our lives and those of our loved ones 

almost every time we have to fly between King Cove and the Cold 

Bay Airport to access health and medical services in Anchorage, 

which cannot be provided in our small clinic. 

However, our clinic can provide one thing that many of us do not 

really want to have, and that is a two-pill prescription of Valium, 

one to fly out of King Cove and one to fly back. This is indicative 

of the fear of flying that the majority of our residents have because 

of our unusual turbulent weather. 

This committee is familiar with the status of King Cove and its 

need for basic transportation infrastructure in the form of an 11- 

mile, one-lane gravel road connecting our communities. 

Madam Chair, we really need this road now and it is a vital element of missing infrastructure in King Cove to our well-being and 

will change our cost of living so that our residents can have a safe 

life and not always have to worry about every time we risk our 

lives traveling for medical and health and safety reasons. 

Since the unfortunate decision by the Department of the Interior 

on December 23, 2013, King Cove has experienced 58 medevacs to 

save lives, including 17 by the U.S. Coast Guard. 

Again, thank you, Madam Chair, for continually championing our 

cause. We also would like to thank our Governor, Bill Walker, and 
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our delegation. The Governor’s presence is particularly felt because 

of his vision and commitment to ask the State Legislature for $10 

million in state funding to help for paying for this road. All we 

need is for Congress to say yes one more time for legislation that 

will finally allow for this lifesaving road to be built. 

Again, I thank you, and I hope that our full testimony can be on 

record. It looks like I went way over the time, and I apologize. 

Thank you. 

[The prepared statement of Ms. Trumble follows:] 
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The CHAIRMAN. Della, thank you. Yes, you did go over the five 

minutes, but what you have included as part of the record merely 

supplements much of what we have heard in this very committee 

room over the years about the need for that lifesaving road. So 

know that the commitment is there to work with you and Mayor 

Mack and all of the fine people of King Cove to assure that this 

small piece of infrastructure is addressed. I think it is no secret to 

anyone. We have been talking early with this Administration to 

make sure they know that it is not only a priority of this delegation, but why it is a priority of so many Alaskans. So we continue 

in that area. 

I really appreciate all that you have provided for the committee 

today, and I want you to know that while we do not have a lot of 

committee members here this afternoon, know that it is Thursday 

afternoon, and we will have one more vote I believe in about 40 

minutes or so. But what you are providing today is comment for 

the full committee record. So while members might not be here to 

personally question you, what we are laying down here this afternoon helps to form the basis for much of what this committee will 

be attempting to advance as we work toward legislation. 

You all know that last year Senator Cantwell and I and members 

of the committee worked very aggressively to build a comprehensive energy plan, something that the Congress has not seen in close 

to ten years now. We were very close to moving that, but we did 

not get it across the finish line. Well, we started that back up again 

today. In this morning’s Energy Committee Business Meeting, we 

were able to advance 62 bills across this dais ready to go to the 

floor to be packaged as part of that comprehensive bill. 

Much of what we did last year—you mentioned the efficiencies, 

Chris, and some of the progress that needs to be made. When you 

think about the ability to provide for financing and opportunities 

for things like hydro, being able to identify that as a renewable resource and make available opportunities on the federal side because of its designation as a renewable resource is going to be important to us. So we are picking up where we left off—some of that. 

But what you have done today has really helped to supplement 

that. 

Now, I want to gain from you information about some of the infrastructure and why it is so significant to us in Alaska because, 

I will tell you, part of my problem here is when the President is 

talking about an infrastructure package, he is talking about a big 

infrastructure package. They are using the T word, that it is going 

to be trillions of dollars. What they want, what everybody wants, 

is the big package. They want the big project. 

Well, in Alaska, part of our problem is the big project may cost 

a lot of money, but when they look at it from a cost-benefit analysis, the number of people that you are benefiting there in Sitka 

is not as many as you would be able to benefit if you were in the 

Lower 48 and you have a significant hydro project. In the Port of 

Nome, they look at the population of Nome and they say, well, 

spending that kind of money, $14 million, here—and how many 

full-time residents do you have? Then, of course, there is always 

the story of King Cove. We are talking about a community of less 
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than 1,000 people. So why are we spending so much money on a 

road? 

