The sale of oil, which when burned causes climate change, is a major source of revenue for Alaska’s state government. It generates hundreds of millions of dollars annually. The state now wants to make some money by stopping certain gasses from entering our atmosphere.
Gov. Mike Dunleavy will introduce a bill in the upcoming legislative session that will increase the state’s ability to absorb and store carbon. He said that it could generate several hundred million to a quarter of a billion dollars annually.
Dunleavy stated that Alaska has the opportunity to sequester CO2 in many ways within the state, including through its forests and our depleted oil-and-gas basins. He also revealed the budget he and his cabinet for the fiscal years starting in July 2023.
Carbon sequestration, the process of capturing carbon dioxide from the atmosphere and storing it is one of the most common greenhouse gases. One method to reduce the amount of carbon dioxide found in the atmosphere is sequestration.
Dunleavy stated that Alaska’s depleted basins like Cook Inlet are ideal places to sequester carbon. According to Dunleavy, Cook Inlet could hold up to 50 gigatons carbon.
He stated that Alaska has more potential to store carbon underground than any other place on the West Coast.
Dunleavy also mentioned Alaskan forests and coastlines, which could be used as carbon monetization assets. Carbon credits can be created by trees and forests absorbing carbon dioxide from the atmosphere. These carbon credits can then be sold to companies that want to offset their environmental impacts. Sealaska or Ahtna are two examples of Alaska Native corporations that developed forest carbon projects many years ago. Research has also shown that seaweed cultivation may be a strategy to remove carbon.
Dunleavy stated that the bill he will introduce in the coming session will serve as a starting point for figuring out how carbon sequestration in the state would look. He also plans to explore topics such as how the state can contract to companies, what’s included in the contract and what lands and basins could be involved.
Meredith Trainor is the executive director of Southeast Alaska Conservation Council. She said that the group is excited to hear the governor think about the possibilities presented by carbon sequestration. “But, of course the devil is always in the details.”
“From the SEACC perspective, protecting the Tongass National Forest is the best way to increase carbon sequestration. This is not the responsibility of Gov. Dunleavy said that it would be crucial for the governor to think more broadly about ways of protecting forested areas where the state has influence. Trainor added, “But we think it’s equally important that the governor refrain from removing land from federal holdings.”
Dunleavy stated that he would like to see action on a broad bill to allow the state to begin to entertain contracts with entities. His office later stated that no potential entities have been identified at this time.
Dunleavy stated that the multi-year revenue option does not “gore any ox.”
“For years, the discussion on revenue was: Whose horse are we going to slaughter? Is there going to be an income tax on Alaskans? Are we going to tax corporations? Dunleavy stated that there is a real chance of getting revenue from the monetization carbon.
The budget proposal does not include revenue from carbon sequestration, however Dunleavy’s 10-year planning includes a target for new revenue. It envisions revenue of $300 million in fiscal 2024, $500m the following year, rising to $750m the year after that, and then leveling at $900m in the subsequent years. This would be sufficient to balance what is required to maintain the state’s functioning.
State Senator Bert Stedman (R-Sitka) doesn’t believe that carbon sequestration revenue will be that fast.
He said, “That’s an important issue that will require quite a lot of analysis and discussion.” It will likely take two years, I believe.
Stedman stated that successful legislation could lead to “multigenerational agreements” between investors and the state. Therefore, lawmakers need to be cautious.
He said, “If we make an error, it could be very costly for the development opportunities.”
James Brooks contributed reporting for this story.
