Governor Mike Dunleavy (R – Alaska), who was re-elected in November, has made selling carbon credits as a means to raise new state revenue a main priority for his second term. Members of his administration have been briefing legislators and the press on a “Carbon Management Bill” he plans to soon introduce.
Gene Peltola, the husband of Congresswoman Mary Peltola (D – Alaska), has been trying to get a piece of this nascent Alaska industry since July of last year through a company he co-owns, according to documents obtained by the Landmine.
A January 12 press release from Dunleavy’s office said:
Shortly, we will introduce our Carbon Management Bill package to launch the State into the emerging carbon market. 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.
On July 11, 2022 a company called Alaska Carbon Solutions registered as an LLC with the State of Alaska. The company has four equal owners, one of whom is Gene Peltola. Peltola and three others each own 25% of the company. Eight days after the formation of Alaska Carbon Solutions, five additional LLCs were registered, all 100% owned by Alaska Carbon Solutions. They are named Alaska Carbon Solutions 1-5.
On July 5 and July 10, 2022, Peltola, Jack Barksdale, and Robert Nantz met with Dunleavy in Anchorage and Houston, according to Dunleavy’s official calendar. The day after the July 10 meeting, Alaska Carbon Solutions was registered as an Alaska LLC. Pletola, Barksdale, and Nantz were each listed as 25% owners.
Peltola told the Landmine that after he retired form his position with the Bureau of Indian Affairs in May, he was looking for his next opportunity and settled on carbon sequestration. He said he ran it by ethics, who said it was ok as it did not violate his one year probation on fisheries and tribal service work. He also said he has known Dunleavy since he was a coach in the Northwest Arctic Borough when Dunleavy was superintendent.
Peltola said after meetings last summer with Tyson Gallagher, Dunleavy’s then-acting chief of staff, and Brandon Brefczynski, Dunleavy’s then-deputy chief of staff, they asked him to send over a proposal for carbon offset.
Documents obtained by the Landmine show that sometime in July, Alaska Carbon Solutions proposed a ” binding memorandum of understanding between the State of Alaska and Alaska Carbon Solutions regarding forestry-based carbon solutions.”
The contract Alaska Carbon Solutions sent to Dunleavy was not signed. Sources confirm that the Department of Law told the Governor’s Office the state could not enter into the agreement because a sole source contract would have violated the state procurement code, and a mechanism to sell carbon credits does not exist in Alaska law. The carbon bill Dunleavy is introducing would create that framework in state law.
Under the proposed agreement, Alaska Carbon Solutions would pay to survey and develop the state lands dedicated for carbon offset, and would pay the state $200 million in exchange for 69% of the revenue after they recover the initial $200 million payment.
A July 15 letter, sent from Advantage Capital to Alaska Carbon Solutions, says Advantage Capital is “highly interested in facilitating the funding of carbon offset projects in the State of Alaska with Alaska Carbon Solutions.” Advantage Capital is a venture capital firm with offices around the country.
The proposal did not say how many acres of state land they were planning on using for carbon offset, but additional documents obtained by the Landmine indicate that the agreement would involve 18.6 million acres, spread out around around five areas of the state.
Last Wednesday, January 18, Dunleavy and members of his cabinet including Lieutenant Governor Nancy Dahlstrom (R – Alaska), Natural Resources Commissioner John Boyle, and Revenue Commissioner Adam Crum met with dozens of legislators in the Governor’s Cabinet Room to brief them on his carbon credit plan. Peltola and Barksdale from Alaska Carbon Solutions were in the room for that meeting, as well as employees from Boreal Carbon, a Canadian company who is involved in the carbon credit business.
Peltola said they were all invited by the Governor’s Office to present to legislators. Also present at the meeting was John Tichotsky, a former Department of Revenue employee and known agent of the Russian oligarch Roman Abramovich. Peltola said Tichotsky is involved with his company on the financing end. After the meeting in the Governor’s Cabinet Room, there was an event at the Governor’s Mansion attended by many of the same people who attended the briefing. Peltola, Barksdale, and Tichotsky all attended.
The day before that meeting, lobbyist Andy Baker registered Peltola Solutions as a new client for an annual fee of $1,000. When contacted and asked whether he was doing any work for Peltola involving carbon credits or offset, Baker said, “I’m working on anything he wants me to work on related to development.”
Peltola said he hired Baker because he has been doing internal outreach but needed some assistance and wanted to hire an Alaska Native lobbyist. Peltola is in Juneau this week and said he met with 5-6 legislators today to discuss carbon credits. He also says his company plans to pursue a carbon contract if and when a bill is passed by the Legislature.
A spokesperson for Dunleavy provided the following comment when asked about his involvement with Peltola and Alaska Carbon Solutions:
Governor Dunleavy has no involvement with Alaska Carbon Solutions beyond discussions that they initiated, indicating that they were interested in doing business with the State of Alaska to monetize carbon. The Governor informed the company that state statutes do not allow sole sourcing and that he would have discussions with legislators about carbon and how to best monetize it.
The Dunleavy Administration will introduce legislation in the near future allowing a competitive RFP process for carbon monetization that could generate significant new revenue for state government.
Carbon offset programs are a relatively new industry. In theory, they allow one entity to “offset” its greenhouse-gas output by paying another entity to reduce greenhouse gas output elsewhere instead. This–again, in theory–should create an efficient carbon market in which greenhouse gas output is reduced in the most economical ways possible. However, critics allege that carbon offset programs do nothing to reduce greenhouse gas production by individuals or companies, and that carbon credit purveyors often overstate the amount of carbon they have reduced or claimed credit for carbon that would never would have entered the atmosphere anyway. Once Dunleavy’s bill is introduced, it is sure to be hotly debated in the Legislature.