Edgmon talks Arctic policy, rural issues

Dillingham Democrat says local, indigenous voices important for work of Alaska Arctic Policy Commission multination Arctic Council

Steve Quinn

For Petroleum News

House Rep. Bryce Edgmon has spent a warm summer studying the world’s coldest regions, in part preparing for the next legislative session. The Dillingham Democrat is seeking a fifth term unopposed, so he’s looking forward to discussions and hearings that follow interim work with the state’s Arctic Policy Commission.

Edgmon, a member of the House Finance Committee, spoke to Petroleum News about his views on Arctic policy, and the pending two-year term the United States will have as chair for the worldwide Arctic Council.

Petroleum News: For starters, what’s a lawmaker for Dillingham doing investing time into Arctic policy?

Edgmon: Well, my interest originally came from the fact that I represented the city of Unalaska and its direct ties to shipping and to the Arctic. Basically a lot of what happens in the maritime industry, including the Coast Guard controls the Bering Sea. With the Northern Waters Taskforce we held a hearing in Unalaska and with the Arctic Policy Commission, we held hearing in Unalaska. Both were very important hearings with a lot of participation from a lot of the local communities and entities involved with shipping, fuel and repair work and salvage operations. It’s centered around the fact that Unalaska is the hub for a billion dollar a year ground fishing industry but it’s also the nexus point for a lot of ships involved in the great circle trade routes and with its year round deepwater ports, Unalaska is able to provide a lot of services. I’ll be back to representing them come next January officially when my district and Bob Herron’s district goes back to their original configurations. These last two years were a bit of a hiatus under redistricting.

Petroleum News: So as Arctic exploration resumes in the next few years do you see Unalaska’s role as a hub getting stronger?

Edgmon: Absolutely. In fact with Shell’s earlier attempts into the Arctic, Alaskans played a very important role in their staging efforts. From what I understand Shell will be trying again and if they can get their regulator clearance, Shell will be using Unalaska as a place to stage a lot of their operations.

Petroleum News: So what are you hearing from the folks in Unalaska? Are the happy about this? Do they have any concerns?

Edgmon: The community of Unalaska is very forward-looking. They are always looking out into the future. They are looking strategically in terms of what lies in the best interests of their community. They fully understand they will be a regional center for a very valuable Bering Sea fishing industry, but they also realize with the services and natural access to various points, they can play a big role in Shell’s efforts as well as anyone else’s efforts to drill in the Arctic. So I think Unalaskans are prepared and ready to seize any opportunities that might come their way and are expecting they will play a big role in the opening of the Arctic.

Petroleum News: So what concerns are you hearing from the Aleutian communities like Unalaska?

Edgmon: their concerns parallel the concerns we’ve heard elsewhere along the coast with a lot of big ships suddenly coming through the Bering Strait choke points. Admiral (Thomas) Ostebo termed it big ships going through the Bering Sea garden, so the concerns I’m hearing parallel what you’re hearing farther north along the coast - a lack of response capabilities, a lack of ability to respond to a big ship if it goes adrift in a certain place at a certain time. I think the people of Unalaska have been proactive in terms of addressing a big issue in terms of big ships going aground. They have pioneered an emergency towing system effort they have been able to utilize once or twice already. As someone who has represented Unalaska in the past, I see a very progressive community in terms of looking at their own interests in the future.

Petroleum News: You attended some hearings recently in Nome and Kotzebue that were specific to the Arctic Policy Commission, but certainly of interest. What are you hearing from people like Admiral (Robert) Papp and Fran Ulmer?

Edgmon: Well we heard a strong commitment to their personal involvement in terms of making opening of the Arctic a national imperative and I think they fully grasp the importance of their advisory role to Secretary Kerry who will be the U.S. Chairman of the Arctic Council when that takes place next spring. We all know Fran Ulmer’s public service to Alaska and Admiral Papp is interested in learning more about Alaska, learning more about the intricacies of the Arctic. I was very impressed with both of their devotion to sitting through long meetings, being very attentive and personable while listening to everyone in Nome and Kotzebue. We definitely have two very committed individuals in the right positions.

Petroleum News: Do you gain a sense that Admiral Papp is interested in the economic development prospects the Arctic presents or is it more on the conservation climate change side of things?

