Elizabeth Earl

What's killing Susitna sockeye salmon?

If any fish population in Upper Cook Inlet could be considered in trouble, Shell Lake’s sockeye could. The lake in the Matanuska-Susitna region, located northwest of the village of Skwentna between the Skwentna and Yentna rivers, has long supported a population of sockeye salmon. When the Cook Inlet Aquaculture Association first studied the sockeye returns there in the 1980s, the lake seemed to sustain a reasonable smolt outmigration and adult return each year. A 1989 Alaska Department of Fish and Game study indicated that the Shell Lake produced about 10 percent of the total sockeye population returning to the Susitna River. That’s not the case any more. In 2015, only three sockeye returned to the lake, according to CIAA’s counts. The total is an estimate, though, because of partial video loss from the video weir the association uses, according to its 2015 report on Shell Lake. A total of 59 smolts left the lake the same year. Compared to the lake’s historical data, the decrease is drastic. In 2006, approximately 69,800 adults returned to the lake and about 80,600 smolts outmigrated in 2007. CIAA studied the lake again around 2006 and has watched the population decline since, said Gary Fandrei, the organization’s executive director. “After a few years (of declining returns), we said if this goes on one more year, it would be doomsday for the fish population,” he said. The dwindling population has the Mat-Su Borough Fish and Wildlife Commission alarmed enough to ask the state to step in. The commission, which represents the Mat-Su Borough on fish and wildlife issues, submitted a non-regulatory proposal to the Board of Fisheries to designate Shell Lake sockeye a stock of conservation concern, the most severe designation in the Alaska Sustainable Salmon Fisheries Policy. The concern is that without intervention, Shell Lake’s sockeye will die out completely, said Terry Nininger, a member of the Mat-Su Borough Fish and Wildlife Commission who also testified at the Board of Fisheries’ work session in Soldotna Oct. 18. “There’s not a lot of local angler effort except for the locals that live around the lake,” he said. “… It’s more of a concern about the fish, not about the angler effort.” There are likely a number of factors in the decline, chief of which is invasive northern pike predation. The infestation of pike in the northern Cook Inlet area is fairly well documented and pike populations have been identified in more than 100 lakes in the broader Susitna and Matanuska drainages. Though the freshwater fish are native to Alaska north and west of the Alaska Range, they are invasive in Southcentral and Southeast Alaska and can devastate salmon populations because they are voracious predators on juvenile salmonids. Individual pike have been discovered with dozens of juvenile salmon in their stomachs. CIAA, which collects eggs from returning Shell Lake sockeye, rears them to smolt in its Moose Pass-based Trail Lakes Hatchery and returns them to be released in the lake, also nets the pike for population control. However, because of the nature of netting, they catch mostly the larger pike while the younger, smaller pike are still a problem, Fandrei said. There have also been problems with two diseases that affect salmon and beaver dams blocking passage. Though the diseases, both caused by parasites, seemed to have abated for a little while, they were detected again this summer, he said. CIAA regularly surveys the area and creates notches in beaver dams that could be blocking fish passage, he said. More fish returned this summer — approximately 215 according to a record copy Nininger submitted to the Board of Fisheries — and CIAA was able to collect eggs again, Fandrei said. However, when fish populations dwindle down to a certain point, they can’t sustain themselves, he said. “(The egg-take and stocking effort was) an effort to save the gene pool, to keep the gene pool alive in that stock of fish,” Fandrei said. “We had seen a very small number of fish coming back. Less than 10 fish might just be strays that wander up there from somewhere.” The Mat-Su Fish and Wildlife Commission wants to see the state switch the designation to a stock of conservation concern and restrict harvest on the sockeye stock across the board for all user groups: commercial, sportfishing and personal-use, as well as a more aggressive program to deal with the pike infestation, Nininger said. “If the department decided to take a step of making it a conservation concern, they could restrict the fish harvest both commercially and the fish going up that stream both for sport fishing and personal use,” he said. “They could restrict the catch … and that would certainly help.” Through the Alaska Sustainable Salmon Fisheries Policy, Fish and Game designates stocks of concern if a particular fish population fails to meet its management goals. There are three categories: yield concern, management concern and conservation concern. There are currently 13 stocks of concern statewide, according to Fish and Game’s website, and eight are in Cook Inlet. The Shell Lake stock would be the only one of conservation concern in the state. The challenge would be for Fish and Game to determine how to reduce harvest on those sockeye specifically, especially in the marine fishery, where set gillnet and drift gillnet fishermen can harvest sockeye of mixed stocks. Fish and Game has conducted genetic studies on the mixed stocks of sockeye salmon in Cook Inlet, but a conservation concern designation would come with additional restrictions. The Mat-Su Borough Fish and Wildlife Commission also asked the Board of Fisheries to consider upping the stock of concern designations on the Susitna River sockeye salmon stock from yield concern to management concern, though the Central Peninsula Fish and Game Advisory Committee asked for the Board of Fisheries to repeal the stock of yield concern designation on the Susitna River sockeye stock, saying the designation was based on a faulty sonar estimate and repealing the designation would open up more commercial fishing. The Matanuska Valley Fish and Game Advisory Committee also asked for upgrades on multiple king salmon stocks of concern. A recent court ruling has thrown a wrench into state management of Cook Inlet’s marine fisheries as well. A three-judge panel of the U.S. Ninth Circuit Court ruled in favor of the United Cook Inlet Drift Association in a lawsuit over the 2011 removal of several Alaska salmon fisheries from the federal fishery management plan. No decision has yet been made on how the fishery will proceed next season. Both Nininger and Fandrei said the stock of conservation concern on Shell Lake’s sockeye salmon could help bring needed attention to the issue, and both said the conditions should be better studied. “We feel the state needs to raise awareness across the board,” Nininger said. “There’s a variety of different ways that could be approached. We are concerned that the management concern level isn’t getting the attention it needs.” Elizabeth Earl can be reached at [email protected]

Many professionals across Alaska will have to pay more to work

Juniper Lanmon-Freeman cried the first time she attended the birth of a child. A licensed midwife, Lanmon-Freeman now delivers two to three babies per month for mothers at their homes. But the job goes far beyond that — by the time she delivers the child, she’s spent weeks with the mother. “(On) my last birth, I visited her 13 times before she had her baby,” she said. “When they’re in labor, you’ve built this relationship with them. It’s more like a sister relationship or a good female friend.” Lanmon-Freeman is one of just 63 licensed midwives in Alaska, and one of two on the central Kenai Peninsula. Three more are licensed in Homer, and the majority practice in Anchorage. Sometimes, when she’s attending a birth and another one of her clients goes into labor, the peninsula’s midwives will step in for each other, Lanmon-Freeman said. “We have an agreement that if (a mother goes into labor) and you’re at another birth and you can’t go, (we’ll cover each other),” she said. “We’ve got some grey hairs out of it.” However, next year, the picture will likely change. The cost to obtain a direct-entry midwife license — a license to practice as a midwife primarily in out-of-hospital settings — in Alaska will more than double, rising from $1,750 to $3,800 for a biennial certification. That doesn’t include the initial application fee and the fees for certifications for apprenticeships, which midwives have to complete before becoming eligible for full certification. For morticians, the fee is increasing from $100 to $150 every two years. For naturopaths, license applications fees are increasing by a factor of 10 from $50 to $500, and a biennial license will cost $1,200 instead of the former $470. It doesn’t include all the licenses. For some, fees are actually going down. For example, behavioral analysts will only have to pay $500 for their licenses next year instead of $1,000. The state of Alaska requires occupational licenses for a variety of professions, from doctors to underground storage tank workers to pawnbrokers. Each of those licenses has to be renewed with the state every two years for the professional to legally work. It’s not a set list — the Legislature can add a licensing requirement for occupations at any time, as in the case of massage therapists, who were not required to be licensed until 2015. The Alaska Department of Commerce, Community and Economic Development administers licenses through its Division of Corporations, Business and Professional Licensing. Boards such as the Medical Board or the Board of Direct-Entry Midwives manage many of the programs, but those that aren’t are administered directly by the division. Alaska statute requires every occupational licensing program to balance its operating fees with the revenue from professional licenses. The division staff evaluates the fees every year to determine if they have to increase or if they can decrease them to stay solvent, said Sara Chambers, division operations manager. “That sounds like a pretty straightforward business practice,” Chambers said. “… Fee programs may or may not be changed. We will often change fees before renewal. It makes a lot more sense to put a new fee in place in advance (of renewals).” The licensing programs don’t rely on the state general fund to operate, so it isn’t the state budget deficit that’s pushing the fees up — it’s increasing investigation and legal fees and imbalances between the operating and licensing costs. “Part of our cost is hearing costs,” said Angela Birt, who oversees the investigations in the division. “We’re represented by the Department of Law … a lot of the cost you see about investigations are typically related to legal proceedings.” Last year, the division conducted 600 investigations, according to a July 2016 report to the Legislature. Investigations can range in complexity, taking years in some cases. The complexity pushes up the cost. But the person being investigated doesn’t pay for the investigation — that’s borne by the program. Fines paid as the result of investigations go back to the state’s general fund, Chambers said. As a result, the staff that works on the investigations keeps tight timesheets. “Generally, they’re trying to count down to the quarter of the hour,” Birt said. Chambers said there had been some concerns raised over the years about the way the licensees bear the cost while the fines go to the general fund. “That’s been a concern that the good apples are essentially paying for the bad apples,” Chambers said. “We’ve worked on it different ways, different times throughout the years.” Rep. Kurt Olson (R-Soldotna), the outgoing representative for the central Kenai Peninsula, proposed a bill in April 2013 at the request of the Department of Commerce, Community and Economic Development “to levelize the dramatic changes in professional licensing fees,” according to the minutes from the House Finance Committee in April 2014. The bill would have changed that law to fund the personnel costs for investigations out of the general fund instead of licensing fees. The Alaska Nurses Association testified in opposition to the move, expressing concerns about additional pressure on the general fund in a time of declining revenues. Patricia Senner, who testified to the House Finance Committee on behalf of the association, said the association instead suggested the Legislature set up a fund to deal with the most expensive investigations rather than all of them. “From a historical perspective, the decision to have licensee fees pay for the cost of the Boards was made during a time of diminishing state revenues,” Senner said in her testimony. “We do not think over the next several years the Division is going to want to be reliant on a diminishing source of general fund revenues when they could have had a more steady income source with licensee fees. If the Division can’t get enough general funds to pay for their investigators, how are they going to prioritize investigations?” The bill was last heard and held in the House Finance Committee in April 2014, according to the Alaska State Legislature’s website. Lanmon-Freeman said she runs her business on a fairly tight margin. She accepts Medicaid and Denali KidCare, both of which pay lower reimbursement rates than private insurers. She also charges between $6,000 and $10,000 for a birth, which includes the prenatal and post-natal visits, she said. A study published July 2015 in the trade journal Health Affairs found that hospital costs for low-risk childbirth varied widely among facilities in 2011. According to the Centers for Medicare and Medicaid Services, the national average covered cost in 2013 was about $13,118 for a delivery without complications. In Alaska, that same procedure cost about $15,477 in 2013, according to CMS. However, that doesn’t include the cost of pre- and post-natal care, medications, travel or the additional costs incurred by complications. CMS did not publish data for Alaska on costs for a C-section without complications, but nationally the average is $20,179, according to the CMS data. Alaska tends to be more expensive than the national average for health care procedures. Midwives are able to offer more personal care without the risk of hospital-acquired infections or travel, Lanmon-Freeman said. In the end, for many mothers on Medicaid or Denali KidCare who use midwives, the relatively controlled costs and low risk of complication save the state money in the long run, but the increase in licensing fees threatens their ability to keep prices low, she said. “It’s pushing a lot of midwives into a predicament: do you continue practicing something that you love, that your clients love, but can you afford it?” Lanmon-Freeman said. “…You just do it for the love of it.” She said she was concerned that as the fees continue to increase, it may drive more midwives to not reapply, increasing the pressure on the remaining midwives in the program to bear the cost of licensing and regulation, pushing fees even higher. Division of Corporations, Business and Professional Licensing Director Janey Hovenden said in testimony to the Legislature in January 2016 that one of the challenges of setting fees is to set up a path to get programs out of an operating deficit while not pricing people out of the occupation. Auditors have suggested some fixes for such a problem, such as combining the midwife licensing program with the nursing licensing program, which has approximately 16,000 licensees, Birt said. To anticipate costs, the division developed a cost prediction tool that is essentially a spreadsheet that allows managers to test different license costs and project the effect on the program’s bottom line in the future. The future is hard to predict because the number of licensees is always uncertain, Chambers said. Program fees pitch up and down over the years as the division corrects deficits and works to reduce surpluses. “If there’s a spike in investigations, that may cost (a particular) program a little more money in the next cycle,” she said. “The tool gives us a consistent and transparent way to estimate those. At the end of the day, it is an estimate.” Elizabeth Earl can be reached at [email protected]

