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An oil pipeline stretches across the landscape outside Prudhoe Bay in North Slope Borough, Alaska, May 25, 2019.

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Alaska can be a rugged and unforgiving place, and that’s not just its landscape. Its economy is prone to big booms and wrenching busts. Lately, it has seen more busts.

More than any other state, Alaska is dependent on oil. As much as 85% of the state’s unrestricted general fund revenue comes from oil production, according to state estimates. In some years, it has been well over 90%. But oil production has been in long-term decline in the state, which was once America’s No. 1 producer of crude but has been surpassed by several shale oil boom states, including Texas, New Mexico and North Dakota. Alaska’s crude production in 2022 was roughly equal to that of Oklahoma, and it hit the lowest level since 1976, according to Energy Department data.

This trend helps explain why Alaska‘s economy performed worse than any other state last year, according to the Commerce Department, shrinking by 2.4%. And it explains why the Last Frontier finished dead last in CNBC’s 2023 America’s Top States for Business rankings.

In addition to a last-place finish in the Economy category, Alaska ranks 49th in the Infrastructure, Education, and Access to Capital categories. It finished 48th in Cost of Doing Business. This is the seventh time since 2007 that Alaska has finished at the bottom, and the third time in the last five studies.

Alaska’s carbon turnaround plan for the future

Alaska isn’t giving up on crude. Recent approvals such as the controversial Willow Project have led state officials to forecast an increase in production in the years ahead. But Gov. Mike Dunleavy and the state legislature have a plan that they hope will reverse Alaska’s fortunes once and for all, by making the state less susceptible to gyrations in the oil market.

“Alaska was built on a promise that we would be north of the future. That we would be visionary,” Dunleavy, a Republican, said at a news conference May 23.

Dunleavy was marking the signing of SB 48, legislation that officially puts the state in the carbon business.

“Just like oil, just like gas, just like our timber, this is a commodity that can be monetized now,” he said.

The Tongass National Forest on Prince of Wales Island, Alaska, July 2, 2021.

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Under the new law, Alaska will be able to sell so-called “carbon offset credits,” capitalizing on the state’s vast public forest lands. Companies that emit carbon will be able to buy the credits, effectively paying the state to preserve and protect its forests, thereby canceling out, or offsetting, those emissions.

What the state doesn’t spend on maintaining its forests, it can keep as revenue.

Alaska Natural Resources Commissioner John Boyle, who is working on the rules to implement the program, said in an interview with CNBC that the market for the new credits could be huge as companies discover the limits of carbon reduction technology.

“Across America, and in the rest of the world, you see a number of companies that have set very aggressive net zero (emission) targets for themselves,” he said. “Ultimately, in order for a lot of these companies to be able to hit the targets that they’ve set for themselves, they’re going to need to look for other options for offsets.”

The emissions offset market is growing

Carbon offset programs are already gaining popularity around the world. The California Air Resources Board operates an extensive offset program that the state says is an essential part of its program to reduce greenhouse gas emissions.

When Dunleavy unveiled the legislation in January, he noted that Alaska’s Native Corporations have generated $370 million in revenue selling offset credits since 2019.

The state has not offered any estimates of how much revenue its program could generate, but Boyle said it could begin making money soon.

“I don’t think it’s unfair to say that the state fully anticipates seeing revenue within a relatively short period of time, likely within the next 12 to 18 months,” Boyle said. “We fully expect to see some new revenues coming in as companies acquire our leases and do other things to prepare themselves to develop carbon offset projects.”

More coverage of the 2023 America’s Top States for Business

Carbon credits are controversial

Alaska is all in on the plan. The bill passed the state Senate unanimously; only two members of the House voted against it.

But outside Alaska, there is no shortage of skepticism.

“Multiple lines of evidence suggest that Alaska’s forest carbon offsets program could produce carbon credits that don’t represent real climate benefits,” wrote Freya Chay and Grayson Badgley of the climate research group CarbonPlan in a commentary published in May. 

They note that while the program promises to protect Alaska’s forests and the climate benefits they provide, it also promises not to reduce timber harvests. The researchers said the credits appear to be structured to “simply reward a landowner for doing what they already planned on doing.”

“Although this could be a win for the State budget, it would be a loss for the climate — and for the credibility of the voluntary carbon market,” they wrote.

Boyle argues that the funding from the offset credits will allow the state to manage its forests more effectively and efficiently. That way, he said, the state will eventually have larger forests — with more trees to capture carbon, and more timber left over to harvest.

“That gives you a margin by which, if you choose, you can do some selective timber harvesting, as long as you maintain a level that is appropriate with the baseline that’s been established,” he said.

Carbon credits are just the beginning of Alaska’s plan to transform its economy. Dunleavy has also proposed creating a “carbon sequestration” program, where the state would capture its carbon emissions — or accept shipments of carbon captured elsewhere — and inject them into underground storage beneath Alaska’s huge expanses of open land.

“There’s a real ability here to move the needle in managing the world’s carbon and storing it for geologically significant periods of time,” Boyle said.

They believe that there is also an ability to diversify Alaska’s economy and make it competitive again, while helping the planet at the same time.

America's Top State for Business 2023 is North Carolina

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New cars from Volvo, VW, Cadillac, and more – plus 0% on Model 3 as Tesla sales fall

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New cars from Volvo, VW, Cadillac, and more – plus 0% on Model 3 as Tesla sales fall

It’s been a big day for big reveals with the all-new Volvo ES90, a new compact electric city car from Volkswagen, plus a pair of new, over-the-top EVs from General Motors that perfectly exemplify American excess. All this and maybe the dawn of the long-awaited “Tesla Killer” on today’s revealing episode of Quick Charge!

