Today’s Key Takeaways: Congress says: Cook Inlet lease sale before the end of the year. Gas fields in Cook Inlet are declining. American Pacific will add the Palmer mine project in Alaska to its portfolio by acquiring Constantine. What to watch for in Alaska’s primary election tonight.
NEWS OF THE DAY:
Five things to watch in Alaska, Wyoming primaries
Julia Manchester, The Hill, August 16, 2022
Tuesday’s primaries in Alaska and Wyoming will help set the tone for November’s general elections, with a number of critical contests at stake.
In Wyoming, Rep. Liz Cheney is in a fight for her political life as she faces Harriet Hageman, who has the endorsement of former President Trump, in the state’s Republican House primary. At the same time, incumbent Sen. Lisa Murkowski will also face off for the first time against Trump-backed Kelly Tshibaka and other candidates in Alaska’s Republican Senate primary. Tuesday will also test former Alaska Gov. Sarah Palin (R) as she seeks to make a comeback to elected office in the state’s special congressional election.
Here are five things to watch ahead of Tuesday’s primaries.
Can Cheney outperform expectations?
Cheney will face a steep climb in Tuesday’s primary against Hageman as polls show the incumbent congresswoman trailing the Trump-backed challenger and as other House Republicans who voted to impeach Trump lose their own primaries.
A Wyoming Survey & Analysis Center poll released last week showed Hageman leading Cheney 57 percent to 28 percent, while a separate Casper Star Tribune poll conducted by Mason-Dixon Polling showed Hageman leading 52 to 30 percent.
On top of that, various House Republicans who voted to impeach the former president, including Reps. Jaime Herrera Beutler (Wash.), Peter Meijer (Mich.) and Tom Rice (S.C.), have lost their primaries to Trump-backed primary challengers in recent months.
But while many pundits and strategists are predicting the end of Cheney’s career in Congress for the moment, others say the incumbent congresswoman could do better than the polls suggest, even if she’ll still likely lose. Cheney has led the fundraising race, with outside money pouring in, opening the door to various campaign resources.
Other experts point to the potential impact crossover Democratic voting could have on the race, predicting that it could give her a helpful boost. The New York Times reported in June that registered Democrats in Wyoming were receiving mail from Cheney’s campaign that contained instructions on how to change their party registration so they could cast ballots for her in the primary. Additionally, Cheney has received support from Democratic lawmakers, including Reps. Tom Malinowski (N.J.) and Dean Phillips (Minn.), who cut ads for her in Wyoming.
Will Palin be coming to Congress?
In Alaska, voters will decide whether to send Palin, a 2008 vice presidential candidate and former governor of the state, to Capitol Hill.
Palin is running in the special election for Alaska’s at-large congressional seat, which was previously held by the late Rep. Don Young (R). The former governor is running against fellow Republican Nick Begich III and Democrat Mary Peltola. While Palin has received Trump’s endorsement, it’s unclear how she will perform in Tuesday’s primary as a result of the new ranked-choice voting system. The new system could benefit candidates such as Begich, given that a traditional primary would have brought out a more conservative base that would likely rally around Palin. Additionally, recent polls show Palin trailing Begich and Peltola.
Because of the new system, the winner of the special election won’t be known for days. Significantly, Palin is on Tuesday’s ballot twice: Once for the special election and again for the at-large House primary featuring dozens of candidates. If she advances to the November general election, she could still have a chance to join Congress, even if she loses the special election this week.
Does Alaska’s voting process go off without a hitch?
Alaska’s special election will mark the first race in the state’s history that will use the ranked-choice voting system.
The state adopted the process in 2020 as a result of a ballot measure approved by voters. Supporters of the process argue that it will lead to less partisanship.
In ranked-choice voting, a candidate needs more than 50 percent of the vote to be declared the winner outright. If the front-runner doesn’t have that percentage of the vote, the candidate with the fewest votes that round drops off the ballot, and those who ranked that candidate first will have their votes go to their second choice. The process continues until a candidate has more than 50 percent of the vote.
he state’s special House race election will be the only race with ranked-choice voting on Tuesday, but it will provide a preview of how other candidates running in races such as the state’s Senate election will do in November.
How does Murkowski do in the primary?
Voters will get their first look at how Murkowski performs in a primary against a Trump-backed challenger on Tuesday, but the results may not be indicative of November’s general election results.
