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State Senator District E
Senate Majority Leader
Senator Cathy Giessel Newsletter
UPDATES
Issues affecting
your family, community and jobs.
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Dear Friends and Neighbors,
This is the best time of year to see birds. I really love the Sandhill Cranes. These were in Creamer's Field, Fairbanks, last week.
Top Line today:
Alaska Permanent Fund audited values are completed. See that section of newsletter below.
Audited Fund value: $75.7 B
· Statutory Net Income (SNI) to Earnings Reserve Account for Fiscal Year 2024: $366.6 Million.
· Cost of PFD in Fiscal Year 2024: $881.5 M (that's ~$1300 for each Alaskan)
(Note - If we spent all $366 M of the FY24 SNI on a dividend, it would pay for close to a $500/person dividend.)
Alaska North Slope Crude Oil is selling for $93.40/barrel.
But production is dropping, now around 460,000 barrels/day.
Why does it matter?
About 32% of State monies come from Earnings of the Fund.
Only about 23% of State funding comes from oil revenue.
Bottom Line: Promising big Dividend checks wins votes, but its not wise, its not sustainable, and its not conservative!
Items in this Newsletter:
· Alaska Permanent Fund Financial Statement
· Last Energy Symposium
· Winter Weatherization & Efficiency
· Clean Hydrogen Hub & Working Group
· Alaska Native Corporations
· Alaska Economic Trends Sept Issue
· Alaska Health Fair Sept. Schedule
· Alaska Trails, Sept
· Local Lumber Grading bill
· Current Topics, Education, Economy, Health Care, Politics
· Alaska History
· Resource Values, Permanent Fund
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Start of FY24 Financial Statements
September 1, 2023
The financial statements for the beginning of the fiscal year 2024 (FY24) for the Alaska Permanent Fund are now available.
As of July 31, 2023, the Alaska Permanent Fund has an unaudited total value of $75.7 billion. The value of the permanent deposits in the Principal is $56.5 billion with $12.4 billion of associated unrealized gains. The Earnings Reserve Account (ERA) has $3.7 billion committed to the FY25 annual draw to support state revenues, $1.4 billion to inflation-proof the Principal, $0.5 billion of uncommitted realized earnings and $1.2 billion of unrealized gains associated with current investments.
While positive performance returns were achieved in FY23 despite a high inflationary environment and relatively flat markets, the amount of income generated through investment activity has decreased compared to previous years.
As a result, the spendable portion of the Permanent Fund is being used faster than it is being replenished.
While this is reflected in the start of FY24 financial statements, it is important to note the current fiscal year’s (FY24) percent of market value transfer for the State of Alaska is already accounted for. Additionally, there is sufficient money in the earnings reserve account to make next year’s (FY25) annual distribution to the State and support the FY24 appropriated inflation-proofing payment to the Principal, which are reflected as commitments on the financials.
SEE GRAPHIC BELOW.
The Fund's history and performance can be found here.
AFPC Website Here.
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The last symposium of the series will be:
Topic: RPS and Clean Energy Standards: National Policy Comparisons
When: Thursday, Sept. 7, 11 a.m.-1 p.m. AKDT
Join the symposiums on Zoom.
For more information on the symposiums, please email Brittany Smart.
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Alaska Environment is hosting their third webinar in their Clean Energy Homes series: Winter Weatherization and Efficiency on September 19th at 5:30pm AK with REAP.
With temperatures dropping and days getting shorter, it’s the start of the time of year when people use the most energy at home. A lot of times this energy is wasted unnecessarily with leaky windows or ducts, old appliances or inefficient heating systems, causing energy use, environmental impact and utility bills to skyrocket during the winter months. Fortunately, there are simple things people can do to make their homes more energy efficient, which can save money and improve comfort.
During this webinar, experts will discuss home energy audits, D.I.Y. weatherization projects, and how to take advantage of the federal and state incentive programs that are designed to lower home heating bills and reduce overall energy use. There will also be a chance to ask questions and get advice on how to get started.
RSVP for this Webinar here.
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U.S. Department of Energy
OFFICE OF CLEAN ENERGY DEMONSTRATIONS
Video: OCED Update on Regional Clean Hydrogen Hub Demand-Side Support Initiative
As part of the Regional Clean Hydrogen Hubs (H2Hubs) program, the U.S Department of Energy (DOE) Office of Clean Energy Demonstrations (OCED) released a Notice of Intent (NOI) on July 5, 2023, which included a Request for Information (RFI), to invest up to $1 billion in a demand-side initiative to support the H2Hubs and help accelerate commercial liftoff of the clean hydrogen economy.
