Sullivan: AK set for primetime, feds willing

Former Alaska AG, DNR Commissioner enjoying new US Senate post, assignments, responsibilities in DC office — and abroad

Steve Quinn

For Petroleum News

Freshman U.S. Sen. Dan Sullivan freely jokes about his ranking in the Republican-led Senate: 100 - dead last.

But he says he’s serious about his job and making sure those in Washington don’t treat Alaska like it’s in some bubble for others to observe and treat as entertainment. Sullivan, a former attorney general and natural resources commissioner under the Sean Parnell administration, talked with Petroleum News about his first six months in office and his priorities.

Petroleum News: Let’s talk about being No. 100. Alaska already has representation on the Energy Committee, so how do you strategize or position yourself to assist Alaska with advancing resource development?

Sullivan: That’s a great question. What I did was I actually sat down with Sen. Murkowski and given the committees she is on and given the committees I thought would be especially important for Alaska, particularly our economy, those are the ones that I sought. That was one of the things I was pleased with very early on.

I sought to be on the Commerce Committee, which has broad jurisdiction. We are going be marking up a couple of bills there - aviation, highway, transportation, rail, Coast Guard. Which is huge for Alaska.

Environment and Public Works, which is really big for Alaska with oversight of EPA and other agencies. But it also includes highways. And in another area that is critically important to the state: Senate Armed Services and Veterans Affairs, both important to Alaska and both passions of mine given my military background

I was really pleased that I was four-for-four. Between that and what Sen. Murkowski is on - all different committees - that provides Alaska really impressive coverage. I don’t know many freshmen who were four-for-four on their committee assignments.

Petroleum News: You still took some initiative on the resource development front. You have taken a few trips to Asia already. Talk about those a little bit.

Sullivan: I met with the prime minister of Japan (Shinzo Abe) and the top guys in METI (Japan’s Ministry of Economy, Trade and Industry) I have been going over there for a while as DNR commissioner. What’s happening right now is the president has highlighted what he calls his rebalance strategy to the Asia pacific. He’s talked about it in terms of military rebalance and economic rebalance. That’s 40 percent of the world's GDP and it’s rising.

It’s no mystery I’m someone who has been critical of the president’s domestic and foreign policies on a number of fronts for reasons I think undermine Alaska’s interests and the countries interest.

On the rebalance, I’ve been real supportive. What I’ve mentioned to the secretary of Defense, the secretary of the Treasury, the secretary of Commerce - all of the cabinet members I’ve been working with - the U.S. trade rep - is that the president shouldn’t have just a two-prong strategy in the Asia Pacific rebalance. It should be a three-prong strategy: military rebalance; economic and trade; and energy.

I wrote an op-ed on that (for The Hill) and even had the secretary of Defense in front of Republicans and other groups saying he agrees with that. I’m on Armed Services and Sen. (John) McCain is the chair and he’s asked me to take an oversight role on the president’s re-balance strategy.

I’ve actually been there twice. As you know Alaska is an Asia Pacific state. In fact, we have parts of the state that are farther west than Hawaii. So I literally have been raising the prospects of LNG and other Alaska exports everywhere I go, whether it’s the METI, whether it’s the Japanese prime minister, whether it’s the defense minister of Korea, the prime minister of Singapore, the top economic and military officials in Vietnam, we think there is a huge opportunity for Alaska. It’s a win-win for all of these countries to have more energy from the United States, more energy from Alaska.

On the trade front, what I’d like to say is, given our size, in terms of population, we are an export powerhouse. The other reason I sought a seat on the Commerce Committee - that’s oversight of fisheries. I like to refer to Alaska as the superpower of seafood. We harvest over half of all the seafood harvested in America. We exported $2.5 billion, not exclusively but very much to Asian markets. We are hopeful this TPA bill gets passed.

So I’m digging into it not only from a military and economic perspective but literally every foreign official I meet with and of course all of my colleagues in the Senate highlighting the promise and opportunity of energy as part of the rebalance in the Asia Pacific region as well.

Petroleum News: What kind of feedback are you getting on Alaska’s prospective LNG project?

Sullivan: Positive. The timing is pretty good. One of the first cabinet members I met was Secretary Moniz; I had worked that issue with him. I had done it when I was attorney general and DNR commissioner. I said when the AKLNG project applies for its export license you cannot treat us like another LNG project because we are different. You cannot just put us in line with the 20 other plus projects, who applied for an export from the Department of Energy. We are different. It’s stranded gas. It’s going to be a win-win-win on so many fronts for consumers and families in Alaska and potentially Hawaii. This export license has got to be put in the front of the line.