Board of Fisheries to consider Tanner strategy and Kenai dipnet boats

SOLDOTNA — The Board of Fisheries wrapped up its Soldotna worksession with the discussion of a board-generated proposal to limit the size of boats in the Kenai River personal-use dipnet fishery. The board members heard several public comments Tuesday asking them to regulate the Kenai River dipnet fishery to make it safer. One agenda change request which was denied Wednesday, asked the board to limit boats to 50 horsepower or less and ban specifically Thunderjet boats from operating in the area. The Kenai River dipnet fishery is the most popular personal-use fishery in the state, attracting thousands of participants over the three weeks of the fishery between July 10 and July 31. Most boaters launch from the Kenai City Dock, which is located next to several commercial fishing processors and often has commercial boats moored close by. During the 2016 season, law enforcement received at least five reports of small boats being swamped by larger boats near the dock. The board denied the agenda change request because the members said they did not feel it met the requirements to be considered out of cycle, but was simply a proposal submitted past the deadline. However, several expressed concerns about public safety in that fishery, and Board of Fisheries Vice-Chair Sue Jeffrey brought forward a board-generated proposal Thursday to address it. The proposal would have limited boats to less than 50 horsepower, less than 21 feet in overall length and less than 106 inches in overall width. Jeffrey said though the group rejected the ACR, the board-generated proposal would be timely because the Upper Cook Inlet meeting is coming in February and the public would have adequate time to look at it and weigh in. “We are not in the policy habit of accepting ACRs that are late, but based on a lot of public comment that we heard and anecdotally throughout the last few days, we have heard about this disorderly, unsafe fishery,” Jeffrey said. However, other Board of Fisheries members disagreed. Board-generated proposals have generated controversy because they can be presented, debated and passed in one day during a board meeting without public comment. Board member Israel Payton said he opposed it because the issue is a controversial one, and a board-generated proposal could dislodge the public’s trust. Overall, he said he did not think the fishery is out of control. People can choose where to fish if they want to get away from the boat congestion near the Kenai City Dock, he said. “I have participated in the fishery and observed it, and I would disagree with that,” Payton said. “I think it’s a pretty safe and fairly orderly fishery.” Board member Reed Morisky agreed with Payton, saying he thought taking action would bring criticism to the board because the proposal didn’t come from the public. Board member Robert Ruffner said he would support the proposal so the board could have the discussion at the full Upper Cook Inlet meeting in Anchorage. Accepting the proposal now would give the public adequate time to review it and comment on it before the meeting at the end of February, he said. “I’m not necessarily in support of this idea, I’m just in support of generating the discussion,” he said. Board member Alan Cain suggested possibly amending a proposal already into the book related to placing horsepower restrictions on boats in the Kasilof River personal use dipnet fishery to include the Kenai River. The board voted against the proposal 5-2, with Jeffrey and Ruffner supporting it. The board chose to take up two other board generated proposals — one clarifying when 4-inch mesh set gillnets can be used during the early season king salmon subsistence fishery on the Kuskokwim River and the other to eliminate the mature female bairdi, or Tanner, crab biomass threshold to open the fishery. The latter is a source of contention because the fishery was closed for the season Oct. 5 because the Alaska Department of Fish and Game’s survey of the crabs population in the Bering Sea District did not meet the minimum threshold for mature females. Fishermen and industry representatives have appealed to the board to reopen the fishery this year because they felt there was plenty of crab in the part of the fishery west of the middle line at 166 degrees west longitude. The Kuskokwim proposal is scheduled to be heard at the Upper Cook Inlet meeting in Anchorage in February and the bairdi crab proposal is scheduled for the Kodiak meeting in January. Elizabeth Earl can be reached at [email protected]

ACLU asks Kenai assembly to stop praying

The American Civil Liberties Union of Alaska has asked the Kenai Peninsula Borough to back down from its newly passed invocation policy. The organization, which advocates for individual constitutional liberties, frequently through litigation, sent a letter to Kenai Peninsula Borough Assembly President Blaine Gilman claiming the policy violates religious liberty because those seeking to give an invocation must pass a religious test. “On its face, this test prohibits people who belong to no religious association or whose religious associations fail to pass the Assembly’s test from participating in the Borough’s civic life by giving a legislative invocation,” wrote ACLU Alaska Executive Director Joshua Decker in the letter. “This violates the constitutional guarantees of equal protection and religious freedom.” After a protracted controversy about who may give the invocation before the assembly’s regularly scheduled meetings over the summer, the assembly debated and passed a formal policy at its Oct. 11 meeting that outlines rules for giving an invocation. Under the policy, the person giving the invocation must be a chaplain serving fire departments, law enforcement agencies, hospitals or other similar organizations or a member of a religious association that meets regularly in the borough, as long as the leader of the association submits a written request to the borough clerk’s office. Before that, the assembly scheduled invocations on a first-come, first-serve basis from anyone who wanted to give one. Decker said the ACLU of Alaska has been following the issue throughout the summer and thought the assembly made the right call when the members decided in July not to restrict who can give the invocation. However, when the assembly passed the policy last week, the ACLU became concerned because the policy seems discriminatory, he said. “We’re hoping the assembly is going to do the right thing and go back to the way things were before (Oct. 11),” Decker said. The policy is shaped after the 2014 U.S. Supreme Court ruling Town of Greece v. Galloway, in which the court ruled that the city council of Greece, New York could have prayers before its meetings as long as the prayers do not show a pattern of “denigrating nonbelievers or religious minorities, threaten damnation, or preach conversion,” according to the borough resolution containing the new policy. The Supreme Court decision also stated that the prayers are permissible because no one is required to participate, and even if some say the prayers offend them, “offense does not equate to coercion.” The resolution also references other court decisions ruling that governmental bodies can have public invocations before their meetings in a variety of states. Decker referenced the Town of Greece v. Galloway decision in his letter to the borough, saying the court had ruled that once a governmental body invites prayer into the public sphere, it must be open to everyone. He said there are two solutions: either to return to the previous policy, in which anyone could give an invocation, or to do away with invocation entirely. At the end of the letter, he urged the assembly to make a decision by Nov. 28, 2016. While the letter does not explicitly threaten litigation, the organization wouldn’t rule it out “if that’s what it took to uphold the Constitution,” Decker said. “We sent this letter today to the borough assembly and hope they’re going to do the right thing,” he said. Gilman said he had just received the letter Thursday afternoon and couldn’t comment on it because the borough assembly will have to discuss it. Borough attorney Colette Thompson said the borough would not comment on the letter either. The legal department asked assembly members not to comment on the matter on behalf of the assembly because the group has not had time to discuss it yet. As an individual, assembly member Willy Dunne said he thought the letter made some valid points. Dunne opposed the new policy and said he doesn’t like the concept of the religious test which people would have to pass to qualify to give an invocation. “I think we will be discussing this more, and I’m looking forward to hearing how the assembly decides on this,” Dunne said. Brandii Holmdahl, who represents Seward on the assembly, said she could not comment as an assembly member but as an individual said she thinks that the assembly should either not have an invocation or should let it be open to everyone. Holmdahl proposed twice this summer to remove the invocation from the assembly’s agenda, but the proposals both failed to pass introduction. Assembly member Gary Knopp said he was not surprised that the decision was challenged and that it will have to be dealt with by the borough legal department and the assembly president. When reached, assembly member Kelly Cooper said she had not seen the letter yet. Other assembly members could not be reached for comment as of press time Thursday. Elizabeth Earl can be reached at [email protected]

