Nathaniel Herz, Northern Journal

In May, the Alaska Legislature narrowly rejected a conservative talk radio host’s appointment to a highly paid position regulating the state’s commercial fisheries.

Now, after the failure of that pick, Republican Gov. Mike Dunleavy has chosen a new appointee with a similar — though not identical — background for the six-figure job at the Commercial Fisheries Entry Commission, or CFEC.

In an unannounced decision, Dunleavy selected Rick Green last month, according to a letter to Green that the governor’s office released Wednesday as part of a response to a Northern Journal public records request.

Green’s first day on the job is July 1, according to the commission’s chair, Glenn Haight; Green will serve at least through the Alaska Legislature’s next round of confirmation votes in the spring of 2025.

On the airwaves for more than 15 years, Green was known as Rick Rydell during a colorful career as a talk host. His on-air character was that of an “unabashed redneck,” according to one of the books he wrote.

One of those books also chronicled how, with two other hunting enthusiasts, Rydell once attempted to shoot, legally, 30 bears in a single long weekend.

But since 2018, Green has ditched his talk show persona and worked as a low-profile special assistant to Alaska’s fish and game commissioner, Doug Vincent-Lang.

That government service may make his chances of confirmation greater than those of Dunleavy’s previous appointee, Mike Porcaro. Porcaro had no experience as a commercial fisherman and was still working as a conservative advertising consultant and talk radio host when the governor appointed him last year.

“Green has some experience in the Department of Fish and Game, which will give him more standing with the Legislature,” said Dillingham independent Rep. Bryce Edgmon, who represents Alaska’s salmon-rich Bristol Bay region and voted against Porcaro’s confirmation. “It’s an important appointment, and I hope it works out this time.”

The fishery commission, with some 20 employees, does largely low-key bureaucratic work — including issuing annual commercial fishing permits, granting and denying permit transfers in the event of illnesses and deaths, and publishing fisheries reports and statistics.

But it has drawn attention from policymakers in recent years for what critics say is a small workload and yearly commissioner salaries that can exceed $135,000.

A spokesman for Dunleavy, Grant Robinson, described Green as a good fit for the job, saying he gained “considerable understanding of fisheries” in his work at the fish and game department.

“He’s been an avid outdoorsman for the past 40 years, served three years on the Anchorage Fish and Game Advisory Committee, and has a background as a project manager for environmental and engineering firms,” Robinson said. “Rick’s professional background and experience in public engagement make him a valuable asset to the CFEC. We are confident that his contributions will benefit the commission and the sustainable management of Alaska’s fisheries.”

Robinson declined to specify Green’s exact compensation, referring to salary guidelines that are tied to the number of years an employee has previously worked in state government jobs. Haight, the commission’s chair, said that Green would be in the same range as Porcaro, who was paid at a $136,000-a-year salary rate before lawmakers rejected his appointment.

In an email, Green said his work for the state, combined with his personal fishing experience and the time he spent on the Anchorage advisory committee, make the CFEC job a “natural extension.”

“I’m grateful to the governor for the faith he placed in me,” Green said in his email, sent from an account that identified him as “Rick Rydell.” The commission, he added, works with the commercial fishing industry “to optimize the development of our natural resources and annually contribute billions of dollars to the economy of Alaska.”

“I already have a great relationship with Commissioner Glenn Haight,” he added. “And I’m eager to meet, and work with, the rest of the staff on this important mission.”

Nathaniel Herz welcomes tips at natherz@gmail.com or (907) 793-0312. This article was originally published in Northern Journal, a newsletter from Herz. Subscribe at this link.

Imagine, for a moment, that you’re the head of a publicly traded oil company.

In your corner office, a team of executives has come to pitch you on a new, possibly lucrative drilling opportunity. It’s in a relatively politically stable country; the local tax regime is reasonable, if not generous. Other companies have found huge deposits in the area, and your own geologists are telling you that there’s likely a whole lot of oil in the ground. You’ve already leased the area.

There’s one big problem, though: The project is in the Arctic, in an undeveloped region of Alaska’s North Slope — and while it’s not in deep water, it’s a slight distance offshore. Which means drilling risks provoking lawsuits and permitting challenges from conservation groups, protests from local whaling captains, maybe even disruptions from climate activists at your next shareholder meeting.

You call up the heads of other multinational oil companies that you sometimes work with to see if any of them want to buy a stake in the project and take the lead on drilling. But they all balk.

So, you take a pass, and hand back to the state what could ultimately be some highly valuable leases. You’ll take your chances drilling somewhere else — probably in a region where you expect to be able to get the oil to market sooner, before there’s too much of a risk of declining global oil demand amid adoption of renewable technologies.

Welcome to Alaska’s future. Or, really, its present.