Unlike in the special House election, Tuesday’s Senate primary will not involve ranked-choice voting. Tuesday will showcase an all-party primary in which the top four voter-getters will advance to the general election; then, in November, the winner will be declared according to ranked-choice voting. Murkowski is not expected to lead in Tuesday’s primary, because the environment will likely favor more partisan candidates such as Tshibaka. However, experts say that once it’s time for the general election, Murkowski will gain more support from Democratic and independent voters, giving her an advantage over Tshibaka.
Still, Tuesday’s Senate primary will be viewed by some as a test of Trump’s political clout in the state. The former president has made it his mission to work to oust Murkowski from office as a result of her vote to convict him during his second impeachment trial. And while Trump won the state by roughly 10 points, Murkowski enjoys a high approval rating in Alaska. According to data released by Morning Consult, 46 percent of Alaska voters say they approve of Murkowski’s job performance, while 39 percent say they disapprove.
Tuesday’s primaries come as recent events have turned up the volume in an already extremely partisan political environment in the country. Last week, the country was rocked by news that the FBI searched Trump’s Mar-a-Lago estate, seizing a number of documents that were deemed classified. An unsealed warrant, which was approved by a federal judge, shows the FBI executed the warrant while investigating whether the Espionage Act had been violated.
Republicans, particularly those loyal to Trump, have pounced on the news, criticizing the FBI and Justice Department over the move to search Trump’s property. Conservatives have also used the news to rally their political base, a move that could stand to boost turnout in highly partisan primaries.
On the Democratic side, it’s unclear how President Biden’s recent wins, including the passage of the Inflation Reduction Act, will impact the party’s turnout in the primaries or if the prospect of Hageman in Congress will drive Wyoming Democrats to vote for Cheney. Regardless, turnout in Tuesday’s primaries could help read the tea leaves going into November.
OIL:
Congress directs Interior Department to hold Cook Inlet lease sale this year
Sabine Poux, KDLL, August 15, 2022
The U.S. Department of the Interior will be required to hold an oil and gas lease sale in Cook Inlet before the end of the year.
That’s according to a section of the new Inflation Reduction Act, passed by the U.S. House on Friday.
The 730-page act, awaiting President Joe Biden’s signature, tackles tax and health reform. Environmental groups are celebrating its big investments in renewable energy.
But the act also requires the Interior Department to hold several oil and gas lease sales this year — including a long-contested sale in Cook Inlet.
Previous plans for Cook Inlet lease sales have always come with the qualifier that they could be canceled due to lack of industry interest. And they have been, repeatedly — most recently this year, as well as in 2006, 2008 and 2010.
But the new act said the lease sale must go forward before Dec. 31, 2022. That means the Bureau of Ocean and Energy Management, which oversees the offshore program, can’t change or cancel the sale regardless of whether they think they’ll get bids, said Liz Mering, advocacy director for Cook Inletkeeper.
GAS:
Natural gas in Southcentral Alaska may be running down
Tim Bradner, The Frontiersman, August 15, 2022
When you turn your gas stove on you expect it to light, right?
When the light switch in flipped, the lights come on?
Alaskans may be too complacent about everyday things, however.
A sobering thought is that Cook Inlet’s natural gas fields in Southcentral Alaska are declining.
These gas wells have heated homes and buildings and provided electricity for decades.
Hilcorp Energy, the major gas producer in the region, is still drilling new gas wells but there has been a steady decline in gas production over recent years.
All this is important because gas provides the bulk of the heat and electricity for Southcentral communities where half of the state’s population lives. The regional utilities and state officials are in discussions on the decline and formed a working group after Hilcorp Energy, the major gas producer, warned of the problem. Talks are still at a preliminary level. No overall solutions seen as yet.
Hilcorp is indeed drilling and finding new gas mainly near its existing field at Ninilchik, on the Kenai Peninsula, but the supply additions are incremental and not enough to reverse the overall trend. Regional utilities are also adopting power use management systems that result in in more efficient use of the fuel, translating to less use of gas.
Matanuska Electric Association, or MEA said it expects a small reduction of gas use this year due to the increased efficiencies, while also still supporting community growth in communities.
MEA said its gas demand for natural gas is expected to drop from 5.9 billion cubic feet last year to between 5.6 billion and 5.7 billion cubic feet this year.
The reduced gas need is a result of efficiency gained through the new “power pooling” agreement in place with Chugach Electric Assoc. where demand is coordinated among power plants, with load shifted to the most efficient plants operating at the time.
