Pebble CEO Collier resigns after release of tapes

Pebble Limited Partnership CEO Tom Collier resigned on Wednesday after an environmental group released secretly recorded videos of Collier and Ron Thiessen, president of Pebble parent company Northern Dynasty Minerals, discussing their connections and influence with Alaska politicians and regulators. Northern Dynasty also issued an apology to “all Alaskans," according to a statement released by the company. Northern Dynasty’s senior management and board of directors accepted Collier’s resignation, the statement said. “Collier’s comments embellished both his and the Pebble Partnership’s relationships with elected officials and federal representatives in Alaska," the statement from Northern Dynasty said. The embellishments involved Gov. Mike Dunleavy, Sens. Lisa Murkowski and Dan Sullivan and senior representatives of the U.S. Army Corps of Engineers, among others, Northern Dynasty said. “The comments were clearly offensive to these and other political, business and community leaders in the state and for this, Northern Dynasty unreservedly apologizes to all Alaskans,” the statement said. Reached Wednesday, Collier declined to comment and said he would no longer speak with news media. The Environmental Investigation Agency, an environmental group, hired individuals in August and September to pose as potential investors in the project, in online video meetings with the Pebble executives. The group released the videos on Monday. In response, Dunleavy, Murkowski and Sullivan strongly denounced the statements by Collier and Thiessen as false and embellished. The Army Corps also issued a statement on Tuesday, noting that the executives had presented inaccuracies and falsehoods, including about the permitting process. The actors for the environmental group posed as representatives of a Hong Kong-based investment firm with links to a state-owned entity in China, Northern Dynasty said. “The unethical manner in which these tapes were acquired does not excuse the comments that were made, or the crass way they were expressed,” Thiessen said in the statement. “On behalf of the company and our employees, I offer my unreserved apology to all those who were hurt or offended, and all Alaskans.” Among other statements, Collier described Murkowski and Sullivan as merely making political points when they said in August that the Corps can’t permit the mine, statements the senators denied. Collier also described his close access to the governor’s office, and said he counted Dunleavy as a friend, prompting the governor’s office to broadly reject the statements made in the videos. Former Pebble Partnership CEO John Shively will serve as Pebble’s interim CEO while the company seeks a new leader, the statement said. The proposed copper and gold project would be built about 200 miles southwest of Anchorage, near headwaters of the valuable Bristol Bay salmon fishery. Critics say it will hurt the commercial fishing industry and subsistence fishermen there. The Army Corps of Engineers is in the final stages of determining whether to issue a permit for the project that could lead to its construction. A final decision could be issued soon. President Donald Trump recently tweeted about the project, saying there would be “NO POLITICS” in the permitting decision. The Alaska Miners Association on Wednesday also condemned Collier’s comments. “Mr. Collier’s comments were clearly inappropriate and we appreciate Northern Dynasty for swiftly handling this issue," said Deantha Skibinski, the group’s executive director. "Our mining operations and projects have a superb track record of meeting the high standards set forth in the regulatory process, and we do so with a commitment to safety and environmental protection.” Shively, the state’s former Natural Resources commissioner under Democratic Gov. Tony Knowles, served as Pebble’s chief executive until 2014, when Collier took his place. Collier, a former chief of staff to Interior Secretary Bruce Babbitt, led the Pebble project through tumultuous years, including a move by the Obama administration that essentially halted the project in 2014, followed by progress under the Trump administration. Collier was scheduled to receive about $4 million from Pebble if the Corps issued a permit decision favoring the mine, and roughly another $8 million if the project survives litigation, he has said. It was unclear on Wednesday what would become of that possible bonus. “We don’t comment on personnel or contract matters related to current or former employees,” said Sean Magee, a spokesman with Northern Dynasty Minerals. Thiessen remained in job on Wednesday, the company said. Major questions loom for the project, including how Pebble will meet steep requirements set by the Corps to compensate for the environmental damage the project will cause. The United Tribes of Bristol Bay, representing 15 tribes opposed to the mine, said Collier should not be the “scapegoat” for the project, according to Alannah Hurley, the group’s director. “His resignation does nothing to address the deep-seated flaws and issues with the Pebble mine’s rigged permitting processes and political influence,” Hurley said. Thiessen, like Collier, also made statements in the videos that drew strong rebukes from Alaska leaders. Thiessen says in the videos that the company can get Dunleavy to call White House chief of staff of Mark Meadows about the project. That statement and others by the Pebble executives are not true, Dunleavy’s office said. Thiessen said Pebble is trying to work with Sullivan so the senator doesn’t say anything that could harm Pebble’s effort to receive the permit from the Corps. Sullivan’s office on Tuesday called that “yet another fabrication.” Sullivan and Murkowski have both said the mine does not meet environmental regulatory standards. They have said a record of decision supporting a permit, or a ROD, should not be issued. Robin Samuelsen, an adviser for Commercial Fishermen for Bristol Bay, representing fishermen opposed to the project, said in a statement on Wednesday he often got hit with a rod as a kid, on his behind. “And that’s what I’m asking Senator Sullivan and Senator Murkowski to do,” he said. “Take out the rod, it’s time to spank 'em. They’ve lied to you, they’ve lied to us out in Bristol Bay, they’ve lied to Alaska and they’ve lied to the world.” Shively, recently the board chair for Pebble Mines Corp., general partner for Pebble Partnership, said in the statement on Wednesday that the project is too important not to be built. “My priority is to advance our current plan through the regulatory process so we can prove to the state’s political leaders, regulatory officials and all Alaskans that we can meet the very high environmental standards expected of us,” he said.

