Board, North Pacific council vacancies await nominations

Gov. Bill Walker will have two appointments to make for the Alaska Board of Fisheries following chairman Karl Johnstone’s resign and Roland Maw’s withdrawal from consideration. Orville Huntington’s term on the board is set to expire at the end June. He has not submitted an application for reappointment, but is not required to reapply for his own seat. According to director of Boards and Commissions Karen Gillis, Walker has until April 1 to make new appointments, which will need legislative confirmation by the end of the session. Walker said Feb. 24 hasn’t had time to think about appointments during his recent trip to Washington, D.C., and that he will begin vetting applicants now that he’s back in Juneau.  Johnstone’s vacant seat has been traditionally held by sport fishing representatives since the 1980s. The governor’s Boards and Commissions office keeps records of applicants going back to 2007. In 2015, 10 have applied for a seat: Dwight Kramer, Dan Ernhart, Bruce Morgan, Roy Ashenfelter, Glenn Angelo Carlo, Robert Charles Wright, Robert Sanderson, Beverly Hoffman, Allen Barrette and Karen Louise Linnell. Dwight Kramer serves as chairman of the Kenai Area Fisherman’s Coalition, a peninsula interest group representing unguided recreational fishermen with conservation concerns in mind for stocks. In the past, Kramer has written opinion pieces for Alaska media urging more in-river protections for Kenai River king salmon. In 2014, Kramer advocated establishing a professional Board of Fisheries before the Alaska Senate Resources Committee. “It has become apparent to many that our current Board of Fish process does not possess the technical knowledge and sometimes internal integrity to accomplish decisions based on science and available technical data,” said Kramer to the committee. He was among several speakers who said some board members arrived at the February 2014 Cook Inlet session with preconceived agendas. “The current Board of Fish process is swayed too easily by the most prominent and powerful groups and often give in to political pressure, innuendo and fabricated statements rather than scientific information,” Kramer said. Dan Ernhart is executive director of the Tsiu River Coalition, which represents area lodge owners. He submitted a proposal to the board in 2012 asking to split the lower and upper river halves between anglers and setnetters, respectively, which the board initially approved but then reversed the next day upon a motion for reconsideration. Bruce Morgan, who works for Sampson Steel, formerly served on the Anchorage area Alaska Department of Fish and Game Advisory Committee, one of 82 such committees the Board of Fisheries receives public input and proposals from. Huntington occupies the subsistence delegate seat on the board, and several subsistence and tribal representatives have submitted names for his replacement. Gillis says they have not yet received a letter of endorsement from Huntington’s employer, the Tanana Chiefs Conference. Typically, the office prefers to have such employer endorsement before appointment, and though Huntington isn’t required to submit an application for his own seat, his wishes for reappointment are unclear. “That’s something I’ll need to discuss with (Huntington),” Walker said. “I’ll need to talk about whether or not he’s looking to be reappointed.” Roy Ashenfelter of Nome served for 20 years on the Northern Norton Sound ADFG Advisory Committee, among other committees and game workgroups, with a heavy focus on subsistence issues. Ashenfelter was key in reviving the Norton Sound crab fishery. Ketchikan’s Robert Sanderson serves on the Southeast Villages portion of the Alaska Federation of Natives, as well as president of the Ketchikan Tlingit & Haida Community Council and the vice president of the Ketchikan Indian Community Tribal Council Glenn Carlo serves as staff of the fish and game section of the Tanana Chiefs Conference, Huntington’s employer. Beverly Hoffman of Bethel is co-chair of the Kuskokwim Salmon Management Working group, and a lifelong subsistence fisher and Orutsaramuit tribal member. She has advocated for further conservation measures for king salmon. Karen Linnell of Glenallen is chair of the Ahtna Intertribal Resource Conservation District, and has advocated for greater tribal representation in subsistence and lands management. Fairbanks trapper Allen Barrette has also submitted his name. Barrette was narrowly rejected from Alaska Board of Game appointment by the legislature in 2010 after having received a nomination by then-Gov. Sean Parnell.  Robert Charles Wright of Tanana, and regular on Discover’s docu-series Yukon Men, has also submitted his name for board appointment. Two North Pacific Fishery Management Council seats will need to be recommended by Walker to the Secretary of Commerce for appointment by March 15. Council chairman Dan Hull’s and sport fishing delegate Ed Dersham’s terms are set to expire. Each council member has served two terms of a three-term limitation for council members. Both are seeking reappointment. Several Alaska fishermen have applied, including former state Rep. Alan Austerman of Kodiak, Andy Mezirow, a Seward sport fishing guide and commercial halibut quota holder, commercial fisherman Buck Laukitis, and former Board of Fisheries member Vince Webster. Gillis says the public opinion of Hull is positive, and that Dersham’s previous health problems have been mitigated with a kidney transplant in December. So far, she says Mezirow has generated several emails and letters of support to the office. Council members serve three-year terms. This year, Boards and Commissions will not be accepting applications after March 1. “We want people to get their heads around it and not try to surprise anyone,” said Gillis. “The names going to the Secretary of Commerce will be names people know.” Gillis also says Lt. Gov. Byron Mallett is looking for subsistence experience in possible candidates as part of a larger plan to boost subsistence representation in Alaska management.

Movers & Shakers 3/01/15

Gerad Godfrey was appointed senior advisor on Rural Business and Intergovernmental Affairs. Godfrey currently serves as the director of Corporate Affairs for Afognak Native Corp. He also serves on FirstNet’s Working Group, a Washington, D.C.-based organization with a congressional mandate to build, operate and maintain the first high-speed nationwide wireless broadband network dedicated to public safety. For the past 13 years, Godfrey has chaired Alaska’s Violent Crimes Compensation Board, having been appointed by Alaska’s last three governors. In this capacity he serves as a volunteer lobbyist on crime victims’ rights legislation in Juneau. He has also held seats on a number of boards and committees, including the Alaska Chamber board of directors, the Alaska Native Village CEO Association’s Legislative Committee, and the Alaska Federation of Natives Media & Election Committee. Make-A-Wish Alaska and Washington welcomed Linda Warford as the new Wish Assist and Administrative Coordinator. In this position, she will work with wish kids from other Make-A-Wish chapters who wish to come to Alaska. Warford is a graduate of the University of Alaska Anchorage with a bachelor’s and associate’s degrees in human services, as well as an associate of art from Santa Barbara City College in California. Hannah Moderow’s position has shifted. Previously regional and communications coordinator, she has transitioned into the role of communications and marketing coordinator, regional markets (Alaska and Eastern Washington). Moderow has been working for Make-A-Wish Alaska since 2013. Alaska Permanent Capital Management announced accomplishments of Associate Financial Planner Kim Butler, CFP, and Investment Analyst William Cox, CMA. Butler has earned her designation as Certitifed Financial Planner practitioner. Butler will be the third staff member of the Wealth Management for Individuals division to earn the credential. She will specialize in retirement planning, financial organization after the loss of a loved one and reorganization after divorce with an emphasis on women’s finances. Cox, has earned the Certified Management Accountant designation from the Institute of Certified Management Accountants. Cox will assist the investment committee in the management of the funds of state and local governments, native corporations, foundations and endowments. Great Northern Engineering, a subsidiary of Old Harbor Native Corp., announced the hire of CEO Gawain Brumfield. Brumfield joins GNE after serving in a wide variety of roles including: pipeline construction manager for the ExxonMobil Development Co. Point Thompson project, and construction manager for the meter stations and production/injection multi-well pads on the Tengiz, Kazakhstan, Future Growth Project. He has both international and domestic experience with construction management, construction/field engineering, project engineering, design engineering, survey, construction supervision, general superintendent, QA/QC, client turnover, commissioning, refurbishment construction, pipeline integrity, geographical information systems, hydraulics, risk assessment, and project documentation for onshore and offshore oil and gas production facilities. PDC Inc. Engineers has recently expanded staff in their Fairbanks office. Staff joining the mechanical department includes Mark Frame, PE, and Jason Colquhoun, PE, LEED AP.  The electrical department adds Michael Smith, EIT, while the environmental department added Erica Betts. The structural department welcomes Natasha Kuchitskaya, EIT, and the admin department welcomes Malia Shoults. PDC Inc. Engineers also announced several promotions and new additions to its leadership group.  Robert Posma, PE, and Patrick Reinhard, PE, have advanced to become principals of the firm, the pinnacle within PDC’s leadership structure. Posma has 30 years with PDC, is a Principal Electrical Engineer, and works from the firm’s Anchorage office. He is also a registered fire protection engineer. Reinhard has 27 years with the firm and is the Principal Structural Engineer based out of PDC’s Fairbanks office. He has specialized experience in the areas of building structural evaluations, seismic design, and facility design. Additionally, Amy Mestas, PE, has advanced to the position of senior associate working with PDC’s Anchorage structural group. Mestas has 10 years of structural experience, all with PDC. In addition to being a registered structural engineer, she is also a civil engineer and a LEED Green Associate. New additions to the leadership team include Heather Estabrook, PE, and Lori Kropidlowski, CPSM, both working from the firm’s Anchorage office. Estabrook is a registered civil engineer with more than 14 years of experience. She is also a registered environmental engineer. Kropidlowski is the firm’s marketing director and has over 30 years of experience marketing professional A/E/C services in Alaska. She is one of four Certified Professional Service Marketers in the Alaska. The SouthEast Alaska Regional Health Consortium added Mary Crann, RN, MSN, OCN, as the new clinic administrator at the Haines Health Center. She comes to SEARHC from the Calaway Young Cancer Center at Valley View in Glenwood Springs, Colo. Crann also spent a portion of her career working at prestigious institutions such as Memorial Sloan Kettering Cancer Center in New York and the National Institutes of Health in Bethesda, Md. Crann has experience as a clinical nurse manager in an ambulatory setting and was member of the leadership team responsible for all strategic planning for a rapidly expanding new cancer center. Along with a master’s degree in nursing and an oncology specialty certification, she also has experience in patient centered physician practice, nursing systems, risk management, patient and staff education, and quality improvement processes with more than seven years of progressive leadership experience. She began her employment with SEARHC in late 2014.

Maw withdraws from Board of Fisheries consideration

Roland Maw has confirmed his withdrawal for consideration for the Alaska Board of Fisheries. He has declined to comment on his withdrawal. Maw was scheduled to resume on Feb. 20 a confirmation hearing for the Board of Fisheries in the Alaska Senate Resources Committee that ran long due to committee questioning and public comment. His involvement with a United Cook Inlet Drift Association lawsuit against the National Marine Fisheries Service was scheduled for a same day Ethics Committee hearing. More than 40 people had registered for public comment online and were heard only after some aggressive questioning by committee members worried about Maw’s priorities, particularly his involvement with the Cook Inlet commercial fleet, the lawsuits of his former employer, and the consistency of his science and biology championing. “You have been a very tenacious supporter of the Cook Inlet fish world, especially the commercial world,” said Alaska Sen. John Coghill, R-North Pole, to Maw at the opening of the hearing. “It seems to me that there are folks on the northern end who think ‘we’ll never be able to get this guy to think our way.’” Maw responded with his mantra of “science first,” and replied that he had never been on the board of directors for the United Cook Inlet Drift Association and had no say in what kind of proposals or lawsuits it submitted, a position he would repeat throughout the hearing. Gov. Bill Walker named Maw to the Alaska Board of Fisheries on Jan 20, replacing Chairman Karl Johnstone, who resigned following public and gubernatorial scrutiny of the board’s actions at the commissioner nominee selection meeting on Jan. 14. At that meeting, Johnstone and his fellow board members declined to deem Maw qualified to interview for the job of Alaska Department of Fish and Game commissioner. At the beginning of the hearing, Giessel said that the Legislature will hold two votes for Maw at the end of the legislative session. One vote will confirm him for the board position he currently sits on, inherited from Johnstone, whose term will end in June 2015. Another vote would have established Maw’s own three-year term to begin in 2015 and end in 2018.    