The details are a bit fuzzy, but this story is not entirely hypothetical. Something like it just happened.

Earlier this month, Shell’s Houston-based U.S. arm said it would relinquish a set of oil leases in an area of the North Slope, West Harrison Bay, that some observers say the company’s own geologists were salivating over. The leases were Shell’s last majority-owned properties in the state, following its decision to give up a batch of federal offshore leases in 2016.

“As a former oil company guy for over 40 years, I have sympathy for those guys in Houston, because I knew it probably drove them crazy that their upper management was so against it — and so scared of the European climate cultists,” said Anchorage Republican Rep. Tom McKay, who convened a legislative hearing about the West Harrison Bay prospect earlier this year.

McKay, a petroleum engineer, said in an interview that he thinks other companies could still acquire the leases at a state auction and drill for oil themselves — including, potentially, an upstart player, Narwhal LLC, that has bought up surrounding acreage.

But Narwhal lacks Shell’s enormous financial wherewithal — a crucial asset when the cost of drilling wells in remote parts of the North Slope can top $100 million.

Other industry players say that Shell’s exit from the state is an important and unsettling symbol of the economic future for oil-dependent Alaska: As the world looks toward lower-carbon energy sources in response to global warming, some of the state’s hard-to-tap petroleum prospects are becoming less attractive.

The exit of Shell — one of the first major companies to operate in Alaska — follows the departure of other major companies from the state, including BP in 2020.

“A lot of stuff is coming together that suggests decreased investment in remote, Arctic areas for oil and gas. Alaska leadership has to understand this stuff is happening,” said Mark Myers, a former state natural resources commissioner who also once led the U.S. Geological Survey. “Worldwide events are overcoming us faster than we can manage it. Shell’s response should not be seen as a one-off.”

The end of oil and gas is still far off in Alaska, where taxes and royalties from the industry amount to slightly more than one-third of the state government’s unrestricted revenue.

Two huge new oil projects are currently under construction on the North Slope, and could collectively boost Alaska’s overall production by some 50%.

But the new Pikka development, now owned by Australian company Santos, was delayed for years amid concerns from investors about backing a project in the Arctic. And ConocoPhillips’ new Willow project has faced a slew of lawsuits and intense, broad opposition from conservation groups and climate advocates.

Shell acquired its West Harrison Bay leases in 2012 — the same year the company began a much higher-profile drilling quest in the Chukchi and Beaufort seas offshore of Alaska. That unsuccessful multiyear campaign, in federal waters, was marked by the wreck of one of Shell’s offshore drilling rigs.

The drilling ultimately cost the company $7 billion, but never produced a barrel of oil for sale.

In the wake of that failure, and amid fierce lobbying by activists against Arctic oil development, the company said a few years later that it would not pursue any new remote exploration leases in the region.

But it quietly held on to its 125 square miles in West Harrison Bay, in the state waters just offshore of the National Petroleum Reserve – Alaska.

The deposit is north of ConocoPhillips’ Willow project, and just to the west of Santos’ Pikka development. And Shell, in correspondence with the Alaska Department of Natural Resources in 2020, said it had identified several potential oil and gas accumulations and prospects.

But to confirm the presence of commercially viable oil deposits, Shell would have to drill wells. In 2020, the company took an initial step in that direction, merging its 18 leases into a single unit.

But Shell, in its correspondence with the state, indicated that it did not want to drill the wells itself. Instead, it was searching for another business to buy a stake in the leases, take on some of the “risk and cost” associated with the area’s development and begin an exploration campaign.

Shell said its efforts were hindered by the coronavirus pandemic. Through September 2023, it told the state that it was still having “ongoing discussions with its global contacts,” but finally, earlier this month, the company said it had been “unable to secure a suitable co-owner” and would surrender the West Harrison Bay leases.

“The Arctic is such a tough optic for a large international oil company. You can’t have an annual meeting without someone saying, ‘Increase your profits, but by God, don’t do it in the Arctic,’” said a person familiar with the decision, who requested anonymity due to the sensitivity of the deliberations. They added: “It’s not that there’s no oil there.”

In an emailed response to questions, a Shell spokeswoman, Cynthia Babski, did not directly identify the obstacles to finding a partner, saying only that the company had been “actively seeking a co-owner and operator” for several years but ultimately was unsuccessful.

Babski declined to address McKay’s comments about the “climate cultists,” and also did not directly answer a question about why Shell did not seek to sell the leases rather than return them to the state.

“After discussions with the Alaska Department of Natural Resources and other stakeholders, Shell chose to terminate the unit and relinquish the leases,” she said.

That choice could have repercussions for Narwhal, a small, privately owned oil company whose majority stakeholder is a Texas-based family partnership, according to corporate filings with the state.

