Gov. Mike Dunleavy says it’s Christmas morning due to the vast oil and other resource extraction President Donald Trump’s executive orders will enable. Meanwhile hundreds of Juneau households are being asked to pay several thousand dollars apiece for huge barriers in their backyard to protect record glacial floods experts say are occurring due to climate change.

Dunleavy and other Alaska leaders supportive of Trump’s early actions say it will reap riches by reviving industries such as mining and timber. Meanwhile, Juneau’s leaders are planning tax hikes and shunning pleas from needy agencies for funds as they confront short- and long-term flood-protection projects that could cost hundreds of millions of dollars.

Nationally there have been 403 weather and climate disasters since 1980 with damages/costs exceeding $1 billion in inflation-adjusted dollars, with a total cost of more than $2.9 trillion, according to the National Oceanic and Atmospheric Administration. There has been an average of 23 such disasters annually since 2020, compared to an average of nine since 1980. A University of Alaska study published in 2019 declares climate change could cost the state up to $700 million a year and scientists since have said accelerating impacts may result in damage exceeding earlier forecasts.

Beyond the purely monetary costs are the loss of property, lives and sense of security such disasters have inflicted on people. It has also been detrimental to some industries, notably fisheries, in the state.

Alaska, however, is experiencing economic struggles both in the governmental and private sectors that, among other things, are resulting in widespread workforce shortages and an expected long-term population decline. Furthermore, another Trump pledge is to drastically downsize federal spending, which could have a major detrimental impact since it provided 37.3% of Alaska’s $16.3 billion budget last year compared to 36.7% from investment earnings and 18.6% for petroleum, according to the state Department of Revenue.

But Dunleavy, in his State of the State speech Tuesday, said Trump’s actions involving Alaska could change the long-term outlook in a big way.

“The (U.S.) Department of Interior estimates the state could see as much as an additional $2 billion per year in revenue if (the Arctic National Wildlife Refuge) is fully developed,” Dunleavy said. “We can develop our way to prosperity if we’re given the opportunity and we take advantage of it.”

Which raises “balance sheet” questions: who will reap what riches if the projects made possible by Trump’s resource-related executive orders become reality and who will incur what climate-related costs as those activities further accelerate the impacts? And do the pluses outweigh the minuses?

Don’t expect “Drill, Baby, Drill” to happen anytime soon

Not surprisingly, there are no definitive answers mere days after Trump issued the orders due to a complex range of questions to be answered, although supporters of his orders say they can pour billions of dollars a year into state government coffers while also enriching many industries in the private sector.

At the same time there are overlapping assertions that the climate impacts feared by many will not occur — at least for many years — with Dunleavy saying such fears are overblown and policy experts saying Trump’s grand development dreams for Alaska are unlikely to be realized anytime soon.

“Many of these areas have been closed for a good long while,” Dustin Meyers, senior vice president of policy at the American Petroleum Institute, told Reuters shortly after Trump issued his initial executive orders. “There is always the risk that these areas could be reclosed after the next election cycle.”

U.S. oil production is already at record levels due largely to increased production in more accessible areas like Texas and New Mexico, and companies have limited spending on new projects to focus on returning cash to shareholders, the news agency reported.

Trump’s executive orders may help with development on existing leases, but overall “I don’t expect the president’s orders to appreciably change oil and gas production in Alaska so much that anyone outside of the state would notice,” Larry Persily, federal coordinator for Alaska Natural Gas Transportation Projects between 2010-2015 and current publisher of the Wrangell Sentinel, told High North News.

“Regardless of the president’s order to change direction on several regulatory reviews, it will take more than that to spur companies and their investors to spend billions of dollars on new oil developments in Alaska,” he said. “Explorers and producers have multiple prospects around the world, and they will invest in the ones that present the lowest risks and the highest probability of returns.”

As with other analysts, Persily said “it also depends on who is in the Oval Office four years from now.”

Another key factor is oil prices need to be high enough for producers to consider investing in new Alaska projects worthwhile.

“For drilling and fracking to pick up substantially, oil and natural gas prices would have to rise, executives say, an outcome that is at odds with Mr. Trump’s goal of stemming inflation by reducing the cost of energy,” The New York Times reported. “Oil companies won’t spend money on production, which is already near record levels in the United States, if they are not confident that they can make money from the extra fuel they churn out.”

The official state revenue and oil production forecasts delivered last month to the Alaska State Legislature don’t take Trump’s executive orders into account since there was no time for such analysis. Officials making the presentations said oil production will likely increase from roughly 470,000 barrels per day this year to 660,000 by 2032 due to existing new projects coming online, but then begin declining again.

Total state revenue from all sources — investment earnings, the federal government, petroleum and non-petroleum — is expected to be $16.8 billion for the current fiscal year, drop to $15.6 billion next year, then gradually rise to $19.6 billion by 2034. However, that doesn’t account for nine years of inflation, which during the past nine years was a cumulative total of 31.5% nationwide. That same rate during the coming nine years would mean Alaska would need $22.1 billion in 2034 to match the buying power of this year’s revenue.