Board of Fisheries addresses Agenda Change Requests

SOLDOTNA — On the second day of its worksession in Soldotna on Wednesday, the Board of Fisheries discussed a number of agenda change requests, or ACRs — requests for fisheries regulations submitted outside the regular cycles — to take up at its upcoming meetings this winter. The ACRs addressed issues around the state, not just the fisheries that have their regular cycles this winter. The Board of Fisheries chose not to take up an agenda change request related to limiting the size of boats in the Kenai River personal-use dipnet fishery in this cycle. Three of the 12 ACRs submitted would affect Cook Inlet fisheries, and only one was accepted. ACR 1, which would align regulations for sportfishing services and sportfishing guide services in saltwater with those in statute and update freshwater guide registration and reporting regulations, was accepted and applies statewide. The proposal came up because of a bill passed by the Legislature in 2015, HB 41, which re-establishes the licensing and logbook program for guides around the state and updates the logbook reporting requirements and fees. For the 2017 season, the Alaska Department of Fish and Game’s registration requirements are out of alignment with the law. “Current regulations require sport fishing businesses and guides operating in fresh and salt water to registered with the department but do not include provisions to implement licensing as required in HB41,” the proposal states. “As a result, current sport fishing business and guide regulations are in conflict with statute.” The Board of Fisheries moved to accept the request because it meets the criteria for an unforeseen consequence of regulation, in this case, from the state. The Legislature has made efforts to update these laws over the years, and this law is a first step, said Reed Morisky, a member of the Board of Fisheries. “It’s got a long, long history, and the Legislature has done various fixes over the years, but there’s still effort in the Legislature to have a longer term solution with this, and I believe that by passing this ACR, we will be headed in that direction,” Morisky said. Accepting the ACR doesn’t mean the regulations will change — it only means the board will discuss it as a formal proposal at a meeting. Newly elected board chairman John Jensen suggested taking it up at the Lower Cook Inlet meeting in Homer, scheduled for the end of November, in order to get the regulations in place by January. Since HB 41 has a sunset date built into it, anything the board passes should also have a sunset date built in, Morisky said. The board declined to take up two Cook Inlet-specific ACRs, one that would have limited the types of boats to be used in the Kenai River personal-use dipnet fishery and the other to remove the net depth restriction for drift gillnet commercial fishing vessels in the Central District of Cook Inlet. The first was proposed because of the number of boats that get swamped near the Kenai City Dock, where many boats of different sizes interact. At least five private boats were swamped this summer, with some needing assistance from the Kenai Fire Department boat that patrols those waters. Several board members said the public safety concerns about the personal-use fishery were legitimate, but the ACR did not meet the criteria to be accepted past the deadline for regular proposals. Board member Sue Jeffrey said she would like to see it discussed and said she might consider a board-generated proposal to address the public safety concerns arising in that fishery. “I think the issue brought up here is important enough,” she said. “It sounds like the (Kenai River dipnet fishery) ... has increased in disorderliness. I’m saying disorderly because it sounds like a mess of a lot of boats going in and out and I think that this is worth discussing more.” Morisky said he understood the public safety risk in the fishery but that a board-generated proposal would likely generate controversy. Board-generated proposals can come up during the regular Upper Cook Inlet meeting, which will be held in Anchorage at the end of February 2017, and do not require public comment before passing. Jeffrey said if the board does come up with its own proposal, the public will have a chance to weigh in on it. The board also denied the agenda change request to lengthen commercial fishing driftnets beyond 45 meshes. The board denied it unanimously, with several members saying it was essentially a late proposal and that the net-depth issue would come up in the regular meeting in February. Board member Orville Huntington said he was also concerned that lengthening nets could interfere with the migration of king salmon, which have been shown to swim deeper than other salmon species. The board did choose to take up one other ACR related to a subsistence harvest limit for sockeye salmon near Unalaska. The Unalaska/Dutch Harbor Fish and Game Advisory Committee asked the board to reduce the limit because of concerns for the fish stocks in a portion of the beach known as Front Beach. Fish and Game does not monitor the sockeye salmon escapement in that system, but the fact that the proposal came from the local advisory committee carried weight, several board members said. Board member Israel Payton said he would give it more credence because the local advisory committee was petitioning to reduce their own limits. “For a community to ask for a reduction of their own subsistence harvest is pretty substantial,” he said. “I take that seriously.” The board recessed for the evening with two ACRs left to consider and will continue its work in Soldotna Thursday, discussing miscellaneous business and non-regulatory proposals. Elizabeth Earl can be reached at [email protected]

Public gets open mic at first day of fish board meeting

SOLDOTNA — Fishermen and the fisheries-inclined turned out by the dozens Tuesday for an open hearing before the Board of Fisheries to air their concerns on a host of issues. The Board of Fisheries, preparing to enter its 2016-2017 cycle, is holding a work session in Soldotna this week to discuss Agenda Change Requests and non-regulatory proposals and to take public comments. When the session was scheduled in October 2014, the board set aside an entire day for fishermen to make public comments on any issue they wanted to address. Title 16 Commenters spoke on a variety of issues, but several recurred throughout the day. The issue that received the most comments, both for and against, was a non-regulatory proposal requesting the Board of Fisheries to lobby the Legislature to update the state fish habitat permitting process to include specific criteria from the Alaska Sustainable Salmon Fisheries Policy. The proposal, authored by a collection of commercial, subsistence and sport fishermen from all around the Cook Inlet region, asks that the Legislature update Title 16 — the Alaska Department of Fish and Game’s fish habitat permit regulations — to more specifically define what constitutes the protection of fish and game. Currently, the law states that the ADFG commissioner should issue permits unless the activity is deemed insufficient for the protection of fish, but the law doesn’t clearly define what sufficient protection is. Willow King, one of the proposal’s 12 authors and a setnetter from Kasilof, urged the board to send the Legislature a letter supporting the proposal. “I find that the references to protecting fish and game in water are vague,” King said. “... What is beneficial to finances isn’t always beneficial to fish. And salmon have enough trials to go through.” The parameters for Title 16 do not require a public notice and comment period for fish habitat permits. Several people testified Tuesday that they want the public to have a chance to weigh in on fish habitat permits as well, like Mike Wood, another of the proposal authors and a setnetter near the mouth of the Susitna River. He said one of the reasons he supports the proposal is the proposed Susitna-Watana Hydroelectric Project, which would have dammed the Susitna River above Devil’s Canyon to produce hydroelectricity. The project received wide criticism from residents and fishing advocates, and Gov. Bill Walker announced in June that the project would go on hiatus. “I think that a closer look at our state’s sustainable salmon proposal could help provide better guidelines to keep large projects such as Susitna Hydro from even going to the point that they did,” Wood said. Other supporters wanted the state to take an “anadromous until proven otherwise” attitude toward the state waters. Sam Snyder, engagement director for the Alaska chapter of Trout Unlimited, testified to the board that because only a portion of the state’s waters are catalogued, ADFG should assume that streams are anadromous when issuing fish habitat permits if not catalogued. The law also has too much ambiguity for how the commissioner could define the proper protection of fish and game, he said. “Luckily, so far, we’re not a part of the story that faces the Lower 48, where they’re spending billions of dollars to restore trout and salmon habitat degraded by bad habitat management, overpopulation, large disruptive dams and other impactful projects,” Snyder said. “In Alaska, while there are habitat issues in the more populated areas of the state, we again largely avoided those issues. If we can keep habitat intact, we can really work to maintain healthy fisheries.” A few testified in opposition to the proposal as well. Andrew Couch represented the Mat-Su Valley Fish and Game Advisory Committee, a citizen group that provides feedback on fish and game issues to the state, and said the group opposes the proposal because members feel they do not have enough information on it and it could potentially make some activities, like gold mining, more arduous. “Several members expressed they had inadequate time to review this proposal — it was not included in the public proposal book,” Couch said. Mat-Su stocks Several people also brought up the issue of declining sockeye stocks in the Susitna River drainage. The Mat-Su Borough Fish and Wildlife Commission submitted three proposals asking for the stock of concern levels for certain stocks of sockeye salmon to be elevated, and for six stocks of king salmon to be designated as stocks of yield concern. Within the Alaska Sustainable Salmon Fisheries Policy, ADFG has several levels of stock concern for declining salmon populations — stocks of yield concern, stocks of management concern and stocks of conservation concern, with conservation concern being the most restrictive on harvest. One of the stocks the Mat-Su Borough Fish and Wildlife Commission is most concerned about is the Shell Lake sockeye salmon stock. Terry Nininger of Wasilla, a member of the commission, urged the board to support the stock designation. Cook Inlet Aquaculture Association, which monitors escapement in the lake, reported that only three adult salmon passed the weir at Shell Lake in 2015, as compared to 69,800 in 2006, according to a March 2016 report. ADFG has rarely used the stock of conservation concern designation, but “the Shell Lake issue is unique,” Nininger wrote in his public comments to the board. Pike predation, disease and beaver dams are primary reasons for the decline, but harvest should still be reduced to help aid the stock’s recovery, he said. “In the short term, this may compromise the interest of sport and personal use fishermen and commercial fishermen, but in the long run, it’s the only action that will return this fishery to its original, natural state,” Nininger said in his testimony to the board Tuesday. Couch, testifying on behalf of the Mat-Su Valley Fish and Game Advisory Committee, said the members also support the stock of concern designations. Bairdi crabs Another issue that several participants commented on was the closure of the bairdi Tanner crab fishery for the 2016–2017 season, which ADFG announced Oct. 5 because of concerns about the biomass of female crabs. A 2016 survey showed that mature female biomass fell below the acceptable threshold, closing the fisheries both east and west of the designated middle line, denoted at the 166 degree longitude line. The board can decide to take up the issue at this work session. The Unalaska/Dutch Harbor Fish and Game Advisory Committee submitted a record copy to the Board of Fisheries asking it to reconsider the harvest policy so the fishery can remain open, criticizing ADFG’s harvest strategy methods and saying the method should be re-evaluated before closing the fishery. Leonard Herzog of Homer asked for the board to generate a proposal to reopen the Tanner fishery. Though the fishery on the eastern side of the line has declined “precipitously,” the stock on the west side is still relatively abundant, he said. The fishery targets mostly old-shell males, he said. “It’s really unclear whether or not they’re a help to the future of the resource or not because the females are all clutched and they’re not affecting the female population,” Herzog said. Josiah Johnson, a commercial fisherman, also urged the board to reopen the crab fishery this year and to re-evaluate the abundance in the fishery. “There was a lot of crab last year, and I was really surprised to see that all of a sudden there was going to be no fishery this year,” Johnson said. “... I just know that when we fished the western Pribilof section last year, they looked really good. There was a lot of crab out there.” The board will discuss the non-regulatory proposals and agenda change requests during its Wednesday and Thursday sessions. Elizabeth Earl can be reached at [email protected]