Fed expected to keep interest rates near zero through 2023

WASHINGTON — The Federal Reserve is likely to keep interest rates pinned near zero at least through 2023, according to projections released Sept. 16 that also show Fed officials are more upbeat about the near-term prospects for the pandemic-battered U.S. economy. The central bank also began to put into effect its recently announced policy framework that will essentially maintain low interest rates longer. In its statement Sept. 16 after a two-day meeting, the Fed said it would aim to push inflation moderately above its long-held 2 percent target — once largely viewed as a ceiling — and that it won’t raise interest rates until this and other related goals are achieved. Analysts said that means it could be five years or longer before the Fed raises rates. “If you take the forecast on its face, yeah, this is years and years,” said Diane Swonk, chief economist at the accounting and consulting firm Grant Thornton in Chicago. The Fed’s brighter economic outlook reflects the stronger-than-expected recovery in the labor market and other sectors of the economy since more businesses reopened this summer, however halting and uneven that has been. More recently, however, data on job postings, small-business revenues and consumer spending suggest that the economy has been moving sideways, if not backsliding a bit, according to Opportunity Insights, a nonpartisan group based at Harvard that is tracking the economic effects of the pandemic. In June, Fed officials foresaw the unemployment rate at 9.3 percent in the fourth quarter, but government officials reported the jobless figure dropped to 8.4 percent in August from a high of 14.7 percent in April. The new projections show that officials, on average, are now looking for unemployment to end the year at 7.6 percent and to decline to 4.6 percent by end of 2022, compared with 5.5 percent in Fed policymakers’ forecast three months ago. Before the pandemic hit, the jobless rate had fallen to 3.5 percent, a 50-year low that opened more doors especially for less-educated and other disadvantaged workers. And Fed Chairman Jerome H. Powell, in a news conference Sept. 16, said he would “love to get back to that,” noting that with unemployment at that level, gains “being shared vary widely across the income spectrum. In fact more to people at the bottom end of the spectrum.” But most Fed officials don’t see unemployment returning to pre-pandemic levels until after 2023; and that’s another reason rates are likely to stay at rock bottom for years to come, said Chris Rupkey, chief financial economist at MUFG Bank in New York. “This argues for interest rates staying lower for longer to make sure the economic expansion is durable and lasting and that all those who lost their jobs this year are able to rejoin the workforce,” he said. The government’s August jobs report said that the economy has recovered about half of the 22 million payroll jobs lost in March and April, but separate data also show that some 30 million people claimed unemployment benefits in August. Fed policymakers also painted a more sanguine picture of economic growth. Three months ago, Fed officials on average saw gross domestic product, the sum of goods and services produced in the nation, falling 6.5 percent this year and then growing 5 percent in 2021. They now see GDP contracting 3.7 percent this year and expanding 4 percent in 2021. Still, Powell acknowledged that the outlook remains highly uncertain and hinges on the path of the pandemic. What’s more, he said that Fed officials made their projections based on the assumption that there will be additional fiscal support, which is not at all clear will be forthcoming. “The fiscal policy actions that have been taken thus far have made a critical difference to families, businesses and communities across the country,” he said. “Even so, the current economic downturn is the most severe in our lifetimes. It will take awhile to get back to the levels of economic activity and employment that prevailed at the beginning of this year, and it may take continued support from both monetary and fiscal policy to achieve that.” The Fed has moved aggressively to support the recovery, and its new policy approach — although in the works well before the coronavirus outbreak — could have significant long-term effects, including risks of increasing speculation and asset bubbles. The shift in strategy, which Powell announced Aug. 27, means the Fed will focus more on expanding employment and worry less about meeting its 2 percent inflation target. Inflation has been running well below that target for years, and under the new approach, the Fed would shoot for an average 2 percent inflation rate, giving it more flexibility to allow inflation to rise above that level for some time before moving to raise interest rates to avert a potential overheating in the economy. In its Sept. 16 statement, the Fed said it “will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer-term inflation expectations remain well anchored at 2 percent.” And until those goals are achieved, it said, the Fed would maintain its current easy-money policies. Powell declined to say more specifically what “moderately above” means. Nor would he get pinned down on the time frame for letting inflation rise above 2 percent, saying only that it’s “not permanently and not for a sustained period.” “We are resisting the urge to try to create some sort of a rule or a formula here,” he said. The policy statement was supported by Powell and seven of his colleagues. Two voting members dissented. In their Sept. 16 projections, the vast majority of Fed policymakers see rates staying near zero through 2023, which is as far as the forecast goes. In the longer run, Fed officials expect its benchmark interest rate to rise to 2 percent to 3 percent, well below historical levels.