So what I would like to ask—I think I will target my first question to you, Bob and Joy and Della. When we are talking about 

these infrastructure projects, if you can speak to the significance of 

not only the impact to the year-round residents, whether it is 

Sitka, Nome, or King Cove, but to the region, the ripple effect that 

comes when you can get goods delivered cheaper in Nome—how 

that translates into smaller communities that are more in the interior. I would like you each to speak to how you would educate my 

colleagues about the benefit of these higher cost infrastructure 

projects to what on paper would be a difficult cost-benefit analysis. 

Who wants to go first? Let’s go to Sitka. 

Mr. POTRZUSKI. Thank you, Senator. 

As I pointed out, Sitka is the 11th largest fishing port in the 

United States, and we do not eat all that fish. Obviously, it goes 

elsewhere. And right now we are walking a real thin line with our 

current infrastructure. Our electric department likes to say that it 

was new in 1982. If we have a major transmission line disruption, 

we could literally be without power for months, which would decimate the fishing industry, processing industry, in Sitka. The 

amount of money that generates region-wide, you know, when you 

have fishermen that come from all around southeast Alaska and 

even from the Northwest to fish in Alaska, it certainly would have 

a deleterious effect on that. So we are desperate to try and figure 

out how to upgrade our infrastructure so that we can continue to 

provide that service that Sitka does. Is that helpful? 

The CHAIRMAN. Yes, thank you. 

Joy. 

Ms. BAKER. Thank you, Senator. 

I believe that it is clear that the transshipment costs in Alaska 

are significantly high. They are increased much more exponentially 

in the western Alaska region. In order to reduce those costs and 

gets those goods transshipped to the remote coastal communities, 

we truly need to get the deeper draft vessels into Nome, which will 

bring increased efficiency through the larger tanker delivery capacity and lower the cost for transshipping in the region of not only 

fuel, but also for goods and exporting gravel to develop and build 

these communities and expand. We provide the gravel resource for 

the majority of the airports, roads in these communities, and they 

are paying the transshipping costs of a lighter draft barge to come 

in and load and bring to their community. I think the increased 

step is extremely important in order to lower the cost of distributing those goods and services to these regional communities to 

allow them to lower their cost of existence in these remote locations. 

The CHAIRMAN. Della, I think you indicated that you had replaced 300,000 barrels of diesel by your project. Is that right? 

Ms. TRUMBLE. Senator, I am going to have Gary answer that, but 

yes, it is 300,000 gallons. I think looking at that, that basically 

changes into a large savings when you are looking at not only moving that 300,000 gallons from Washington to Alaska, having to use 

less. But Gary I think could probably answer a little better on anything that needs to be added to that. 
226 

The CHAIRMAN. Gary Henning. 

Mr. HENNING. Real quickly, Senator. The savings in fuel pays for 

the debt service that we have had to incur. It has allowed for the 

community to know that we can have a stable and cheap kilowatt 

hour for King Cove for at least the next 20–30 years. And we did 

not talk about certainly taking the carbon out of the environment 

and what that does for the residents of King Cove as well. 

The CHAIRMAN. This is another area of inquiry that I would like 

to get out on the record. We are talking about cost savings most 

clearly, but there is clearly an environmental savings. You just 

mentioned, Della and Gary, that you are seeing a significant reduction in terms of the amount of diesel that you are bringing in. The 

whole aspect of the carbon—you know, when you think about the 

transshipment issues that you face in a place like Nome where you 

are lightering from one vessel to another, whether it is fuel, whatever the resource is, it is an issue that if you have an opportunity 

for a part where you can tie up to dock, you not only have cost savings, but you have environmental issues that you are able to eliminate as well. 

Ms. BAKER. Yes, Senator. The offshore ship-to-ship transfers 

have significantly increased the last three years. One event that 

comes to mind is when Secretary Darcy was in Nome last year and 

noticed the tanker sitting offshore, she asked what they were 

doing. We shared with her that they were transferring fuel back 

and forth. And she was surprised and said we need to do whatever 

it takes to get that gas station back on shore. It needs to be on 

shore, not on the water. So she made a very quick deduction that 

that was a risk, which of course it is. I think that is why we have 

the significant support of some of the regional communities, Bethel 

Native Corporation, St. Mary’s Native Corporation, to expand the 

Port of Nome and reduce those risks for those offshore transfers 

and reach the cost savings that they so desperately need. 