Narwhal’s leaders include a former Shell employee who worked on the company’s West Harrison Bay development plans. And Narwhal owns more than a dozen of its own leases in the bay that surround the area formerly leased by Shell — though it also hasn’t done any drilling.

For the past two years, Narwhal has pushed Republican Gov. Mike Dunleavy’s administration to pressure Shell into advancing its drilling efforts in West Harrison Bay. It also said in 2022 that Shell had “summarily dismissed” at least a half-dozen of Narwhal’s formal proposals, since 2016, to either jointly drill for oil in the area, or to buy Shell’s leases outright.

Narwhal officials did not respond to requests for comment, and Babski declined to comment on Narwhal’s assertions. But now, if Narwhal wants to buy the leases formerly held by Shell, it will have to win them at an upcoming auction held by the natural resources department, which officials say could happen as soon as later this year.

“The department understands this area to be highly prospective,” said John Crowther, the department’s deputy commissioner.

One major problem for any oil company that ends up finding oil in West Harrison Bay is getting it out.

The land surrounding the nearshore leases relinquished by Shell is all within the National Petroleum Reserve, where the Biden administration just finalized new limits on oil and gas infrastructure and development.

Industry observers say that building a new pipeline from West Harrison Bay across the petroleum reserve and east to connect back to the trans-Alaska pipeline could be difficult, if not impossible, to secure environmental permits for. Crowther and others suggested that perhaps a pipeline could stay offshore, in state waters, until it connects back to state-owned land, where permitting is more industry-friendly.

The big question now is whether any company can secure the investment needed to take up such challenges.

Myers, the former natural resources commissioner, said he thinks that permitting and political impediments have become an increasing problem for Arctic projects, given that oil developments in other areas can often be brought online more quickly.

“You have to look at the time it takes you to permit and develop, even if you’re successful. How does that play into the timing of when we start decreasing oil demand in the world?” he said. “Before, if I sit on it for 20 years, it’s worth hanging onto because there’s always going to be a market for it in the future. Now, oil is systematically being replaced for many of its uses. You’re looking at a different opportunity in the future.”

Myers is worried enough about Alaska’s post-oil economic future that he’s currently investigating whether the state might hold economically valuable underground deposits of a carbon-free fuel: hydrogen.

Dunleavy, the governor, is also hosting a sustainable energy conference this week. But some lawmakers remain deeply skeptical about the need to reposition the state’s economy.

McKay, the Republican state representative, noted that the Alaska Legislature just passed a bill that could help sustain the state’s oil and gas industry by allowing companies to sequester carbon pollution underground.

He also dismissed federal conclusions and the broad scientific consensus about the far-reaching and worsening effects of climate change.

“It’s all emotion. You can’t spend trillions of dollars on something that’s based on emotion,” he said. “I’m just not ready to surrender our oil and gas business.”

Nathaniel Herz welcomes tips at natherz@gmail.com or (907) 793-0312. This article was originally published in Northern Journal, a newsletter from Herz. Subscribe at this link.

For decades, Alaska shipped liquefied natural gas to Japan, which burned the fuel to generate power — and also generated ample climate-warming carbon emissions.

Now, the Biden administration wants to study whether those Japanese emissions could be captured, liquefied and shipped back to Alaska. There, they’d be injected and locked away underground in Cook Inlet, just west of Anchorage, to help stem the warming of the climate.

Officials from the U.S. Department of Energy announced Tuesday at an Anchorage workshop that they’re starting a formal study of the concept, building on Japan-U.S. cooperative agreements announced by the White House last month.

“Even as the decline of natural gas in the Cook Inlet heralds the end of a previous and impressive energy area in this region, awareness and interest is growing here in the region’s potential to become a storehouse for capturing carbon emissions — both domestically and internationally,” said Brad Crabtree, assistant secretary for the Department of Energy’s Office of Fossil Energy and Carbon Management.

Crabtree spoke Tuesday to an audience at Anchorage’s Sheraton hotel that, in addition to Alaska policymakers and fossil fuel executives, included some 15 representatives of Japan’s energy industries and government.

The Department of Energy’s new study is a reflection of the growing interest in injecting and storing climate-warming carbon pollution in underground reservoirs in Alaska — a trend amplified, in part, by provisions in President Joe Biden’s signature climate law to incentivize greater use of the technology.

Alaska lawmakers are currently debating a bill sponsored by GOP Gov. Mike Dunleavy that would establish a legal system for carbon injection and storage. And one Japanese company recently hired an Alaska-based lobbyist, at $7,500 a month, to track carbon-related policy developments in the state.