However, in the big picture the numbers don’t look good: In 2005 Cook Inlet was producing over 200 billion cubic feet (bcf) of gas yearly. That had dropped to 102 bcf in 2015; 83 bcf in 2018; 78.4 bcf in 2020 and 76.8 bcf in 2021. The gas fields were aging and rapid drop from 2012 to 2016 were major factors in the loss of major gas-related manufacturing plants on the Kenai Peninsula that made fertilizer and ammonia as well as liquefied natural gas, or LNG, for export.
Since 2016 regional electric and gas utilities have been the major customers for gas producers, mainly Hilcorp, but the continued decline is now raising concerns over the future supply of energy.
In 2010 there was a similar worry about gas supply. The Municipality of Anchorage was seriously concerned about gas for power generation and space heating during winter cold snaps, and plans for rolling power “brown outs,” with mandatory reductions in use of electricity to preserve natural gas.
Imports of liquefied natural gas, or LNG, were being investigated as a solution.
Hilcorp Energy’s arrival in Cook Inlet in 2012 postponed the problem. Hilcorp invested in refurbishing and repairing old wells and finding some new gas. However, community and business growth led to more gas demand. That is continuing.
Meanwhile, an approximate $40 billion North Slope gas pipeline, once seen as the ultimate solution by tapping large gas reserves on the slope, seems indefinitely on hold.
There is more gas known in Cook Inlet, for example adjacent to the Cosmopolitan oil field near Anchor Point, offshore the Kenai Peninsula. There are also undeveloped resources in the small Kitchen Lights field, also offshore in the Inlet. The cost of developing this gas is unknown.
There are, as yet, no big new discoveries and no major new exploration efforts, at least based on lackluster results in a state Cook Inlet lease sale held last spring.
Here are the major components of natural gas demand today:
Enstar Natural Gas says it typically requires 33 bsf billion per year; Chugach Electric needs about 8 billion cubic feet, and MEA requires about 5.7 cubic feet. There appears be enough gas to meet these needs for the near and perhaps medium term.
But new buyers are knocking on the door. Donlin Gold, a potential large gold mine west of Anchorage, could be a major new user with a need of 15 billion cubic feet to 18 billion cubic feet per year.
Another potential mining company that will want gas is Nova Minerals, which is exploring a major gold deposit near Skwentna in the western Mat-Su region. This mine, if built, would be near the proposed route of a gas pipeline from Cook Inlet to the Donlin Gold project. Nova Minerals wants to tap into the gas line to Donlin Gold.
Gas sales to private firms are typically negotiated and not regulated, so mining firms could offer premium prices to gas producers. That could encourage more gas exploration, but it could also bid up the cost of gas to the regional utilities, and consumers.
Meanwhile, more demand for gas and power generated from gas may be coming from the state’s Interior. Golden Valley Electric Association, the Fairbanks-based cooperative for the Interior, plans to close one its two coal-fired power plants and will purchase more electricity from Southcentral Alaska that is generated with natural gas and sent north over an electric intertie.
Fairbanks Natural Gas, or FNG, a small gas utility that serves Fairbanks with LNG trucked from Southcentral, is expanding its customer has and will need more liquefied gas. FNG is already importing small quantities of LNG from British Columbia to supplement its LNG trucked from Cook Inlet. That could be expanded.
Unless there are major new gas discoveries or construction of a North Slope pipeline, the idea of LNG imports may be resurrected. That will grate on many Alaskans.
MINING:
American Pacific to acquire Constantine
Shane Lasley, North of 60 Mining News, August 15, 2022
Will add the Palmer mine project in Alaska to its portfolio
Under a deal announced on Aug. 15, American Pacific Mining Corp. will gain 44.9% ownership of the Palmer zinc-copper-silver-gold-barite mine project in Southeast Alaska through the acquisition of Constantine Metal Resources Ltd.
Being advanced under a joint venture between Constantine and Dowa Metals & Mining Alaska Ltd., Palmer hosts 4.68 million metric tons of indicated resource averaging 5.23% (539 million pounds) zinc, 1.49% (154 million lb) copper, 30.8 grams per metric ton (4.6 million ounces) silver, 0.3 g/t (451,000 oz) gold, and 23.9% (1.12 million metric tons) barite; plus 9.59 million metric tons of inferred resource averaging 4.95% (1.05 billion lb) zinc, 0.59% (124 million lb) copper, 69.3 g/t (120.6 million oz) silver, 0.39 g/t (21.4 million oz) gold, and 27.7% (2.65 million metric tons) barite.
