Gov. Mike Dunleavy signs legislation allowing the state to set up a carbon offset program Tuesday in Anchorage. Dunleavy signed the bill with Alaska lawmakers and administration officials standing behind him during the Alaska Sustainable Energy Conference at the Dena'ina Civic and Convention Center in downtown Anchorage. (AP Photo/Mark Thiessen)

Dunleavy signs carbon ‘trees’ bill at sustainable energy conference

National and state leaders discuss Alaska’s green market prospects in-state and internationally

A bill allowing Alaska to enter carbon credit markets was signed by Gov. Mike Dunleavy, and top U.S. officials expressed optimism about the state’s alternative energy potential amidst turbulent global times during the second annual Alaska Sustainable Energy Conference that began Tuesday in Anchorage.

Vast changes in the global situation during the past few years due to factors such as the COVID-19 pandemic and Russia’s invasion of Ukraine means Europe has largely abandoned Russia as an energy supplier, while large parts of eastern and central Asia are rapidly emerging markets, according to featured opening-day speakers.

“There’s no way I can see that Europe will ever again go and be vulnerable by tying itself to Russia’s natural gas,” U.S. Ambassador to Japan Rahm Emanuel told Dunleavy during a 20-minute question-and-answer session. “(Russia is) now turning very quickly to the Indo-Pacific region. That’s where I think the future battle is, getting to that market.”

Both men acknowledged it was an unusual meeting of the minds between the Republican governor and Emanuel, who was chief of staff to former President Barack Obama and Chicago’s mayor for two terms before his ambassador appointment by President Joe Biden. Similar alignment was expressed by state and federal officials from both sides of the political aisle about other sustainable energy goals such as lowering costs and reducing environmental impacts.

Events at the conference feature presentations and panel discussions on topics such as decarbonizing various forms of transportation, opportunities for investors, sustainable production of non-energy resources such as food through agriculture and mariculture, and how carbon markets are being implemented globally.

A bipartisan group of legislators stood behind Dunleavy during his ceremonial signing of Senate Bill 48, nicknamed the “trees bill,” which primarily seeks to generate revenue by selling carbon offset credits to polluters and other entities in exchange for leaving carbon-absorbing natural areas such as forests intact. The bill passed during the final days of the legislative session with 58 of 60 members voting in favor, following months of in-depth hearings where some lawmakers voiced plenty of questions and skepticism.

“I think it speaks volumes for their optimism as well,” said Dunleavy, who made two carbon bills he introduced early in session a major part of his legislative and fiscal agenda as he began his second four-year term. “This bill is going to allow us to have conversations worldwide with individuals that are involved in the carbon markets.”

Dunleavy initially argued carbon markets could provide billion-dollar sums of revenue annually to the state within a few years to help its long-term financial situation, although subsequent analysis on behalf of state and legislative entities suggest the amount will be far less — and the bill’s fiscal notes declare a reliable revenue estimate isn’t currently possible.

Ongoing doubts are also being expressed, in some instances by legislators who said they hesitatingly voted for the bill. Among the range of doubts is potential security threats if an adversarial nation like China is allowed to lease a large amount of land for carbon credit purposes, perhaps limiting Alaska’s ability to develop its natural resources in the process.

Dunleavy sought to calm such doubts during the bill signing.

“This does not prohibit the state from doing other activities on its land,” he said. “We’re going to be able to hunt, fish, live, mine, produce oil and produce gas. This is just in addition to the other commodities that we already monetize.”

Indeed, continuing Alaska’s aggressive efforts to drill for fossil fuels was emphasized by U.S. Sen. Dan Sullivan, who along delivered brief introductory remarks via video shortly after the conference began. While Sullivan and the rest of Alaska’s congressional delegation has devoted considerable effort during the past year to opening the Willow oil field on the North Slope to drilling, he spent most of his remarks Tuesday focusing on natural gas.

“In short we have so much of what we need to counter authoritarian aggression,” he said.

SB48, which takes effect immediately, contains three main provisions: 1) authorizing the state to develop carbon management projects on state lands where it sells carbon offset credits, 2) leasing state lands to individual entities for carbon management purposes, and 3) allowing the Alaska Oil and Gas Conservation Commission to seek state rather than federal authority for underground injection wells used for geologic sequestration of carbon dioxide.

The latter provision adopted during the legislative process is a precursor to Dunleavy’s other carbon bill, which focuses on revenue from entities paying for underground storage of carbon emissions. House and Senate versions of the bill both got several hearings during the session, but neither made it past the committee process to a floor vote. Legislative leaders with both chambers have said the bills will get further serious consideration next year.

Emanuel, in his conversation with Dunleavy that followed a keynote address to the convention audience of about 800, emphasized a multitude of sustainable energy elements such as hydrogen, geothermal and micronuclear — in addition to well-known alternatives such as wind and solar — are needed to address the broad range of needs and available resources in Alaska and various countries.

That, Emanuel said, is part of the rapidly increasing value being placed on both a reliable resource and supplier.

“Companies today pay a predictability premium for sustainability and stability,” he said.

Investments the federal government is making in sustainable energy, ranging from infrastructure projects to tribal loans, were highlighted by David Turk, deputy secretary of the U.S. Department of Energy. He said incentives have led to nationwide investments such as $100 billion in battery manufacturing and recent actions such as the bipartisan infrastructure bill are providing a million jobs a year.

“Also we’re really prioritizing energy communities,” he said. “Alaska is certainly an energy community and we’re making sure there are a huge range of economic opportunities going forward.”

Not everything was in lockstep among officials featured at the conference. Sullivan mentioned his “disagreements with Biden on many issues” and Emanuel, following Sullivan’s heated advocacy for natural gas extraction, called it a “transition fuel” that has its own drawbacks such as methane emissions.

“We need to make sure ours is better on the issue of methane,” Emanuel said. “It is a serious challenge to climate change.”

• Contact reporter Mark Sabbatini at

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