In this video recording, DOE officials present an overview of the H2Hubs demand-side support initiative, as proposed in the NOI, and discuss overall thematic responses from the RFI.
The demand-side support initiative will help ensure both producers and end users in the H2Hubs have the market certainty they need during the early years of production to unlock private investment and realize the full potential of clean hydrogen.
Presenters include:
· Kelly Cummins, Acting Director, Office of Clean Energy Demonstrations, DOE
· Leslie Biddle, Senior Advisor, Office of the Under Secretary for Infrastructure, DOE
· Ramsey Fahs, Policy Advisor (Contractor), Office of Clean Energy Demonstrations, DOE
For more information on the Regional Clean Hydrogen Hubs, visit the program website.
Watch Video
On the local side of Hydrogen...
Alaska Hydrogren Working Group - Sept 5 monthly meeting recording. Passcode: ?Z3izce%
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Alaska Native Corporations
Who are they?
What do they do?
The Alaska Business Magazine this month has an outstanding edition featuring each of our 12 Alaska Native Corporations (ANCs).
These corporations are integral to Alaska's economic development and culture. But they reach far beyond our state borders, into national and global markets.
The Alaska Native Claims Settlement Act (ANCSA) was passed by Congress in 1971. The Act came about by the courageous voices of Alaska Native leaders who effectively held back the construction of the TransAlaska Pipeline until their claim to land in Alaska was settled. That meant that until those claims were settled, no Prudhoe Bay oil was going anywhere!
Instead of "indian reservations", our First Alaskans demanded land be given them. I'll let you read more ANCSA details here. The $962.5 Million divided among the 12 corporations, along with 44 million acres of land, was the start of these very successful businesses serving their shareholders.
This September issue of Alaska Business Magazine highlights the diverse businesses and successes of the ANCs. Its a great read. It even has a tool that helps with pronunciation of our many Alaska Native place names.
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September brings the freshness of fall, the promise of new beginnings, and an essential reminder for us all: Prostate Cancer Awareness Month.
September Health Fairs
September is a bustling month for AHF with numerous opportunities to participate in health education and affordable blood screenings. We invite you to join us at these events across various communities. Please note that you can schedule your appointment online and see the most current schedule on our front page, www.alaskahealthfair.org. Walk-ins are welcome at all health fairs.
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Senator Bjorkman’s Local Lumber Grading Bill Signed into Law
(Big Lake, AK) - Senate Bill 87, sponsored by Senator Jesse Bjorkman (R-Nikiski), was signed into law today. The bill creates a local lumber grading program for Alaska sawmill operators to become certified to grade and sell certain types of dimensional lumber that they have produced for residential construction.
“Local lumber grading in Alaska will create economic opportunities for small businesses, provide an opportunity for Alaskans to purchase local products, and perhaps offer building materials at a lower cost than dimensional lumber from the lower 48,” said Senator Bjorkman. “It will also encourage higher value-added use of materials harvested from forest thinning and hazardous fuels reduction projects that would otherwise be piled and burned.”
Alaska is struggling to meet housing shortages across the state, made worse by the significant increase in the cost of construction materials and lag time due to supply chain issues. Currently, dimensional lumber used in construction must be graded and stamped by third-party grading agencies in order to meet lender requirements and building codes.
“Local lumber has been used successfully to build sturdy houses, boats, and even aircraft parts for generations already,” said Trevor Kauffman, Kenai Peninsula sawmill operator and owner of Kauffman Enterprises. “However, Alaska's relatively small forest products industry has not been able to bear the cost of Pacific Northwest lumber grading services, in most cases. To use an expression from the forest industry, the local use lumber program will "grease the skids" for skilled Alaskans to bring high-quality wood products to market.”
The Department of Natural Resources will operate the local lumber grading program and oversee the criteria used for grading the allowed Number 2 and better, Stud and Number 3 grades of dimensional lumber. The Department will provide free training for sawmill operators and establish benchmarks for certification. Once certified, a sawmill operator could then grade and sell the dimensional lumber they produce directly to a homeowner or their contractor for use in a residential structure with three or fewer units in areas where building codes allow for the use of locally graded lumber.