AJOC EDITORIAL: Don Obama shakes down ConocoPhillips

Nice little oil project you’ve got there, Conoco. Be a shame if anything were to happen to it. The $8 million exacted from ConocoPhillips in order to receive its permit to construct the Greater Moose’s Tooth-1 project in the National Petroleum Reserve-Alaska is a rather elegant combination of old school protection rackets and third world government kickbacks. In the Record of Decision issued Feb. 13 authorizing the GMT-1 project, the compensatory mitigation section states that the permittee “must contribute” $1 million to the Bureau of Land Management within 60 days to develop a Regional Mitigation Strategy for the northeastern NPR-A. After that, C-P must pay $3.5 million after laying the first gravel and another $3.5 million after completion of the road, pad and pipeline. Even if ConocoPhillips decides not to move forward with GMT-1, it still has to fork over $1 million to BLM by April 13 in exchange for its preferred road route being selected. George Orwell would have appreciated the doublespeak of calling a mandatory payment a “contribution,” but perhaps not as much as Mario Puzo would appreciate ConocoPhillips being forced into a decision to either “contribute” the $8 million to BLM or see its permit application rejected and tens of millions if not more in engineering work go down the memory hole. Talk about an offer you can’t refuse. Interior Secretary Sally Jewell doesn’t see what the big deal is. After all, ConocoPhillips is a major oil producer and has plenty of money lying around to grease government palms. It’s a striking revelation of an authoritarian mentality that believes the private assets of a company engaged in lawful activities are subject to the appropriating whims of the federal government that controls the permits. To be clear, this $8 million “contribution” goes above and beyond what ConocoPhillips is already obligated to spend for mitigation measures directly related to its activities and in fact goes further into potentially being used to clean up the federal government’s mess of legacy wells in the NPR-A. The ROD acknowledges this fact, stating that the mitigation measures may include “cleanup of previously disturbed sites that pre-date the production phase of NPR-A” such as “legacy well reserve pits.” Put another way, Jewell would make ConocoPhillips pay for damage it hasn’t done in order to clean up damage the federal government already has. The ultimate irony of this petty graft is that ConocoPhillips has paid billions upon billions in royalties and taxes over the years that have benefited Alaska Natives far more than anything Sally Jewell can come up with, and it willingly gives millions more in actual contributions to successes such as the Alaska Native Science and Engineering Program. If we hadn’t already lived through six years of an administration whose hypocrisy is only outdone by its disregard for the rule of law, this “pay-to-play” scheme could be considered a new low. Unfortunately, it’s only the new normal.

EDITORIAL: Playing a budgetary shell game with student loan debt

Liberals make it seem as if federal student loans don’t cost taxpayers a penny. Some, notably Elizabeth Warren, are aghast that the government is profiting handsomely from lending to students. No need to worry, Senator. Buried in the White House budget is a $21.8 billion writedown on the government’s student loan portfolio that no one seems to want to mention — perhaps because taxpayers can expect more red ink to come. The budget news that dare not speak its name is that more borrowers with larger student debts are enrolling in President Obama ‘s Pay As You Earn loan forgiveness plan, which caps graduates’ payments at 10% of their adjusted gross income minus 150 percent of the poverty line. After 20 years, borrowers can shed their remaining debt. Those who go to work in “public service” can be debt-free after 10 years. The Administration’s definition of public service is, well, broad. The liberal advocacy groups 350.org and Center for American Progress, which has been lobbying hard for more student loan forgiveness, would qualify since they’re 501(c)(3) nonprofits under the tax code. Can journalists qualify, too? Under a 2010 law, only new borrowers as of 2014 qualified for these generous loan forgiveness programs; Congress wanted to keep a short-term lid on the costs. Then in 2012 President Obama extended the loan giveaway retroactively to 2007, which happened to cover more of the young voters he needed to win re-election. Then last year he eliminated the statute of limitation in toto to qualify an additional five million borrowers. Meantime, the Education Department and student-loan servicers have been aggressively steering more borrowers into these plans with the goal of keeping down politically embarrassing default rates. High-priced law and graduate schools have also been advertising the benefits. Georgetown Law holds seminars instructing students on how to stick taxpayers with the maximum writeoff. According to the New America Foundation, 24 percent of Federal Direct Loan Program balances that have come due are enrolled in loan forgiveness plans, up from 14 percent about a year ago. Hence the White House’s new $21.8 billion writedown, which isn’t included in the White House budget summary tables that project how its proposals would affect deficits. That’s because the writedown is now built into the budget baseline. Instead and incredibly, the White House projects $14.6 billion in savings over a decade from its de minimis “reforms” to Pay As You Earn, such as extending the repayment term on balances greater than $57,500 to 25 years from 20. The putative savings are so large only because the original, undisclosed costs of extending eligibility were so big. In a giant fiscal shell game, President Obama wants to pump these fictitious savings into expanding other higher-ed subsidies such as Pell grants. Then in next year’s budget, he can propose more “reforms” to pocket more “savings” that he can use to increase spending again. The proper name for this budget charade is Kick It Forward.

Movers & Shakers 2/22/15

Michelle Pearson, a senior GIS analyst with AECOM, was appointed director of the Alaska Miners Association Anchorage Branch. AMA is composed of more than 1,800 members that come from seven statewide branches: Anchorage, Denali, Fairbanks, Juneau, Kenai, Ketchikan/Prince of Wales, and Nome. In her role as Anchorage Director for AMA, Pearson will guide administrative and policy decisions for the AMA statewide staff and help further the mission of public outreach about Alaska’s mining industry. She is on the convention planning committee where she has been involved in coordinating technical training courses since 2004.  She will serve as Director for a two-year term, upon which she is eligible for reelection. Amara Sanguni of Juneau was named one of Alaska’s top two youth volunteers of 2015 by the Prudential Spirit of Community Awards, a nationwide program honoring young people for outstanding acts of volunteerism. Sanguni was nominated by Girl Scouts of Alaska in Anchorage. A seventh-grader at Floyd Dryden Middle School, Sanguni works on a variety of events each year to raise money for the Helping Hands food pantry in Juneau. Fundraisers include a Halloween carnival, assisting with food sales at Juneau’s Gold Rush Days and Fourth of July celebration, wrapping Christmas gifts, and selling tickets for an annual dinner and auction. Over the past year she has helped generate nearly $24,000, enabling Helping Hands to distribute nearly 100,000 pounds of food to people in need. As a state honoree, Amara will receive $1,000, an engraved silver medallion and an all-expense-paid trip in early May to Washington, D.C., where she will join the top honorees from each state and the District of Columbia for four days of national recognition events. The National Association of Athletic Development Directors named Tlisa Northcutt of University of Alaska as Fundraiser of the Year. Northcutt is UAA’s associate athletic director for development, and she led the fundraising campaign for the university’s new Alaska Airlines Center. She has worked at UAA for 15 years in various capacities including donor relations, special event coordination and university advancement. She is a founding member of Alaska Women’s Giving Circle, and serves on the Alaska Children’s Trust board of directors. She is a 1995 graduate of UAA with a bachelor’s degree in journalism and public communication. Northcutt will be honored June 16 at a national convention in Orlando, Fla. Sam Albanese has been selected as the new meteorologist-in-charge of the National Weather Service forecast office in Anchorage. Albanese replaces retiree Bob Hopkins. Before accepting the meteorologist-in-charge position, Albanese served for 12 years as the forecast office’s warning coordination meteorologist. He began his 28-year career with the National Weather Service in Alaska as an intern at the weather service office in Yakutat in November 1986, where he spent a year before transferring to the weather service office in Valdez. In 1990, he joined the forecast office in Anchorage as a developmental forecaster and in 2013 served as acting chief of the Environmental and Scientific Services Division of the National Weather Service Alaska Region. Albanese earned a bachelor’s degree in meteorology from the State University of New York at Oneonta in May 1986. Matthew Daggett has been appointed president of NANA Management Services. NMS is jointly owned by NANA Development Corp. and Sodexo USA, and provides a range of outsourcing services to public and private clients in the petroleum, health care, education and telecommunications industries. Daggett joins NMS after serving as senior vice president of Operations with Afognak Native Corp. since 2009. Prior to joining Afognak, Daggett served in key management roles for Chugach Alaska Corp. where he gained significant experience with customer service and operational performance. Daggett also worked for two global companies, Bechtel Corporation and Raytheon, where he supported client projects for the U.S. Department of Energy and AT&T. RIM Architects has opened a new office in Palmer in addition to its existing office in Anchorage, established in 1986. The new office enables the firm to become part of the growing Mat-Su community, engage with local leaders, contribute to local economy, and provide local design services with boots-on-the-ground staff. James Dougherty, the managing principal for the Anchorage office, will also be managing principal for the Palmer office. Two of the other RIM Anchorage principals are also taking turns working out of the Palmer office.