I was given that commitment by senior Obama administration officials when I was DNR commissioner. When I got here, they seemed to be slow rolling it so I wrote the secretary of Energy, I met with him, I met with the top assistant secretary for all of this. I said enough. This is good for Alaska. This is good for our country. This is good for our allies.

You may have seen they got that out a few weeks ago. We were putting a lot of pressure on them to move it. It was enough that when I was out in Asia, I stood in front of about 100 reporters and I announced it.

Again, it’s part of something that’s part of a broader strategy that can help the United States, help Alaska and help our allies I the region.

Petroleum News: Now, your chief of staff (Joe Balash) was a former DNR commissioner and your assistant, do you have him doing anything particular on these fronts? I realize the chief of staff is more encompassing that just energy.

Sullivan: Well, it’s important to have a chief of staff who is up to speed on natural resource policies that affect our state. We are working on those from a federal perspective to make the possibility and likelihood of increased investment and expedited permitting for our project from the permitting side happen.

Petroleum News: Let’s talk about Seattle. I know that touched a nerve with you. What upset you about it? Was it the protests themselves? Was it the government being involved?

Sullivan: No, it wasn’t the protests. Every American has a right to protest. What I was trying to do with the op-ed was certainly show displeasure that I had with some of the political leadership in Washington, who I thought were grandstanding: the mayor; the governor. Then more importantly I wrote it to remind their constituents that this economic relationship between our states has gone on for decades and had benefited both states tremendously. To remind people in that part of Washington state, particularly the Puget Sound area, your political leaders are trying to score some political points.

Ultimately this isn’t good for some of their own constituents. You saw some of the numbers the McDowell Group did in regards to the benefits in terms of jobs and wages and economic activity the Seattle area has in regards to trade with Alaska.

It’s enormous. For these political leaders to come out and actually try to score what I thought were cheap points, I wanted their constituents to know that ultimately these guys were going to harm their own constituents.

It’s always easier to go after someone else’s economic activity and jobs. I thought the Legislature did a great job with the resolutions they passed - very bi-partisan resolutions.

How about some of the hypocrisy going on? If the mayor of Seattle is really worried about greenhouse gas emissions, well he can lead protests at the Boeing factory. Looks like that’s going to be the EPA’s next step anyway in trying to regulate emissions.

In the op-ed, I said that would not be my recommendation. I think Boeing is a great company. We need more great companies like Boeing, but I thought our Legislature did a great job of highlighting that the mayor and the governor were trying to score cheap political points at the expense of an economic relationship that has actually benefitted Alaska and the state of Washington quite well. That’s my hope.

But I also wanted to remind them that if they become unreliable partners from an economic standpoint because their politicians are not reliable, then we certainly can focus on having our own capacity dealing with what I think is more and more important with the Shell drilling and hopefully with the AKLNG project ramping up.

Petroleum News: So were they protecting their own interests or meddling in Alaska’s?

Sullivan: I think they were shooting themselves in the foot without realizing it.

Petroleum News: OK, back to Shell. What gives you confidence the company is ready to resume exploration and re-enter the Arctic? The concern over the Kulluk incident is what drove the pushback in Washington state.

Sullivan: As I’ve mentioned before, resource development is not an industry without risks, yet - and a lot of people miss this - we’ve been drilling offshore wells in Alaska, whether it’s state or federal waters, for decades. We have a very, very strong record of doing it. I’ve been meeting with Shell officials on a regular basis. Obviously they are very focused. This is a huge issue for their company.

One thing that does concern me is when the federal government puts such short timelines on the ability just to undertake an exploration well, you could almost be, through federal regulations, rushing what they have to do up there and that would not be a good result.

This is critically important. Some would say this is a make or break summer for us. What’s missed here, people focus on the Kulluk, the federal government has been delaying, and delaying and delaying the ability for Shell to do simple exploration wells despite the fact that they paid billions of dollars in lease fees to the federal government.

When I was attorney general in 2010, Secretary Salazar slapped an Arctic moratorium on our state. I ended up suing him on what I thought was an illegal action. They did it simply because they were encouraged to do it by outside groups after he made an announcement to put a moratorium on the Gulf. These delays have been much more problematic than what happened to the Kulluk.

Petroleum News: Have you been talking to other players waiting in the wings with their own projects like ConocoPhillips and Repsol?

Sullivan: I’ve been talking to Repsol about their much more immediate announcement, which I think is exciting for the state. It looks like they will be moving into development soon; that would be a significant deal to put tens of thousands of barrels a day of oil into TAPS.

