Today, Alaska Governor Mike Dunleavy outlined his Carbon Management Bill Package, previewing legislation he will introduce, creating statutory and regulatory structures needed to capitalize on the carbon markets.
“Shortly, we will introduce our Carbon Management Bill package to launch the State into the emerging carbon market,” said Governor Dunleavy. “Managing this resource is clearly in Alaska’s best interest. It is in alignment with our constitutional mandate to develop all resources. This opportunity does not exclude or negatively impact current industries in Alaska, such as logging. Monetizing carbon has a very real potential of bringing revenue to the State of Alaska to the tune of millions, if not billions, of dollars. We will be asking legislators to seriously consider the legislation that will be introduced.”
Carbon management is required or incentivized in multiple ways around the world, driving growth and investment in carbon markets and projects. This opportunity can generate carbon offsets and/or credits, which are sold, traded, and utilized by companies and entities in two kinds of markets: “regulated” or “compliance” markets found in jurisdictions around the world where activities are required to utilize credits, and “voluntary” markets, where companies use them to comply with corporate missions and commitments to limit net emissions associated with their activities.
These markets are growing rapidly. Alaska Native regional corporations like Sealaska, Chugach Alaska Corp., and Ahtna Inc. have been participating in these markets for years. Since 2019, carbon offsets generated in Alaska have brought $370 million to our Alaska Native Corporations and were the most prominent forestry participants in the California Air Resources Board’s regulated offset/credit market.
The State is proposing legislation for maximum flexibility to participate in this evolving industry. Under this legislation, the Department of Natural Resources would be authorized to promote and provide two main categories of carbon management:
- Geologic sequestration – where concentrated carbon is compressed, injected and stored in deep underground geologic formations. Also typically referred to as carbon capture, utilization, and storage or “CCUS”.
- Biologic sequestration – where the accumulation of carbon in trees, soils, kelps, or other natural processes can be promoted or encouraged. These projects could occur both on state lands and potentially in state waters off of our coasts.
For geologic sequestration, the bill package would establish statutory authority, rules, and processes for leasing State subsurface lands for CCUS activities. In addition, it would create operating rules, regulatory oversight authority, and liability provisions for CCUS projects in Alaska, whether located on State or other lands. For biological sequestration, the bill package would establish the authority for DNR to develop and market carbon offsets and would authorize DNR to lease State land for purposes that include carbon offset projects.
“We’re proposing a flexible framework broad enough to cover the growing possibilities and opportunities with carbon management,” said DNR Commissioner John Boyle. “This burnishes the State’s environmental, social and governance (ESG) credentials – and shows the market that we’re open for business. This bill package came together with the leadership of Governor Dunleavy and through teamwork with the Department of Environmental Conservation, the Alaska Oil and Gas Conservation Commission, and the University of Alaska.”
Governor Dunleavy added, “I’m asking lawmakers to take this legislation seriously as the cornerstone of a long-term fiscal solution that complements revenue from oil and gas and the Permanent Fund. Then, by working with like-minded legislators and stakeholders, we’ll turn that principle into policies and a new era of prosperity for the Alaskans we serve.”