The CHAIRMAN. We are all reflecting a little bit on Alaska’s history today. My grandparents lived in Nome in the mid to late 

1920s, and we still have pictures and actually video that my grandfather took of the steamships that were anchored off. And what 

people did for entertainment was to watch as the small boats were 

loaded with people as they were coming onto shore basically riding 

the rollers in, not exactly a fun ride, but that is how people got to 

shore from the steamships then. That was 100 years ago, yes, and 

we are still in the same situation where, hopefully, they are not 

watching that for entertainment. 

I want to talk a little bit here about some of what Steve 

Masterman has advanced with the discussion about what we have 

with our resources underground, whether it is our mineral wealth, 

whether it is our oil, and whether it is our gas. We had a hearing 

Tuesday of this week focused on critical minerals and the reality 

that as a nation we have done a woefully poor job of understanding 

that mineral wealth, that resource wealth in terms of mapping it. 

We were given an updated assessment from USGS on some of Alaska’s assets that have been identified. 

What do we need to do to ensure that we have a better understanding of what it is that we have? Again, I started off my comments by recognizing that we have really, I think, a good and a 
227 

strong atlas of our renewable energy resources, and I think that 

that is an important thing for us to know where these assets lie. 

Not everything is situated equally. Wind is not good everywhere. 

Certain renewables just do not work everywhere. But how are we 

coming in your view in understanding our inventory of the minerals that we have available to us? 

Mr. MASTERMAN. Senator, if you have to leave in 45 minutes, I 

will have to be brief. [Laughter.] 

We are way behind the power curve, Senator. As you may be 

aware, our state is large. Geological mapping started in our state 

in the end of the 1800s, and we are right now—two-thirds of our 

state is mapped to the scale of 63,360 feet to one inch for geology. 

Sixteen percent of our state is mapped to the scale of an inch to 

a mile, which is really what we consider to be the usable scale, and 

about 0.1 percent is mapped at an inch to 24,000. 

The CHAIRMAN. What is the Lower 48 mapped to? 

Mr. MASTERMAN. I heard that in the testimony that was given 

here recently that the number was about a third mapped at a usable scale for energy and resource development and infrastructure. 

I am not sure whether that is an inch to a mile or they are talking 

about 1 to 25,000. So when you factor in the area of Alaska, the 

Lower 48 is probably about 50 percent mapped, and our state is 16 

percent mapped. 

If you look at some of the other data sets that are required for 

mineral development, airborne geophysics being one that is very 

rapid to acquire, we are about four percent mapped with regard to 

that data set. 

Geochemical surveys. The Lower 48 recently completed a soil 

geochemical survey for the entire Lower 48 states. It has not begun 

in Alaska here, so that is 0 percent complete. 

Our stream sediment surveys, which are really an arrow as far 

as pointing at where mineral occurrences may be present—say you 

take an element like silver, which Alaska is the largest producer 

in the nation of silver. Only 15 percent of the quadrangles in the 

state have an adequate number of stream sediment samples that 

would allow any modern exploration company to evaluate whether 

silver might be an economically viable commodity there. 

Mineral assessments. Mineral assessments in our state were essentially stopped in the 1980s under the AMREP program and 

none have really been completed since then. So those need to be 

updated because many of the commodities that are currently being 

used—and rare earths being a fine example of that—were not well 

understood, were not well documented at that time. In order to do 

those mineral assessments, you really have to do the foundational 

information. Otherwise, it is garbage in, garbage out. So the basic 

mapping needs to be completed and then the mineral assessments 

need to be updated. 

The same really can be said for the petroleum systems too. The 

USGS has done a fine job of assessing their remaining 

undiscoverable oil and gas potential in the state, but some of those 

assessments have proved to be inaccurate I would say. They have 

underestimated the amount of oil and gas that is present. The recent discoveries at Pikka and Willow on the North Slope highlight 

that, that they do not really account for those recent discoveries in 
228 

their estimates of undiscovered, potentially recoverable oil. So I 

think there is a lot to be done in terms of the petroleum geology 

to our understanding that, as well as redoing the petroleum assessments for the North Slope. 

The CHAIRMAN. Well, thank you for speaking to where we are on 

land. I think we recognize that offshore we are also woefully 

unmapped, uncharted. We talk a lot here in this hearing room 

about how so much of our offshore areas are either uncharted at 

this point in time, unmapped, or we are relying on lead line readings taken back in the day of Captain Cook. Unfortunately, every 

now and again, we find a vessel that encounters something that 

was not on somebody’s chart, and we saw that just last year off of 

Unalaska. 