BLM releases decision on Greater Moose's Tooth-1 road

The U.S. Bureau of Land Management has approved construction of the first oilfield access road into the National Petroleum Reserve-Alaska, the agency announced Feb. 13. But part of the deal involves ConocoPhillips Alaska Inc. paying $8 million into a mitigation fund for oil impacts in the petroleum reserve, although it is not clear that the impacts are related to ConocoPhillips’ activities. BLM’s Alaska spokeswoman Lesli Ellis-Wouters said the agency signed a Record of Decision for its supplemental environmental impact statement, or SEIS, on ConocoPhillips Alaska Inc.’s development of the Greater Moose’s Tooth No. 1 project. The action clears the way for federal permits to be issued for the project, which is in the northeast NPR-A. NPR-A is a 23 million-acre federal reserve in northwestern Alaska. It was created in 1923 for its oil and gas potential but despite exploration over several years no commercial-scale discovery was made until ConocoPhillips and its minority partner, Anadarko Petroleum Corp., explored the northeast part of the reserve in recent years and made discoveries. GMT-1 is expected to produce 30,000 barrels per day when it is completed. ConocoPhillips hoped to begin construction this winter but said recently that it would not start work because of delays in the final SEIS and the Record of Decision, as well as low oil prices. On the North Slope, construction involving road or pads built with gravel is typically done during winter, when the land surface is frozen, because of summer restrictions in working on thawed tundra. One cause for the delay were differing opinions between the BLM and the U.S. Army Corps of Engineers over which of two roads routes were the least environmentally disruptive. The Corps favored one route because it was slightly shorter and would thus require less gravel placement on wetlands. BLM initially favored another, slightly longer route, Alternative B in the SEIS document, because it avoided an environmentally sensitive area identified in the agency’s long-range protection plan for the reserve. BLM switched its position, however, to side with the Corps on its route selection, Alternative A, which prompted criticisms from conservation organizations. Conservation groups had sided with BLM originally in its choice for Alternative B because the sensitive areas would be avoided. Approval of the road is important because it will provide access for additional exploration and development farther west. ConocoPhillips and Anadarko Petroleum have already explored to the west and have tentatively identified a second project dubbed Greater Moose’s Tooth No. 2 that could be developed after GMT-1 is in production. Conservation groups criticized the BLM’s decision to switch to the Corps-favored route because it infringed on protected areas. “We are disappointed that BLM’s final decision encroaches on a buffer zone that exists to protect the Fish Creek area” and its valuable habitat for wildlife,” said Nicole Whittington-Evans, Alaska regional director for the Wilderness Society. The Fish Creek area had been set side for protection in BLM’s 2013 land management plan, she said. Kevin Harun, Alaska director for Pacific Environment, said the decision sets a terrible precedent. “This landscape should be managed to protect wildlife and their movements,” he said. U.S. Interior Department officials praised the agreement, however. In a statement, Assistant Interior Secretary Janice Schneider said, “The department looks forward to continuing to work with ConocoPhillips as it moves forward with safe and responsible development of the North Slope.” “The strategic planning and mitigation measures agreed to by ConocoPhillips are important as we continue to support thoughtful and balanced development in this region and are critical to compensating for the impacts of this project.” Although the GMT-1 project in within the NPR-A, the royalties from oil and gas production will be paid to Arctic Slope Regional Corp., or ASRC, the Alaska Native development corporation for the North Slope. ASRC owns the mineral title under the ConocoPhillips leases under terms of the Alaska Native Claims Settlement Act passed by Congress in 1971. Ordinarily, 50 percent of the federal royalties would have been shared with the state of Alaska. However, the state’s oil and gas production tax does apply to production from federal and privately-owned lands, so some revenue from GMT-1 will come to the state. What may be more important is the additional oil provided to the Trans Alaska Pipeline System, which is moving just more than 500,000 barrels per day, and operating at about one fourth its original capacity of 2 million barrels per day. More oil moving through TAPS not only helps keep the pipeline economically viable but also lowers the tariff, or transportation charge, for all oil in the pipeline. A lower transportation charge raises the tax and royalty value of oil from other North Slope fields on state lands and increases state revenue.

EDITORIAL: 'No-drama Obama' needs to recognize radical Islamist threat

As if to prove that there truly is no limit to their brutality, the terrorists of the Islamic State have reached a new low by burning alive the Jordanian pilot captured last December when his plane crashed over Syria. The 20-minute video, which according to those with the stomach to view it, has the production values of a slick Hollywood short subject, shows 26-year-old Lt. Muath al-Kaseasbeh with his face clearly beaten and swollen, then in a cage, his orange jumpsuit doused with a liquid. Then there is slow-motion horror of the flame being lit, the sight and the sounds of death. A spokesman for the Jordanian military confirmed the death and said, “While the military forces mourn the martyr, they emphasize his blood will not be shed in vain. Our punishment and revenge will be as huge as the loss of the Jordanians.” We can only hope they mean it, because the effort by the Jordanian government to negotiate with the terrorists over the possible trade of an al-Qaida prisoner responsible for the deaths of 60 people for a 2005 bombing of a hotel didn’t work out so well. Meanwhile, President Obama maintained his No-Drama Obama stance referring to ISIS as “this organization” as if it were the local Kiwanis club, adding, “Whatever ideology they are operating under is bankrupt.” Whatever ideology? Really! Gosh, wouldn’t want to accuse Islamist radicals of being Islamist radicals or anything. What we do know is that more American citizens remain among their hostages and that “this organization” continues to spread its “bankrupt ideology” like the cancer that it is. Meanwhile, the Obama administration continues in its own policy-free zone of doing just enough to avoid international condemnation and too little to make an impact.

Groundhog Day for mining controversy in Southwest AK

Is another mining controversy stirring in Southwest Alaska? Nondalton’s tribal council is protesting the move of its village corporation, Kijik Corp., to form a joint venture with Anchorage-based Alaska Earth Sciences to explore a copper/gold deposit near the village and adjacent to the Pebble project. Pebble is near Iliamna southwest of Anchorage. Nondalton is a community near the Pebble project. The joint venture will explore on state-owned lands near where the Pebble Partnership, a subsidiary of Vancouver-based Northern Dynasty Minerals, proposes to build a large surface mine. On Jan. 6, Kijik Corp. and Alaska Earth Sciences, Inc. announced the formation of Chuchuna Minerals Co., with Alaska Earth Sciences Inc. holding a 51 percent interest and Kijik Corp. owning 49 percent interest in the company. The exploration venture will explore near Groundhog Mountain, which is on nearby on state lands. The Nondalton Tribal Council isn’t happy about that, however. In a statement released Feb. 3 the council said, “We don’t want mining in our area. We don’t want harm to come to our land and water in any way, shape or form. This is the foundation to our way of life and culture.” Despite those feelings, economic development and jobs are badly needed in the region, which is one of the more economically depressed areas of the state. Populations in small communities in the Iliamna area are dwindling, village schools are closing and local services, such as mail delivery, are being curtailed. Mining development is one potential for local development and jobs. Several geophysical surveys have been conducted on the Groundhog property over several years, Kijik and Earth Sciences said in their press release Jan 6. Multiple occurrences of porphyry-style mineralization have been found in the area including Pebble West and East, and several other significant discoveries. All of these occur along a northeast-trending mineralized system. Chuchuna Minerals Co. will be seeking an option partner to continue exploration efforts including geophysical surveys as well as drill testing identified target sites, according to the press release. A possible preemption of mining in the region by the U.S. Environmental Protection Agency is still possible, however. EPA has moved to use its authority under the Clean Water Act to preempt development and has proposed a ban on large mines in the Bristol Bay region, an area the size of many states. The action has been halted temporarily by a federal court order in an action brought by Pebble Partnership. A decision is pending from Alaska U.S. District Court Judge H. Russel Holland in Anchorage. Kijik Corp. is the ANCSA Village Corporation for the community of Nondalton, located on 6 Mile Lake between Iliamna and Lake Clark. Nondalton is the closest community to the Groundhog Project and is adjacent to the Pebble Project.  “Kijik Corporation brings local experience and resources to the project from the outset, greatly improving the development of an effective community engagement program and focused successful workforce development, the press release said. “In addition, Kijik Corporation has other strategic land holdings in the vicinity of the Groundhog Project.” Alaska Earth Sciences is a geologic and project management consulting company operating in Alaska since 1985. The company has decades of experience working in remote areas of Alaska providing geologic consulting expertise and support to the natural resource and mineral exploration industries. 

State alcohol statutes up for first revisions since 1980

JUNEAU — State legislators ended their fourth week of the 2015 session Feb. 13 with finance subcommittees focused on state agency budgets and a planned $550 million spending reduction from the current year. The Legislature’s Finance Division is completing its analyses of Gov. Bill Walker’s fiscal year 2016 budget and is providing those to House and Senate Finance Committee subcommittees. Lawmakers are also preoccupied with the impending Feb. 24 legalization of marijuana and new legislation to provide public protection and guide state agencies and municipal governments in regulatory mechanisms for a commercial marijuana industry that will emerge. Alaska voters approved legalization of use and sale of marijuana products in a voter referendum in the last state general election. Meanwhile, and somewhat related to marijuana regulation debate, a bill will be introduced shortly in the Legislature to revamp Title 4, the state statute governing alcohol regulation and control. For the last 2½ years, a state-citizen task force has been working on a rewrite of the liquor control law under the guidance of the state Alcohol Beverage Control Board, according to Cynthia Franklin, the ABC board director. “The last rewrite of the law happened in 1980 and a lot has happened since then,” Franklin said. The revamp will include streamlined liquor licensing procedures and provisions to make laws prohibiting underage drinking easier for police officers to enforce, she said. Present procedures are too cumbersome to be effective. “Title 4 is in many ways outdated, confusing and otherwise ineffective in carrying out the intent of the statute,” said a report issued by the task force in November. Included are recommendations to increase liquor license fees, which have not been increased since 1980 and are intended to defray the state’s cost in regulating the industry. Jeff Jessee, CEO of the Alaska Mental Health Trust Authority, has been extensively involved in the Title 4 rewrite. A major thrust is to decrease the number of license types and simplify the system to achieve more consistent enforcement, Jessee said. “The license system has evolved in a haphazard system (since the last revision) with changes usually pushed by special interest groups lobbying the Legislature to get around limits or to establish new license types,” Jessee said. In another development, lawmakers are also preparing for hearings scheduled next week Walker’s proposed expansion of Medicaid, the state-federal program providing health care to low-income Alaskans. Former Gov. Sean Parnell had rejected expanding Medicaid out of concerns for long-term costs to the state but Walker has embraced it, citing positive near-term budget impacts with federal dollars replacing state funds for certain existing health services, such as for prisoners. A vigorous debate will develop in the Legislature over the proposal, and a preliminary skirmish occurred in the House Finance Committee Feb. 9 when state Department of Health and Social Services officials presented an overview of the entire Alaska Medicaid program. Several members of the committee asked a line of questions centering on whether there are alternative ways, such as private insurance, that could cover low-income Alaskans as an alternative to the long-term costs incurred in an expansion of Medicaid. Several states are investigating options like these, sometimes with the approval of federal health officials. Rep. Tammie Wilson, R-North Pole, questioned department officials on whether there are other alternatives including private health insurance for medical coverage for children enrolled in Denali Kid Care, which is the Medicaid program for children, when the parents are working. Margaret Brodie, the state’s director of health services, said there are options now for the state to assist with premium payments for private insurance for children. “There are ways we can help,” with the cost of premiums, she said. Wilson and Rep. Dan Saddler, R-Eagle River, also asked how many adult Alaskans and children now enrolled Medicaid who are Alaska Natives could instead receive Indian Health Care service. Brodie explained that Indian Health Care is a system operated in Alaska by Tribal health nonprofits but that federal funding for IHS does not cover the full range of health services that Medicaid would provide. Rep. Cathy Munoz, R-Juneau, asked for the cost of Medicaid broken down by age groups. Brodie said children under Denali Kid Care are relatively inexpensive to cover because their health is typically good unless they are disabled or have special conditions. Older age groups are more expensive, she said. Brodie also said with children enrolled in Denali Kid Care the state has programs to go after adults, such as absent parents, who have health insurance that could cover children. “We have a contractor who goes out and finds these people. We typically collect about $24 million a year,” Brodie said.

