State of Alaska US National Ice Center and US Arctic Research Commission Symposium on the Impacts of an IceDiminishing Arctic July 18 2017 Commissioner Chris Hladick Alaska Department of Commerce Community amp Economic Development ID: 719938
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Slide1
Maritime Economic ActivitiesState of Alaska
US National Ice Center and US Arctic Research CommissionSymposium on the Impacts of an Ice-Diminishing ArcticJuly 18, 2017
Commissioner Chris Hladick
Alaska Department of Commerce, Community & Economic DevelopmentSlide2
2
View of the Arctic Slide3
3
Source:
U.S. Arctic Research
Commission
Alaska’s ArcticSlide4
4
Alaska Budget StatusState Spending cut 44% since FY2013
State Revenue has declined 80%
State has been in deficit since FY2013
Savings balance: $2 billion at the end of FY2018 down from $16 billion
Credit rating is now among lowest in the nation only above Illinois and New JerseySlide5
5
The Good NewsThe state’s sovereign wealth fund, the Alaska Permanent Fund has current market value of $60 billion
Annual
earnings from the Alaska Permanent Fund is Alaska’s largest annual revenue source
Structured use of Alaska
Permanent Fund earnings plus a modest broad base tax would balance the state’s budgetLegislature passed the operating budget just in time to avoid a shutdown
The Bad News
Legislature
has not passed any revenue measures or a capital budget
Legislative session is the longest in Alaska history at 181 day so farSlide6
6
Alaska Arctic PolicySlide7
Barrow
Bethel
Kotzebue
Nome
Kodiak
Fairbanks
Mat-Su Borough
Anchorage
Kenai Peninsula
Glennallen
Valdez
Ketchikan
Juneau
Economic Development StrategySlide8
Business Development
Cultivate a resilient business climate that supports growth and expansion of existing and emerging industries. Finance and InvestmentMaximize the productive use of capital for Alaska business expansion.Economic Development InfrastructureBuild the transportation, energy and technological foundations for economic growth.
Entrepreneurship
and Innovation
Position Alaska to thrive in a technologically advanced global economy.
Economic Development Capacity BuildingStrengthen the ability of Alaska organizations to execute economic development initiatives that create jobs and investment.Quality of LifeImprove the attractiveness and livability of Alaska communities to attract and retain a quality workforce and set the foundations for economic well-being.
Economic Development
Goal AreasSlide9
Crystal SerenitySlide10
Bering Strait Marine Traffic (2009-2016)Slide11
Vessels Through the Being Straits (2016)
20
–
39
120
–
139
180
–
199
220
–
239
140
–
159
40
–
59
60
–
79
0
–
19
100
–
119160–17980–
99
200
–
219
240
–
259Slide12
Year
Northbound Transits
Southbound
Transits
Total
Transits
2009
136
126
262
2010
128
114
242
2011
124
115
239
2012
154
162
316
2013
171
173
344
2014
130
125
255
2015
232
220
452
2016
184
185
369
Recorded Transits of the Bering StraitSlide13
Northern Sea RouteSlide14
14
Emergency Towing System (ETS) LocationsSlide15
U.S. IcebreakersSlide16
Photos of arctic development, fishing,
etc
Arctic Development and FundingSlide17
17
Port Planning Slide18
18
Nome Port Slide19
19
Oil and Gas IndustrySlide20
Employment in the Oil and Gas IndustrySlide21
Employed 5,033 workers in Alaska
Including 4,275 Alaska residents earing $749 million in wagesGenerated multiplier effects totaling 41,3000 jobs and $2.4 billion in wagesOil and Gas Industry Impact (2016)Slide22
22
Commercial FishingSlide23
U.S. Seafood Consumption up by Nearly One Pound Per Person in 2015.
This is the biggest leap in seafood consumption in 20 years!
Strength of the Alaska Brand
23Slide24
ALASKA SEAFOOD MARKETING INSTITUTE
Global Factors Impacting Value
Strong dollar hurts U.S. exporters and helps competitors
Eco-labels diminish
Alaska’s ability to distinguish
on sustainability
Competition from farmed and imported seafood
Volatility of wild harvests, decreased quota for key species
Russian embargo
& Ukrainian conflict
Negative Factors
Global salmon
supplies tightening
Stronger Yen
Long term
demand vs. supply
Strong Alaska
Seafood brand
Responsibly managed fisheries
Positive Factors
24Slide25
~60,000 Direct Workers in Alaska
111,800 U.S. Jobs (including multipliers)
Harvest Volume (2015):
6.1B
lbs.