So much of all of this, whether it is an inventory or mapping, all 

comes down to money, and it is getting tougher on the state side, 

of course, and it is not really that much easier on the federal side 

either. 

One of the things that I think we learned from Alaska and what 

Shell was attempting to do in the offshore several years back was 

they recognized that there needed to be greater mapping. And so 

what we saw was the private sector industry needing to get the information, doing much of it themselves, and then sharing that information. We saw a partnering, if you will, that allowed for some 

of the work that I think most would expect has already been done 

up in Alaska. 

I would ask you, Kara, the effort right now on the offshore is 

pretty quiet after the Obama Administration. We do not know what 

the incoming Administration is going to be doing with the five-year 

lease sales. It is my hope that they are going to be relooking at 

that and that we will see renewed opportunities in our offshore. 

But can you speak to the collaboration that we have seen between 

industry and government as we are providing for some of what I 

call basic infrastructure, which is mapping and charting? 

Ms. MORIARTY. Thank you, Senator. 

As you mentioned, you gave Shell as the example of how their 

industry investment led to increased infrastructure around the Arctic, whether it was supporting local communities so that they could 

support them, assuming that there would be a development. But 

that is not unusual. As I mentioned in my testimony, industry will 

invest private sector dollars if they think there is an economical 

project there and if they have the framework to do so. 

And that partnership between industry and whether at the federal, state, or local government frankly, has existed ever since we 

started oil and gas development in Alaska 60 years ago, starting 

in Cook Inlet. Some of those initial roads on the Kenai Peninsula 

were roads for oil and gas, and then they become shared roads. 

And then they become shared—it is the reason that you have a 

utility, and now you have a refinery. And the same way with the 

North Slope. 

The state relies an awful lot on our data, whether it is scientific 

data regarding polar bear denning, and the industry usually has 

the latest and greatest technologies that they can employ and deploy for whether it is, as you mentioned, mapping or other infrastructure needs. Having a strong partnership is important, and we 
229 

view our partnership with the State of Alaska as just that, a partnership. And so there is a litany of examples that happened either 

during Shell or happen today about how when industry comes, 

there is a benefit for all. 

The CHAIRMAN. Let me ask you, Chris, because you mentioned 

the Connecticut Green Bank as something innovative. As we are 

looking to perhaps be a little more creative when it comes to financing because while we are talking about significant projects out 

of this Congress, it may or may not happen. I do not know. But 

what I do know is that Sitka is going to continue to struggle to deal 

with their energy situation. The fine folks in King Cove are paying 

for that debt servicing. 

What do we do? How can we be attractive to the outside when 

we are talking about microgrids, when we are talking about small 

systems that benefit small populations? And, again, that was why 

I asked—is there a bigger impact? I think we recognize that. But 

when you are looking at it on a spreadsheet, it costs a lot, with few 

people served. How do we become interesting to those investors? 

How do we lessen that risk that comes with an extraordinarily 

high-cost environment that Alaska just is? 

Mr. ROSE. Senator, I think that is a really good question a lot 

of us are thinking about. As you said, there are a lot of communities that do not have a tax base. They do not have a lot of people 

there, and yet they are struggling every month to pay utility bills. 

The money is coming from somewhere. So what we want to be able 

to do is take that cash-flow and somehow be able to use it in a financing scheme. 

What the Green Bank has been able to do is really educate private investors, banks that do not really operate in the energy efficient and renewable energy space yet to make them understand 

how they can structure a deal so that the state can de-risk it a little bit. Maybe there is some federal money in there that helps derisk it. 

It is really a no-brainer with energy efficiency. The Governor’s office and a couple other folks down in Juneau asked Mr. Hunter this 

week, what is the pitfall? What do you have to worry about? And 

he said, ‘‘waiting.’’ 

The CHAIRMAN. Waiting? 

Mr. ROSE. Yes, waiting. Do not wait because we are spending 

this money. The status quo is we are spending $5 billion a year. 

But on the microgrids, we are a natural laboratory. We have 

these remote places. We have these really high energy costs. And 

when you are looking at just more mature technologies like wind 

and solar, it is really about the integration and use of storage. And 

the price of storage keeps coming down. So what we are really good 

at is not so much we are building a wind turbine or a solar panel. 

We are really good at integrating them. So we are like the chef 

that is putting all those ingredients together. 

