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Commentary
At the end of March, House Democrats released a draft energy and
climate bill that would establish a cap-and-trade regime and a
"twenty-five by twenty-five" national Renewable
Electricity Standard. The U.S. Senate has starting marking up
certain titles of a comprehensive energy package but has yet to
introduce or release a climate package. President Obama signed an
omnibus public lands bill codifying the National Landscape
Conservation System, permitting the Izembek land exchange proposal
to move forward, and creating Alaska's first national heritage
area. Sixty-seven Democratic members of the U.S. House of
Representatives delivered a letter to President Obama asking the
President to establish a task force to re-write Arctic management
programs, drawing a terse response from the Alaska congressional
delegation. In Alaska, federal agencies have
started distributing more than $900 million available under the
national economic stimulus bill passed in February. And, in April,
Anchorage will host The Indigenous Peoples' Global Summit on
Climate Change, which will focus on the participation and role of
indigenous peoples in responding to global climate change.
CONGRESS
Federal Energy and Climate Legislation Would Impose a National
Renewable Electricity Standard and a National Carbon Cap-and-Trade
Program
On March 31, 2009, House Democrats
released a draft energy and climate bill that would establish a
national carbon cap-and-trade program, a "twenty-five by
twenty-five" national Renewable Electricity Standard (RES),
and other national energy initiatives.
The "discussion draft" of
the American Clean Energy and Security Act of 2009 (also being
called the Waxman-Markey proposal) would require "retail
electric suppliers"—i.e., electric
utilities that sell more than 1,000,000 megawatt hours per year of
electricity—to obtain six percent of their energy from
qualifying renewable energy resources for the calendar year 2012,
rising to 25 percent by 2025. Qualifying renewable energy resources
would include wind energy, solar energy, geothermal energy, limited
types of biomass, landfill gas, qualified hydropower (which is
defined to include incremental hydropower, but does not include
small or micro-hydro units), and marine and hydrokinetic renewable
energy.
The U.S. Senate has starting marking
up certain titles of a comprehensive energy package. At this time,
however, a Senate climate package has not yet been introduced or
circulated. It remains uncertain whether a Senate bill will
incorporate both national RES legislation as well as national
carbon cap-and-trade legislation.
Senators Jeff Bingaman (D-NM) and
Mark Udall (D-CO) have both introduced national RES legislation.
Under Senator Udall's RES proposal, the RES mandate would apply
starting in 2012, requiring regulated electric suppliers to obtain
six percent of electricity from renewable resources the first year
of the program, with the requirement increasing to 25 percent by
2025. Under Senator Bingaman's RES proposal, the renewable
electricity mandate kicks in at four percent in 2011, and increases
to 20 percent by 2021.
Senator Lisa Murkowski, ranking
Republican on the Senate Committee on Energy and Natural Resources,
has warned that a national RES could impose major hardships on
parts of the country—particularly the
Southeast—that lack an abundance of
"qualifying" renewable resources. Senator Murkowski also
has expressed concern that it may not make sense to impose a
one-size-fits-all mandate in light of transmission capacity
constraints that hinder the ability of utilities to reach potential
sources of renewable energy. "In order for an RES to work, it
must make the connection with transmission," Murkowski has
said. "We can't force utilities to meet a [a national RES]
requirement if they lack access to renewable energy at any
price."
The House Committee on Energy and
Commerce plans to complete consideration of the comprehensive
energy legislation by Memorial Day, with subcommittee hearings the
week of April 20, subcommittee markups beginning the week of April
27, and full committee markups beginning the week of May 11. The
Senate Committee on Energy and Natural Resources's schedule for
consideration of national energy legislation is, for now, less
clear.
Conference on Climate Change
Will Consider Effects of Global Warming on Indigenous
Communities
The Indigenous Peoples' Global
Summit on Climate Change will be held in Anchorage, Alaska, April
20-24, 2009. Participants will focus on the impact of climate
change on indigenous peoples around the world, and the
participation and role of indigenous peoples in responding to
climate change.
The summit comes at a time Congress
is considering energy and climate legislation that may establish a
national carbon cap-and-trade regime.