Ex-Vessel Value (2015): $
1.7B
First Wholesale (2015): $
4.2B
Commercial Fleet: 8,618 vessels
Shoreside
Plants & Facilities: 176
Most Valuable Renewable Resource in AK
ALASKA SEAFOOD
INDUSTRY SNAPSHOTSlide26
ALASKA SEAFOOD
HARVEST BY VOLUME
6.0 Billion Lbs.
HARVEST VOLUME
Sources: ADF&G and NMFS,
compiled by McDowell Group
2014-2015 AVERAGESlide27
ALASKA SEAFOOD
HARVEST BY VALUE
$4.2 Billion
FIRST WHOLESALE VALUE
Sources: ADF&G and NMFS,
compiled by McDowell Group
2014-2015 AVERAGESlide28
ALASKA SEAFOOD
ON THE WORLD STAGESlide29
ALASKA SEAFOOD
ON THE WORLD STAGE
2013
Rank
Country
(Primary Exporters)
Edible Seafood
Exports in
Billions
of $US (2013)
1
Norway
$10.7
2
Chile
4.5
3
Russia
4.3
4
Vietnam
4.2
5
Canada
3.9
6
A L A S K A
3.1Slide30
ALASKA SEAFOOD
EXPORT MARKETS
1.1 Million MT & $3.3 Billion
EXPORT TO ~120 COUNTRIES
China - Largest Partner
EU & Japan – Largest Markets
GROUNDFISH 55%
SALMON 25-33%
EXPORTS = 60-70% OF VALUESlide31
HISTORICAL EX-VESSEL VALUE AND
HARVEST VALUE
Some decline in value due to weak dollar, oversupply, smaller harvests of
high-value species
Challenges/Opportunities
Sources: NMFS, ADF&G,
and McDowell Group estimatesSlide32
Mining Industry ActivitySlide33
Upper Kobuk Mineral Projects (Arctic & Bornite)
Significant exploration work conducted since 2011Preliminary economic assessments completed for underground and open pit operation (Arctic)Completed drilling program and technical studies in 2015–2016 (Arctic)Environmental baseline data collected (Arctic)
Recoveries and concentrate grades for
copper
and zinc are excellent (Arctic)
Updated resource statement (Bornite)Mineral resources of an estimated 40.5 million tons of copper at
base cutoff grade (
Bornite
)
Revenue Stream from Preliminary Economic Assessment Report on the Arctic Project
Arctic Mining – Advanced Exploration StageSlide34
Red DogThe world’s largest zinc concentrate producer
Only taxpayer in the Northwest Arctic BoroughDiscovered in 1968, producing since 1989600 employees (including contractors) in 2016
Arctic Mining – In ProductionSlide35
Alaska LNG ProjectSlide36
Alaska LNG TimelineSlide37
Value of Alaska LNG Project to AlaskaSlide38
Alaska LNG
SummitIn March, AGDC hosted an event in Girdwood, presenting Alaska LNG to 23 representative of 14 potential Alaska LNG buyers/investorsFERC applicationAGDC
submitted application to construct the Alaska LNG project with FERC
Capacity
solicitation
AGDC commenced a “open season” capacity solicitation in JuneKOGAS MOUIn June, AGDC signed
a memorandum of understanding with
the Korea Gas
Corporation
Alaska LNG Project UpdateSlide39
Alaska LNG 2017 PrioritiesSlide40
Alberta to Alaska Railway
Fort McMurray, Alberta
Delta Junction, AlaskaSlide41
The Alberta to Alaska Railway will create a multipurpose link from Alberta to tidewater that will
Open access to the Arctic with dual direction freight to and from North American destinationsEmpower Alaska ports to move trade in world marketsAllow stranded Canadian bitumen to move economically to tidewaterCreate economic connectivity and make stranded resource projects viable, increasing regional growth potential
A2A Railway OpportunitySlide42
Thank you
Chris HladickCommissionerDepartment of Commerce, Community and Economic Developmentchris.hladick@alaska.gov(907) 465-2500