A 2019 preliminary economic assessment that was updated earlier this year outlines plans for a 3,500-metric-ton-per-day mill at Palmer that would produce 1.07 billion lb of zinc, 196 million lb of copper, 18 million oz of silver, 91,000 oz of gold, and 2.89 million metric tons of barite over an initial 11-year mine life.
American Pacific, a well-funded exploration company advancing copper, gold, and silver project in Montana and Nevada, has entered into a definitive agreement to acquire all the issued and outstanding common shares of Constantine in an all-shares transaction that represents an immediate upfront premium of 48.6% based on each company’s respective 20-day volume weighted average price.
The combined company is expected to have more than C$10 million in cash, which would provide American Pacific with plenty to fund its share of joint venture mine projects in Alaska and Montana, while continuing to explore its other western United States gold, silver, and copper projects.
“This is a transformational step for American Pacific as the Palmer Project gives us an established PEA-stage asset with a tremendous amount of exploration upside,” said American Pacific Mining CEO Warwick Smith. “We are very impressed with the quality of technical work completed by Constantine and Dowa to-date and look forward to collaborating with our new partners and stakeholders to expand resources and realize the full potential of this high-grade VMS system while continuing to deliver exposure to progress and new discoveries across our existing portfolio of highly prospective past-producing exploration projects.”
POLITICS:
As Alaska goes to the polls, here’s what to watch for on Tuesday night
James Brooks, Alaska Beacon, August 16, 2022
In Alaska’s first ranked-choice election, the leader on election night may not be the ultimate winner
When the polls close at 8 p.m. Tuesday for Alaska’s primary election and the special U.S. House election, Alaska starts a wait of more than two weeks for the final result.
The state’s first-ever ranked choice election, which will decide who represents Alaska in the U.S. House until January, will be finalized Aug. 31, the last date that mailed-in ballots can arrive from Alaskans overseas and still be counted.
Though there’s weeks to go, some results will be released late Tuesday night, and political consultants say there’s some things to watch for.
Expect Peltola to take an early lead, but it may not last
On Tuesday night, said political adviser Jim Lottsfeldt, the “conventional wisdom” is that Democratic candidate Mary Peltola will be leading the special election, followed by either Republican Nick Begich III or Republican Sarah Palin.
That’s been indicated by the few available public polls of the race.
Though we won’t yet know the end result of the new ranked choice voting system, the Alaska Division of Elections has said it will publish the first choices of Alaska voters after polls close on election day.
Alaska has many more Republican and Republican-leaning voters than Democratic and Democratic-leaning voters, but Republican votes will be split between two candidates, likely giving Peltola an early lead, but not one large enough to clinch victory outright by taking more than 50% of the first-choice votes.
Mailed ballots will arrive through the 31st and could change the ranking, but if Peltola is leading, the experts say to look at second place for hints at what happens next.
Who’s in second place?
Under the ranked choice system, if no one has more than 50% of the vote, the person with the fewest first-choice votes is eliminated from contention first.
Anyone who voted for the eliminated candidate then has their votes go to their second choice.
But what happens if voters don’t have a second choice?
In that case, there are fewer votes needed to reach 50%.
Here’s a hypothetical. Imagine 100 people are voting, and the vote splits 40-32-28. The 28 votes are redistributed, and if they all go to the person in second, the split is 40-60 and the second-place person wins.
But if those 28 voters don’t rank a second choice, the final tally stays 40-32, and the person in first place wins.
“The big thing — but we’re not going to know (on Tuesday) is how many people actually elected to rank,” said Sarah Erkmann Ward, who has advised some Republican candidates this year.
The Alaska Republican Party has been running a campaign to prevent that circumstance, telling voters to “rank the red” and to leave Peltola off the ballot entirely.
That effort has been undercut by former President Donald Trump, who has urged voters to rank only Palin. The candidate recorded herself early voting, and her ballot had only one mark, that for her.
Some Nick Begich voters have also said that they will not rank Palin.
Tom Anderson of Optima Public Relations has advised Palin’s campaign and said he believes supporters of both Republicans will leave their second choices blank, and some may choose to write in Tara Sweeney, a Republican who missed the cutoff in the June special primary election.
If the Republican running in second doesn’t get a significant boost from the Republican running in third, Peltola could win.
The likelihood of that happening will depend in part on how wide the margin is on election night. If Peltola has more than 40% of the vote and both Republicans are below 30%, it creates a gap that is more difficult to overcome.