Alaska Gasline Development Corporation takes the lead on LNG Project

The board of directors for the Alaska Gasline Development Corporation, which represents the state’s interests in a gasline project, met at Kenai’s Cannery Lodge Thursday to discuss work on the Alaska LNG Project and recent gas marketing efforts in Asia. “We want to reach an agreement, and then we have a number of transition activities that are going right now that will wrap up by the end of the year," said AGDC President Keith Meyer. He presented updates to the board, saying the negotiations around the transfer of the project’s assets “are continuing in a cooperative manner.” Since an analysis from consulting firm Wood MacKenzie was presented to the Legislature in August showing the Alaska LNG Project as one of the least competitive LNG projects in the world at present, and the three producer partners on the project — BP, ConocoPhillips and ExxonMobil — announced they would step back from making further investments, the state has been working out how to transition the completed assets from the project so the state can press on. The target date for the agreement is in October, and Meyer said he expected the transition to be complete by the end of the year. He said AGDC hoped to have access to the project assets by then to completed the filings to the Federal Energy Regulatory Commission for a “seamless continuation of the project.” Up until now, the project has been in the pre-front end engineering and design phase, or pre-FEED. The producer partners opened the FERC docket with all their names on it, applied for an LNG export permit and filed the draft resource reports with FERC, and now that the state has taken over leadership, all of that will need to be transferred. The state was not originally on the export permit, nor did it hold ownership in the Alaska LNG Project, LLC, which owned the land purchased in Nikiski for the proposed plant and all the geotechnical and geophysical work conducted there. Right now, the project is paused before the decision to enter the front-end engineering and design phase, or FEED. Once the FERC application is filed, the agency will return comments to the project managers on its concerns and the concerns of the public commenters. Meyer said AGDC staff is currently meeting often with the licensing team, participating in community meetings, contracting with the existing contractors to complete resource reports and prepare the application and contracting with legal counsel to help with the FERC application, among other preparatory tasks. Because the state is taking over, AGDC is also evaluating alternative structures for the project, including a potential tax exemption for the income of the project. Gov. Bill Walker has said in previous Clarion interviews he is confident the state can secure that tax exemption, which will bring down the cost of production and make the project more competitive. Both Walker and Meyer have been making visits in Asia to gauge interest from potential buyers for Alaska’s LNG there. “Nobody needs LNG right now, we know that, but people know they want it by that early 2020s timeframe,” Meyer said. “It was good to hear that. … I think the market folks we met with, both government and industry people, were happy to hear that Alaska is still alive and well in the LNG space and also are looking forward to the kind of offering I think we can make given the geographic proximity and the ability to price this project with quite a bit less volatility than what their other suppliers may offer.” Meyer restated that the producer partners stepping back does not constitute their withdrawal from the project. ConocoPhillips signed a memorandum of understanding with AGDC to negotiate the formation of a joint venture marketing firm, to market North Slope LNG. He said while the MOU is only with ConocoPhillips at the moment, it is open to other producers in the future if they want to join in. “We did want to make that available to the other producers and to other third parties,” Meyer said. “That doesn’t have to be just the former joint venture participants. We see it as a good way to communicate to the market that in fact we’ve got gas supply.” Next year will likely be a hard-hitting year for marketing the project, Meyer said. The Final Investment Decision will likely not come until late 2018 or 2019, but in the meantime, AGDC executives will be raising awareness for the project among potential buyers and working out the licensing and project structure, he said. Since the announcement of the producer partners’ backing down from investment, many Alaskans have expressed doubts about the future of the project, especially in the face of a still-looming state budget shortfall. The global LNG market is currently oversupplied and prices have stayed low as a number of LNG facilities worldwide have come online, and because Alaska’s project is expensive to develop and market, it is less competitive. Board member Hugh Short asked Meyer what he would say to Alaskans who say AGDC should walk away from the project. “These are the things that I hear in the community about this project. I think the biggest challenge … was that if the majority of Alaskans, whether that’s the Legislature or the business community or voters, constituents, if they don’t support this project, it presents even that much more of a headwind as you go out to market Alaska’s gas,” Short said. Meyer said the state would be missing an opportunity for decades if it failed to move forward on the project now. The state is not going it alone, but will be looking for investors elsewhere rather than from the producers, he said. “I think it’s something the state really owes its people, to look at what does it really look like if you just stop? What if you don’t do this project? What if you don’t ever have a gas pipeline? What if you just let the oil run dry?” Meyer said. “…If you really look at the two paths, the two choices, either do it or not, I believe having a project will be much more beneficial to the state than not having a project.” Elizabeth Earl can be reached at [email protected]

Lower oil prices may be here to stay

The lower oil prices that Alaskans have been anxiously hoping will go back up may be the trend for the next several years. With Alaska North Slope oil hovering around $50 per barrel, less than half the price it traded for in early 2014, producers are trying to make ends meet and the state is puzzling over how to recover from the loss of the production tax and royalty income from oil production. Gov. Bill Walker has estimated that the state’s budget would need oil to trade at $103 per barrel to balance it on oil revenue alone, but that doesn’t seem likely in the face of global oversupply and toughening competition, said Marianne Kah, chief economist for ConocoPhillips In a speech at the annual Alaska State Chamber of Commerce’s Fall Forum on Wednesday in Kenai, Kah outlined some of the challenges in the oil and gas market and what the future may hold for producers in Alaska. Chief among the causes in the toughening market is the sharp spike in the production of tight oil, the name for oil extracted from low-permeability rock layers such as shale, in the Lower 48, she said. “(The boom in tight oil production) has really changed our outlook for not only the short term, but maybe for the long term,” Kah said. ConocoPhillips operates oil and gas production units around the state, including production rigs on the North Slope and the oldest liquefied natural gas export facility in North America, located in Nikiski. Since the beginning of the decline in oil prices, the company has curtailed its capital expenditures by about 68 percent, reducing the expenditures in 2016 from $6.4 billion to $5.7 billion, according to the company’s most recent quarterly filing with the Securities and Exchanges Commission. The company also plans withdraw from deepwater exploration, which is much more expensive than other types of exploration, according to the filing. Kah said Alaska has been relatively buffered from most of the major layoffs and cuts so far compared to Houston, where the company is headquartered. However, oil production is Alaska is being challenged because of the high cost of entry compared to the faster and cheaper setups of tight oil production in the Lower 48. Production of tight oil has climbed quickly in the last five years as methods of extraction become more efficient, as has the resource potential. Some of the oil patches in the Lower 48 have the potential to be Prudhoe Bay-sized fields, she said. “This is truly a game changer in our world,” she said. The U.S. Energy Information Administration projects tight oil production to double between 2015 and 2040, reaching about 10.36 million barrels per day in its International Energy Outlook 2016 and Annual Energy Outlook 2016. Most of that production will come from the U.S. Tight oil production is also more resilient to low prices, according to the EIA. Most of the production is coming from new wells, with about half of the Lower 48’s oil production coming from wells drilled since the beginning of 2014, according to a March 22 analysis from the EIA. That’s partly because horizontal wells drilled into tight formations have high initial production rates but it quickly declines over time. The number of rigs in the U.S. has dropped from a high of nearly 1,600 rigs in the fall of 2014 to 524 as of Oct. 7, according to Baker Hughes. The glut in the market has dislodged the high prices of recent years, but a historical analysis shows the current lower price is not an anomaly from the historical trend of oil, Kah said. In general, except for particular periods of history — the formation of OPEC and the rapid industrialization of China in the mid-2000s, for example — oil prices have been relatively low and declining since the 1860s as new resources rapidly came online, she said. “Those probably are the exceptions, and … the question is what does oil return to when it does return to a normal rate?” Kah said. “I would say in a … system like oil, I’m beginning to believe there is no such thing as an equilibrium price.” Drivers for future demand on oil may include growth in the global GDP, large geopolitical events such as the United Kingdom’s recent vote to leave the European Union, known as Brexit, the future demand for oil in China and India and global investment uncertainty. Governments around the world are also beginning to look to alternative energy with subsidies, adding further competition to the market, she said. Natural gas prices are also on a downhill slide worldwide. A global oversupply of liquefied natural gas has pushed prices down and two new facilities in the U.S. have recently come online, with more planned in the U.S. and worldwide. Renewable energy sources are taking a cut out of the natural gas market as well, Kah said. That, in combination with the lower cost of shale and Permian oil production, should drive Alaska to find ways to lower its cost of production, she said. “Alaska has to find a way to make its production more competitive,” she said. “Other countries around the world are doing the same because they’re very much threatened by this environment where U.S. tight oil and OPEC are taking most of the production.” ConocoPhillips recently stepped back from its investment in the Alaska LNG Project, which is transitioning to state leadership through the Alaska Gasline Development Corporation, and Kah said she saw advantages in the state-led structure because of the possibility for tax exemptions. To encourage further resource development, the state needs to balance its budget and provide stability in the tax credit program and both the state and federal government should also simplify the permitting process and opening up access to federal lands in Alaska, she said. “The state should do everything it possibly can to make investment in Alaska more competitive. Further unlocking resources in Alaska I think would require greater access to federal acreage,” Kah said. Elizabeth Earl can be reached at [email protected]

Voters to decide on Kenai sales tax

More goods and services may be subject to sales tax in the Kenai Peninsula Borough if voters pass Proposition 3 in the October municipal general election. Borough voters will be asked to approve an ordinance to raise the cap for amounts subject to sales tax from $500 to $1,000 per transaction. Currently, if someone purchases a $501 item, the tax will not increase any more for the additional dollar. Borough Mayor Mike Navarre’s administration began reviewing the tax code about a year ago and produced four proposed changes. Two were ordinances considered and passed by the borough assembly updating and adding language to the general tax code. The other two will appear on the October ballot. The question of whether to raise the sales tax cap will appear as Ballot Proposition 3, while the question of whether to reduce the borough’s optional senior property tax exemption, will appear as Ballot Proposition 4. Because the state has no broad-base sales tax, borough and city governments administer individual sales taxes. In the Kenai Peninsula Borough, the peninsula-wide rate is 3 percent, with some exemptions for items like groceries in the winter. Incorporated cities — Homer, Kenai, Seldovia, Seward and Soldotna — can collect their own sales taxes in addition to the borough’s sales tax. Borough voters established the $500 sales tax cap in 1965 and have not raised it since. The borough assembly considered changes in May 2011 but voted not to send it to the ballot. Currently, sales tax is collected on the first $500 of a transaction. If the ballot proposition passes, businesses will pay taxes on sales up to $1,000, doubling the amount of the transaction that can be taxed. As part of the proposition, residential rentals would be exempt from sales tax. “The concern is that renters would be disproportionately impacted by the increase in the maximum taxable transaction on a recurring basis each month,” wrote Larry Persily, special assistant to the mayor, in a May 5 memo to the Kenai Peninsula Borough Assembly. “Affordable rental housing is important for the borough and its residents and, as such, exempting residential rent from sales tax would be consistent with that public policy goal.” The borough administration estimates the change will generate an additional approximately $2.8 million in revenues annually after the loss from the rent exemption is calculated in. The cities that administer their own sales taxes would gain as well: after the rental exemption is subtracted, Soldotna would gain $114,497, Kenai would gain $266,605, Homer would gain $126,130, Seward would gain $208,275 and Seldovia would gain $4,730, according to the borough administration’s financial projections. Part of the consideration for the increase in taxes is because of the strong likelihood of decreasing state financial support in the future. The assembly also passed a set of changes to the general sales tax code and added a number of revenue sources, including sales tax on flightseeing tours and on food items sold at locations that don’t sell enough food to accept food stamps, like hardware stores. Persily said when the borough assembly reviews the budget next year, if no additional sales taxes are raised, the members will be again faced with the question of whether to pursue additional revenue or cut services. “(The assembly members) are going to have to decide … if (they) want to provide the same level of services and increase property taxes, or they can cut services,” he said. Some have expressed concern that changing the sales tax cap would send Kenai Peninsula residents to buy their more expensive goods elsewhere, like Anchorage, which has no municipal sales tax. Scott Shelden of Dan’s TV and Appliance in Kenai said he wasn’t sure whether he thought people would make the drive to all the way to Anchorage to save the additional tax, but the change would affect the business. “It seems like it’s not quite fair to local businesses,” he said. Others are concerned about what goods and services are exempt. Legal services, which can often stretch for months and cost hundreds of dollars, are not exempt from sales tax. Kenai attorney Kristine Schmidt wrote in a public comment to the assembly in June that increasing the sales tax cap while applying it to legal services harms consumers and small legal firms. “(The sales tax cap increase) will substantially increase the amount of sales taxes most legal services consumers must pay,” Schmidt wrote in her comments. “Most flat fee legal services are over $500, so sales taxes could double for clients of those services. Clients with monthly bills could see as much as $360.00 per year sales tax increase. These sales tax increases could make legal services no longer affordable for some consumers.” Other municipalities in Alaska have recently raise or considered raising their sales tax caps as well. The City and Borough of Juneau recently raised its cap from $7,500 to $12,000, and the City and Borough of Sitka raised its cap from $1,500 to $3,000. The Ketchikan Gateway Borough Assembly postponed a decision on raising its sales tax cap from $1,000 to $1,500 at its Aug. 1 meeting. Voters can cast their ballot on the sales tax cap increase on the Oct. 4 ballot in the municipal election. Absentee ballots became available Monday, either by mail or in person at the Kenai Peninsula Borough building in Soldotna, the Borough Annex Building in Homer or the City Clerk’s office in all the cities of the peninsula except Soldotna. Elizabeth Earl can be reached at [email protected]