The uncertainty of such forecasts, especially long term, is emphasized by state officials making such presentations. And in what might be considered a paradox, the Environmental Protection Agency’s website as of Feb. 1 notes climate change is having a detrimental impact on energy production that is expected to worsen.

“Sea level rise, melting sea ice, and thawing permafrost are all expected to damage oil and gas infrastructure in Alaska, affecting energy production,” the EPA’s website notes.

Governor: “There are no regulations in China…Alaska takes care of its environment”

Dunleavy acknowledges there aren’t likely to be quick rewards from Trump’s Alaska-specific executive order, although the governor largely blames opposition from environmentalists for the anticipated delays.

“There’s going to be NGOs that are going to tell you that the world’s going to end if we cut a tree down in the Tongass, or we dig for rare earths here in Alaska,” he said. “What they won’t tell you is, once again, if we do it here we don’t enrich our enemies overseas. We don’t send the jobs overseas. We don’t send our national security overseas. And they may want to minimize that, but I don’t think we can, to be perfectly honest with you, and so I think this is a tremendous opportunity. We’re going to do everything we can to take advantage of it. For those that believe that Alaska will be destroyed, its environment will be destroyed, it’s going to become a colony again it’s not going to happen. It’s never happened.”

But innumerable examples and claims of environmental damage and climate change impacts have been cited by many people and organizations, including federal and state government agencies. Concerns raised since Trump returned to office go beyond those “business as usual” impacts due to the scope of his executive order titled “Unleashing Alaska’s Extraordinary Resource Potential,” which declares the policy of the U.S. is to “fully avail itself of Alaska’s vast lands and resources.”

All federal agencies are ordered to “rescind, revoke, revise, amend, defer, or grant exemptions from any and all regulations, orders, guidance documents, policies, and any other similar agency actions that are inconsistent with the policy,” according to the executive order.

Such language — suggesting the elimination of any federal rules inhibiting oil development and other resource extraction — led to some strongly worded pushback.

“I think it’s important for us to think about the fact that we’re not a colony to be pillaged,” Senate Majority Leader Cathy Giessel, an Anchorage Republican, said a day after the executive order was issued. “By throwing open all of the regulations related to resource development we could be jeopardizing our lands and waters.”

However, Giessel did suggest “this is the time for us to look at managing our own land and water,” which overlaps Dunleavy’s suggestion the state is capable of responsible oversight.

One of Dunleavy’s arguments favoring further resource activity is if Alaska doesn’t do it somebody else will — such as China — with few or no concerns about environmental considerations. He also rejects the suggestion that a wholesale elimination of any federal regulations that hinder resources will result in the state operating much like the polluters he singles out.

“There are no regulations in China,” he said. “That’s why they’re putting on coal plants two or three a week. Their carbon footprint is three times as much as the United States. This idea that we’re going to enter an era of 1800s unbridled resource development and environmental destruction. Nobody believes that’s going to happen…Alaska takes care of its environment, regardless of what the federal government says.”

But the Dunleavy administration has pursued actions seeking to weaken existing federal environmental standards, such as proposing the state take over decisions involving wetlands development that currently are subject to the federal Clean Water Act. He is also seeking to seize state control of submerged lands such as Mendenhall Lake, which among other things would allow motorized vessel access that is currently banned.

Dunleavy has also faced criticism — along with a litany of federal officials and previous governors — for what some environmental and tribal officials call inadequate protection of salmon and other subsistence resources that are being threatened by activities such as mining. That includes both pollution from activity and accidents in the state, as well as decades-old criticisms from transboundary issues such as cleanup of the Tulsequah Chief Mine where critics say a tougher stance toward enforcement is needed from state and federal leaders.

A January 2023 assessment by the International Arctic Research Center at the University of Alaska Fairbanks states a balance between a strong oil economy and preservation of other state assets is possible — and indeed desirable given the state’s relative lack of economic diversity and reliance on oil.

“Alaska does not have to choose between renewables or oil, and in fact the state’s recently diversifying energy portfolio shows that Alaska can be a leader in deliberate energy transition,” the study notes.

The bottom line on impacts of climate change — which in Alaska’s Arctic is occurring three to four times as fast as the planet overall — are also mixed, according to the assessment.

“While climate change may bring new economic opportunities that boost the economy, threats from extreme weather and other changes may hurt the economy,” the study notes.

Positive impacts cited are investment in infrastructure and new economic opportunities as oil extraction and other activity becomes possible in more areas of the Arctic. Negative impacts include “extreme weather, precipitation & ocean circulation changes, sea level rise” and “threats to highly populated, large economic regions.”

• Contact Mark Sabbatini at mark.sabbatini@juneauempire.com or (907) 957-2306.