GM is practically daring the competition to build a bigger, badder EV with a new, bigger $133,000 Cadillac Escalade and 1,100 hp off-road special in the form of the new Chevrolet Silverado EV ZR2. Finally, you guys are never happy … try to enjoy this episode, anyway!

Prefer listening to your podcasts? Audio-only versions of Quick Charge are now available on Apple PodcastsSpotifyTuneIn, and our RSS feed for Overcast and other podcast players.

New episodes of Quick Charge are recorded, usually, Monday through Thursday (and sometimes Sunday). We’ll be posting bonus audio content from time to time as well, so be sure to follow and subscribe so you don’t miss a minute of Electrek’s high-voltage daily news.

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Got news? Let us know!
Drop us a line at tips@electrek.co. You can also rate us on Apple Podcasts and Spotify, or recommend us in Overcast to help more people discover the show.

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Tesla to build a new Megafactory in Texas near Houston

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Tesla to build a new Megafactory in Texas near Houston

Tesla is going to build a new Megafactory in Texas near Houston, according to a tax abatement agreement with Waller County.

At the time of writing, Tesla had yet to comment on the new project, but the Waller County Commissioners Court confirmed the project on Wednesday when they approved a tax abatement deal with the company:

Under the proposed agreement, Tesla will receive tax abatements from Waller County based on property improvements. The deal includes $44 million in facility improvements and $150 million in Tesla manufacturing equipment that Tesla will install. The next phase involves a new $31 million distribution facility with about $2 million in Tesla distribution equipment and building upgrades.

Tesla is going to take over a 1-million-sq-ft building that it already held the lease on at the Empire West industrial park near Katy, Texas – just outside of Houston.

Logistics company DB Schenker occupied the space where it handled parts for Tesla, but it will move out and Tesla plans to build Megapack production lines at the site:

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Tesla will operate a new Megapack battery storage manufacturing facility at a 1 million-square-foot building, which was initially constructed with no tenant on speculation that it would attract jobs and economic development.

Tesla has previously referred to plants producing Megapacks as “Megafactory”. The company already operates one in Lathrop, California, and one in Shanghai, China, where it just started production.

Those factories are set up for a production capacity of 40 GWh worth of Megapacks per year.

It’s not clear if Tesla plans for a similar capacity at this new factory, but the county announced project should result in creating 1,500 jobs.

In addition to the existing building, the project will include the construction of an additional “600,000-square-foot distribution facility with some manufacturing capabilities.”

Unlike its automotive business, Tesla’s energy business has been growing at an impressive pace – although prices and margins have come down last year.

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Is Genesis taking notes from Porsche? New GV60 Magma caught with the Taycan [Video]

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Is Genesis taking notes from Porsche? New GV60 Magma caught with the Taycan [Video]

Genesis is gearing up to unleash its alter ego with its upcoming Magma lineup, its debut into the world of high-performance luxury vehicles. First up is the Genesis GV60 Magma, due out later this year. As testing wraps up, the GV60 Magma was spotted alongside none other than the Porsche Taycan.

The first dedicated Genesis EV model, the GV60, will kick off another new chapter for the Korean luxury automaker.

Genesis unveiled the GV60 Magma last March, claiming it will kick off “the brand’s expansion into the realm of high-performance vehicles.” The performance EV includes an improved battery, chassis, and motor for added performance.

The Magma model boasts a wider, lower stance for more control. Other key upgrades include a wider front air intake to help cool the batteries, motor, and brakes. It also includes air curtains to maximize efficiency and an added roof fin channels air to the rear wing, generating downward force.

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Genesis upgraded the interior to match the GV60 Magma’s luxurious, sporty design. It includes unique sports car-like bucket seats with exclusive “double-diamond stitching” in the Magma orange and titanium coloring.

Genesis GV60 Magma spotted with the Porsche Taycan

With its official debut coming up, the sporty Genesis GV60 Magma was spotted testing alongside a Porsche Taycan and Hyundai’s IONIQ 5 and IONIQ 6 N models.

Despite the camouflage, the video from CarSpyMedia reveals a few new design elements, like the two-line headlight featured on the updated GV60 model.

Genesis GV60 testing alongside a Porsche Taycan, Hyundai IONIQ 5 N and IONIQ 6 N (Source: CarSpyMedia)

Genesis will launch the GV60 Magma later this year in its home market, followed by the US, Europe, and others. Production is scheduled to start in the third quarter of 2025.

Will the Genesis GV60 Magma keep up with the Porsche Taycan or Tesla Model S Plaid? Priced and specs will be revealed closer to launch, but it will sit above the Performance AWD trim, which starts at $69,900 in the US. With up to 429 horsepower and 516 lb-ft of torque, it can hit 0 to 60 mph in 3.7 seconds.

Horsepower 0 to 60 mph
(seconds)
Starting Price
Genesis GV60 Performance 429 3.7 $69,900
Genesis GV60 Magma ? ? ?
Porsche Taycan 402 4.5 $99,400
Porsche Taycan Turbo GT
(with Weissach Package)
1,092 2.1 $230,000
Tesla Model S Plaid 1,020 1.99 $89,990
Genesis GV60 Magma vs Porsche Taycan vs Tesla Model S Plaid

In comparison, the Porsche Taycan starts at $99,400 with up to 402 hp and a 0 to 60 mph time in 4.5 seconds. The Taycan Turbo GT, equipped with its Weissach package, packs 1,092 hp for a 0 to 60 mph sprint in just 2.1 seconds, but it costs $230,000.

Tesla’s Model S Plaid starts at $79,990 and can accelerate from 0 to 60 mph in 3.1 seconds with 1,020 horsepower. Which performance EV are you choosing?

Source: CarSpyMedia

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