Summer AK LNG fieldwork winds down

KENAI — Fieldwork in Nikiski is winding down and future plans are uncertain for the Alaska LNG Project as the summer slides into autumn. An evaluation from consulting firm Wood McKenzie presented Aug. 24 to the Legislature’s Joint Resources Committee ranked the project as one of the least economically competitive liquefied natural gas projects in the world at this time. Natural gas prices worldwide have fallen due to a flooded market, and the project as presently planned is too expensive to balance out, the report concluded. The three producer partners, BP, ExxonMobil and ConocoPhillips, responded by saying they did not want to spend any more on the Alaska LNG Project in the next phase. With the pre-front end engineering and design ongoing, the four project partners are spending approximately $30 million per month, according to figures presented to the Joint Resources Committee Aug. 24 from Project Manager Steve Butt. Costs will increase throughout the remainder of the process. The state of Alaska is now planning to take the lead role, though the technicalities of that may present challenges. Gov. Bill Walker said in an Aug. 25 press release the state plans to move forward with the project toward a January 2017 application to the Federal Energy Regulatory Commission. “The project team, which includes our industry partners, have spent several years and completed over $500 million in engineering, permitting and necessary work to complete pre-FEED,” Walker said in the press release, referring to an acronym for pre-front end engineering and design used by the project’ managers. “Now is not the time to shelve that excellent work and start again at a future date.” While the governor and state administration are addressing potential strategies for transitioning to state leadership — including whether the state can work out cost-reducing tax exemptions for the project and whether it can solicit third-party investors to help underwrite it — residents of the Kenai Peninsula are carefully watching what administrative and timeline changes would mean on the ground. Nikiski residents have lived with geotechnical and geophysical work in their area for three summers as well as more than 600 acres of land being purchased for the proposed liquefaction plant near the bluff. They have watched plans for the Kenai Spur Highway to be moved and waited for a final decision to be selected from a number of options the project managers presented to them in fall 2015 and many have weighed in on thousands of pages of documents of data compiled on the project and the environment of its proposed location, called Resource Reports, submitted to FERC. However, contractors completing the fieldwork and land purchases were coordinated through the Alaska LNG Project, LLC, a holding company that does not include the state’s Alaska Gasline Development Corporation. In the future, the state will apply for FERC approval alone, so some details remain to be worked out, said Larry Persily, special assistant to Kenai Peninsula Borough Mayor Mike Navarre, who consults on the Alaska LNG Project. Among these are getting the state included in the LNG export authorization, making North Slope gas available to the state to sell, designating the state as the sole applicant and transferring the completed technical work and purchased land in Nikiski to the state because FERC approval requires site control. “The state is either going to have to buy the land, get an auction on the land, get a consignment on the land, something so they can go to FERC and say, ‘Here’s our application, and here’s the paper that proves we have the right to use that land,’” Persily said at a public meeting held Sept. 1 at the North Peninsula Recreation Center in Nikiski. “… If the state needs to pay for it, they will probably need an appropriation from the Legislature next year because (the Alaska Gasline Development Corporation) does not have enough money to buy the land from the companies.” Although the state will take over the lead and put its name on the application, the producer partners still plan to stay involved. ExxonMobil, the partner with the most significant stake in the project, will not withdraw its support in the remainder of the pre-FEED process, said Aaron Stryk, a spokesman for the company. “We’re going to complete our pre-FEED activities — we’re committed to those deliverables,” Stryk said. “Beyond that, the future role in the development of the North Slope gas is going to be development of Prudhoe Bay and Point Thomson.” Once the pre-FEED process is complete, the company will focus on the development of the natural gas on the North Slope rather than the participation in the pipeline and liquefaction plant. The partners and the state will work on scheduling handover sessions in the fourth quarter of 2016, said Bill McMahon, senior commercial advisor for ExxonMobil, in an Aug. 25 presentation to the Joint Resources Committee. The fieldwork is nearly finished for the year, and a planned aquifer pump test will not take place. Project managers had initially planned a test in August that would draw millions of gallons of water out of the aquifers beneath Nikiski to test the area’s ability to provide water to a proposed plant during construction and in case of fires. After permitting delays, the test was pushed back to September, and with winter closing in and a lack of information about existing groundwater conditions, the test has been cancelled for this year. Some work is still going on, said Josselyn O’Connor, the community stakeholder liaison for the project. “We plan to finish installing wells and wrap-up our water quality sampling program this fall as planned,” O’Connor said in an email. The relocation of the Kenai Spur Highway remains a loose end. Persily said at the meeting the borough administration intends to ask the project managers to pick a highway route in its comments on the resource reports. “Our comment is going to be … there’s no need to stall on selecting a preferred route,” he said. The project managers have now submitted Resource Reports 1–11 and Resource Report 13, which are available for public review through the FERC website at www.ferc.gov. Elizabeth Earl can be reached at [email protected]  

Walker talks finances, LNG in Kenai

Gov. Bill Walker reiterated a call Monday for a fix to Alaska’s budget deficit while also signing into law a tax credit designed to incentivize fertilizer company Agrium to reopen its Nikiski plant. With the sponsor, Speaker of the Alaska House of Representatives Mike Chenault (R-Nikiski), looking on, Walker signed the bill after speaking at a joint Kenai and Soldotna chambers of commerce luncheon in Kenai on Monday. “This one is different than the other ones we’re doing up north,” Walker said. “This (tax credit) is one (in which) the benefit to Agrium will be three, four, five million dollars with a maximum of five years, and the benefit on the revenue side is four, five times that.” The Legislature passed the bill, HB 100, on April 17. It extends a corporate tax income credit to urea and ammonia manufacturers, who use methane from natural gas to make fertilizers and other products. Effective July 1, 2017 the company would receive a tax credit equal to Agrium’s potential gas supplier’s royalty payment to the state, making the credit budget neutral. According to the fiscal note on the bill, Agrium would consume approximately $15 million in royalty gas but only have corporate tax liability of between $3 million and $4 million. Because the bill will not allow the tax liability to drop below zero, the state’s payments would be capped there. Agrium’s return is not a given, but a representative of the Calgary, Alberta-based company said in a previous Clarion interview the company was in talks with potential gas suppliers in Cook Inlet. The company’s return to Alaska would benefit not only the Kenai Peninsula’s economy — rippling outward with added jobs and taxes to the local  government — but also around the state, Walker said. “The benefits of Agrium go far beyond the actual people doing the work,” he said at the luncheon. “It benefits Alaska significantly. And then there’s the value-added opportunity.” With the administration at work on a new fiscal plan proposal for the next Legislature to consider, Walker said he has “moved from optimistic to hopeful” about a budget fix. After the Legislature’s failure in the last session to pass any new sources of revenue for the state budget, opting instead to draw down on the state’s Constitutional Budget Reserve to fill the budget deficit, Walker issued a number of vetoes to the state’s fiscal year 2017 budget, including appropriating half the earnings of the Permanent Fund. The vetoes have not been popular, but he saw them as necessary to address the budget deficit, he said. “It will be devastating if we go through all of our savings and then sit down and try to fix this,” Walker said at the luncheon. He also participated in an afternoon worksession with the Kenai Peninsula Borough Assembly to discuss options and challenges for the budget. Assembly members asked questions about Walker’s proposals for fixing the budget, ranging from whether the governor’s administration would consider incentivizing alternative energy development to whether a budget fix could wait a year or two to see if oil prices rose again. To the latter question, Walker said he would like to wait but didn’t want to take the risk. “I’m willing to take the political risk associated with what I’m doing rather than the fiscal risk to the state’s future,” Walker said. “…if we wait a couple of years and we’re wrong and (the price of oil) doesn’t bounce back up, at that point we need probably $120 oil to fix the budget, (and) then obviously the impact will be zero dividend and income taxes multiple times higher.” Another major source of discussion was the future of the Alaska LNG Project. Since the governor’s administration announced its intention of pursuing a state-led project at the end of August, a number of questions about the future structure and execution of the project have arisen. One of the concerns among the three producer partners — BP, ExxonMobil and ConocoPhillips — was how to reduce the cost of the project. Walker said one way to do that would be to leverage the state’s position to obtain tax-exempt status for the income generated by the project and tax-exempt financing for the bonds to fund the project. Walker said in an interview that he was “very confident” the state could obtain the exemption for the pipeline from the Internal Revenue Service based on a precedent on a previous pipeline project planned for Valdez. “We’ll go through a new application process — it’s not complicated — to basically say income of the entity would be exempt from federal taxes, which is a pretty significant exemption,” he said. “It had to show it was a political subdivision of the state in order to qualify. … in our scenario, we aren’t a subdivision of the state. We are the state. So I would think it would be even clearer for the state.” If it were tax-exempt, though, one of the casualties could fall on local governments in loss of payment in lieu of taxes, or PILT. Walker assured the assembly during the Monday worksession that some form of a PILT program would exist if the project goes forward. One thing is certain, he said: The state is not giving up on the project. The producers have signaled their intention to continue their involvement, if not as partners, and approximately $600 million of preliminary work has already gone into the planning. If the project does not go forward, “I’m going to lose on the field, not forfeit in the dugout,” he said. “It’s by far the biggest get-well card in our hand by far, by magnitudes,” Walker said. “We’re in a pretty good position from the standpoint of being able to carry on where the work will be done at the end of this year, not incurring more risk at all or more financial obligations … there’s two things you need for a successful LNG project. You need gas, and you need a market. We certainly have that, so we’ll see.” Elizabeth Earl can be reached at [email protected]