Movers & Shakers 2/15/15

The Alaska SeaLife Center is proud to announced the 2015 Alaska Ocean Leadership Awards given annually to individuals and organizations that have made significant contributions to the awareness and sustainability of the state’s marine resources. Al Burch will receive the prestigious Walter J. and Ermalee Hickel Lifetime Achievement Award. The late Gov. Walter J. Hickel and his wife Ermalee endowed this award for 10 years to recognize an individual who has made exceptional contributions to the management of Alaska’s coastal and ocean resources over a period of 20 years or more. Starting as a shrimp dragger in Seward, Burch has fished Alaskan waters for more than 55 years and serves on numerous national and international fishing boards. Since 2002, he has represented the Kodiak Island Borough on the board of the Prince William Sound Regional Citizens’ Advisory Council. He is a founding member of the Alaska Fisheries Development Foundation and served 30 years on the North Pacific Fishery Management Council’s Advisory Panel. He recently retired as the Executive Director of the Alaska Whitefish Trawlers Association, a non-profit group representing approximately 40 bottom-fish vessels out of Kodiak. He was inducted into the United Fishermen of Alaska’s Seafood Hall of Fame in 2009. Ahtna Inc. announced Timothy F. Gould, PE, as the new vice president of subsidiary companies Ahtna Environmental Inc. and Ahtna Engineering Services LLC. He will be based out of the Anchorage office. Gould brings to Ahtna a wealth of skills, industry knowledge, and extensive work experience, including multiple roles directing, managing, and overseeing facilities, energy, environmental and transportation projects for federal, state, and local governments. Gould also holds Alaska licenses in civil and environmental engineering. Resource Data Inc., a custom software development, geographic information system and IT consulting firm, has hired Senior Business Analyst Rod Nibbe and Senior Programmer/Analyst Jessica Austin to its Anchorage branch. Nibbe has a Ph.D. in pharmacology from Case Western Reserve University, a master’s degree in geophysics and a bachelor’s degree in geology from the University of Wisconsin. His most recent expertise is in systems biology, although he has legacy experience as a geophysical analyst and software developer. Austin has more than five years of software development experience with skills in Java, JavaScript, Python, C++, shell scripting, XML, SQL, Android SDK, and iOS. She has an master’s degree in robotics from Carnegie Mellon University and has her bachelor’s degree in mechanical engineering from the California Institute of Technology. Christine Dahl, partner at Otter Creek Partners, a registered investment advisor located in Ketchikan, has been authorized as of Dec. 31, 2014 by the Certified Financial Planner Board of Standards to use the Certified Financial Planner and CFP designation marks. Dahl is one of only 70 Certified Financial Planners who have been awarded this prestigious designation in Alaska and one of only two located in Ketchikan, both at Otter Creek Partners. In recognition for consistently superior customer service, Tanana Chiefs Conference honored University of Alaska Fairbanks Allied Health student, April Maynard with their “Health Services Above and Beyond Award.” Maynard is the medical assistant for TCC’s Upper Tanana Health Center. Maynard is taking distance education classes under a Department of Labor Grant to complete her certificate and associate’s of applied science degree from the UAF Community & Technical College’s Allied Health Medical Assistant program. Steven Hatter and Mike Neussl have been appointed deputy commissioners of the Alaska Department of Transportation and Public Facilities. Hatter previously acted as DOT deputy commissioner of Aviation from 2011 to 2014. He most recently worked for RLG International Consulting with ConocoPhillips and CH2M HILL. Hatter served in the U.S. Air Force for 26 years, retiring from the active duty rank of Colonel. He holds a master’s in international relations, a master’s in national security policy and a master’s in project management. Neussl previously served two years at DOT as deputy commissioner for Marine Operations between 2011 and 2012. A former U.S. Coast Guard Captain, Neussl retired in 2010 after 30 years of service, and amassed over 5,100 helicopter flight hours. Neussl was a 1998 NASA Space Shuttle Mission Specialist finalist. He holds a master’s in engineering with an aeronautical focus. Bob Manwaring has been hired as the new CEO for the Alaska Association of Realtors, effective Jan. 15. Manwaring has served the Alaska real estate community for the last 18 years, first as customer relations liaison with Alaska Multiple Listing Service Inc. and most recently as a business development officer with Stewart Title of Alaska. Terry Snyder of Palmer is Alaska’s new volunteer state president for AARP. Snyder had 20-year career in tourism as a travel consultant, human resources director, vice president of operations and as a sub-contractor with her own thriving travel constituency of a large businesses and personal travel clientele. During her long career in the travel and hospitality industry she was able to build a strong network of colleagues, business customers and friends. From 2000–04, she co-owned and operated Big Lake Lodge. Solstice Advertising added Copywriter Elyse Delaney to its team. Delaney joins Solstice with a broad range of disciplines including social media, blogging and account management, garnered from her previous work at a local agency. Delaney’s advertising experience began on the University of Idaho’s selective advertising team, winning campaigns for Glidden Paint through Walmart, as well as an interactive and strategic campaign for Mary Kay where she served as co-captain and account executive. Delaney also served as vice president for her university’s advertising club and holds a bachelor’s degree in advertising. Anna Johnson of Seward Windsong Lodge has been recognized as the Guest Services Manager of the Year. Johnson was recognized at the Alaska Hotel and Lodging Association at the annual Stars of the Industry Event Jan. 24.  This award is open to any Alaska hospitality employees and is voted on by peers in the industry.  David Hobbie is the new chief of the U.S. Army Corps of Engineers-Alaska District Regulatory Division. In this position, Hobbie provides oversight of the Corps’ second-largest regulatory division in the nation with responsibility for all permitting activities in Alaska. He has extensive experience with the Corps and has been employed at six different districts as a park ranger, project manager and within emergency management operations. Hobbie is based at the Alaska District’s headquarters located on Joint Base Elmendorf-Richardson near Anchorage. Central Council Tlingit and Haida Indian Tribes of Alaska has added Elizabeth Moore as employment and training manager and Grace Singh as special assistant to the president. Moore returned to Alaska after spending the past two years managing the funds for a non-profit charter school in Caldwell, Idaho. Moore is Yupik and was born in Dillingham and raised in the Bering Sea village of Quinhagak. Singh holds a bachelor’s degree in political science with a minor in journalism from the University of Alaska Fairbanks. Singh was born and raised in Fairbanks and is a Steven’s Village tribal member. Margaret MacKinnon has been named acting director of Assessment and Accountability.  MacKinnon has served the department for more than 30 years, including 25 years as a teacher in the former Alyeska Central School. She is a certified teacher and administrator in Alaska. She holds a bachelor’s degree in math education from the University of South Carolina, a master’s degree in education from Rutgers University in New Jersey, and an education leadership certificate from the University of Alaska Anchorage.