“Creating new opportunities for lumber sales through the local lumber grading program can serve as a catalyst to help grow Alaska’s timber sector by lowering the barrier of entry for new sawmills,” said Senator Bjorkman. “In addition to providing economic opportunities across the state, this could provide the additionality needed for creating and selling forest carbon offset projects.”
Senate Bill 87 received strong, statewide bi-partisan support, passing the House with a vote of 38 -1 and the Senate unanimously.
To hear more from Senator Bjorkman on the positive impacts of Senate Bill 87, you can listen here.
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Current Topics
Dept of Interior cancels leases in Alaska's Arctic Refuge. Alaska Public Media
No company was close to drilling in the refuge, in northeastern Alaska. Two companies that bought leases during the Trump administration later gave them up. A state agency, the Alaska Industrial Development and Export Authority, still holds seven leases. But Haaland’s cancellation forecloses the possibility it might sell them to a company to develop them. Her announcement also seems aimed at dissuading any company from even thinking about drilling in the refuge, even as the department is planning its second legally required lease sale there.
Alaska-grown produce struggles to catch up after brutally cold start to summer. Alaska's News Source
A warm and sunny August has allowed vegetable crops to begin making a comeback after a brutally cold and windy spring forced farmers to plant weeks later than normal. Arthur Keyes, owner of Glacier Valley Farm in Palmer, said his vegetable crops are three weeks behind where it would typically be in an average summer in Alaska.
Bad behavior hasn't ended with COVID. Axios
Rededicating ourselves to in-person interactions and some grace can go a long way toward restoring civility. "The good news is, it isn't that some innate characteristic of humans has changed," Ranney said. "We just need to work to come back together as a community and to practice the Golden Rule."
How analyzing ancient and modern polar bear samples reveals the full scope of global warming. Alaska Beacon
"The global climate is changing and the Arctic is warming rapidly. These are objectively true statements that most people have come to accept. But it is also true that Earth’s climate has never been stagnant and climate anomalies have been frequent throughout the past. How then, do we understand our current situation relative to past climate shifts? Are the impacts of modern climate change comparable to those of the medieval warm period (MWP) or the little ice age (LIA)?”
Coast Guard Cutter Alex Haley returns to homeport after 57-day patrol in Arctic Ocean, Bering Sea. U.S. Coast Guard News
The Coast Guard Cutter Alex Haley (WMEC 39) and its crew returned to its homeport of Kodiak following a successful 57-day patrol in the Arctic Ocean and Bering Sea, Monday. Nicknamed the “Bulldog of the Bering,” the Alex Haley and crew supported multiple strategic-level objectives for the Seventeenth Coast Guard District and the U.S. Northern Command, including providing presence along the U.S. Maritime Boundary Line and supporting U.S. Navy assets during a transit through the Bering Sea. The Alex Haley crew also navigated the Bering Strait into the Arctic Ocean, patrolling in support of the White House’s National Strategy for the Arctic Region and the Coast Guard’s Arctic Strategy.
Education
Millions enrolled in new student loan repayment program. Alaska Beacon
“Our top priority is to support borrowers as they prepare to return to repayment with the tools and resources that they need,” Jason Miller, deputy director for management at the Office of Management and Budget, said on a call with reporters Tuesday. In Alaska, there are 6,300 residents enrolled in the program.
Schools' new COVID fight. Axios
Schools grapple with COVID surge. Axios
There isn't consensus among public health experts around how schools should deal with COVID this fall.
George Washington University health policy professor Leana Wen, who's long advocated for a return to pre-pandemic life, suggested kids with mild symptoms can still go to school. Georges Benjamin, head of the American Public Health Association, said any kid feeling sick should stay home. "You're not just protecting that individual child, but that child has classmates who may have chronic diseases," he said. Any decisions about reinstating mask mandates should be made on a "case-by-case" basis, Benjamin said.
Seeking Shelter/Seeking Solutions: The homeless students of Anchorage. Alaska's News Source
On the first day of school, 90 students took taxi rides to school and that number is expected to increase as the school year progresses and the district identifies new homeless students.
University of Alaska system boasts overall enrollment growth after financial challenges. Alaska Beacon
“These growths are from a valley,” she said. “What’s reflected here is the confidence of the public in the ability of the university that we didn’t have over the past several years.” The state cut funding to the university by $55 million from 2019 to 2022. The state spending rose by $47 million in the budget year that ended in June. Less than half of college bound Alaska high school students attended college in the state in the last two years, according to a study by the Alaska Commission of Postsecondary Education. University of Alaska Fairbanks Chancellor Daniel White said the budget cuts reduced Alaskans’ confidence in UA education.