Kenai Assembly passes sales tax changes

The Kenai Peninsula Borough Assembly passed a number of revisions to update and clarify the borough’s sales tax code Tuesday night. Borough Mayor Mike Navarre’s administration has been working on a comprehensive rewrite to the sales and property tax code for approximately a year, clarifying language, updating some provisions and adding others. From the rewrite came four ordinances, all of which have now been reviewed and passed by the assembly. Two of the ordinances require voter approval before they go into effect and will appear as ballot propositions in the Oct. 4 municipal regular election — Ballot Proposition 3, an increase of the maximum amount of a sale subject to sales tax from $500 to $1,000 with the exception of residential rentals; and Ballot Proposition 4, a gradual reduction of the borough’s optional senior property tax exemption. The assembly passed the third, an ordinance containing a number of updates and revisions to the property tax code, at its Aug. 23 meeting. It reviewed and passed the fourth, a similar set of revisions to the sales tax code, at its Tuesday meeting. “The intent of this ordinance is to improve the clarity of the sales tax code, make administration of the code more efficient for the sellers and the borough, and make appropriate policy changes in the code as to what is and is not taxable,” wrote Larry Persily, special assistant to the mayor, in a July 28 memo to the assembly. “Some of the exemptions and definitions have not been revisited in years and should be updated to reflect today’s commerce, which is more about services and less about goods.” Among the changes are an exemption for businesses that report less than $2,500 in annual sales; a clause allowing businesses exempt from sales taxes to not file tax returns; a requirement for businesses that don’t accept food stamps to charge sales tax on food items, capturing sales tax from snack foods, candy and soda; a requirement for nonprofits that operate an ongoing business location like a gift shop to charge sales tax; the removal of an exemption for moving freight; and a requirement for out-of-state and out-of-borough businesses operating in the borough to collect and remit sales tax to the extent possible. After review, assembly members proposed a number of amendments to the proposed ordinance. One of the major items of contention was a provision adding sales tax to flightseeing tours. In the past, flightseeing has been exempt from the same tax that applies to sightseeing tours by boat or car. Dozens of charter businesses on the Kenai Peninsula offer flightseeing tours but don’t have to pay the tourism tax that those who purchase trips on charter boats or ferries do. As the peninsula’s oil and gas fields age, the local economy may become more reliant on the visitor industry, and flightseeing tours are part of that, Navarre said at the meeting. “This is something that at least a couple of our communities would like to see and have the opportunity to collect the revenues on this in lieu of passing the tax on to someone else,” Navarre said. A question of legality arose, though. The borough’s legal department recommended removing the flightseeing tours from the ordinance, concerned about the potential for lawsuits. Assembly member Dale Bagley proposed an amendment to the ordinance to do so. He said at the meeting the legal department concerns were legitimate and he would like to see the flightseeing tax removed. “If I was a betting person, I would say there’s going to be a lawsuit over this, and I don’t think the money that would come in from this is worth the headaches of dealing with this, so I guess I’m going to err on the side of not taxing the air charters,” Bagley said. However, other assembly members disagreed, as did the mayor. Navarre said other municipalities in the state, such as Wasilla and Kodiak, tax flightseeing tours that take off and land on the same day within city limits, and if a lawsuit does come forward, the borough could win. “So I think that it’s worth the risk … the reality is that this particular type of case, I think hasn’t ever been brought up, and this particular one needs to be tested in the courts to determine whether or not we can assess this tax on flightseeing,” Navarre said. “And I think we ought to try it.” The assembly was split four to three on Bagley’s amendment, with assembly members Brandii Holmdahl abstaining because of a conflict of interest and Stan Welles absent. Although four voted yes, the amendment needed five votes to pass. Assembly member Willy Dunne proposed an amendment on the same section, this time revising it to exempt air charters and air taxi sales but include “ground-based wildlife viewing, sportfishing, hunting or other goods or services provided in combination with such air charter and air taxi sales.” Dunne’s ordinance did pass with seven yes votes, with Holmdahl again abstaining and Welles absent. Two other amendments from assembly member Kelly Cooper clarified language in two sections of the ordinance. The entire ordinance passed seven to one, with Holmdahl again abstaining and Welles absent. Elizabeth Earl can be reached at [email protected]

Walker appoints Nick Miller to MCB

Gov. Bill Walker on Wednesday appointed marijuana industry representative Nick Miller to the Marijuana Control Board. The appointment fills the seat left vacant by Bruce Schulte, the former chair of the board whom Walker ejected from the board on July 29. Miller, the chair of the Anchorage Cannabis Business Association, is in the process of opening a retail store in Anchorage. “I’m very pleased to appoint Nick to the Marijuana Control Board during this critical time in this new industry’s development,” Walker said in a press release. “Nick will do a great job complementing the existing Alaska Marijuana Industry Association’s representation on the board, and enable even broader industry perspectives.” Miller joins four other members of the Marijuana Control Board as the second industry representative alongside Brandon Emmett, who has applied for a marijuana production license in Fairbanks. The other members represent public health, the rural public and public safety, hailing from Juneau, Bethel and Soldotna, respectively. Stakeholders in the marijuana industry had expressed concern that Walker’s new appointee might not represent industry interests. There are two seats on the Marijuana Control Board to represent industry, though Emmett’s seat is technically industry/public, while Schulte’s former seat is industry. The law establishing the Marijuana Control Board provided for one person from the public safety sector; one person from the public health sector, one person currently residing in a rural area, one person actively engaged in the marijuana industry and one person who is either from the general public or actively engaged in the marijuana industry. Because Emmett is currently actively engaged in the marijuana industry, he would fill the industry requirement, and the other member could be a member of the public. Emmett represents the Alaska Marijuana Industry Association, the statewide industry group for the marijuana industry, and Schulte gave up his position as president of the association when he took the position as chair of the Marijuana Control Board. Miller represents another smaller industry group, the approximately 30-member Anchorage Cannabis Business Association, which focuses specifically on marijuana businesses in the Municipality of Anchorage. The goal of the association is to “provide two-way communication between industry participants and government officials (and) agencies,” according to Walker’s press release. Miller could not be reached for comment on Wednesday evening. His appointment runs through Feb. 28, 2016, according to the release from the governor’s office.   Reach Elizabeth Earl at [email protected]  

Sport humpy record broken twice in a day

SOLDOTNA — After 42 years, the Alaska state record for a sport-caught pink salmon was broken — twice. Thomas Salas hauled a monster pink salmon out of the Kenai River near Big Eddy in Soldotna on Aug. 22. The California resident, who said he visits the Kenai every other year or so, was originally going to throw it back when a friend told him to hang on to it. “(He) said, ‘You gotta keep it, that might be a record,’” Salas said. As it turns out, he was right. When the anglers took the fish into the Alaska Department of Fish and Game office in Soldotna the next morning, it weighed in at 12 pounds and 13 ounces and 28.5 inches long, claiming the state record from the previous 12 pound and 9 ounce fish, caught in 1974. Multiple biologists certified it and sent Salas on his way, the new holder of the state record. About three hours later, Robert Dubar brought in his own humongous pink salmon. He’d pulled the monster out of the Kenai River just downstream of Angler’s Lodge in Sterling on Aug. 23. “I thought it was hooked on a log,” Dubar said. “Then it started moving a little bit. Took about five minutes to get him to the shore.” Dubar, who is visiting the Kenai Peninsula from Incline Village, Nev., brought the pink salmon into the Fish and Game office in early afternoon. The biologists there again took its weight and measurements and certified it — 13 pounds, 10.6 ounces, 32 inches long, the new state record. Dubar said he plans to mount the monster. Salas took the news with a laugh. “Really?” he said. “Another guy caught a bigger fish?” Fish and Game certifies and seals particularly big fish caught by sport anglers through its trophy fish program. For pink salmon, the minimum weight to qualify is 8 pounds. Entries have to be weighed in the presence of witnesses and a trophy fish official on a certified scale. Catch-and-release fish can qualify for an honorary certificate as long as the angler doesn’t remove the fish from the water and someone gets a photo of it. Honorary certificates are measured by length. The previous record was held by Steven A. Lee for a 12 pound, 9 ounce pink salmon caught in the Moose River in 1974. Two other state trophy fish — a 16 pound sockeye salmon and a 97 pound, 4 ounce king salmon — were both caught on the Kenai River as well, both in the 1970s. Anglers have been catching enormous pink salmon in the Kenai River this season, said Jason Pawluk, the acting area management biologist for the Division of Sportfish in Soldotna. “I have lost track of how many pinks have been brought in this year for our trophy program, and that’s a pink over 8 pounds,” Pawluk said. The pink salmon have been consistently larger. Commercial fishermen began reporting early in the season that the pink salmon were larger, but the average has been consistently increasing throughout the season. The Kenai River experiences high even-year pink salmon runs, but these are some of the largest anglers have recalled seeing. “We’ve observed this in the inriver sport fishery and confirmed for sure in the commercial fishery,” Pawluk said. “The pound average per fish is an order of magnitude difference than it has been in previous years.” The reason for the larger size isn’t really clear. Low pink salmon runs have been a mystery in Prince William Sound, Kodiak and Southeast Alaska this year — managers have suggested ocean temperatures as a possible cause. The pink salmon have been larger than usual in Kodiak as well. Pawluk said it’s still uncertain how large the run is, but the trend in larger size is clear. “It’s possible there’s still a record fish out there,” he said. Reach Elizabeth Earl at [email protected]  