Many climate advocates are skeptical of carbon storage’s potential to meaningfully reduce global warming, saying it’s expensive, unproven on a large scale and enables continued dependence on fossil fuels.

But Crabtree, in an interview after his announcement, said that certain substantial sources of carbon pollution aren’t tied to fossil fuel combustion. Cement manufacturing, he noted, generates emissions not just from burning fuels but from a specific chemical process that converts limestone into lime.

“I don’t see this as enabling oil and gas at all,” he said. “I see this as enabling the transformation of our energy industrial economy to be fully decarbonized.”

Alaska, however, has to overcome a significant obstacle in order to participate in the carbon storage industry, according to Crabtree: While it has “enormous” storage potential in the form of depleted oil and gas reservoirs, it produces relatively low quantities of emissions from its few major power plants and industrial facilities.

That’s where Japan, and possibly South Korea, come in.

Japan is the world’s fifth-highest energy consumer, according to the U.S. Energy Information Administration’s most recent statistics. But while Japan has committed to being carbon neutral by 2050, it has limited capacity to deposit emissions underground, as well as risks to the integrity of storage from earthquakes, Crabtree said.

Japanese businesses have already signed study agreements with international partners to explore the idea of shipping carbon to Malaysia and Indonesia and storing it there. Now, Crabtree’s office will examine whether the same idea is possible in the U.S., with a focus on Alaska.

An official from a Japanese company following those developments, who requested anonymity because of their political sensitivity, described the interest from his country as “very, very early.”

“It’s a tool that’s being evaluated,” the official said. “The economics are painfully expensive.”

Oil companies have long injected carbon into their reservoirs to help extract more petroleum. But the federal government has licensed very few projects solely dedicated to storing carbon to keep it out of the atmosphere.

As of September, the Environmental Protection Agency had issued just two permits that have led to projects, both in Illinois, according to E&E News.

Enhanced tax credits for CO2 storage in Biden’s climate law have boosted industry interest in new projects, but there’s now a major permitting backlog at the EPA. And because the tax credit only applies to carbon captured in the U.S., Japanese emissions shipped to Alaska wouldn’t qualify, Crabtree said.

The energy department’s study, with help from a newly hired contractor, will examine whether the cross-border carbon shipment concept makes technical and economic sense — and what costs and prices for capture and storage would allow such projects to move forward.

One idea is that if Alaska can produce climate-friendly fuels, like hydrogen, to ship to Asia, the same tankers could return to the state carrying carbon emissions.

“We create this value chain of, potentially, exporting energy to Japan and backhauling carbon dioxide, which we then sequester in our rocks,” said John Boyle, Alaska’s commissioner of natural resources.

Studying the technical feasibility should be just the first step, said Kelsey Schober, director of government affairs at Alaska’s branch of the Nature Conservancy, which recently published a study on carbon capture and storage in the state.

“It can’t be the only step. We also have to ask: What are the impacts? Who’s going to feel those impacts the most? Have they been consulted about these projects?” she said.

From an environmental perspective, Schober added, the potential benefits of carbon capture and storage depend on where the pollution is coming from. It’s more valuable, she said, if it’s being used for industries — like cement manufacturing or steelmaking — that are difficult to decarbonize.

“We have to think about prioritizing avoiding and reducing direct emissions — not just using CCUS technologies as a way to bail out existing emission levels,” she said, using an acronym for carbon capture and underground storage.

Nathaniel Herz welcomes tips at natherz@gmail.com or (907) 793-0312. This article was originally published in Northern Journal, a newsletter from Herz. Subscribe at this link.

A federal appeals panel issued a last-second ruling Wednesday that will allow this summer’s Southeast Alaska troll chinook salmon fishery to open as scheduled July 1 — reversing a lower court ruling that would have kept the $85 million industry off the water.

“It’s a major victory,” Alaska Fish and Game Commissioner Doug Vincent-Lang said in a brief phone interview Wednesday. “We can go fishing.”

The panel, in a five-page ruling, said that the entities defending the fishery — the Alaska Trollers Association, the state of Alaska and the National Marine Fisheries Service — met the legal standard required to grant what’s known as a “stay” of the lower court ruling.

The decision, the panel said, was based on the likelihood that those entities could show that “the certain and substantial impacts” of closing the harvest on the Alaska salmon fishing industry outweigh the “speculative environmental threats” posed by allowing the fishery to take place.

The Washington-based environmental group that sued in an effort to shut down the harvest, the Wild Fish Conservancy, argued that allowing the fishery to continue would harm a population of 73 endangered orca whales that live off the coast of Oregon, Washington and British Columbia.

The Southern Resident orcas depend on chinook salmon for most of their diet.

This article was originally published in Northern Journal, a newsletter from journalist Nathaniel Herz. Subscribe at this link.