Reaction mixed on proposed AIDEA purchase

The Interior Energy Project has taken a “180,” just when it looked like everyone involved would have a chance to catch their breath.  The Alaska Industrial Development and Export Authority announced its intent to purchase Fairbanks Natural Gas for $52.5 million Jan. 28 along with its sister companies under Pentex Alaska Natural Gas Co. Gov. Bill Walker said in a release from AIDEA that it is important to focus on the immediate goal of lowering energy costs in the Interior. “AIDEA’s initiative to help streamline gas distribution systems in the Interior is a positive development,” Walker said. Some legislators aren’t so sure. Rep. Mike Hawker, R-Anchorage, said he is concerned about the “tone” the state is setting by intervening in private business. “If I was doing this in my business it would be called insider trading,” Hawker said. In November, Pentex confirmed a deal with Hilcorp subsidiary Harvest Alaska LLC to purchase Titan Alaska LNG, the midstream part of Fairbanks Natural Gas’ supply chain, including the small Point MacKenzie liquefaction facility and two LNG-powered trucks and tanker trailers. The deal with Harvest Alaska also included a 10-year supply agreement for LNG delivered to Fairbanks at a cost equivalent to $15 per thousand cubic feet, or mcf, of natural gas. Energy infrastructure company WesPac Midstream LLC has a project under development that could deliver gas to the Interior at about the same price, company officials have told the AIDEA board. Those costs do not include storage, regasification and local distribution. WesPac Vice President Brad Barnds told AIDEA his company planned to move forward developing an LNG facility at Port MacKenzie to serve rural Alaska with or without the Fairbanks market. Walker spokeswoman Grace Jang wrote in an email Feb. 3 that shortly after the governor took office, administration staff was directed to work with AIDEA to develop a contingency plan if AIDEA’s North Slope LNG plant work with MWH Global Inc. couldn’t meet price goals. When AIDEA parted ways with MWH in late December, the process of negotiating with Pentex began. Chief of Staff Jim Whitaker was directed to “establish discourse with Hilcorp and AIDEA,” Jang wrote. No one from the Walker administration discussed anti-trust concerns regarding the pending deal between Hilcorp-Harvest and Pentex-Titan, according to the governor’s office. “We have determined that private corporations can’t accomplish on their own what they are trying to do with the Interior Energy Project,” Fairbanks Natural Gas President and CEO Dan Britton said in an interview. That goal is to get gas to residents for about $15 per mcf. The earlier version of the Interior Energy Project could not get below a projected final price in the $18 to $20 per mcf range. House Speaker Mike Chenault, R-Nikiski, also said in a Jan. 30 press conference that he worries state involvement might push the final cost higher. Similar comments were heard from the Senate. AIDEA’s preliminary deal is challenged on several fronts, Sen. Peter Micciche, R-Soldotna, said Feb. 2. “I think it would’ve been healthy to brief the Legislature prior to announcement. The state simply doesn’t have the money to buy things without adequate due diligence,” Micciche said. “The LNG-to-Fairbanks business that’s operating today is not in peril and operates at capacity.” AIDEA acts as a self-sustaining organization separate from the rest of the state. It approved a $17.6 million dividend to the state treasury in December, representing half of its net income for the fiscal year 2014 that ended last June 30. Supply and demand The roughly 1 billion cubic feet, or bcf, per year liquefaction plant run by Titan supplies Fairbanks Natural Gas to serve about 1,100 mixed residential and commercial customers in the heart of Fairbanks. Britton, president of both Titan and Fairbanks Natural Gas, said the utility could serve more than 3,500 residential customers after distribution build out this summer if it had a larger gas supply. The sale of Titan came about after discussions about ways to increase gas supply to the Interior and Hilcorp is a company with the resources to do just that, Britton said at the time. Hilcorp spokeswoman Lori Nelson said the company is looking forward to the opportunity to expand affordable energy options in the Interior. That sale is pending review of the Regulatory Commission of Alaska and Attorney General Craig Richards. A statement from Hilcorp Jan. 29 said the news of AIDEA’s pending deal with Pentex was unexpected, but that Hilcorp and Harvest look forward to collaborating with AIDEA and the state to get cheaper and cleaner energy to the Interior. Harvest President Sean Kolassa said the company is working on plans to expand LNG capacity within 18 months. “We don’t fully understand yet how this will affect our existing agreement to purchase the Point MacKenzie LNG facility, but we think Harvest is the best candidate to own, operate and quickly advance efforts to expand LNG deliveries to the Alaskan Interior,” Kolassa said in a formal statement. With the new tentative structure, Britton said the late 2016 timeline for first gas the Interior Energy Project had been on could be met. Britton said in an interview that the plan to sell to AIDEA includes but should not impede the sale of the LNG plant to the Hilcorp subsidiary, a concern some legislators voiced. “It’s a shareholder change,” he said. With no other liquefaction facilities in the region, the LNG would likely have to come from the Titan plant and the ConocoPhillips LNG facility in Nikiski. Micciche, the superintendent of ConocoPhillips’ LNG export facility in Nikiski, suggested a small, flexible natural gas pipeline run north from Southcentral as a way to minimize transportation costs, which were projected at about $5 per mcf to truck LNG from the Slope to Fairbanks. “The challenge with LNG is how many times you have to handle it before it gets to the burner tip,” he said. With a goal of getting gas to residents at a burner tip price of about $15 per mcf, transportation would have accounted for a third of the cost of the North Slope-focused iteration of the Interior Energy Project, had it been successful. Micciche concurred with the concern about whether or not purchasing a private utility should be within the authority’s purview. Hawker took it one step further. “We have a long history of failed dreams when it comes to these equity investments by AIDEA,” he said. Fairbanks Democrat Rep. David Guttenberg lauded the proposed purchase of the gas utility. “I think this is a very good idea. I think we’re working on better alignment” between the utilities, Guttenberg said in an interview. He was a vocal critic of AIDEA’s previous work under Senate Bill 23, the legislation that provided a $332.5 million financing package to develop a gas trucking operation and North Slope LNG plant. He argued that bringing in MWH as a management firm doomed the finances of the work because MWH’s private investor in the North Slope plant needed a return on their capital investment. Guttenberg said he and the rest of the Interior delegation were notified of the deal in a meeting with the governor shortly before it became public. “Private industry had an opportunity for 30 years to do something,” he said. “(Fairbanks Natural Gas) never built out their infrastructure and now when there’s a push to do it everybody’s falling all over themselves — nobody wants to commit.” Britton has long said his company would’ve expanded had the small utility been able to secure a long-term Cook Inlet gas contract. When SB 23, sponsored by former Gov. Sean Parnell, passed the Legislature two years ago with no opposition, a scenario where Cook Inlet was flush with gas seemed far-fetched to everyone after talk of possible shortages prior to that winter. Many Interior homeowners relying on fuel oil were projected to save $2,000 or more on their annual heating costs with $15 per mcf gas when oil was in the $100 per barrel range. Guttenberg has stressed that lowering the cost of energy in the region would benefit all of Alaska through the disposable income that would be freed. A study released in January 2014 and commissioned by AIDEA on home heating conversions from fuel oil to natural gas found that Interior residents would save $835 million over 12 years after full buildout of the Interior Energy Project. That figure was based on $15 per mcf gas and $4 per gallon fuel oil. The deal Former Fairbanks senator and AIDEA board member Gary Wilken said there are reservations about the proposal because some might not be fully apprised of what the authority is trying to do. It is a continuation of the work AIDEA was tasked with two years ago, he said. Concerns that AIDEA is getting into the utility business are unwarranted, according to Wilken. He sees a purchase of Pentex as an infrastructure buy, similar to the authority’s ownership of the Ketchikan Shipyard, which is operated by Vigor Alaska. It would allow AIDEA to utilize its multitude of financing options to support a natural gas supply chain. “AIDEA does not want to run a gas plant or run anything for that matter,” Wilken said in an interview. “I think (the sale proposal) took some folks by surprise, so I think we’re just sort of in the education process right now and I think that’s our purpose.” The authority has a special Feb. 5 board meeting scheduled. Spokesman Karsten Rodvik emphasized that AIDEA simply issued a Letter of Intent to purchase. “This contemplated Pentex purchase is subject to AIDEA’s rigorous due diligence and is subject to AIDEA board approval,” he wrote in an email. The Jan. 26 letter signed by Britton and AIDEA Executive Director Ted Leonard sets a Feb. 28 good faith deadline to have a “Definitive Agreement” in place and due diligence completed. It’s anticipated that the agreement would be executed by April 30, at which point AIDEA would make a 5 percent down payment on the purchase. The letter sets a hard closing date of July 31. Pentex’s assets are valued conservatively at $75 million, according to the Letter of Intent. AIDEA will pay that in cash at closing unless an escrow amount no more than 5 percent of the purchase price is agreed to. Leonard declined requests for an interview. While it is early in the overall process, Britton has been told that AIDEA has a “high level of confidence” in existing Fairbanks Natural Gas management and wants the utility to operate as it has in the past with him in the lead, he said. For his view, the deal does not mean AIDEA is shunning other ideas, Wilken said. At the same time the authority is moving forward. The other plans to get gas to the Interior put forth have been “nothing more than PowerPoints with significant holes in them,” he said. It is AIDEA’s duty to keep abreast of new ideas, Wilken added. “For now, this is the best idea going. AIDEA, because of its structure, has the ability to bring some things to this that private industry doesn’t,” he said. “Let’s pursue that and see where that gets us. We’re not slamming the door in new ideas; at least I’m not. “I would hope that other folks — that if they do have an idea that they think benefits the Interior and benefits their shareholders or their interests — they should be knocking on our door and saying, ‘What about us?’ because this is moving ahead and now is not the time to sit on your hands.” There is a general consensus around the Interior Energy Project that the infrastructure available in Southcentral, including the railroad, could help get gas to the Interior cheaper now that there is more gas to be had. Interior Gas Utility chair Bob Shefchik said he supports the philosophical shift. Next steps AIDEA’s press release announcing the deal stated the purchase of Pentex “would promote an integrated gas distribution system that can be built and operated in a more efficient manner” throughout Fairbanks and North Pole. The prospect of joint management of gas storage and transmission facilities makes sense, Shefchik said, and Economic efficiencies should be had in design and construction of a single distribution system as well. “There’s good, sound logic underneath what they’re doing,” he said. To this point in the project IGU and Fairbanks Natural Gas have been developing individual buildout plans for their separate networks. Britton said having two utilities share such a small area never made sense. “The idea is with AIDEA’s ownership (of Pentex) it provides a greater level of coordination between the two rather than a private entity versus a public entity,” he said. IGU is a public utility owned by the Fairbanks North Star Borough. It competed with Fairbanks Natural Gas for its service area in September 2013 Regulatory Commission hearings. IGU has a $37.7 million loan proposal before AIDEA to fund several years of its six-year distribution construction plan. The loan would be a $29 million add-on to an $8.1 million design-construction loan the authority approved last spring. It is one of the matters likely to be taken up at the Feb. 5 special board meeting. The utilities worked closely during the first round of the Interior Energy Project, with Golden Valley Electric Association as part of the group as well. The regional electric utility has long been seen as an anchor tenant to the project. Its large-share purchase of gas was viewed as essential to drive the overall price down through the economy of scale. Golden Valley President and CEO Cory Borgeson said he was told by the administration that his utility would not have to commit to a “take-or-pay” gas purchase agreement under the new proposal. “That was of great relief to my board,” Borgeson said. He said the weak oil market has pushed the price of naphtha Golden Valley buys from the Petrostar refinery below $10 per mcf of gas equivalent. AIDEA’s purchase of Pentex had been in the works for some time. Shefchik said the idea was floated to him shortly after AIDEA cut ties with MWH around the New Year, but he heard a deal was imminent about the same time it was finalized. Britton said AIDEA approached him with the deal about a month ago and negotiations proceeded from there. However, the plan was hatched in the governor’s office. For that, Guttenberg said Walker deserves credit. “This wasn’t AIDEA’s idea. Parnell would still be governor if he did what Walker did, and that is saying, ‘We’re going to make this work. I’m putting the resources behind my office,’” Guttenberg said. To get at those resources AIDEA will have to go back to the Legislature and get a change in SB 23. The legislation requires the funding behind it be used only towards a North Slope gas supply. Guttenberg said the change could be as simple as changing North Slope to Cook Inlet or broadening the scope to whatever source is appropriate. The Alaska Gasline Port Authority, which Walker was a strong advocate of as its legal counsel, tried to buy Fairbanks Natural Gas from Pentex for $55 million nearly five years ago. The complex structure of the Gasline Port Authority required multiple layers of approvals, which hampered the deal, and it never came to fruition. At the time, Fairbanks Natural Gas was working on its own plan to truck North Slope gas to the Interior.

2015 Top Forty Under 40 announced

The Alaska Journal of Commerce is proud to announce the 2015 class of the Top Forty Under 40. A committee of Journal management selected the 2015 class from nearly 160 individuals and more than 230 total nominations. “In my third year involved in the Top 40 selection this is easily the most individuals and total nominations we have had to choose from,” said Managing Editor Andrew Jensen. “This year had 40 more individuals — an entire class in and of itself — than were nominated in 2014. The decisions were in some cases very difficult and even though it makes our jobs harder we encourage everyone to continue to nominate the best and brightest of Alaska. It is heartening to know how many fine young professionals are working to make this state great.” In addition to Anchorage, winners hail from Kodiak, Barrow, Bethel, Fairbanks, Southeast and the Mat-Su Valley. The 2015 Top Forty Under 40 class will be honored April 3 at the Dena’ina Civic & Convention Center in Anchorage. Doors will open at 11:30 a.m. and the event will run from noon to 1 p.m. Tickets are $50 and are available by contacting Michelle Ditmore at (907) 275-2178 or [email protected] Event sponsorship opportunities are also available by contacting [email protected] 2015 Top Forty Under 40 winners: Joe Bell, 34, CEO, Keller Williams Realty, Alaska Group, Anchorage Logan Birch, 35, Director of Treasury, Arctic Slope Regional Corp., Anchorage Luke Blomfeld, 31, Principal/Senior Project Manager, Davis Constructors, Anchorage Jay Blury, 36, VP, Marketing & Communications Director, Northrim Bank, Anchorage Pearl Kiyawn Nageak Brower, 34, President, Ilisagvik College, Barrow Charity Carmody, 39, President, Beacon Hill/State Farm, Anchorage Deantha Crockett, 33, Executive Director, Alaska Miners Association, Anchorage Joey Crum, 36, President, Northern Industrial Training, Wasilla Dr. Nicole Cundiff, Director Northern Leadership Center, Assistant Professor, University of Alaska Fairbanks School of Management, Fairbanks Jason Davis, 36, President, Turnagain Marine Construction, Anchorage Heidi Embley, 37, Executive Director of Communications, Anchorage School District, Anchorage June Gardner, 33, Operations Systems Manager, Alaska USA FCU, Anchorage Darrell Garrison, 36, Superintendent, Bethel Youth Facility, Bethel Clare Gauster, 31, Principal, Ravenwood Elementary School, Eagle River Krista Jean Gonder, 34, Owner, Alaska Tags & Titles, Wasilla Jennifer Haney, 26, President, Peak 3 Technical Services Magen James, 29, Programs/Events Director, Anchorage Chamber of Commerce, Anchorage Katherine Jernstrom, 30, Anchorage, and Brit Szymoniak, 28, Sitka, owners/co-founders, The Boardroom Dr. Katherine Johnson, 38, Ophthalmologist/Owner, Mountain View Medical Center, Fairbanks D.K. Johnston, 31, Filmmaker, Tri-Seven Pictures, Anchorage Kirsten Kinegak-Friday, 32, Associate General Counsel, Calista Corp., Anchorage Nolan Klouda, 30, Executive Director, University of Alaska Center for Economic Development, Anchorage Charlie Kozak, 39, EVP/CFO, Arctic Slope Regional Corp., Anchorage Zoi D. Maroudas-Tziolas, 35, President, Bambino’s Baby Food, Anchorage Capt. Andrew Merrill, 39, Acting Captain of VPSO Program, Alaska State Troopers, Anchorage Amanda Moser, 32, Deputy Clerk, Municipality of Anchorage Glenna L. Muncy, 39, Parking Services Director, University of Alaska Anchorage Ric Nelson, 31, Chair, Governor’s Council on Disabilities & Special Education Natasha Pineda, 36, Program Officer, Alaska Mental Health Trust Authority, Anchorage Gordon Pullar Jr., 29, Business Associate, Koniag Inc., Anchorage Tracy Runyan-Traylor, 38, Associate Nurse Executive, Alaska Native Medical Center, Anchorage Ginessa Sams, 28, Deputy Behavioral Health Director, Tanana Chiefs Conference, Fairbanks Kisha Smaw, 35, Owner/CEO, Hearts and Hands of Care Inc. Lea Souliotis, 37, Global Well Supply Chain Manager, BP Alaska, Anchorage Lindsey Spinelli, 31, Account Executive, Porcaro Communications, Anchorage Brandon Spoerhase, 32, Commercial Broker, Jack White Commercial, Anchorage Dr. Anna Stevens, 39, Clinical Psychologist, Kodiak Area Native Association, Kodiak Alexa Tonkovich, 33, International Program Director, Alaska Seafood Marketing Institute, Juneau Steve Wackowski, 33, Operations Manager, Tulugaq II, Anchorage Wally Ward, 30, Senior Facility Development Engineer, ConocoPhillips, Anchorage