Alaska LNG Project submits second draft of resource reports to FERC

Members of the public can get another look at the results of years of fieldwork conducted by the Alaska LNG Project now in the reports submitted to the Federal Energy Regulatory Commission. The resource report drafts, which detail everything about the project from a general overview to where potential workers’ children would go to school, are the culmination of about three years of summer geotechnical and geophysical work as well as public meetings and comments. The project managers submitted the second draft of the 10 reports, totaling more than 33,000 pages, to the federal government on July 15. There are two other drafts as well, detailing reliability and safety and PCB contamination, that have not been made available yet. FERC requires the resource reports to be submitted and reviewed before beginning the environmental impact statement, or EIS, process, which the project needs before proceeding. The first drafts of the resource reports were submitted in the first quarter of 2015. These are the second draft, and after public and agency review and comments, project managers will submit them in a final application to FERC. Agencies have 60 days from the submission date to comment, and while the public can technically comment at any time, the Alaska LNG Project encourages the public to comment within that same 60-day window, said Josselyn O’Connor, community stakeholder advisor to the project. However, FERC accepts public comments at any time. Project managers originally planned to submit the second draft of the resource reports in early 2016 in time for a final application submission in late 2016. That schedule has moved back, and the timing of the final application will be up to the project partners — ExxonMobil, BP, ConocoPhillips and the state, O’Connor said. Beyond just the groundwork, the reports also try to address local concerns, O’Connor said at a community meeting held Aug. 15 in Nikiski. “If you made comments, they’re in here,” she said. One of the reports of most interest to the local community, Resource Report 5, outlines possible socioeconomic effects if the project were to go forward with placing its liquefaction plant in Nikiski. The introduction traces Alaska’s economic development from 1970–2010, focusing on oil development, the construction of the Trans-Alaska Pipeline System and ending with a comparison between Alaska’s and the rest of the country’s economies in 2010. The body of the report itself considers a broad range of socioeconomic impacts, from pressure on infrastructure to the potential additional traffic in emergency rooms because incoming workers do not have primary care physicians in the area. “Given the scale of the Project and its potential importance to the Alaska economy, the direct socioeconomic effects of the Project would also be experienced throughout the state,” the report states. “These statewide effects would include employment, fiscal and energy supply effects.” Other reports focus on the project’s effect on natural resources such as fish, wildlife, vegetation, soils, air and noise quality, geological resources and water quality. The resource reports are accessible to the public on the FERC Library, but for easier access, the Alaska LNG Project has linked them on its website. The Kenai Peninsula Borough has also linked them on its website and the Alaska LNG Project provided thumbdrives and CDs loaded with the reports at the public meeting Aug. 15. For those who could not attend, O’Connor said project managers can mail copies of the reports to those interested. “This is your chance to be heard. I will tell you that when we started this project, we looked at comments on past gas line projects,” said Philip Brinkmann, licensing manager for the project. “There’s been 40 years of plans to build this gas line, and it’s a hard gas line to build. So we will look at those comments to make sure our project is learning.” The project’s contractors are still taking soil samples in the Nikiski area near the proposed location for some of the storage tanks. Next month, project contractors also plan to run an aquifer pump test in the Nikiski area for a period of about 10 days to see the effects of their drawdown on the neighbors and surface water locations like lakes. Project managers had originally planned the pump test for August, but they are still waiting for the Alaska Department of Environmental Conservation’s permit to discharge the water into a quarry on Robert Walker Avenue, said Jeff Raun, a project advisor for the Alaska LNG Project, at the community meeting Aug. 15. There are three aquifers estimated to lie beneath Nikiski. At its peak, the proposed liquefaction facility would use about 1.4 million gallons of water per day, or about 250 gallons per minute, according to Resource Report 2, which details the project’s water use plan. The aquifer pump test would draw first out of the second underground aquifer, pumping about 350 gallons per minute for about 10 days to reflect the maximum possible need during construction. After that test, contractors will either deepen one of the wells or drill a new one down to the third aquifer and conduct a shorter but more intense test, pumping 1,000 gallons per minute for eight hours. Residents attending the meeting expressed concern about where that water would go and whether it would have any effect on the levels at Cabin Lake or Island Lake, both surrounded by homes. The water level at Cabin Lake, which is close to the center of industrial pumping in the area, declined more than other lakes further from the pumping source, according to 1981 U.S. Geological Survey research. Public concern about water levels led the contractors to plan for surface water monitoring on Cabin Lake, Raun said. Throughout the test, contractors will monitor the effects on the lake’s level and said any residents who notice a difference in their water pressure or quality should call the project managers to let them know. The Alaska LNG Project managers plan to use significantly less water than operations like Tesoro or Agrium, Raun said. After the fieldwork for the summer has wrapped up, project activities will likely be scaled back. No decision has been made yet about moving the Kenai Spur Highway to avoid the proposed facility site, and all the structures on the land the Alaska LNG Project purchased in the area have been demolished, said Matt Horneman, the deputy lands director for the project. The plan is to close the local Paragon Partners office, which has been handling the land purchasing, and relocate operations to Anchorage. Call volume has decreased significantly and closing the office will save money, Horneman said. Reach Elizabeth Earl at [email protected]

BOEM takes comments on Cook Inlet lease sale

KENAI — A few Kenai-area residents turned out Aug. 18 to offer their advice on a draft environmental impact statement for a proposed oil and gas lease sale in Lower Cook Inlet. The draft, prepared by the Bureau of Ocean Energy Management, the federal agency that oversees oil and gas leasing in federal waters, outlines a proposed sale in an area of Cook Inlet beginning south of Kalgin Island and ending at a line extending westward from Seldovia. If the Secretary of the Department of the Interior approves the plan, a lease sale would take place in June 2017. Mark Storzer, the regional supervisor for BOEM’s Office of Environment in Anchorage, said the EIS will simply set up the structure for a lease sale to take place in the future. “We always make sure to emphasize with people that this does not mean a lease sale is going to take place,” Storzer said. The current plan presents 224 blocks, each nine square miles, in the region that would be offered for lease. A number of alternatives accommodate critical habitat for endangered Cook Inlet beluga whales, threatened Northern sea otters and the drift gillnet fishery that operates in the area north of a line extending west from Anchor Point. Another alternative would offer all the area for lease but would prohibit any company from discharging drilling fluids or cuttings into Cook Inlet. The agency held multiple public hearings in the Cook Inlet region last week — one in Anchorage on Aug. 15, in Homer on Aug. 17 and in Kenai on Aug. 18 at the National Guard Armory. The meeting in Kenai drew about a dozen people, some of whom chose to wait and offer their comments online through regulations.gov. The ones who did offer comments expressed concern on a wide range of issues, from industry infrastructure to wildlife. Gary Oskolkoff, a Ninilchik resident, said he thought the proposed lease sale was “probably, for the industry, about two to three decades too early.” “There’s just not structure involved there, things really don’t exist now,” he said. “If you go out there and do some seismic work, if you want to spend money on it and make a good find out in the middle of nowhere, well, that’s going to change your perspective, but who’s going to spend the time on it? To me, it just seems like one of those things that should be held off.” Lauren Moss, a Soldotna resident, said the draft did not address potential conflicts with king salmon migration or for other large mammals. She said the draft also did not account for the effect of seismic survey noise on large mammals. “Imagine taking your kids to the grocery store to get something to eat, and then someone turns the lights off and an alarm like … a hockey horn starts to go off,” Moss said. “You can’t find your kids … that’s essentially what this is like for these whales. They use sound to see.” Most of the written comments submitted online also oppose the sale. Many of the commenters referenced the Exxon Valdez spill of 1989, which shut down the drift gillnet fishery because of the oil in the water and left deposits of oil on the beaches as well as on wildlife. Some expressed concern that more industry activity in the area would be a stress for marine wildlife already under stress with changing ocean conditions. Local conservation organization Cook Inletkeeper wrote during the initial scoping in 2014 that it would oppose any lease sales because of the risk to habitat. “This region supports vital salmon, halibut and other fisheries resources, which in turn support over a billion dollars a year in economic activity,” wrote Cook Inletkeeper Executive Director Bob Shavelson. Earlier in the process, the Marine Mammal Commission, a federal agency, opposed the lease sale on the grounds of risk to the beluga whales. The National Marine Fisheries Service also expressed this concern. “NOAA Fisheries encourages BOEM to consider mitigation strategies such as leasing deferrals in areas designated as critical habitat for the Cook Inlet beluga whale,” the agency’s letter states. BOEM took the comments during the scoping period in 2014 into account when shaping the lease sale area, Storzer said. That is why some of the areas are excluded and why some of the alternatives are proposed, he said. “One of the reasons we didn’t include any of (the area near Seldovia, Port Graham and Nanwalek) was because the communities had so much concern about subsistence,” he said. After the environmental impact statement is approved, the Secretary of the Department of the Interior can choose to hold a lease sale or delay it. When BOEM originally asked the industry if there was interest in oil and gas exploration in that part of Cook Inlet, more than one company responded positively, said John Callahan, a spokesman for BOEM. Reach Elizabeth Earl at [email protected]

Ninilchik tribe finishes Kenai subsistence season

The heads of passing boaters swiveled toward the bank, curious to see the only subsistence gillnet allowed in the Kenai River. The Ninilchik Traditional Council’s subsistence gillnet takes up about 30 feet of bank. The net swayed in the strong current, bucking when a fish struck the mesh. Though the gear made it in the water this season, whether it will make its way through the regulatory process next year is unclear yet. “Seeing any rainbows?” a boater called out to the tribal staff near the net as his boat passed. “None!” called back Daniel Reynolds, one of the designated fishers for the tribe. “Just reds.” The boaters nodded and called back good luck before navigating down the river. Gina Wiste, an environmental technician who fishes for the tribe, said the exchange was one of the kindest they’d had since their first day fishing there July 28. “It’s a mix. Some people can be really unpleasant, and some are just curious,” Wiste said. Wiste, Reynolds and Resource and Environmental Director Darrel Williams have fished for Ninilchik residents most days this summer. The tribe got permission to use a subsistence gillnet in the Kasilof River in January 2015 and ran that for the beginning part of this summer. However, though the tribe was approved for nets on both the Kenai and Kasilof rivers, the U.S. Fish and Wildlife Service only granted the permit for the Kasilof net in 2015. The federal agency issued a permit for the Kenai River net on July 27 after the tribe filed a special action request with the Federal Subsistence Board, the body that oversees subsistence activities in Alaska, amid a year-long legal tangle with the U.S Department of the Interior and the U.S. Department of Agriculture. The tribe has been working on a permit to fish with a gillnet in the Kenai since 2006. Williams said the tribe didn’t know what to expect from the special action request. “To be honest, we were all pretty surprised that it went through,” Williams said. Williams zigzagged the tribe’s boat up the Kenai River from Swiftwater Park outside Soldotna on Aug. 14. He passed lines of anglers casting for silvers and reds in the Moose Range Meadows and the yellow sign marking the end of state waters, passing into the portion of federally managed part of the river. Williams said they have tried out different portions of the river to find where is the most effective to set up. About 40 feet offshore, Williams stalled the boat and Reynolds dropped an anchor and sandbags off the bow, following it with a buoy to mark the edge of the net area. Williams guided the boat over to the shore, where Reynolds disembarked with the gear. Williams and Wiste joined him after mooring, running the 5.25 inch-mesh net out into the current. The first fish hit within six minutes. “We’re in a channel right here, and the fish like that,” Wiste said. “They head right up this way and toward the bank, and that’s where we catch them.” The tribe staff fishes for Ninilchik residents who may not be able to do it themselves. They can only harvest as many fish as people who submit permits — 25 per head of household with five additional fish per family member. So while they were allowed to harvest up to 2,000 sockeye, 50 king salmon, 50 rainbow trout and 100 Dolly Varden this year, they can only catch as many fish as the submitted permits allow. Wiste tallied each fish caught while Williams and Reynolds picked them from the net. Per regulation, she clipped each one’s dorsal fin and recorded it on the permits. They deliver the fish whole to the permit holders, who clean them at home. Regulations prohibit the tribe’s fishermen from cleaning the fish on site because it could attract bears, Williams explained. The fish are fewer and smaller on the Kasilof. Williams said some days on the Kasilof would produce less than 10 fish after several hours of netting. “These fish (on the Kenai) are so much bigger, and some people will say, ‘Those fish are huge, I can’t take any more’, ” Wiste said. “Everybody on this list has gotten fish.” Only tribal employees can fish because of the federal requirement to carry a $500,000 insurance policy. They also take samples of every king salmon they catch. “People were sort of wondering if they were going to get any (fish from the Kasilof gillnet),” he said. “That’s really what this is all about, doing something for the people.” After three hours of netting, the designated fishers had hauled in 54 salmon, all sockeye except for two coho. As of Aug. 14, the tribe had only caught one king salmon and one Dolly Varden, both of which were less than 18 inches long, according to the catch records. The Federal Subsistence Board, the body that oversees subsistence activities in Alaska, approved the nets on the Kenai and Kasilof rivers in January 2015 but the U.S. Fish and Wildlife Service did not issue a permit for the 2015 season. The permit for the 2016 season only came after legal action in the courts, and it was approved as experimental, meaning that next year’s gillnet activity hangs in the balance of federal approval. A subsistence fisheries regulation cycle is approaching this winter as well, bringing two proposals to ban the Ninilchik tribe’s gillnet in the Kenai River entirely — one from Fish and Wildlife Service itself and the other from the Cooper Landing and Hope Federal Subsistence Community. The latter complains that the net is detrimental to stocks of conservation concern. Fish and Wildlife Service managers haven’t had time to evaluate what happened on the fishery but they will do so since the fishing season ended Aug. 15, said Andrea Madeiros, spokesperson for Fish and Wildlife Service in Anchorage. “The U.S. Fish and Wildlife Service remains concerned about the use of a gillnet in the Moose Range Meadows because it is a spawning area,” Madeiros wrote in an email. Both Williams and Wiste said they were unsure what would happen for next year. Williams said he understands the conservation concerns and the tribe has carefully evaluated the net’s effects on the river’s habitat and the fish populations. The tribe brought on a fisheries biologist for advice as well. “If anything, we’re conservation minded,” Williams said. As they were packing the fish into bags to leave the site Aug. 14, Wiste said they would have to plan for more fish storage next year because more people would likely take part. What she’d really like, she said, is a fish tote. “It’s not gonna do us any good this year, since the season’s almost over,” Williams said. “Wait ‘til next year.” Reach Elizabeth Earl at [email protected]  