The Waxman-Markey draft energy and
climate bill would establish a market-based program for reducing
global warming emissions from U.S. facilities that emit significant
quantities of greenhouse gases. Under the proposed cap-and-trade
program, regulated entities would be required to have tradable
federal permits, or "allowances," for each ton of
pollution they emit into the atmosphere.
The proposed legislation could have
significant impacts on indigenous communities in Alaska and
abroad.
Under the Waxman-Markey proposal,
regulated entities under a U.S. cap-and-trade program could meet
part their emissions compliance obligations by submitting
"offset" credits for activities that reduce deforestation
in developing countries. Under a separate program, U.S.
Environmental Protection Agency (EPA) would provide additional
support for deforestation programs in developing countries by
setting aside emissions allowances to support such programs. The
proposed legislation directs the EPA, in developing and providing
support for the proposed international deforestation reductions
program, to seek to ensure that developing countries protect the
rights and interests of local communities, indigenous peoples and
vulnerable social groups, and to promote consultation and profit
sharing with such communities.
The Kyoto Protocol, a global
cap-and-trade program in which the U.S. has declined to
participate, established a carbon offsets program called the Clean
Development Mechanism (CDM). The availability of international
offsets under the CDM has caused developed countries to finance
billions of dollars of projects to reduce emissions and promote
sustainable development in developing countries, often benefiting
rural and indigenous populations in those countries.
Federal cap-and-trade legislation may
represent a similar opportunity for rural and indigenous peoples in
the U.S. and abroad, including Alaska's rural and indigenous
communities, to utilize carbon financing to help fund the
development of renewable energy infrastructure. The draft
Waxman-Markey bill permits regulated entities to submit up to 2
billion tons of domestic and international offset credits per year
and could create a multi-billion dollar market for carbon
offsets.
Access to reliable and affordable
electricity is a prerequisite for economic development in all
communities. Yet, a highly disproportionate share of the
world's rural and indigenous populations lack access to modern
energy services. If a national carbon cap-and-trade bill like the
Waxman-Markey proposal becomes law, it would likely create an
offset program that could help fuel energy development for rural
and indigenous communities in Alaska and abroad.
President Obama Signs Omnibus
Public Lands Bill Codifying the National Landscape Conservation
System, Permitting the Izembek Land Exchange Proposal to Move
Forward, and Creating Alaska's First National Heritage
Area
On March 30, President Obama signed
the Omnibus Public Land Management Act of 2009, Public Law No.
111-11, a collection of nearly 170 separate measures which, among
other things, designates two million acres of wilderness area in
nine states, codifies the establishment of the National Landscape
Conservation System (NLCS) within the Bureau of Land Management
(BLM), initiates the process of approving the Izembek land
exchange, and creates Alaska's first national heritage
area.
The legislation codifies the
establishment of the NLCS within the BLM. The NLCS, originally
created by BLM in 2000, consists of over 26 million acres of
National Conservation Areas, National Monuments, Wilderness Areas,
Wilderness Study Areas, Wild and Scenic Rivers, and National Scenic
and Historic Trails, for the purpose of conserving, protecting and
restoring nationally significant landscapes. The Public Land
Management Act provides a congressional stamp of approval on this
originally administratively-created program, with only the broad
directive that NLCS be managed "in a manner that protects the
values for which the components of the system were
designated," and provides only limited protection for certain
types of recreation in specified areas.
The omnibus legislation includes the
controversial Izembek National Wildlife Refuge Land Exchange,
establishing a process which could increase the size of the Izembek
and Alaska Peninsula Wildlife Refuges by more than 61,000 acres in
exchange for a small gravel single-lane road
corridor—incorporating 206 acres—leading from
the community of King Cove to an all-weather airport in Cold
Bay.
Before the Izembek land exchange can
take place, construction of the road must receive federal
permitting and environmental review under the National
Environmental Policy Act. The legislation also requires the
Secretary of the Interior to determine "that the land exchange
(including the construction of a road between the City of King
Cove, Alaska, and the Cold Bay Airport) is in the public
interest."