Anchorage residential sales decline 4.2% as prices rise

It was a mixed bag for Anchorage’s housing market in 2014. While demand slowed, prices generally continued to grow. Michael Droege of Century 21 Realty Solutions told the Anchorage Board of Realtors that the total number of units sold in the municipality fell 4.2 percent last year, to slightly less than 4,000. Despite a softer market in 2014, residential activity has increased 21 percent over five years, he said. With 2,684 transactions, residential home resells were down 6.5 percent and new construction home sales fell more than 17 percent in Anchorage, primarily because of the ever-present space issue, Droege said. There were 171 new single-family homes built in Anchorage in 2014, according to Multiple Listing Service data. “New construction is definitely a result of a lack of available, developable, affordable land,” Droege said. “The cost of a new construction — you can’t even touch one for under $400,000 with the cost of land, even a small ranch.” The cost of a 7,500 square-foot lot can approach 45 percent of the overall construction cost for a new home once city utilities are installed, he said. On average, the price of a new home in Anchorage was $489,000, up 24 percent from 2011. Including condominiums, the mean sale price of an Anchorage home was $334,000, which is a 13 percent increase over five years. Existing single-family structures sold for an average of nearly $348,000, up 8.6 percent from 2010 and a 10 percent increase from 2011 when home prices dipped briefly. Nationwide, the average home sold for $255,000 at the end of 2014, according to the National Association of Realtors. That was a 3.7 percent year-over-year increase. The median sale price in December was $208,000, up 6 percent for the year. Overall time on the market for listed properties fell 5.4 percent to 87 days, a 28 percent decrease from 2010. Existing single-family homes spent an average of 46 days on the Anchorage market and existing condos were listed for 48 days. Much of that was due to a lack of supply. “Even though we’ve had inventory less than five months in most categories, the demand hasn’t supported a solid sellers’ market,” Droege said. He added that a shift in how new construction properties are marketed has changed average market times as well. “New construction market time — it’s not unusual to see a 300-day market time,” he said. “But what we’re seeing now is marketers are either holding those until they get a little closer to construction or they’re pre-selling them and listing them for stats only.” Newly built single-family homes were on the Anchorage market for an average of 113 days last year and new condos spent 141 days advertised. Other regions Statewide, there were nearly 6,900 single-family and condo sales financed through the third quarter of 2014, according to Alaska Housing Finance Corp. loan data. That is virtually flat when compared with the third quarter of 2013. The average sale price on those homes through the first nine months of the year was $294,000; that’s a 2.1 percent increase year-over-year and a 10.9 percent price increase over five years. Single-family loan activity grew 5.3 percent in Fairbanks through the third quarter of 2014. Those homes sold for an average price of $242,000. In the Matanuska-Susitna Borough there were 1,173 loans drafted for single-family home sales through three quarters last year, a 12 percent year-over-year increase. The average sale price was $265,000. Activity in Juneau fell significantly; it was down more than 18 percent through September. The average home price in the capital city was $352,000. Rental market The statewide rental market held mostly steady last year. Prices rose a little and vacancy rates were mixed in the state’s major markets. Statewide rental vacancy increased 1 percent to 6.2 percent in 2014, according to AHFC’s annual market survey. The average contract price across all unit subsets increased 1.9 percent to $1,082 per month. As is often the case, Kodiak Island was the most expensive place to rent in Alaska last year, with an average monthly price of $1,251. Rental rates in Anchorage grew an average of $16 per month last year across all subsets to $1,135. Overall vacancy in the municipality was 3.2 percent, down 0.1 percent year-over-year. Single-family rent averaged $1,780 in Anchorage and apartments went for $1,112 per month. Vacancy increased more than 6 percent in the Fairbanks North Star Borough to where 15.6 percent of rentals were empty in 2014. Despite the availability increase rental rates still managed to increase 2.3 percent. The Mat-Su Borough saw rental vacancy increase 0.2 percent to 5.3 percent last year and monthly rates grew 3.8 percent to an average of $1,022, according to AHFC. Vacancy was steady in Juneau at 3.4 percent and monthly rates increased 6 percent to $1,117. On the Kenai Peninsula the average rent was $831, up 4.5 percent from 2013. The number of available units increased more than 2 percent to 6.7 percent. It was a real increase of 21 more available on average for the year.

EDITORIAL: Pentex purchase raises questions, signals commitment

While the state’s planned purchase of Fairbanks Natural Gas parent company Pentex may play a large part in the solution for natural gas delivery to Fairbanks, for the moment it mostly raises questions. The purchase would reduce the number of items local and state officials have to put into place, potentially including a gas liquefaction facility. But it also creates other wrinkles that must be dealt with before the end goal of affordable energy is achieved. The announcement by the Alaska Industrial Development and Export Authority on Jan. 28 that the state is planning to buy Pentex for $52.5 million was a surprise, but could significantly benefit the Interior Energy Project and its goals. The direction and timeline of the project were uncertain after the pullout of North Slope gas liquefaction plant contractor MWH in late December. With the pending acquisition, Gov. Walker has indicated a clear direction in which progress can continue. Moreover, the deal could be a significant boon if it includes the services of Pentex subsidiary Titan’s Port Mackenzie liquefaction plant, and if supply can be lined up from Cook Inlet producers. Even before its cost estimate crept upward, MWH’s plant on the North Slope was projected to cost $185 million — to have liquefaction capability at less than a third the up-front price would be a tremendous step forward for the Interior’s energy goals. But those, at least for now, are ifs, and big ones. In late 2014, Pentex announced it was planning to sell the Port Mackenzie facility to Hilcorp subsidiary Harvest Alaska LLC. Whether that sale will still go forward is an open question, and one that could have serious ramifications with regard to the ability to deliver natural gas to the Interior at the target price of $15 per thousand cubic feet (the equivalent of heating fuel at roughly $2 per gallon). If the sale goes through, the state must hammer out terms with Harvest Alaska that would ensure the price goal can be met. Also a source of consternation in some quarters is the apparent entry of the state as a gas supplier, creating a potentially odd relationship with regard to regulation — for instance, the Regulatory Commission of Alaska, a state body, may end up ruling on whether the sale of the liquefaction plant to Harvest Alaska goes through. Additionally, the state may end up negotiating gas supply terms with the same Cook Inlet producers whose license applications it is in a position to grant. Care must be taken to not let the government’s interests create an unfair operating environment. Given Gov. Bill Walker’s aggressive timetable for Interior energy relief, these questions likely will be addressed soon, which will do much to clarify exactly how good of a deal the Pentex acquisition would be for the state and Interior residents. For now, the best sign that the deal may contribute significantly to gas delivery goals is the reaction of Interior legislators and the Interior Gas Utility. The bulk of their response has so far been positive. Despite the additional issues raised by the state’s planned acquisition of Pentex, it’s good news that the Interior Energy Project isn’t languishing after MWH’s departure. It’s also good to see the state take an active role in helping pieces for the project come together. In the next few weeks and months, we hope to see those pieces assembled into a concrete plan for gas delivery to Fairbanks.

GUEST COMMENTARY: Alaska Forum offers weeklong event on environment

When it comes to the environment, Alaska sits at the apex. Alaska contains more than half of America’s designated wilderness and more coastline than all of the other states combined. We are in the unique position of being stewards of the majority of our nation’s untouched land and wild ecology, and our rural communities have deep legacies rooted in Alaska Native culture. Ongoing concerns about development, sustainability and protection of our natural resources remain forefront in Alaskan hearts and minds. From oil and gas to minerals, to timber to seafood to tourism, Alaska has environmental wealth that support modern life, health, and economic prosperity. The challenge remains in how to balance the need for resources with the need to protect and preserve. The Alaska Forum on the Environment tackles this question head on by providing an opportunity to understand the diverse perspectives of others. The Alaska Forum on the Environment is a statewide gathering of individuals with professional interests and expertise on environmental issues. The event is about sharing, teaching, and learning. During the week of Feb. 9–15, as many as 1,800 participants will come together in downtown Anchorage to learn about and discuss the latest environmental projects, advancements, and issues. Along with our keynote speakers, the conference features more than 100 technical breakout sessions. This year’s event includes expanded coverage on marine debris, tsunamis and other coastal issues. The diversity and breadth of our participants is truly energizing. Students meet community elders. Business leaders sit side by side with conservationists and government agencies. When we bring together diverse perspectives, everyone can discover something new. Whether it is a new kind of technology, a pressing issue that needs attention, or an innovative solution to a challenge, the Alaska Forum on the Environment offers a wealth of opportunities for cooperation and collaboration. The weeklong event is also a time to celebrate environmental successes. Often we focus on the environmental mistakes and scars of our past, which have affected each and every Alaskan. Rarely do we get to highlight what goes well, and the Alaska Forum on the Environment is the chance to do just that. We recognize both individuals who have made a long-term commitment to environmental and natural resources science programs or projects that have contributed to the advancement of knowledge, cooperation or management of Alaska’s environment or natural resources. It is vital to recognize the strides we are making and to build upon plans with diligent forethought. In addition to hosting the annual conference, the Alaska Forum (a 501c3 non-profit organization) is now host of the Green Star Program, and also offers environmental training and education programs. Our Apprenticeship program pairs budding environmental technicians with employers who need versatile and well-trained Alaska workers. The program is a blend of classroom instruction and on-the-job training, where apprentices acquire essential knowledge and experience. The arrangement is mutually beneficial—young people get started in a fulfilling career and “earn while they learn,” while companies build a high-quality Alaska workforce. Resources mean more than the materials that can be developed and more than the money in the bank. They also mean the talent that we cultivate in our residents and the ingenuity we show when tackling tough issues. Alaskans are the most important resource our state has, especially during uncertain and challenging times. In this way, the Alaska Forum on the Environment is truly for those seeking responsible resource-development and those seeking diligent conservation. The Alaska Forum on the Environment focuses on what is going right and fixing what is not doing well. The Alaska Forum on the Environment strives to inspire the next generation of scientists and leaders. For the last seventeen years, the Alaska Forum has grown and improved, and the February 2015 event will offer even more opportunities. You are invited to join us and learn more about Alaska’s natural resources and environmental issues. The environment is more than a passing concern—it is about the resources that make life possible. Our decisions should improve the quality of life for generations. For more information on the Alaska Forum on the Environment or to register for the event, please visit www.akforum.org.