KPB marijuana ban petition won't be on October ballot

A citizen initiative seeking to ask voters whether commercial marijuana is legal in the Kenai Peninsula Borough outside the cities is a no-go. The borough clerk’s office finished verifying the signatures Friday and found the petition came up short. The petitioners were 62 signatures shy of the 898 they needed to qualify for the Oct. 4 general election ballot, said Borough Clerk Johni Blankenship. “They submitted 998 signatures,” Blankenship said. “We were only able to validate 836.” The petition cannot get onto the October ballot. However, it doesn’t rule it out entirely from a vote. The petitioners still have 10 days to gather additional signatures to supplement the ones they have, and if they succeed, the clerk’s office has another 10 days after that to verify them, Blankenship said. If the initiative at that point has enough valid signatures, the petition would then go to the Kenai Peninsula Borough Assembly. Assembly members would be able to decide then whether it would go to a special election or would have to go to the October 2017 ballot, she said. The clerk sent out a notice to borough assembly members and the petitioners letting them know the petition had been certified as insufficient to be placed on the ballot for the Oct. 4 regular election. The petition has been a political football for the past few months, after an ordinance that would have placed the question on the ballot failed to be introduced at the borough assembly in May. A group of citizens circulated the petition booklets this summer and turned them in on July 26, just before the borough assembly meeting. The technical deadline fell at 5 p.m. on July 21, but the petitioners requested and were granted a five-day extension, according to the letter from the clerk. Reach Elizabeth Earl at [email protected]

Upper Cook Inlet commercial fishermen near 2M salmon harvest

KENAI — Salmon are rolling into Upper Cook Inlet’s commercial fishery. The drift fleet and setnetters in Cook Inlet have been out frequently in the past two weeks and were out for extended hours Thursday. The Alaska Department of Fish and Game also opened the drift gillnet fishery in the Expanded Kenai and Expanded Kasilof Sections of the Upper Subdistrict and the Anchor Point Section of the Lower Subdistrict for an additional 12-hour period on Friday to increase harvest on the sockeye salmon bound for the Kenai and Kasilof rivers, according to an emergency order issued Thursday. The salmon harvest came in just shy of 2 million as of Tuesday, with sockeye leading the pack at 1.6 million, followed by pink salmon at approximately 244,000 fish. Silvers and chum are starting to come in as well, with about 43,000 silvers and about 57,000 chums so far, according to Fish and Game’s inseason harvest estimates. The drifters in the central district have brought in 868,959 fish so far as of Tuesday, with 648,248 sockeye and 147,740 pinks. The chum salmon are mostly coming into the central district drifters — they accounted for 43,662 of the total 56,434 caught in the Upper Cook Inlet Central district. All told, the setnetters in the Ninilchik, Coho, Kalifornsky and Salamatof sections have brought in about 629,000 fish as of Tuesday, according to Fish and Game’s data. Similar to the total, the vast majority of those are sockeye, followed in numbers by pinks and kings. Fish and Game is expecting large runs of sockeye to return to the Kenai River this year — the river is already more than halfway to its escapement goal of 1.1 million to 1.35 million fish, with 607,787 fish having passed the sonar as of Wednesday. The department widely exceeded the upper end of its escapement goal last year, putting more than 1.7 million fish into the river by the end of counts on Aug. 26, according to Fish and Game data. However, the harvest is less than would be expected from a high forecast, said Division of Commercial Fisheries Area Management Biologist Pat Shields. It looks like the run will be multiple days later than the typical midpoint this year, similar to last year’s run, he said. “Based on our forecast, the harvest so far is probably a little bit less than you would expect of this time in July,” Shields said. Prices have varied between $1.10 and $1.20 for sockeye, less than the average of $1.54 that Cook Inlet fishermen received last year. Competition and a strong U.S. dollar damaged salmon prices in the state last year, but commercial fishermen had hoped prices would improve after last year because of an algal bloom that killed millions of farmed salmon in Chile. Anne Poso, the dock manager at Snug Harbor Seafoods, said the low prices have disappointed fishermen so far. The season so far has been “tepid,” despite the fact that the third week of July should be the peak of the season, she said. “I would normally expect it to be a lot better right now,” Poso said. Sorting fish at the Pacific Star Seafoods’ dock on Thursday, dock manager Mike Johnson said the season has looked best for setnetters fishermen so far. “It’s been looking good for the shore-based guys right now,” Johnson said. “Not so much for the drifters ... The fish have all been down low, with the warm water.” In the Kenai River, Fish and Game biologists have observed the sockeye salmon migrating further out into the river than they normally do, Shields said. They are still trying to understand why, but the migration pattern could contribute to the low success rates in the sportfishery and the personal use dipnet fishery on the Kenai, he said. Because of the low success rates in the personal use dipnet fishery, Sen. Bill Wielechowski (D-Anchorage) sent a letter to Fish and Game Commissioner Sam Cotten’s office requesting a suspension of emergency commercial fishing openers on the Kenai and Kasilof rivers. Many of his constituents complained that they had traveled hours and spent days on the river with little success while Fish and Game issued several emergency commercial fishing openers last week, according to a news release from Wielechowski’s office. A representative from Cotten’s office said he was not currently crafting a response to the request. Reach Elizabeth Earl at [email protected]  

Marine jobs the dominant sector for Kenai Peninsula

KENAI — The Kenai Peninsula’s economy depends even more on the ocean and rivers than is apparent on paper. Some are obvious: commercial fishing, shipping and marine fishing guiding all depend on the ocean directly. However, others — such as fish processing, oil and gas support services and fishing gear retailers — only “touch” the water and may not be counted in a cursory glance. When added together, about 3,400 people on the peninsula work in a maritime-related profession, the most of any sector in the region, according to the 2016 Situations and Prospects report from the Kenai Peninsula Economic Development District. The annual report, which provides data and forward-looking estimates on the economy for the Kenai Peninsula, details a growing maritime sector that paid approximately $177 million in wages in 2014, the most of any industry in the region. Most of the employment is in commercial fishing — almost half the workers are self-employed commercial fishermen, as are the vast majority of the earnings, according to the report. The Alaska Department of Labor and Workforce Development would not classify some maritime-related professions, such as fish processing, as farming, fishing or agriculture — they are classed as manufacturing. That separates some of the data, said Rick Roeske, the executive director of KPEDD. Because the economy on the peninsula is relatively small compared to cities like Anchorage, KPEDD has to blend together some data for confidentiality purposes, he said. “You wouldn’t think that the peninsula manufactures a lot, but when you look at that data, 80 percent of it is fish processing,” Roeske said. Fishing is a major driver in the four largest cities on the peninsula — Homer, Kenai Soldotna and Seward. The three ports in Homer, Kenai and Seward landed 85.2 million pounds of commercial fish in 2014, with Homer leading. Homer commercial fishermen landed 74 percent of all pounds of fish that Kenai Peninsula residents harvested and earned 65 percent of the gross earnings that year, according to the report. However, other industries that depend on the sea are also growing. Cook Inlet is home to a vast number of seafaring boats, supporting a large boat service industry. More cruise ships are coming to Seward and Homer each year as well, bringing in tourism revenue and funds from the state’s commercial passenger vessel excise tax. City administrations in Seward and Homer are in the process of improving their ports. Homer recently finished a paving project to provide access to its deep water dock. The city is also in the process of conducting a feasibility study to expand the dock, which should be finished and sent to the Homer City Council for review in the fall, said Bryan Hawkins, the harbormaster. “There was a lot of survey and interviews with the customer base that use the dock now and expanding that out to other possible customers, to talk about Homer as a hub and connection point,” Hawkins said. The deep water dock currently serves as the port for the handful of cruise ships that come to Homer each summer as well as a dock for industry, as in the case of the jack-up rig Randolph Yost, which spent the month of May at the dock before Furie Operating Alaska moved it to its Kitchen Lights Unit near Nikiski to drill additional gas wells. Seward recently completed work on its harbor, replacing floats and installing lighting, said Matt Chase, the deputy harbormaster for Seward. The work was completed in April and replaced many older sections of the floats for the first time since the 1960s, he said. The city is also in the process of building a breakwater near the Seward Marine Industrial Center on the east side of Resurrection Bay, which will establish more harbor space for larger vessels, Chase said. In addition to the breakwater, the city has also been working on the uplands to lease out more space to businesses, and many have shown interest, he said. “When we started getting the permits and the rocks (for the breakwater) and the bids, it was like the gold rush was on,” Chase said. Homer and Seward saw more cruise ships arrive last year — 19 percent more for Seward and twice as many for Homer between 2014 and 2015, according to the Situations and Prospects report. Hawkins said the number of cruise ships varies from year to year but has been relatively consistent for the past few years; Chase estimated that approximately three cruise ships arrive per week in Seward. Tourism continues to grow on the Kenai Peninsula, with increasing visits and a predicted record-breaking year for 2016 amid an oil and gas downturn and a state budget crisis. Year over year for five years, guided water and land activities have increased, with sharp upticks in 2014 and 2015. Most of the industries that showed significant growth in 2015 were related to tourism, according to the report. Although guided land activities are included in those numbers, gross sales from guided water activities outpace them by more than 19 times — more than $65 million to approximately $3.4 million in 2015, according to figures from the Kenai Peninsula Borough’s finance office. The Situations and Prospects report works in complement with KPEDD’s submitted draft Comprehensive Economic Development Strategy plan, which encompasses five-year goals for the peninsula’s economy. KPEDD wants to provide information and collaborate with the various governments and organizations around the peninsula to work toward economic goals in the next few years, Roeske said. “Although we’re connected by the road and the internet, we’re all pretty focused on our own little areas,” Roeske said. “We’re going to try to get these silo groups to become more cluster groups.” Reach Elizabeth Earl at [email protected]

Pages

Subscribe to RSS - Elizabeth Earl