Cathy Giessel focuses on Arctic issues

Chair of Senate Resources, member of Arctic Policy Commission, Anchorage Republican wants to see state policy, federal cooperation

Steve Quinn

For Petroleum News

With an oil tax reform bill passed and an in-state natural gas pipeline advanced during the recent legislative session, Senate Resources Committee Chair Cathy Giessel, R-Anchorage, is focusing squarely on the Arctic.

Giessel sits on the state’s Arctic Policy Commission, which met recently for the second time this year, this time in Barrow. On that commission, Giessel chairs the oil and gas development, resources and mining committee.

Giessel sat down with Petroleum News to review a few highlights of the legislative session before discussing priorities with the policy commission.

Petroleum News: Before getting to the Arctic, let’s review a few things from session. The debate over Senate Bill 21 and whether it should be in place continues and may continue further if a referendum to overturn it gets on the ballot. Why do you suppose the debate continues so strongly?

Giessel: What you’re asking me is why do some folks have a fundamentally different philosophy, that philosophy being government should control everything and control the economy, thereby taxing. When someone holds that philosophy, they find SB 21 something they don’t want to agree with. That’s counter to the philosophy the rest of us have. The power to tax is the power to destroy. The bill does allow people creating the wealth to keep more of the money they earned. So why do they have this philosophy? I have no idea. I really don’t know.

Petroleum News: Are you concerned that it could be on the ballot and does it belong on the ballot?

Giessel: Well to your second question, does it belong on the ballot? We are representative republic. That means that citizens are allowed to vote; they are empowered to vote; they are responsible to vote. It is their responsibility to vote for their representatives who then agree to take on the job and do the work of becoming informed on topics like this and make a decision in the best interest of the citizens they represent and the piece of geography they represent, in this case the state.

The citizen initiative system can lead to some very flawed decision making simply because these are such complex subjects and the citizenry has already said we don’t want to make these decisions. That’s why we are a republic. That’s why we elected these folks to go and immerse themselves in this. So does it belong on the ballot? I don’t think it does because it is so complex and there is no way a citizen can understand the depth of information.

That’s not saying they aren’t intelligent enough but because it takes so long to delve into all these details. Am I concerned about it? I will not be surprised at all if they get enough signatures. The method of getting those signatures I think is deceptive. They are telling folks that this is a giveaway. This is going to result in negative economics for individuals as people living in this state. That’s just not true.

They also are hiring individual signature gatherers who I’m told — I have not spoken to anyone personally — but I’m told by folks who have spoken to signature gatherers who are saying repeatedly, “I know nothing about this. Please sign this. It means income for me.”

And you have to admire them for that. They are out there working hard. This is a capitalist society. What they are working on negates another group of people from being capitalist, from earning money for their hard work.

Petroleum News: Let’s switch to gas lines. Now that House Bill 4 has passed to advance an in-state gas line, where do you think things are with two projects, though differing in size and scope, still on parallel tracks?

Giessel: I love the fact that we have competition going on. It’s a horse race, and the best horse will win. The most economic project will win. The project that results in buyers will win. Success means we have sellers and we have buyers. They negotiate terms and they sell product back and forth. We are the sellers .We have buyers who are interested not only in building the pipeline but also in buying the natural gas. We have citizens of course and development projects who are going to need natural gas. We have an export opportunity. Japan and South Korea have been to the state. A Japanese company (Resource Energy Inc.) has an office in Anchorage and very, very interested in long-term contracts to buy our gas. So I’m thrilled that we have these two projects going forward. The best-case scenario to me is to have natural gas to Alaska’s citizens by 2019 and after that rippled out to world markets.

I held a joint Resources Committee meeting (end of May) and REI was the last group to present. They completed a feasibility study and they are going back to their potential investors to solicit support.

Petroleum News: Did you like what they had to say?

