Former Alaska Gov. Frank Murkowski in April 2017. (Michael Penn | Juneau Empire File)

Former Alaska Gov. Frank Murkowski in April 2017. (Michael Penn | Juneau Empire File)

Opinion: AIDEA is critical to resource development in Alaska

The state needs to develop its abundant natural resources.

Gov. Mike Dunleavy’s proposed budget for Fiscal Year 2020 addresses the extent to which the state of Alaska has spent more than it can afford and has developed an economy unsustainably dependent on state spending. As a result of his proposed budget, all the talk in Alaska these days is about budget cuts and how those cuts will affect the economy of the state.

But Alaskans must also work with the Dunleavy administration to aggressively expand Alaska’s economic pie and grow its private sector economy through natural resource development. As Wally Hickel once famously said: “We can’t cut our way to prosperity.”

Alaska needs to develop its abundant natural resources in order to create a stable and sustainable future — the type of economy that will create good paying private sector jobs, and at the same time, create additional sources of state revenue.

Fortunately, Alaska has a tool for fostering economic development and financing needed infrastructure in one of its public corporations — the Alaska Industrial Development and Export Authority — commonly referred to as AIDEA.

[Frank Murkowski: Here’s how to fix the Alaska Marine Highway System]

AIDEA has a record of successful projects from the Ketchikan shipyard to the Skagway dock, and of course, the Red Dog Mine.

AIDEA at present is working on two important projects that can open two extensive mining districts and potentially add several new mines to those mines now operating in Alaska.

The Ambler Road Project involves a proposed road from the Dalton Highway to the Ambler Mining District. This Ambler Access project could add four new mines to Alaska’s economy at no cost to the state because AIDEA would invest its own money, issue bonds and seek private partners to pay for the construction and maintenance of the road. In return, the Ambler area mines using the road would pay a toll to AIDEA and its partners that would pay back the investment with interest. This is the same model that AIDEA used to develop the Delong Mountain Transportation System (DMTS), the road and port AIDEA financed to support the successful Red Dog Mine.

[Could Canadian mine be cautionary tale for Southeast?]

Another AIDEA effort is working with the Trust Land Office on behalf of the Alaska Mental Heath Trust to remove obstacles that are hindering the development of the Palmer Mining District near Haines. This is a significant mining area where potentially the royalties from mine development would flow to the Alaska Mental Health Trust and provide needed income to support its activities to deliver mental health services to AMHT beneficiaries across our state.

AIDEA is also working on developing infrastructure such as connecting roads that will support the oil industry and put new sources of oil into the Trans-Alaska Pipeline System. Again, these developments can go forward without state funds because AIDEA has the resources to invest its own money or issue bonds for development as it did at the Red Dog Mine. AIDEA also supports the tourism industry by financing and investing in cruise ship docks. All these projects contribute to the growth of the economy and create jobs while making a return for AIDEA.

[New state revenue forecast slightly more positive for 2020]

AIDEA is also unique because it operates without state revenues or tax dollars. Its operating budget comes out of the returns it makes from the projects that it owns and in which it has invested over the years.

AIDEA is semi-independent of the state government. It is run by a skilled executive staff that reports to a board that makes its investment decisions. The board consists of two state commissioners and five members from the private sector. This board composition provides the authority with a private sector outlook and feel.

In these times of reduced state budgets, Alaska should look to AIDEA to develop the access roads, ports and projects that will be built in partnership with private capital to develop our natural resources and diversify the economy.

AIDEA is the engine will propel the development of the infrastructure necessary to support the resource potential of Alaska. Using its financial resources for non-development purposes would defeat AIDEA’s purpose and adversely affect resource development.


• Frank Murkowski was the governor of Alaska from 2002-2006 and served as a U.S. senator from 1981-2002. My Turns and Letters to the Editor represent the view of the author, not the view of the Juneau Empire.


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