Tom Begich, the Alaska Senate’s Democratic minority leader and an uncle to Republican candidate Nick Begich III, noted that about half of voters in last year’s ranked choice election for New York City mayor didn’t fill out their entire ranked choice ballot.
Statistics published by FairVote, a national organization that supported the installation of ranked choice voting in Alaska, noted that 13% of voters in that election chose only one candidate.
FairVote also noted that in 522 ranked choice races since 2004, the candidate with the most first-choice votes has won 96% of the time.
How will primary candidates perform?
The special U.S. House election is only one side of the ballot. On the other side are the primary races for U.S. Senate, governor, state House and Senate, and the full two-year U.S. House term.
Up to four candidates will advance from each primary to the Nov. 8 general election.
In the race for U.S. Senate, Republican challenger Kelly Tshibaka and incumbent Sen. Lisa Murkowski have raised large amounts of money and campaigned aggressively. Democratic candidate Pat Chesbro has the label of a major party.
All three are expected to advance in the primary, and it’s possible that Tshibaka finishes ahead of Murkowski in the primary.
Lottsfeldt, who operates an organization backing Murkowski, downplayed that possibility, saying it would be akin to Murkowski losing the 2010 Republican primary. (She went on to win the general election with a write-in campaign.)
It’s not known who the fourth candidate will be, and there’s a wide range of possibilities, including a Libertarian and a series of independents.
In the governor’s race, incumbent Republican Mike Dunleavy, Democratic candidate Les Gara and independent Bill Walker are all expected to finish among the top four, and there’s a competition between two Republicans — Charlie Pierce of the Kenai Peninsula, and Christopher Kurka of Wasilla — to fill the fourth spot.
What do the legislative results look like?
In all but one of the state legislative races on the ballot, there are four or fewer candidates for office. That means someone is eliminated in only one race — the one for House District 35 in Fairbanks.
That race features two Republicans, two Democrats and a member of the Alaska Constitution Party.
“There is almost a sigh of relief from all of our clients that there’s not a primary battle,” said Anderson, who is advising many Republican and Republican-leaning candidates.
Joelle Hall, president of the Alaska AFL-CIO, said there are some places where primary results may matter. In districts dominated by one party — she offered downtown Anchorage’s firmly Democratic House District 17 as an example — the electorate may not change between August and November.
A victory by Democratic candidate Harriet Drummond or Democratic candidate Zack Fields in that district would be a stronger signal of victory in November, she said.
For other legislative seats, the noncompetitive primaries are effectively an August opinion poll. A close margin indicates — but doesn’t guarantee — a close race in November.
Anderson, who is advising many Republican and Republican-leaning candidates, said he expects lots of close results.
“What we are seeing unfold in a lot of state legislative races is a very competitive environment, because you have incumbents at the municipal, borough and state level running against other incumbents,” he said.
He pinpointed the state Senate race in Fairbanks between Republican Jim Matherly and Democratic incumbent Scott Kawasaki, and the state Senate race in Anchorage between Republican incumbent Mia Costello and Democratic challenger Matt Claman, a sitting member of the state House.
If a legislative candidate walks away from the primary with 70% of the primary voters, Erkmann Ward said, “that’s a really good indication that they’re well positioned to win in the general. If it is a nail-biter, then we won’t have much more insight other than it’s going to be a very close race.”
What does turnout look like?
All of this comes with a big caveat, experts say. Turnout in primary elections is typically lower than it is in November, and primary voters are typically more partisan.
The fewer people who vote on or before Tuesday, the less representative August’s results will be of November’s outcomes.
“If the turnout numbers are 30% or lower, that implies fairly low interest in the election, which doesn’t necessarily translate into November numbers,” Begich said. “But if the numbers are higher, that’ll be of more interest.”
Lottsfeldt said he is skeptical of drawing conclusions until after the rankings are released on the 31st.
“I think tomorrow’s a big nothingburger,” he said on Monday.
Erkmann Ward noted that this year’s primary elections are open to every voter, unlike past elections that limited participation by party. That’s a point in favor of August working as a preview of November, at least for the U.S. House contest.
“So when we see those percentages come in tomorrow, it should be a pretty good indication of — barring anything dramatic — how this race is going to look going into November,” Erkmann Ward said.
“For things like U.S. Senate, governor, the legislative races, this will be basically a fascinating poll for us to see where everybody’s landing on these candidates,” she said.