(My comment: Our state population is declining in ages 16-64. Thirty-three percent (33%) of people age 18-26, leave and do not return. The University of Alaska budget cuts eliminate a reason for Alaska kids to stay.)
Economy
Child care is about to get even more expensive as federal funds dry up. ADN
Now, with the last of that money expiring this month, an estimated 70,000 child-care programs - or about one in three - could close as a result of lost funding, causing 3.2 million children to lose care, according to a study by the Century Foundation, a liberal think tank. That translates to $10.6 billion in lost U.S. economic activity, researchers found, adding new strain to a nation already struggling with a profound lack of child care.
Alaska a top contender nationally in cost-of-living. Raven Radio
Paying $100 for a large bag of groceries is becoming more common in urban Alaska. In Kodiak, almost a twin of Sitka’s across the Gulf, groceries are 53-percent more expensive than the national average.
Alaska unions urge Biden administration to block Albertsons-Kroger merger. ADN
Labor unions in Alaska are calling on the Federal Trade Commission to block a $25 billion merger that would combine Fred Meyer and Carrs Safeway grocery stores into one corporate behemoth.
Opinion: Labor shortages are a problem everywhere, but Dunleavy's inaction is making Alaska's situation worse. ADN
Not surprisingly, the governor’s fixation on the Permanent Fund dividend is proving to be more of a political popularity magnet than a job applicant attraction. Alaska continues to lose more residents than it has gained for 10 years running. Those are lost workers.
The return of 2%. Axios
First half U.S. gross domestic product was a hair over 2%. Inflation expectations are nearly back to 2%. It may not last, but right now, it looks like we're moving back toward the slow growth environment that preceded the COVID-19 crisis, something we used to call the "2% world.
Politics
OPINION: Alaskans should be dubious of Dunleavy’s plan to use public money to defend himself. ADN
Alaska AG Jahna Lindemuth has said, “The attorney general is charged with representing the state of Alaska. The governor is not the client except to the extent he represents the state. Allowing the attorney general in his sole discretion to defend ethics complaints against the governor or lieutenant governor, or the Department of Law to defend the AG, is inappropriate and inherently inconsistent with the attorney general’s role. It is also an inappropriate use of state resources.”
(My comment: When an Attorney General appointee is before the Legislature for confirmation, the question posed is: “Who will you be the “attorney” for - the Governor who has appointed you, or the people of Alaska”. It’s an important question.)
Health Care
Consolidation's costs. Axios
Primary care physicians affiliated with large health systems drive up spending on patient care through increased referrals to specialists, emergency department visits and hospitalizations. The findings in JAMA Health Forum are the latest to challenge claims by the hospital industry that consolidation leads to economies of scale that result in less spending. Instead, the study from Harvard's public health school suggests primary care doctors who have relationships with health systems steer patients into the systems and increase spending.
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Alaska History
· 1886, Sept. 7 - Franklin & Madison discovered gold in the FortyMile district (Interior Alaska)
· 1905, Sept. 13 - Fire burned Nome
· 1907, Sept. 10 - Tongass National Forest established U.S.S.R. passenger route to Alaska Airlines
· 1975, Sept. 15 - Municipality of Anchorage formed
· 1986, Sept. 15 - Five Billionth barrel of oil flowed to Valdez through TAPS
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Alaska Oil Resource Values
Alaska North Slope crude oil price (9/6/23): $93.40
FY24 budget (beginning 7/1) is fully funded at forecast $73/barrel oil.
Price on 9/30/23: $87.99
Price on 9/30/22: $86.91
Price on 6/29/22: $116.84
Price on 3/8/22: $125.44
Price on 12/22/21: $75.55
ANS production (9/5/23): 460,591 bpd
Oil's 2023 High. Axios
The decision to keep the oil market tight also has political implications, as it further links Saudi Arabia — once a stalwart U.S. strategic ally — with American adversaries Russia and China. How much the higher crude oil prices feed through to U.S. gasoline prices — already at the highest level this year — and potentially reinvigorate broader price pressures as well.