One of the things we can be doing is exporting our expertise to 

those 700 million people around the world. We have been invited 

to several continents over the last couple years to talk about this, 

because even though we think we have a long way to go, we are 

seen as world leaders in these hybrid microgrids. 
230 

But then there are all these emerging technologies, and storage 

would still be considered that because the price keeps diving. So 

there is a lot of new storage technologies coming. 

Electric vehicles are still something that is going to explode, but 

is that kind of a nascent point right now? 

Ocean power, tidal wave, hydrokinetics. We believe that those 

kinds of things are going to be commercialized in the future. But 

really Alaska is one of the only places certainly in the United 

States, if not the world, where developers are attracted because 

they can come in and do a pilot project and save money off the bat. 

You know, a $0.60 tidal power project does not do anything for you 

if you are in Boston, but if you are beating $0.70 power in a community, then all of a sudden you have got a little different economics. 

So these public-private partnerships for financing are possible. 

On the efficiency side, again I think they are really no-brainers. We 

just have to be able to package those deals for the private sector 

so they understand how to do it. 

Right now, for instance, the property assessed clean energy programs that are around the country. Thirty states now have PACE. 

Our state legislature is about to pass a PACE program, and that 

is going to allow commercial building owners another financial tool 

to borrow money from a local tax assessment district and pay back 

that loan on the retrofit for their building through a tax assessment. But guess what? You know, the municipalities do not want 

to be the lenders, so the banks come in, and then they are the ones 

who are providing that money. 

And when Connecticut first started doing this, they had a tough 

time just kind of getting the ball rolling. Now basically the banks 

just take it all. They have facilitated the process to where now the 

banks are taking all that because they are making money, and it 

is a very secure loan. 

So I think there are ways for us to do it, but the federal support 

in R&D is super important. We are not going to benefit on things 

like ocean power if we do not have also federal support for those 

kinds of technologies because the Europeans are doing that. I 

mean, there is a great center for that in Scotland right now, and 

there are places around the world who see this stuff is going to 

happen. So for America generally to be supportive of renewable energy on a level playing field is really going to help Alaska do the 

same thing. We have great relationships with the national laboratories, and we would like to see those continue. 

The CHAIRMAN. I think the national labs are key, and what I 

keep pressing them on is we can be your real-life incubator up here 

because we have got a lot of good ideas. We have got a lot of people 

that are not held back by saying, well, we tried that before and it 

did not work. I think we have a lot to advertise in that way. 

I always look at, particularly, our southeast communities that 

are really powered by hydropower, whether it is Sitka or Ketchikan 

or Juneau. They are on an island. Why do the electric vehicle manufacturers not say, aha, you are my test case because I know that 

I am not going to really have to worry about building a system of 

charging stations that stretches across the country. You only have 

14 miles in Sitka. Is that what you said? I think we can do charg-
231 

ing stations along 14 miles. Use these communities that are powered by hydro to figure out how you make it work. 

You brought up a point, though, Chris, that we have a renewable 

energy fund in Alaska. Unfortunately, it has no money. The opportunity to be the great innovator on the state side has really slowed 

us down. 

Again, in Alaska, we are blessed to have an abundance of wealth. 

We have got the renewables and the potentials, but we also have 

our traditional fuels. We have our minerals. We have our oil. We 

have our gas. And we can use that to help fund the opportunities 

and the build-out for our renewable potential. We need to be unleashed to do just that. 

So I want to ask you, Kara. NPRA. We are all talking about how 

we get that oil pipeline, how we get TAPS full up again. It was four 

years ago that President Obama approved a new land plan for the 

National Petroleum Reserve Alaska (NPRA), and he basically put 

52 percent of the NPRA off limits. It did leave a corridor for a westeast pipeline. But I guess the question to you is in view of the actions that were taken under the previous Administration and the 

opportunities that we now have in a new Administration, your 

thoughts on whether that plan should be revised and revisited. 

Can you talk just a little bit about the opportunities that exist 

within the NPRA? Obviously, there is a great deal that is going on 

that is exciting on the state side with some of the recent finds, but 

more specific to the federal aspect and opportunities within the National Petroleum Reserve Alaska, and how we work to make sure 

that as we develop, we do so with care for the environment, for the 

wildlife, the waterfowl, just speaking to NPRA here. 

Ms. MORIARTY. Well, thank you, Senator. 