Cruise industry offers ideas to allow resumed sailings

Cruise companies are stepping up their pressure on U.S. health authorities to allow them to cruise again amid the COVID-19 pandemic. On Sept. 21, Royal Caribbean Group and Norwegian Cruise Line Holdings submitted health and safety protocols to the U.S. Centers for Disease Control and Prevention as part of the agency’s request for public comments about how to safely resume cruises. The protocols include testing all passengers and crew for COVID-19 before boarding, requiring masks and expanding medical capabilities on cruise ships. The cruise industry’s lobbying group, Cruise Lines International Association, sent a separate, less-specific list of recommendations to the CDC on Sept. 21, vowing that all cruise companies will require testing before boarding, masks and social distancing; improve ventilation and medical capabilities; and limit shore excursions. Sept. 21 was the final day to submit public comments to the CDC about cruising during the COVID-19 pandemic. The CDC has banned cruises in the U.S. until Oct. 1, and most cruise lines have said they will not resume cruises until at least Oct. 31. “We’ve learned a lot in six months,” said Royal Caribbean Group Chairman Richard Fain. “Our job was to find a way going forward to learn from the past, and not to repeat it.” Norwegian Cruise Line Holdings CEO Frank Del Rio said it was “absolutely” safe to resume cruises again, citing the announced protocols. “There is not one silver bullet,” he said. “It’s layer on top of layer on top of layer … We’re going to test it, make adjustments along the way.” A spokesperson for the CDC said the agency has not requested plans to resume passenger cruises from the companies. “Currently, CDC does not have enough information to say when it will be safe for cruise ships to resume passenger operations,” the spokesperson said in an email. “CDC will continue to work with cruise lines to ensure that all necessary public health procedures are in place before cruise lines begin sailing with passengers.” Carnival Corporation CEO Arnold Donald said it typically takes 30 days to get a laid-up ship running again. The 74 recommended protocols submitted to the CDC on Sept. 21 by Royal Caribbean Group and Norwegian Cruise Line Holdings were hashed out by a panel of experts, including several that used to work for the CDC. The panel said it is impossible to eliminate the risk of COVID-19 spread at sea, but with their recommendations, that risk can be minimized. The panel did not determine an infection threshold on land that would make it safe to resume cruises but instead focused on what companies can do to bolster health and safety on ships. “Getting down to zero risk is not likely,” said former Utah Gov. Mike Leavitt, who chaired the Royal Caribbean Group and Norwegian Cruise Line Holdings panel. “Therefore we have to have the component of mitigating spread and ability to respond.” Some of the recommendations include: • All passengers should be tested for COVID-19 between five days and 24 hours prior to boarding • Crew should be tested in their home countries before leaving to join a ship and then again at the end of a seven-day on board quarantine period, ideally using PCR tests. • Both passengers and crew should have their temperatures taken daily. • Cruise companies should visit only ports that agree to evacuate and repatriate sick people on board. • All ship heating and air-conditioning systems should be upgraded to MERV 13 filters, similar to those used by hospitals. • Ships should lower doctor-to-passenger ratios on board. • Crew should live in single cabins whenever possible and be allowed limited shore leave. • Passengers who don’t attest that they agree to protocols not be allowed to cruise. A protocol that was floated in March as cruise companies scrambled to try to avert a shutdown was barring passengers over 70 years old, who are particularly vulnerable to the effects of COVID-19. That was scrapped by the panel. Passengers who are at higher risk will instead be advised to consult with their doctors before cruising. Carnival Corporation, the largest cruise company in the world, endorsed the CLIA proposals, which include testing; that’s already being conducted on its Costa Cruises ships in Italy. “This has been probably the most difficult period in our industry’s 50 year history,” said CEO Donald. “We are on a path with the industry to resume cruise operations in the U.S. using the knowledge from our advisors and in full cooperation with the authorities.” Preventing COVID-19 spread on cruise ships is exceptionally difficult, health experts say. At least 110 passengers and crewmembers have died from COVID-19, at least 38 in Florida, according to a Miami Herald investigation, and at least 86 ships have been affected — approximately one-third of the global cruise fleet. Cruise companies have struggled to contain COVID-19 outbreaks among crew members on their ships during the industry’s pause. On several occasions, even after months of isolation at sea, crew members tested positive upon returning to their home countries. CDC data obtained by the Miami Herald via a Freedom of Information Act request shows at least seven ships in U.S. waters during the month of August reported COVID-19 or COVID-like illnesses to the CDC that month. Carnival Corporation and Virgin Voyages pulled their ships out of U.S. waters in June and are no longer reporting illnesses to the agency. Norwegian Cruise Line Holdings is reporting from just three of its ships.

