Alaska
DOGE update: Alaska volcano monitor closure blocked amid eruption threat
The planned lease termination of the Alaska Volcano Observatory in Anchorage has reportedly been reversed amid threats of a volcanic eruption.
The observatory had appeared on lists of federal building leases set to be terminated by Elon Musk’s Department of Government Efficiency as part of efforts to shrink the size of the federal government.
However, the office of Representative Nick Begich, a Republican from Alaska, told Must Read Alaska that he had intervened to block it. The congressman said in a statement that the lease was “critical for mission objectives, particularly in the midst of a growing volcanic threat.”
Newsweek has contacted Begich’s office and the Alaska Volcano Observatory for further comment via email. The General Services Administration, which manages federal real estate, has also been contacted for comment via email.
Wyatt Mayo/Alaska Volcano Observatory, U.S. Geological Survey via AP
Why It Matters
The General Services Administration, working with DOGE, has notified landlords that federal agencies will be terminating hundreds of leases for offices and buildings in the coming months.
The Alaska Volcano Observatory, run by the United States Geological Survey, has long monitored dozens of volcanoes in Alaska for risks of eruption, providing crucial information that leads to early warnings that allow evacuations or changes to air travel.
In recent weeks, employees worked with uncertainty amid signs that the likelihood of Mount Spurr, a volcano near Anchorage, erupting in the next few weeks or months had increased.
What To Know
On March 6, NOTUS, a nonprofit news organization, reported that the Trump administration was in the process of terminating the leases for the building that houses the observatory in Anchorage and another building used to monitor volcanoes in Hawaii.
The building that houses the Alaska Volcano Observatory, one of a number used by USGS on the Alaska Pacific University campus, had a lease termination date set for August, NOTUS said, citing multiple sources familiar with the matter.
Relocating the equipment in the observatory building could cost more than $1 million and would risk damage to sensitive devices and computers, the sources said.
Begich’s office said the lease was officially restored on March 18.
On Wednesday, the observatory said unrest was continuing at Mount Spurr, with “numerous small, shallow volcanic earthquakes detected beneath the volcano over the past day.”
What People Are Saying
Representative Nick Begich said in a statement to Must Read Alaska: “The Alaska Volcano Observatory federal office lease is critical for mission objectives, particularly in the midst of a growing volcanic threat. This observatory is important to Alaska’s safety and aviation industry. My staff and I worked with the Department of Interior and the GSA to address this issue as a high priority.”
The Alaska Volcano Observatory said in a statement on Wednesday: “AVO continues monitoring activity at Mount Spurr for signals indicating that the volcano is moving closer to an eruption. Based on previous eruptions, changes from current activity in the earthquakes, ground deformation, summit lake conditions, and fumarolic activity would be expected if magma began to move closer to the surface. Therefore, if an eruption occurred, it would be preceded by additional signals allowing warning.”
What Happens Next
The observatory reported on March 11 that an eruption of Mount Spurr was “likely, but not certain, to occur within the next few weeks or months.”
Last Friday evening in Haines, there was only one place to be: The brand new Quick Shop, a shiny new building stocked with everything from ice cream and gun safes to an entire row of Xtratuf boots.
It seemed that much of town was packed into the building on the Haines’ waterfront — the store had just reopened after burning down more than a year ago.
The October 2024 fire destroyed a string of apartments and businesses including the convenience, liquor and sporting goods shop known collectively as the Quick Shop.
“It’s a big day for our town,” Haines Mayor Tom Morphet shouted from the checkout line that stretched through the store.
Minutes after opening, some 50 people were already in line, with dozens more milling about. Many kids’ arms were piled high with goodies.
Further back in the store, owner Mike Ward was busy scanning toilet paper amid the chaos. In between greeting customers, and accepting their congratulations, he said it’s been a long road to get here.
“It’s a relief to finally be open,” Ward said. “But we got a lot of work ahead of us, so it’s not that much of a relief.”
Ward said he aims to have the store fully stocked and in order by the fire’s two-year anniversary on Oct. 5. He added that he rebuilt as quickly as possible because he had heard a larger convenience chain was thinking about moving into Haines.
“So that’s one of the major reasons why I got aggressive, right?” he said. “I didn’t even think about taking the money.”