As you mentioned, the current land use management plan in the 

National Petroleum Reserve Alaska I would characterize as problematic at best. Even though some can say well over half of it is 

available, if you look at a map now of NPRA and the land use and 

where you can and where you cannot, it is like a patchwork quilt. 

It is hard to decipher. It almost looks like the land ownership map 

of Alaska as being complicated. 

There are a lot of wonderful opportunities. Obviously, we have 

the first production from NPRA now finally. And that goes to what 

I was referencing before. Taking seven years to get a bridge across 

a river really impedes industry’s appetite for putting private sector 

dollars in either federal lands or local lands or state lands. And we 

think there is more oil around NPRA. We had a very successful 

lease sale around those same prospects, if you will, of where Conoco Phillips currently is. 

But there is also some really exciting developments just outside 

NPRA. I think Mr. Masterman mentioned it with the Willow discovery of Conoco. That is a 120,000 barrel a day a field. So let us 

start doing some math. So current production is around 500,000. It 

might actually be a little higher, 540,000 barrels a day. So we 

think that field could have 100,000 to 120,000 barrels a day. 

Just north of NPRA is a major new discovery called Smith Bay 

by Caelus Energy. It could have as much oil as Kuparuk. It is a 

massive discovery. Now, it is 120 miles from TAPS. And the challenge will be with the current land use management plan how will 
232 

we build a pipeline because you are not going to do a zigzag, the 

corridor that may or may not have worked if we get an east-west 

pipeline across NPRA from the Chukchi—that is not going to work. 

That corridor did not have Smith Bay in mind. So that could be another 100,000 plus, 200,000, maybe even up to 200,000 barrels a 

day. So if you go Smith Bay, then you go over to Willow, then you 

have Armstrong and Repsol have announced a new discovery in the 

Pikka unit, that is 100,000 barrels a day. Then if you keep going 

over to TAPS, if I have my map here, just north of that is where 

the Liberty project is, and that is in federal waters, and that could 

be 70,000 barrels a day. 

So if you put all of those projects in what I call near-term—and 

near-term in Alaska is five to ten years. But if all of those projects 

came online in the next decade, which is reasonable—it is not out 

of the question—we could double our production, which would be 

absolutely significant not only for the industry but really for Alaska’s economy. 

So we are very encouraged by the new Administration’s interest 

in looking at some of these previous decisions. We are encouraged 

by the decision that was made yesterday in looking at other areas 

around my friends in the coal industry. So we are hopeful that this 

Administration will revisit what we think are unreasonable expectations and management plan. 

But we are not asking for access anywhere and everywhere to do 

anything we want, and I think that is an important point to emphasize. Of course, we want to protect the environment that we live 

in and work in, and we want to work with those communities closest to the environment in our projects. And on the North Slope, we 

are talking about the Village of Nuiqsut. We want to be in lockstep. 

But you also have to start thinking about the community of Barrow. They are very excited about what the Smith Bay opportunity 

could mean for them and actually getting a road from Barrow potentially all the way to TAPS and to connect to the Dalton Highway. They are very landlocked, as the Port of Nome or down in 

King Cove. 

And so there is a lot of excitement, and I think that is why it 

will be really important that as we look at these opportunities, that 

all of the stakeholders are at the table together so that we can 

identify these common core corridors that not just have a benefit 

for an oil prospect like Smith Bay, but can really benefit the whole 

community. 

The CHAIRMAN. Steve, do you want to add to that? 

Mr. MASTERMAN. Yes. Thank you, Senator. I just would like to 

speak a little bit to add to Kara’s comments about the potential inside the NPRA and in the near-shore waters just north of there. 

The discoveries by Conoco and by Armstrong and by Caelus are 

essentially new play types on the North Slope, which means that 

those play types are essentially unexplored for the rest of the area. 

So just to be a little geeky, the Willow and Pikka unit discoveries 

in deltaic sediments that were deposited by a river that flowed 

from west to east, and those same sediments have been found in 

drill core on the west coast of Alaska at Wainwright. That is 200 

miles away. They did not have any oil in Wainwright, but those 

same rocks were highly porous, highly permeable, an excellent res-
233 

ervoir host if oil was present. That is 200 miles of essentially unexplored territory between there and the Willow discovery that is in 

NPRA. 

The same can be said for Caelus’ Smith Bay discovery. Those sequences of rocks are also essentially unexplored along the Barrow 

arch, along that stretch of the coast. 