Edgmon: I think that’s an excellent question because the members of the Arctic Policy Commission, we’ve all been concerned about the lack of emphasis on the economic development portion on the Arctic and how it relates to Alaska. Admiral Papp in Nome talked about his definition of national security and how it‘s not a one-dimensional term. It’s important to look at it more though a lens of it being a multidimensional term incorporating economic, environmental, shipping and other factors. He told me he’s going to go forward with that viewpoint of the Arctic and its importance to national security to Alaska but the nation as a whole.

Petroleum News: What is your view on the economic development potential?

Edgmon: It’s a critical component that comes out of the Alaska Arctic Policy Commission. Based on the work that we’ve done thus far and in terms of the recommendations we will submit to the Legislature, I think it will be the cornerstone of any work product in terms of what comes out of the policy statement. In terms of our ability as a commission or as a state to affect what happens at the federal level in the Arctic, that is another question. I think it’s a question that makes many of us on the commission somewhat uneasy. We started our process as a commission with underlying goals to affect what’s happening back east in terms of having Alaska involvement. We’ve spent a lot of time on Arctic issues. A lot of our northern communities, places like Nome, Kotzebue and Barrow have a lot of personal knowledge and history, as well as being a place for high-level meetings and forums of Alaska. So my personal vision is that has to be a very important part of whatever the Legislature puts on the desk of the governor. I don’t detect any dissention on that point. Economic development needs to be up there with a lot of other points.

Petroleum News: So what do you believe are the priorities for the Arctic? Infrastructure gets talked about a lot?

Edgmon: Things are happening so fast in the Arctic. I think back to our first meeting with the Northern Waters Taskforce - the Arctic Policy Commission’s predecessor - on Oct. 1, 2010, when we held an all day listening session. We heard from 20 some entities. It was a true drinking from the fire hose experience. All of this stuff was going on and there was no central repository.

One of my priorities, and I make no bones about it, I represent rural Alaska. I represent the Alaska Native communities. Part of my heritage is that of being an Alaska Native. One of my priorities is to make sure that the Arctic policy statements and any recommendations that go forth to the Legislature, properly address the role of the indigenous people of the Arctic.

I had the opportunity to attend last year’s Arctic Circle conference in Reykjavik, Iceland, and heard from members of the Inuit Circumpolar Conference, members in Greenland, Norway, Russians and so forth. The bigger picture, of course, is the Arctic is a frontier in so many ways when you look at the lack of international agreements on shipping, fishing, transboundary oil and gas issues, just a whole range of subject matter. You also get the sense that Arctic nations - all eight of them involved in the Arctic Council - are also viewing it as an opportunity to recognize that the role of indigenous people is important to their individual strategies. They are a big part of what’s happening in the Arctic today.

Petroleum News: Canada is said to be an example of integrating the indigenous people for their Arctic policies. As Canada gets ready to pass the gavel as Arctic Council chair, do you get a sense of that?

Edgmon: Absolutely. We heard that a lot in Nome and Kotzebue recently. Local involvement and decision making - having a seat at the table as it was termed - was incredibly important to the people of the area, all up and down the coast, for that matter, have been consulted by federal entities, but not directly involved with decisions that affect their communities. My sense is these communities want to change the paradigm to be more included in the big decisions and the small decisions that affect their communities.

Petroleum News: You mentioned having seat at the table. Is that becoming meaningful? Is Washington taking it seriously?

Edgmon: I think to some degree sure. We are having some meaningful meetings with Ambassador Bolton and Admiral Papp, and with others who have been involved in the Arctic decision making at this point. Have we seen the full alignment that we would like to see, I would say, no. But in fairness, I’m not as directly involved in the state-federal relationships as co-chairs (Bob) Herron and (Lesil) McGuire. I think it’s going to be an uphill battle to assert Alaska’s will to what happens back east in that age-old frustration of decisions being made for Alaska thousands of miles away is going to continue to be a problem for us as the Arctic opens up. That said, I think we are very fortunate to have someone like Fran Ulmer being in a key advisory position. I heard Admiral Papp in Nome and Kotzebue commit to naming one or more indigenous persons to assist him and Ms. Ulmer with the work that they are doing before and during the U.S. period of chairing the Arctic Council.

Petroleum News: So do you get a sense the United States is behind on drafting Arctic policy that guides the country?