Saudis will have a say in U.S. elections. Axios
Saudi Arabia's extension of oil production cuts until the end of 2023 or longer helps ensure energy prices will become an election 2024 battleground
Santos executes carbon offset agreement with Alaska Native corporation. Petroleum News
"Santos is committed to delivering a net-zero emissions project (Scope 1 and 2, equity share) and has executed an agreement with an Alaska Native corporation to deliver carbon offsets, with additional carbon solution opportunities being evaluated."
EPA, Corps finalize definition of WOTUS after Supreme Court ruling. Petroleum News
The Supreme Court ruled that only wetlands that are indistinguishable from waters of the United States because of a continuous surface connection can be viewed as part of WOTUS. This is a critically important issue for Alaska, given the state's myriad of waterways, lakes and wetlands. While activities impacting WOTUS areas require federal permits, the Alaska Department of Environmental Conservation conducts environmental permitting for state waterbodies and wetlands.
Sidebar: Inlet natural gas down 1.2%. Petroleum News
Cook Inlet natural gas production peaked in the mid-1990s at more than 850,000 mcf per day. Now, natural gas production in Cook Inlet averaged 198,586 thousand cubic feet per day in July, down 2,319 mcf per day, 1.2%, from a June average of 200,905 mcf per day and down 2.5% from a July 2022 average of 203,606 mcf per day.
Project with Lynden delivers wind turbine to Stebbins. Petroleum News
Lynden News Aug. 29, STG Construction has depended on the Lynden companies for almost two decades to help support the important work of bringing renewable wind energy to communities in need of replacing other energy sources like diesel fuel. Alaska Marine Lines and Northland Services have moved many smaller 100 kW wind turbine components to about 30 remote Alaska communities. For the larger EWT 900 and 1 MW wind turbines, Alaska Marine Lines has delivered two to Kotzebue, one to St. Mary's and one to Bethel.
Alaska watches, nervously, as Ukraine war pushes more Russian oil through Bering Strait. Northern Journal
The war in Ukraine appears to be driving a sharp increase in shipments of Russian oil to China through the Bering Strait, prompting new warnings that the traffic threatens the isolated villages and residents’ fish and wildlife harvests on the American side of the border.
Japanese firms advance plan for wind-powered methane in Peru. Wind Power Monthly
The companies have signed a joint study agreement to commence a preliminary front-end engineering and design (FEED) study for the project, which is meant to produce e-methane from green hydrogen and carbon dioxide. The companies say that, because e-methane has the same composition as natural gas, it can use existing infrastructure such as natural gas pipelines. Carbon emissions from the combustion of synthetic methane are to be offset by the CO2 separated and recovered as part of the methanation process.
Catch up fast on LNG and oil. Axios
The U.S.-Europe LNG trade is expanding as nations seek to replace Russian supplies. Elsewhere, U.S. LNG company Venture Global announced plans to expand its export capacity from 70 million metric tons annually to 100 million.
A big lithium deal moves closer to fruition. Axios
The bid for more Australian lithium comes as some other lithium-rich countries are asserting more state control over deposits.
Alaska Air Force Base Home To Mini-Nuclear Reactor Pilot Project. Oil Price
The USAF issued a Notice of Intent to award a contract for micro-reactors to supply the Eielson Air Force Base with power and heat. Because of their small size, micro-reactors can be constructed cheaper and faster than traditional, giant, light-water reactors. The push for nuclear power comes as a new Pew Research Center survey shows that most Americans now want atomic power.
Sept. 6, 2023 Precious Metal Prices
Gold - $1929.55
Silver - $23.32
Platinum - $927.70
Palladium - $1250.05
Alaska Permanent Fund
Fund's total value Sept 5 is $77,851,300,000.
Website
July 31, 2023 Audited Values
The Principal total includes:
• $56.5 billion in permanent savings contributions
• $12.4 billion in unrealized gains
The Earnings Reserve Account total includes:
• $0.5 billion of uncommitted realized earnings
• $3.7 billion for the FY24 POMV draw
• $1.4 billion for FY24 Inflation Proofing of the Principal
• $1.2 billion in unrealized gains
PFD payout from ERA, 1980-2022: $26.6 B
Cost of PFD in 2023: $2.2 B
Cost of PFD in Fiscal Year 2024: $881.5 M
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Create a great offer by adding words like "free" "personalized" "complimentary" or "customized." A sense of urgency often helps readers take an action, so think about inserting phrases like "for a limited time only" or "only 7 remaining"!
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