Marijuana, gasline, budget cuts dominate early agenda

It’s week three of the 2015 legislative session. Ten weeks to go until adjournment. Marijuana regulation, a bare-bones state budget and agonizing cuts to state programs, the first legislative actions needed for the large natural gas pipeline and liquefied natural gas project — it’s really a full plate. Gov. Bill Walker is also due to submit his amended 2016 state operating budgets. Until now the Finance committees have been dealing with “template” budget bills, essentially the proposals of former Gov. Sean Parnell. The pace is typically a slower at the start of the session, particularly in a new Legislature with newly-elected lawmakers. Activity is now picking up, however, as Finance Committee subcommittees on agencies dig into the budget numbers, usually in evening meetings. Committee agendas during the day have been packed with information overviews by the state agencies, aimed at informing lawmakers on what the agencies do as well as new initiatives or problems. The hallways of the Capitol have been crowded as different organizations conduct “fly-ins” for their members and boards to get the ear of legislators before the pace of activity picks up. The Resource Development Council and Alaska Chamber had back-to-back visits of their members in the session’s first two weeks, and since then municipal groups have others have been in legislators’ offices. Managers at the Baranof Hotel, a favorite meeting place in the capital city, reported that the hotel’s January lodging and restaurant business set a record for the month. It was virtually all linked to legislative matters. Much of the Legislature’s time this week was taken up with further hearings on the pending legalization of marijuana, particularly on how municipal authority can be strengthened to control the use and sale of pot and the more potent derivatives that are also to be legal under a voter initiative passed in the Nov. 4 state general election. The House and Senate Judiciary Committees are dealing with criminal provisions in the marijuana law in Senate Bill 30 and House Bill 79. The state affairs committees in both the House and Senate are dealing with state and municipal regulation. There is no bill so far in the Senate but the House Community and Regional Affairs Committee has introduced House Bill 75 as a starting point. Also last week the Alaska Arctic Policy Commission, composed of legislators and community leaders in coastal areas, submitted its final report to the Legislature, and legislative committees started work on bills, House Bill 1 and Senate Bill 16, that would implement the recommendations of the report. The legislation would set a framework for the state’s involvement, mainly through the state administration, as the U.S. assumes the chair of the Arctic Council, a multi-national forum of nations that share the Arctic. “Our goal is ensure public safety and encourage economic opportunity,” said Rep. Bob Herron, D-Bethel, one of the commission’s co-chairs. Herron and his co-chair, Sen. Lesil McGuire, R-Anchorage, hope to influence the Obama administration’s Arctic policy as it emerges, which may have a major slant toward environmental protection and climate change issues and less emphasis on economic opportunity for residents of the Arctic. Canada, currently the Arctic Council chair until passing it to the U.S. in late April, has emphasized economic opportunities during its tenure heading the council. On gas pipeline matters, one piece of legislation needed this spring is a bill that would authorize a Payment-in-Lieu-of-Tax, or PILT, procedure for municipal governments along the pipeline route that would substitute for local governments’ traditional property taxes. A PILT is needed because the traditional form of property tax would create more economic challenges for the big gas project. An alternate form of payment, such as an annual payment linked to gas volume moves, would ease those problems but bring municipalities the same amount of money, the project sponsors have argued. However, the legislation is not yet ready for introduction, a spokeswoman for the state Department of Revenue said. “There is more work that has to be done with the Municipal Advisory Group,” said spokeswoman Stephanie Alexander. The advisory group is a task force of mayors set up to work on the PILT with the revenue department. Another meeting of the MAG is set for late February, she said. Meanwhile, new state Department of Natural Resources Commissioner Mark Myers is to appear before the Senate Resources Committee Feb. 6, and will surely be questioned by committee chair Sen. Cathy Giessel, R-Anchorage, on the progress to date of the state administration’s negotiations with the gas project partners. Myers may not be able to tell the committee very much, however, because he has not signed a confidentiality agreement that would give him access to the negotiations. Deputy Commissioner Marty Rutherford, who has signed a confidentiality agreement and who is leading the state negotiations, said talks are underway but did not provide details. Several key agreements need to be agreed on and ratified by the Legislature in 2015 for the project to stay on schedule. Giessel said in a Feb. 2 briefing that she and other senate leaders have started preparations for a special session of the Legislature in October to ratify the agreements negotiated by the administration.  

Conflict brewing over recent Subsistence Board decisions

If science-based fisheries management is Gov. Bill Walker’s goal, then he has more than just the Alaska Board of Fisheries to worry about. There’s a conflict brewing between subsistence and conservation-minded, scientific fisheries management at the Federal Subsistence Board. During its January meeting, the board passed a unanimous motion to close the federal waters of Sitka Sound around Maknahti Island to commercial purse seine herring harvests, in addition to voting in favor of gillnet subsistence fisheries for the Kenai and Kasilof rivers. Subsistence is meant to be the first and foremost consideration of fisheries management, according to both state and federal bylaws. But fisheries must also be managed by the best available science. Conservation, and the science that backs it, is the constitutional mandate of the Alaska Board of Fisheries and Alaska Department of Fish and Game Commissioner Sam Cotten. Walker has made it his stated mission to rid Alaska fisheries of politics and focus on science-first management. The Sitka Tribe of Alaska submitted the Maknahti Island proposal, which was endorsed by the Southeast Regional Advisory Council. State and federal advisors both recommended against the measure in the absence of evidence that it is necessary to preserve herring stocks. The board also made a controversial vote Jan. 21 to add a subsistence gillnet for the Ninilchik Traditional Council along public segments of the Kenai and Kasilof rivers in pursuit of sockeye salmon. State and federal biologists recommended against the measure on conservation concerns for the chinook salmon and trout that will inevitably be caught in the non-selective gear type. The Kenai measure only narrowly passed with a 4-3 vote: the Bureau of Land Management, U.S. Fish and Wildlife Service, and Forest Service opposed the motion on conservation grounds. State Rep. Les Gara, D-Anchorage, wrote a public request for reconsideration, citing the same conservation concerns for chinook salmon biologists did during the board’s January meeting. The Federal Subsistence Board operates as part of the U.S. Department of the Interior to control subsistence on federal lands in Alaska. Members are the regional directors of the U.S. Fish and Wildlife Service, National Park Service, Bureau of Land Management, Bureau of Indian Affairs and the U.S. Forest Service. There are three public members appointed by the secretaries of the Interior and Agriculture: two represent rural subsistence users and one is the Federal Subsistence Board chairman. Tim Towarak currently sits as the board chair. A subdivision of U.S. Fish and Wildlife called the Office of Subsistence Management is a support organization for the board to provide analysis and execute board decisions. The waters to be closed around Maknahti Island are a small area and only sparely fished by commercial herring vessels, but the objections aren’t about the economic loss, but the legality of the ruling. The board derives its authority from the Alaska National Lands Interest Conservation Act, passed by Congress in 1980. Under Section 815 of the Alaska National Lands Interest Conservation Act, or ANILCA, the Federal Subsistence Board has the right to restrict fisheries in public waters to federally qualified subsistence users, but only if there is sufficient evidence of conservation necessity. The Alaska Department of Fish and Game, or ADFG, holds that the board acted outside its authority with its Maknahti Island herring closure, because available science suggests no conservation concern for herring in Sitka Sound. This is the last of several proposals to shut the area to all federal non-subsistence users. The Sitka Tribe of Alaska submitted two previous proposals for non-subsistence closures in the federal waters around Maknahti Island in 2007 and 2013. Each time they were rejected for lack of conservation necessity. At the January meeting, the Office of Subsistence Management opposed the closure on the same grounds as before. “Adoption of this proposal would result in further area closures to non-federally qualified subsistence users, which do not appear to be needed for either conservation purposes or to protect federally qualified subsistence users,” wrote the office in comment to the federal board. ADFG provided much of the literature cited by the OSM, and itself spoke against the proposal both at the meeting and in formal written comment. “The fishery is being managed with conservation in mind, and our position is that there is not a conservation need to close the Maknahti waters,” said ADFG area management biologist Dave Gordon. Conservation management for herring in Sitka Sound is based on a minimum biomass requirement. The mandatory minimum annual biomass for herring returning to Sitka Sound is 25,000 tons. If the estimated biomass drops below that number, the federal board can restrict fisheries in public waters to federally qualified subsistence. Herring stock estimates, provided mainly by ADFG biologists, aren’t even close to approaching the minimum, and haven’t for 20 years. The estimate for pre-fishery 2014 herring return was 81,665 tons. Annual estimated biomass of herring returning to Sitka Sound has not dropped to 25,000 tons since the mid 1990s, and reached a peak of 119,049 tons in 2009. The state isn’t beyond area closures when necessary, even if stocks have no conservation concern. The 2012 Sitka Sound herring harvest was closed by the Alaska Board of Fisheries to “reduce perceived conflict between the commercial fishery and the subsistence fishery.” Gordon says the closures won’t likely affect the commercial herring fleet, as the federal waters around Maknahti Island are not key for that fishery. But that could change, he said, and that’s not the point anyway. The commercial fleet is nervous about allowing an area closure against available science and in apparent violation of ANILCA Section 815. Representatives from ADFG say the department is evaluating their options regarding whether or not to file a request for consideration or take other measures, which could include a lawsuit. Requests for reconsideration are rare, said Theo Matuskowitz, the policy expert for the Federal Subsistence Board. In most cases, board measures are low-profile and attract little attention, or have the broad support of the public who recognize subsistence priority and aren’t affected by rulings. But board decisions aren’t always well received. In 2013, the village of Saxman in Southeast Alaska filed a lawsuit against the board, the Department of Interior, and the Department of Agriculture over a 2007 board ruling that stripped the village of federal subsistence rights. A key part of qualifying for federal subsistence rights means having a “rural” designation. In 2007, the Federal Subsistence Board ruled that Saxman and its largely-Tlingit tribe inhabitants would incorporate into the Ketchikan urban area two miles north and lose rural status, and therefore not qualify for federal subsistence fishing. The board has not overturned the decision, but instead opened a public conversation about the establishment process for rural designation. The board has opened several meetings in different Alaska regions seeking for public comment on proposed regulatory changes that would give the board greater flexibility in declaring specific communities rural or non-rural. The Kenai and Kasilof rivers gillnets already riled public sentiment and a request for reconsideration by Gara. On Jan. 30, the Alaska House of Representatives Finance Committee heard a departmental overview from Cotten, flanked by deputy commissioners Charlie Swanton and Kevin Brooks. After an overview presentation, two subjects commanded the conversation: slashed funding for the ADFG’s Chinook Salmon Research Initiative, and the Federal Subsistence Board’s decision to allow a gillnet on the Kenai. Cotten and his delegation, for their part, took a “wait and see” attitude. Rep. Mark Neuman asked the ADFG what they think will happen to the fishery and what could be done about the Kenai situation. Swanton had no knowledge beyond Gara’s reconsideration request. “Rep. Gara has received much information over the last 16 or 18 hours,” Swanton said. “That will play out over the course of the next several months. I couldn’t predict the outcome. Certainly department staff have made their concerns known.” Gara said in a telephone interview that he’s received no news regarding his request, nor is he involved with any movements opposing the Maknahti Island closure. “Requests for reconsideration are open to anyone, and we’re really just trying to get the word out,” Gara said.