Giessel: To be honest, one of the things I stressed to them in private conversation and in the hearing was our interest was Alaskans number one. That is delivered gas to Alaskans. So any talk about contracts, they have to understand Alaskans need that gas first. They are a willing buyer. This will be driven by the economics. I do trust the capitalist system and the economics of this to make the right decision.

Petroleum News: In some eyes, feasibility studies can be considered a dime a dozen.

Giessel: They are taking the feasibility study to world investors. These are not stupid people. Energy is a critical issue in Japan as it is everywhere. But with the de-commissioning with the vast majority of nuclear generation, they are desperate for natural gas. So their banks and investors are going to be very careful. I trust that.

Petroleum News: Now let’s go the Arctic. You’re on the Arctic Policy Commission and just had a two-day hearing in Barrow. What was your take?

Giessel: The first day we went to the Barrow assembly chambers and we just listened. It was good. We learned a lot from the citizens, the leadership of the North Slope Borough and also the Northwest Arctic Borough. (Former House Rep. and Borough) Mayor Reggie Joule was present. One of the things that surprised me was the number of people testifying saying please open ANWR and do it before we resort or move to outer continental shelf, offshore development.

In fact former North Slope Borough Mayor Edward Itta was pretty eloquent with that. He said let’s stick a straw in ANWR and suck it dry before we start working on the OCS. So that was pretty interesting. He also talked about the disconnect that the federal government has with Alaska.

I don’t know if you read the book “The Eskimo and Oil Man.” Well in that book, he recounts one day how he discovered that the federal government declared 180,000 acres of their area, their land, polar bear critical habitat, and there had been no local input. Mayor Itta and others testified, basically said thank you for being here, please hear our voices, ask us for input.

The next day, part of that meeting was talking with the federal folks here in the state. They came on the phone with us to talk to the commission up in Barrow. I told them, it’s all well and good to tell us you want to hear from Alaskans, but if you really want to hear from Alaskans, get on a plane and come to Barrow. You need to look people in the eye and shake their hands, and have that personal contact to hear that message. So I hope in the future, they will travel to local communities and get their input. It’s the rural folks affected by resource development and they want to have a voice.

Petroleum News: So as far as policy and Arctic development, what are your takeaways?

Giessel: We have six committees. I chair the oil and gas, and mining group. Each group is actually delving into their subject, looking at what kind of Arctic policy we would be recommending to not only develop these various resources, but also preserve the resource for the future.

The federal government is dumping out dozens of Arctic polices now in the past few months. The policy we spoke of was the national strategy for the Arctic region. It all sounds really good talking about collaborating with Alaska and safeguarding the environment and still providing the energy the United States needs, but we want to make sure there is an Alaskan on these kinds of commissions and on these federal groups. So when we spoke with the federal folks the co-chairs (Sen. Lesil McGuire and House Rep. Bob Herron) suggested there be a liaison from the Arctic Policy Commission to this federal group and they seemed amenable to it. We’ll see if they actually allow it to happen.

Petroleum News: So within your Arctic policy committee, what are the priorities for resource development?

Giessel: As we spoke, that is the commission, one of the messages coming forward from all of the commissioners is this has to benefit the people who live in the regions and our state as a whole as we go forward developing Arctic resources, whether it’s fisheries or oil and gas, mining. We’re very concerned about the Coast Guard being adequately supplied with resources. A few years ago, cruise ships appeared in Barrow and tourists came onshore and there is no U.S. Customs there. These folks came onshore and wandered around Barrow. The Coast Guard should be able to track these vessels and provide that national security there. The federal government is lagging in their responsibility on that. We’d like to see more federal revenue sharing there, starting with the offshore.

We need healthy communities where people can have jobs and support themselves with education and healthcare. We are so much in the early stages of these. We were empowered by the Legislature last year but we really didn’t get going until March. My committee has been meeting almost once a week for the past month and a half so we’re pretty far along.

Petroleum News: Are the state and the federal government on the same page? Are you getting the support you need? And I’m not talking about just money.

Giessel: When you ask about federal support that again takes me back to the Coast