The omnibus legislation also creates
the Kenai Mountains-Turnagain Arm National Heritage Area,
Alaska's first national heritage area. The National Park
Service will administer the heritage area, although the Cooper
Landing-based Kenai Mountains-Turnagain Arm Corridor Communities
Association is eligible for up to $1 million a year, for a maximum
of $10 million over 15 years, to promote tourism in the heritage
area.
The legislation also approves a land
conveyance to the City of Coffman Cove, directing the Secretary of
Agriculture to convey to Coffman Cove a 12-acre parcel of U.S.
Forest Service-owned land within the city.
ADMINISTRATION
Fate of Polar Bear Special Rule in Question
In the March issue of the Alaska
Policy Update, we discussed the successful passage of a rider to
the Omnibus Appropriations bill, signed by President Obama on March
10, which allows the Administration to roll back Endangered Species
Act (ESA) regulations for the polar bear without standard notice
and comment proceedings. The Department of the Interior is
considering actions under the rider, with an expedited deadline of
60 days looming for action if the Department decides to use the
special authority under the rider to withdraw the Polar Bear
Special Rule, issued under section 4(d) of the ESA.
Obama Administration Pressured to Re-Write Arctic Management
Programs
On March 24, 67 Democratic members of
the U.S. House of Representatives delivered a letter to President
Obama that asks the President to establish a task force to develop
a conservation plan for Alaska's Arctic, provide statutory
wilderness designation for the coastal plain of Arctic National
Wildlife Refuge, and suspend additional oil and gas development
activities in the National Petroleum Reserve-Alaska.
The recommendations mirror
recommendations that a coalition of 29 environmental groups made to
the Obama Administration transition team in a November 2008 report
entitled "Transition to Green."
In response to the letter, the Alaska
congressional delegation delivered a letter to the President
requesting a meeting with him to discuss Alaska's management of
the Arctic, before his administration takes any actions that will
have a significant impact on the State and its residents. The
delegation urged the President not to take any "rash
actions" regarding Alaska, stating that such actions could
harm the nation's economic recovery and the shared goal of
increasing the nation's energy independence.
Federal Agencies Move to Distribute Stimulus Funds in
Alaska
Federal agencies have set about the
task of distributing $743 billion available under the economic
stimulus bill passed in February, formally known as the
"American Recovery and Reinvestment Act," (Pub. L.
111-5). Alaska could receive as much as $930.7 million in
federal stimulus funding. However, either the Alaska governor or
the State Legislature must formally ask for the federal stimulus
money in order for the state to receive it. In mid-March, Governor
Sarah Palin announced her intention to refuse $288 million, or
about 31 percent of the funding. The Governor indicated that she
would only request the portion of funding that would fund
construction and infrastructure. The Governor remains committed to
refusing much of the funding.
Alaska legislators have expressed
concern that, even if the Alaska legislature accepts the money, the
Governor could veto parts of it or refuse to fill out the necessary
paperwork to receive it. Certain categories of the Recovery Act
funds may only be accessed by a state if the Governor formally
applies for them. Thus, for instance, regardless of the State
legislature's actions, Alaska may not receive State Fiscal
Stabilization Fund monies available "for the support of
elementary, secondary, and postsecondary education" and
"public safety and other government services" absent the
Governor submitting the required application for such funds under
the provisions of the Recovery Act. The requirements for funding
under other Recovery Act authorities vary by account, with
guidelines either already issued or to be issued soon.
NATURAL RESOURCE PROJECTS MOVING FORWARD IN ALASKA
Donlin Creek
Mine
The Donlin Creek mining prospect in
the Kuskokwim region is proving to be a model of success,
completing studies and preparing state and federal permit
applications to be filed in the near future.
Donlin Creek, LLC is a partnership
between two Canadian mining companies, Barrick Gold Corp. and
NovaGold Resources. The project, located on Native land, has
generated significant public support.
Donlin would be one of the
world's largest gold mines, producing 30 million ounces of gold
over its 25-year to 30-year lifetime.
Van Ness Feldman is assisting with
pre-application efforts and federal permitting.
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