ConocoPhillips delays GMT-1 amid BLM talks

ConocoPhillips has delayed a decision to develop its Greater Moose’s Tooth-1, project in the National Petroleum Reserve-Alaska as negotiations continue over permitting issues with the U.S. Department of the Interior. “We have no specific timeframe for revisiting the Final Investment Decision, but having alignment with BLM is important to that,” ConocoPhillips spokeswoman Amy Jennings Burnett said. The delay in securing permits is one of several factors in the decision along with current oil prices, she said. However, sources in congressional offices say they have been informed that BLM’s insistence on a set of costly mitigation measures has also become a factor. Greater Moose’s Tooth-1, or GMT-1, would produce 30,000 barrels per day at peak and would have started production in late 2017 had the company started construction this year. That schedule may now have slipped. In a statement, ConocoPhillips’ Alaska President Trond-Erik Johansen said, “We are deferring the final investment decision for GMT-1. The project is challenged by permitting delays and requirements, as well as the current oil price environment.” Seismic work planned for the GMT-1 area this winter will continue, he said. Meanwhile, ConocoPhillips is proceeding on other planned projects, including an expansion of viscous oil production in the Kuparuk River field, Johansen said. The $450 million North East West Sak, or NEWS, project is expected to add 9,000 barrels per day of new production in 2016. In October, the company announced that it is proceeding with its new Drill Site 2S in the Kuparuk field, a $600 million project that will have peak production at 8,000 barrels per day with first production beginning in late 2015. Also, the CD-5 project now under construction is also on schedule and will also start up late in 2015, with peak oil production of 16,000 barrels per day. On GMT-1, however, ConocoPhillips has been frustrated by delays in securing final permits from the U.S. Bureau of Land Management, the Interior Department agency that administers the 23-million-acre NPR-A. BLM issued a final supplemental environmental impact statement, or SEIS, on Oct. 24 but has yet to issue a Record of Decision. The ROD typically leads to federal permits being issued, and the delay will likely lose the 2015 winter construction season for ConocoPhillips, which could set the schedule back a year. Congressional sources familiar with the project say the main problem the company now faces is BLM’s request on a set of mitigation measures that will add an estimated $40 million to GMT-1’s cost. “ConocoPhillips has already built mitigation for wetlands impacts into its project plan using the customary three-for-one formula (three acres of restored wetlands for one acre affected by gravel placement) but BLM is insisting on further steps that would add $40 million in costs,” said Robert Dillon, spokesman for the Senate Energy and Natural Resources Committee, which is chaired by Alaska U.S. Sen. Lisa Murkowski. Dillon said ConocoPhillips had briefed Murkowski on the negotiations with BLM. He does not know the details of the additional mitigation or other stipulations BLM is seeking but at one point BLM sought ConocoPhillips’ agreement that the company would fund cleanup of old exploration wells drilled decades ago in the reserve by the federal agencies. Those were abandoned in an unsafe condition and Alaskans officials have been pressing BLM for years on funding a cleanup the wells, some of which are leaking. There is also a disagreement between the BLM and the U.S. Army Corps of Engineers over the route of an eight-mile road to GMT-1 from CD-5, a drill site now under construction that is on the boundary with state lands to the east of the federal petroleum reserve. Dillon said BLM and ConocoPhillips expect to be able to resolve differences over the road, but that there is an impasse over the mitigation. “Our concern is that this will kill the project,” Dillon said. “It sets a precedent for future activity in the petroleum reserve. No one will buy NPR-A leases if they see they will be bled to death by project stipulations.” Neither ConocoPhillips or BLM would comment on the status of the mitigation negotiations. Alaska officials are watching the GMT-1 project closely because the additional production in 2018 and beyond will be important in offsetting declines from producing fields in the central North Slope area. Also, GMT-1 and its access road will lead to further development in the reserve. ConocoPhillips is already working on plans for a GMT-2 project further west but that would be delayed if GMT-1 is not constructed on schedule. Meanwhile, the GMT-1 access road disagreement involves a route favored by ConocoPhillips, labeled as “Alternative A” in the SEIS document, and a slightly-longer “Alternative B” that was favored by BLM. The U.S. Army Corps of Engineers favors Alternative A because it is shorter by about one mile, at 7.7 miles, than Alternative B, and would have a smaller gravel “footprint” of 72.7 acres compared with 80.4 acres covered by gravel in the Alternative B routing. BLM’s decision favoring the longer road route stems partly from support for that from the Native Village of Nuiqsut, the tribal community for the nearby Nuiqsut village, because the route avoids an important subsistence use area in the Fish Creek area. Conservation groups have also supported the tribal group in supporting Alternative B. “The Fish Creek area was set aside for protection in 1998 to protect acquatic habitat, which is considered of international significance, and that was reaffirmed by the BLM in 2013 with the adoption of an Integrated Activity Plan for the national petroleum reserve,” said Nicole Whittington-Evans, Alaska director for the Wilderness Society. “If BLM were to favor Alternative A it would constitute a violation of the agency’s own management plan,” she said. Members of the Nuiqsut tribe were not available for comment but Whittington-Evans said she has understood that many of the concerns rise from the high elevation of some of the Alpine field roads built by ConocoPhillips and the concern that the road to GMT-1 would be of similar height, constituting a barrier for wildlife movements. “The SEIS says that the road will be a minimum of five feet in height but does not state a maximum,” she said. The Native community on the North Slope is divided on the issue, however. Kuukpik Corp., the village corporation for Nuiqsut; Arctic Slope Regional Corp. and the North Slope Borough have joined ConocoPhillips in support of Alternative A. In an Oct. 30 letter to the BLM, North Slope Borough Mayor Charlotte Brower said, “We understand that BLM’s concerns (over the road routes) are based on discussions with the Native Village of Nuiqsut about not permitting the road in the Fish Creek buffer, as a way to mitigate the impacts to subsistence.” However, “Because of the reduced (gravel) footprint, we continue to support Alterative A,” she said. Overall, the borough supports GMT-1 development because its expected 30,000 barrels per day of development, “will provide significant economic benefits to Alaska Natives on the North Slope and throughout the state through direct payment of royalties and revenue-sharing among the Native regional corporations,” Brower and Rex Rock Sr., president of Arctic Slope Regional Corp., wrote in a separate letter. “New resource development in Alaska will help offset the current North Slope production decline and help meet the energy demands in the state and nation,” Brower and Rock wrote. NPR-A was originally created in 1923 as Naval Petroleum Reserve No. 4 by President Warren Harding with the intention of exploring to find oil reserves for the U.S. Navy. The Navy itself funded exploration in the 1950s and found small oil and gas deposits but none of a size sufficient to develop. In 1975 the reserve was transferred to BLM and a second round of federally-funded exploration was initiated, led by the U.S. Geological Survey. This effort also failed to find significant oil and gas. In the 1980s President Ronald Reagan opened the reserve to leasing by private industry. Over three decades, industry exploration, led by ConocoPhillips and its partner, finally found commercial deposits in the northeast part of the reserve, which has become the company’s GMT-1 project. Tim Bradner can be reached at [email protected]

Administration 'fully engaged' in advancing AK LNG Project

State officials are “fully engaged” in negotiations over commercial agreements needed in 2015 for the large North Slope natural gas pipeline and liquefied natural gas project, but declining to give specifics. “We are in commercial negotiations with all Alaska LNG parties and are making every effort to maintain timelines. However, commercial negotiations can only occur as quickly as all parties come to agreement,” Marty Rutherford, Deputy Commissioner of Natural Resources, said in a statement released to reporters. Gov. Bill Walker has designated Rutherford as the state’s lead negotiator in the gas project negotiations. “It is premature to predict when all project-enabling contracts will be ready for legislative approval,” she said in the statement. Talks now underway include the “upstream gas supply, commercial structure and fiscal terms,” the statement said. On gas supply, the issue involves an assurance that the state will be able to receive its full 25 percent share of gas production in the event of a problem in the producing fields on the North Slope or some other disruption. Because the state does not control gas production operations, unlike the producer company partners in the project, some agreement must be in place to guarantee the state a steady supply. This is needed so the state can sell its share of LNG and to guarantee customers on delivery. Similar agreements will be in place among he producer company partners but those firms have operational control of gas production plus access to other LNG on world markets to make up any supply shortfall in commitments to customers. The fiscal terms discussion relates to some form of agreement with gas producers that tax terms will not change on the project. Another important action for the state is a formal determination that royalty will be taken in kind, or as gas, rather than cash. This will be tied to modifications of the state leases, Rutherford said. “An RIK (royalty-in-kind) decision itself does not require legislative approval but it is tied together with the lease modification, which will need legislative approval,” she said. It is difficult to link the RIK action to a specific timetable because it is part of the overall negotiations. “The final RIK decision must be made before FEED (the decision to begin front-end engineering and design) and this decision is closely linked to the ongoing commercial negotiations,” Rutherford said. In a related development, Senate Resources Committee chair Sen. Cathy Giessel said Feb.2 that the Senate Republican leadership has started planning for an October special session in anticipation of needed legislative approvals of the agreements. The agreements are also needed before a Dec. 30, 2015, deadline for the state to sign a long-term gas “throughput” agreement with TransCanada Corp. to transport the state’s 25 percent share of gas through TransCanada’s portion of the gas pipeline and North Slope gas conditioning plant. Rutherford’s comments came amid expressions of concerns by legislators over whether the state is on track with the necessary negotiations. The overall project is on a tight schedule for the agreements to come into place if the FEED, a multi-billion-dollar commitment to detailed engineering, is to begin in 2016. The FEED is needed for a Final Investment Decision on the project, basically the approval for construction, which would come in late 2017 or early 2018 under the current plan. That would allow time for equipment and materials procurement and construction, and a start of operations in late 2023 or early 2024. The state would be an equity partner in the project with North Slope producers BP, ConocoPhillips, ExxonMobil and TransCanada, a pipeline company. The state-owned Alaska Gasline Development Corp. would own the state’s interest in the large LNG plant now planned to be built at Nikiski, near Kenai. Tim Bradner can be reached at [email protected]


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