The Anchorage Press is a reader-driven publication. If you’re already a subscriber, we’re grateful for your support; if you’re not, $130 will buy you our undying gratitude AND a hard copy of the Press in the mail each month!
Some of Alaska’s most polarizing development projects — from oil drilling in the Arctic National Wildlife Refuge to a mining road in the Northwest Arctic — share a key feature.
They’re under the direction of the same state-owned corporation, one that’s been a lightning rod for diverging visions of Alaska’s economy and future.
In the past year, the board of the Alaska Industrial Development and Export Authority, or AIDEA, has approved some $250 million for Arctic oil exploration and two separate mining road proposals.
But only a fraction of that money has been spent. The projects haven’t been built.
And now, with Alaskans set to elect a new governor Nov. 3, AIDEA’s fate is in limbo.
If Democrat Jonathan Kreiss-Tomkins, the current frontrunner, wins the race to succeed outgoing Republican Gov. Mike Dunleavy, the export authority could be poised for a sharp change in direction.
In a recent interview, Kreiss-Tomkins said he’s been “frustrated” by the authority, citing concerns about a lack of transparency and a sense that it’s “rogue and off on its own.”
If elected, Kreiss-Tomkins said, he would “completely reassess everything that AIDEA is looking at.”
Boosters and critics
Other issues — the Permanent Fund dividend, oil taxes, education — have dominated the discourse in this year’s governor’s race.
But political observers agree that the next governor’s approach to AIDEA could also have big implications for the state’s finances and nationally significant development proposals across Alaska.
Among the projects being led by AIDEA are the Ambler Road, a proposed 210-mile mining road that would run through northern Alaska and across a national preserve; the West Susitna Access project, a separate mining haul route through a remote stretch of the Susitna Valley, west of Anchorage; and oil development in the Arctic National Wildlife Refuge.
All three of those projects face aggressive, organized opposition, including from conservation groups and some tribal governments.
For years, AIDEA has drawn strident criticism that it’s wasting public dollars with risky investments and evading accountability. A report written by two economists and released a few years ago by the conservation group SalmonState concluded that AIDEA had cost Alaskans $10 billion over four decades.
But the export authority and its supporters dispute that, noting that it pays annual dividends to the state’s general fund that have totaled about $500 million since the 1990s.
Boosters, including Kreiss-Tomkins’ opponents, say AIDEA is a useful tool for encouraging resource extraction in a state where early-stage development can often be too expensive to attract private investment.
One of the three Republican candidates for governor, former Anchorage Mayor Dave Bronson, told the Anchorage Press he thinks AIDEA’s current executive director, Randy Ruaro, has done a good job. If anything, he said, he’d like to see the agency do even more to promote development.
“I wish they’d be a little more aggressive,” said Bronson.
“My philosophy is: Get it done,” he added. “We’ve got to monetize, in a responsible way, our natural resources.”
The other two Republican candidates, conservative activist Bernadette Wilson and former Alaska attorney general Treg Taylor, did not respond to interview requests. But observers say they’re unlikely to take AIDEA in a markedly different direction.
“If the next governor is a Republican, you’re not going to see an appreciable change in AIDEA’s approach,” said Rep. Andy Josephson, an Anchorage Democrat who’s been a critic of the export authority in recent years.
Governor has appointment power
The Alaska Legislature created AIDEA in 1967 to promote economic growth by financing businesses across the state. It has made some profitable investments, including a haul road built decades ago to connect the Red Dog Mine to a port in Northwest Alaska. But the authority has lost money on other ventures, including a troubled North Slope oil project and an Anchorage seafood processing plant.
AIDEA inhabits a strange niche in state government: It’s a self-funded public corporation, meaning its finances are independent from the state’s main operating fund and the legislative budget process.
The authority also does not report directly to the executive branch. But the governor still has substantial sway, appointing the board members who oversee it.
Five of AIDEA’s seven board members are appointed by the governor directly, while members of the governor’s cabinet — the revenue and commerce commissioners — fill the other two seats.
State law says AIDEA board members serve two-year terms “at the pleasure of the governor,” meaning that the governor can remove them at any time. The board often turns over at the start of new administrations.
Kreiss-Tomkins said he would explore his options. He didn’t rule out the idea of firing current board members, saying he would be “fully informed by what the legal parameters are.”
“If I’m fortunate enough to be elected, I think most people in leadership positions are assuming that they will be off to new adventures,” Kreiss-Tomkins added.
Proposed reforms
AIDEA critics also support policy changes like requiring legislative approval for spending above a certain threshold and legislative confirmation for board appointees.
State legislators have proposed various reform bills in recent years, but to no avail — in part because they didn’t have a clear path through Dunleavy’s office.
“The governor would veto that thing so fast your head would spin,” said Josephson, who has supported more oversight.
While serving in the state House, Kreiss-Tomkins backed legislative approval of AIDEA board members.
But in a recent interview, he would not commit to pushing any specific policy changes. He also would not take a position on some of the authority’s more controversial projects, including the Ambler and West Susitna road projects — even though leading anti-Ambler advocates have publicly supported his campaign.
In the House, Kreiss-Tomkins voted for resolutions supportive of opening the Arctic Refuge to oil development. In the interview, he reiterated that support, but he said a “strong assumption” was that private companies would show interest in the refuge — and he’s skeptical of the state “sinking resources” into an area private industry isn’t investing in.
Like Kreiss-Tomkins, Bronson would not comment directly on AIDEA’s role in specific projects.
But he said he would support financial decisions, like buying oil leases in the Arctic Refuge, “if the return on investment is there.”
“If they can come in and jump-start a program and get us to a return on investment at a sooner date, if they can monetize our resources earlier, then I support it,” Bronson said.
One of AIDEA’s staunchest supporters in the Legislature, Republican Rep. Kevin McCabe of Big Lake, said electing Kreiss-Tomkins could jeopardize projects like the West Susitna road, which is in McCabe’s district.
“We’ve seen governors shut things down before,” he said. “I think it’s entirely possible that JKT, should he get elected, could do that.”
But McCabe also expressed some uncertainty about Kreiss-Tomkins’ approach, given that “he says that he’s a pragmatist and that he understands the need for resource development.”
“I just am not sure where he would go,” McCabe said.
About the election, he added: “We are all watching it very closely.”