So the potential for additional discoveries in that part of the 

state is extremely high. And as an economic geologist, that is what 

we like to call blue sky potential because there is a lot of blue sky 

there, Senator. 

The CHAIRMAN. Good to hear. 

You know, when we talk about any kind of a project, though, you 

need to be able to get your permits, you need to have a little bit 

of regulatory certainty. That is something that we have heard in 

all three of the prior infrastructure hearings that we have had. My 

hope is that we will have a little bit more success with where we 

are with just moving forward from a certainty perspective and from 

an ease of permitting, not relaxing on standards, but just making 

sure that there is a process with some deadlines that you can kind 

of count on because I do realize that when you are sitting and waiting for the permits and they are not coming, that means you are 

sitting on the opportunity to advance a project and that costs 

money. So that makes everything a little more complicated. 

I am told that I have less than five minutes on the vote, so I am 

going to have to excuse myself. Because we are on Senate time, so 

I think if everybody has like 22 seconds to say one thing that you 

want this Energy Committee to remember about Alaska and Alaska infrastructure, what would it be? Steve, we are going to start 

with you. One thing on Alaska infrastructure. 

Mr. MASTERMAN. We need a lot more of it, Senator. We need 

more roads primarily to access the mineral-bearing lands. As I 

mentioned in my testimony, almost all of the mines and the advanced stage projects are within 50 miles of a road. If you are more 

than 50 miles away from a road, the economics get a lot harder. 

So we need more roads, a road west to Nome. A road down along 

the Kuskokwim River road on the west side of the Alaska Range 

would open up vast areas of the state to mineral development. 

The CHAIRMAN. We are one-fifth the size of the country, and we 

have less than one percent of the roads. 

Mr. MASTERMAN. That is correct, Senator. It is actually less than 

one-half of one percent of the roads. 

The CHAIRMAN. Less than one-half of one percent. I overstated. 

Okay. 

Mr. MASTERMAN. So really more roads. More access equals more 

development just because it reduces the cost of developing those facilities. 

The CHAIRMAN. Good, great. 

Bob. 

Mr. POTRZUSKI. Capital costs in Alaska are significantly higher 

than elsewhere. 

The CHAIRMAN. And we need to appreciate and understand that 

up here because it is not always apples to apples, and I really appreciate you bringing that up. 

Joy. 
234 

Ms. BAKER. Yes. Thank you, Senator. 

The Port of Nome is an existing developed port facility. We are 

ready to move forward with expansion to address the needs of the 

larger vessel fleet. 

The CHAIRMAN. Shovel ready. 

Kara. 

Ms. MORIARTY. Senator, I think on this 150th anniversary of the 

Alaska purchase, I think it would be important to remind your colleagues that if there is a cost-benefit analysis done today, like your 

colleagues are asking you to do for Alaska projects, it probably 

would not pencil, but it was probably a good deal. And if they are 

looking for big projects, that is all we do in Alaska is big. We have 

big mines. We have big fish. We have big timber, and we have big 

oil and gas. 

The CHAIRMAN. It is all good. Big. 

Chris. 

Mr. ROSE. I would say that the entire world is going toward renewable energy. More than 50 percent of all new capacity worldwide last year was renewable energy on the planet, and that does 

not include large hydro. And a lot of that is distributed generation, 

meaning small places. We are the place where we have small, remote communities more than any other place in the United States. 

We can be world leaders in America and all over the planet in distributed generation and integration of renewables. 

The CHAIRMAN. We can be big in the small things. 

Mr. ROSE. Right. 

The CHAIRMAN. Good. 

Della. 

Ms. TRUMBLE. Thank you, Senator. 

I think I am going to go with the roads and transportation corridors. It is very important. You know, having the renewable energy in our small community helps a lot, but when we are not able 

to get outside or get in, I think that hurts us more and that cost 

savings that we have on like the renewable energy has a bigger impact on us to be able to survive as small communities. 

The CHAIRMAN. Access. Very, very important. Very much appreciated. 

I know that you all took a lot of your time and effort to be here 

and know that it is greatly and deeply appreciated. 

Anything else that you would care to add for the record, we will 

be happy to do so. Thank you for your presence today, and thank 

you for contributing to an important hearing. And thank you for 

continuing to build our state’s record when it comes to an amazing 

and historic place. So thank you very much. 

We stand adjourned. 

[Whereupon, at 4:10 p.m., the hearing was adjourned.] 
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