But the money part hasn’t been easy. Ward had insurance, but his policy didn’t come close to covering rebuilding costs – or the $1.8 million in inventory that also went up in flames.
“I got hosed,” he said. “I took a $2.5 million loss.”
The loss was felt in the community, too. Haines’ grocery stores close by 8 p.m. most days, and even earlier on Sundays. The Quick Shop is open until midnight.
“I feel like not having anywhere to get food late at night is pretty hard for people. So I feel like everyone’s pretty excited to have it back,” said local Ryan Irvin, who worked on the crew that built the facility.
He added that it’s cool – and somewhat novel – for the community to have a space that was actually built for its purpose.
“We’re always retrofitting old buildings, making them work. But this is actually designed for what we’re doing, what Mike’s doing, rather,” Irvin said.
Morphet, the mayor, echoed that point. He said the new store is a testament to Ward’s faith in Haines’ capacity to keep it open.
“We’re only 2,000, 2,500 people here, so it’s kind of a shot in the arm to town morale,” Morphet said. “People like the town to have nice stuff, and this is beautiful.”
The first month of the U.S. war against Iran caused crude oil prices to skyrocket around the world, and the price of Alaska’s oil has risen particularly far.
That rise is making tens of millions of dollars, maybe a few hundred million dollars if high prices persist, available for state services and the Permanent Fund dividend, even as it squeezes the finances of individual Alaskans.
In figures newly compiled by the Alaska Department of Revenue, the average price of a barrel of Alaska North Slope (ANS) crude was $111.17 in April.
That’s $8.70 higher than the average price of a barrel of Brent crude, a benchmark price for Europe’s North Sea oil. It was also $13.11 per barrel higher than the average price of West Texas Intermediate, the benchmark for oil from America’s second-largest state.
“The differential is the largest monthly value since the year 2000 and may be the highest value in history,” said the Department of Revenue, referring to the gap between Brent and North Slope crude.
“The large premium is due to a tightness in the Pacific basin oil market, where ANS is traded,” the department said.
Alaska crude goes to refineries in Washington state and California, with a small volume delivered to a refinery in Nikiski on the Kenai Peninsula.
In addition to Alaska oil, U.S. West Coast refineries obtain their crude from Canada, North Dakota and California oil fields, and a substantial volume from overseas suppliers.
“Uncertainty about shipping and delivery is incentivizing refiners to pay a premium for available crude that does not transit areas with substantial security risks. Crude grades from the Americas are the safest option. Brent primarily trades in the Atlantic basin, where the impacts from the Iran war are not quite as pronounced on a barrel-for-barrel basis.”
The premium now being paid for Alaska crude will have a significant impact on the state treasury if it continues for months.
Each $1 increase in the average price of a barrel of ANS crude for a full year is worth roughly $30 million to $50, depending on the price.
While more than half of the state’s general-purpose revenue now comes from the Alaska Permanent Fund’s investments, oil is still the No. 2 source of flexible spending money for the state, and prices — combined with production — cause the amount of available money to flex up and down each year.
Legislative budgeters write the state spending plan with an average crude price in mind for an entire fiscal year, from July 1 through June 30 of the following year.
In the current fiscal year, which ends June 30, the Department of Revenue expects prices to average $75.26 per barrel.
Thanks in part to the Alaska premium, the average through May 5 was $75.71. Every day that prices stay above that level, the more unexpected money the state will receive.
The state Senate already has a plan for that extra money.
The first $96 million would go to an “energy relief” payment that increases the amount of the 2026 Permanent Fund dividend by $150 per Alaskan. The next $111 million would be distributed to public schools, and anything above that would go into the state’s principal savings account, the Constitutional Budget Reserve.
While Alaska’s state treasury is receiving a boon from the high prices, legislators don’t expect it to last. In the fiscal year that starts July 1, they’re anticipating significantly lower average North Slope oil prices.
“The Senate operating budget, when combined with spending agreements for the capital budget, balances the budget on $73/barrel oil, with some money left over,” said Bethel Sen. Lyman Hoffman, co-chair of the Senate Finance Committee, speaking about the Senate’s budget proposal on May 6.
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