Edgmon: I think we are definitely behind. We are in catch-up mode. I had an opportunity to travel to Scandinavian counties these last few years. It’s not like they have Arctic strategies or policy statements that are fully refined. What I’m seeing are a lot of other countries, Iceland for example, are sort of in the same catch-up mode as the United States. Finland revised their Arctic policy statement. I believe the Russians have as well. So has Sweden. It all depends on how fast the ice is melting and the northern sea route becoming more open. Just the fact that a lot of countries are viewing the Arctic as being a big part of their national interest happening a lot sooner than they would have earlier anticipated.

Petroleum News: It’s common to hear criticisms of groups formed to study as yet another group studying the issue. Do you believe the Arctic Policy Commission has fulfilled its mission as outlined and as a follow-up to the Northern Waters Taskforce?

Edgmon: I really do. To dig into the opening the Arctic subject is to learn that it is multifaceted, that it’s fast moving and to learn that any conclusions we draw today will change tomorrow. All 26 of us on the commissions have realized that the work product we hand over to the Legislature is a work in progress if you fast forward five, 10 or 20 years from now. We have traveled to a number of communities, seen firsthand and talked to local leaders. I’m comfortable that what we do bring to the Legislature for the 2015 session will be reflective out there of what needs to be done by way of Alaska being more involved.

One thing for sure is we need a full-time legislative committee to work on the many issues associated with this new frontier. I fully support that. In terms of the policy commission continuing, I think there is merit in it. But with larger budget deficits in the future, we have to be mindful that commissions cost money and be careful to where we can allocate those dollars in the future.

Petroleum News: Let’s talk a little bit about the future. The oil tax debate has ceased, at least for now, with voters approving the upholding of SB 21. Do you think this can make it easier for the Legislature to move forward?

Edgmon: As we talk about SB 21, the elections haven’t taken place, and I’m not saying A or B is going to happen, but it will be interesting to see if there are any residual effects. That said, SB 21 is firmly in place. We do go forward. I don’t expect the elections to have a groundswell of change in the Legislature, but we don’t know what’s going to happen with the governor’s race at this point. In terms of other resource development discussion, the back and forth will be with the fiscal climate. That’s the bigger driver than anything else.

Petroleum News: Still looking ahead, and with that in mind, do you have any concerns that the state can’t afford to be a partner in this project?

Edgmon: I think we would all have concerns with a project that has been touted somewhere between $45 billion and $65 billion with the caveat that these bigger projects could be cost overruns of up to 30 percent or even more. When you look at the state’s share of the equity financing, we have to factor in the costs and our longer-term outlook relative to spending and our savings and to our financial wherewithal like our ratings. So there is definitely a concern about it. When we passed SB 138 last session, with overwhelming support I might add from both the House and the Senate, it wasn’t lost on anybody the hurdles that lie ahead between the stage we are at today and getting Alaska’s gas finally to market. Those hurdles are breathtaking when you look at the scope of the project itself.

Petroleum News: Do you feel the steps taken thus far demonstrate that things are working or could things be better?

Edgmon: I think it demonstrates to me that things are happening, that there is momentum. The project offices are being set up in Houston, Calgary and Anchorage. The staffing arrangements are coming together. All the money spent on regulatory data, and preliminary design work, all of that indicates there is alignment on the industry side and the state. We are going forward taking the steps necessary toward the fall or winter of 2015, when the Legislature can have the special session to make more commitments and have this thing going forward.

Petroleum News: Now you and co-chair Alan Austerman worked pretty hard to make sure the rural areas get consideration. Do you feel this came together well?

Edgmon: As with any oil and gas bill that comes to the House Finance Committee, we have worked hard to make sure that there be a meaningful addressing of rural Alaska’s failure to get affordable energy down the road. SB 138 has certain provisions in there tied to Alaska’s energy policy and the Alaska Affordable Energy Act. The fact that rural energy is also going to be the focus of the Alaska Gasline Development Corp. is key. We worked hard with our Senate counterparts to make sure rural Alaska didn’t get overlooked. I would also say on that subject that I was impressed with a lot of the provisions on SB 138 that draw upon all the experiences collectively we as legislators have had.

Petroleum News: There’s only so much the Legislature can do next session but what would you like to see accomplished between now and next year’s special session?

I would like to hear more progress being made like we have been. When you look at a project of this scope, you’re looking at the interlocking of a lot of things at one time: financing, engineering, the overall economics. All of this is kind of moving in tandem going forward. It’s a lot of moving parts, meanwhile you’ve got a global market moving, changing and shifting. Hopefully this is setting the stage for us moving to the next phase for us getting the largest private sector project in North America.