With Conoco, I’ve been in touch with them, but my discussions with them over the last several months are more federal permitting delays with NPR-A. You know one thing I think is really important to remember is we get to these points where Shell is hopefully going to be doing responsible development exploration this summer and Conoco with NPR-A and the administration applauds themselves.

Well, as you remember back in 2010 that the (Colville River) bridge was delayed for two years. We’ve got to keep in context how long it’s required to do simple permitting in the state of Alaska. I know it’s something I’m going to try to fix on the federal side.

Petroleum News: Let’s talk more about that. I know back in January the Obama administration hit you with some news that upset many in Washington and here in Juneau with designating ANWR as wilderness and later OCS restrictions.

Sullivan: Well, you put your finger on one of the key issues. It’s not just delay that’s literally taking years. It’s removing opportunities for responsible resource development on federal lands.

Myself, like most Alaskans, want to see the federal government going in the other direction: more access to federal lands, not less. The other thing I’ve been doing, and hopefully you’ve seen is, is asking the administration where they believe they have the legal authority to undertake, particularly their announcement with 1002 ANWR.

As you know, only the federal government through Congress - through Congress - can determine whether the coastal area is going to be wilderness or developed for oil and gas.

That’s a proposition that any lawyer who has read ANILCA recognizes. Yet you had this administration for the first time ever - the Clinton administration never did anything like this - announce a policy where they say we are going to put forward a bill to put the coastal area into wilderness, which they can but it won’t go anywhere in this Congress.

But then they say in the meantime they are going to manage the coastal area as wilderness anyway. Nobody has done that. When I question the head of Fish and Wildlife Service (Dan Ashe) where do they get the authority to do that, they are very vague. They are very vague because they don’t have the authority to do that.

You may remember when I was DNR commissioner I filed a lawsuit on the state’s ANWR exploration plan under ANILCA 1002(e) and Gov. Walker’s team has strongly followed up on that. As a matter of fact, I had a good conversation with Attorney General (Craig) Richards just about two weeks ago on that.

That’s another example where I believe they are not following the letter of the law under ANILCA. The question I posed to the head of the Fish and Wildlife Service is one that flips the issue toward oil and gas development. What if there is a Republican president in 2017 who proposed a bill to develop the coastal area to develop oil and gas, and it’s taking time for Congress to move forward, should that president say as I’m waiting I’m going to manage the area for oil and gas development anyway?

It’s a pretty fair question given that’s what they are doing with regard to wilderness. After hemming and hawing the director of the Fish and Wildlife Service said no.

Well, he says no to that scenario, he has to say no to the scenario that he’s undertaking right now. That’s where I don’t believing they are abiding by the law and I think it’s my responsibility to make sure they do.

Petroleum News: Still on the Arctic, the U.S. took over as chair for the Arctic Council a few months ago. What would you like to see for Alaska during these two years?

Sullivan: I think it’s a great opportunity for the United States to be the chair of the Arctic Council. We had a meeting out here with a bunch of Alaskans and a senior state department official recently where we talked about these opportunities. It’s energy. It’s transportation. It’s tourism. It’s of course protecting our beautiful environment. I want to make sure that as we lead on this, that we are not emphasizing one issue over the other and not downplaying for economic growth, particularly for people living in the Arctic. The United States is a chair of the Arctic Council for one reason: because Alaska is a state.

I do see some promise. You may have seen that Tara Sweeney was chosen as chair for the Arctic Economic Council. She’s an outstanding leader, someone with tremendous knowledge of the region, not only big cities but villages like Barrow and other places on the North Slope. She is going to do a great job there.

I also want to make sure we are moving out of what I refer to as the snow globe syndrome here in Washington. I’ve seen it with a lot of officials in Washington. They want to keep us in a glass globe because it makes them feel good.

I always remind them there are hundreds of thousands of people who live in our state and we need opportunities for them. The Arctic is a great opportunity for the country in so many different ways. Assuming chair of the Arctic Council is a way for our country to make sure those opportunities are highlighted throughout the world.

Petroleum News: The Obama administration has made it clear climate change is its agenda for those two years. Yet many in Alaska would like an emphasis on economic development. Can these be reconciled?

Sullivan: That’s what I meant by emphasizing one issue over the other. I think that right now they seem to be emphasizing the issue of climate change over all other matters with regard to the U.S. chair of the Arctic Council. I gave some remarks to a group last week when we met informally and I said what the administration needs to do is a better job of is listening to Alaskans. Our input is critical. We are the ones who live there. We are the ones who want to make sure our future is bright there. I don’t think they are doing a good enough job on that. The ability to balance those different matters, those different issues will come if the administration makes a point of listening to leaders like Tara Sweeney and others who can pull us out of the snow globe that Secretary Kerry and others have placed us in.