DEC: Shortfall in spill response fund requires revenue or appropriation

State environmental regulators are seeking more money for Alaska’s spill response fund amid a comprehensive review of the requirements for petroleum producers and shippers. Department of Environmental Conservation Commissioner Jason Brune said during a Sept. 18 meeting of the Prince William Sound Citizens’ Regional Advisory Committee that he is advocating for the Dunleavy administration and Legislature to commit more funding to the state’s shrinking Spill Prevention and Response fund. The conclusion that the SPAR fund needs additional help — most likely through a general fund appropriation — comes as the state is facing a fiscal year 2022 budget deficit of roughly $2 billion. It also goes against the grain for an administration that has pushed for often deep spending cuts across state government to erase the state’s ongoing deficits and finance paying larger Permanent Fund dividends without additional taxes. Brune acknowledged the challenges inherent in asking for more money given the state’s fiscal situation but said the need for a robust SPAR fund necessitates it. He said seven positions were cut last year from the SPAR team of more than 100. “It remains a priority of mine to bring sufficient funding to SPAR,” he said to the council board. “It’s going to be a heavy lift, but it’s one I’m going to attempt to make.” Department officials declined to specify the size of the SPAR request to the Office of Management and Budget but spokeswoman Laura Achee wrote via email that they “recognize that there are funding sustainability issues for SPAR and are committed to working with the Legislature to address them.” DEC officials have also supported increasing the surcharge on refined fuel products sold in the state from 0.95 cents per gallon to 1.5 cents to help cover an anticipated revenue shortfall in the fund. The refined fuel surcharge — dedicated to the prevention account in the fund — was implemented in 2015 to further support the SPAR fund, which had largely relied on a 5-cent per barrel charge on oil produced in the state for revenue. Money from fines and settlements related to hazardous substance spills is also deposited into the prevention account. When the roughly 1-cent per gallon surcharge was put on refined products it was expected to bring in approximately $7.5 million per year, but actual revenue has been about $1 million short of that. The account held $8.5 million at the end of 2019, according to DEC’s annual SPAR report. Overall, more than $25 million was spent from the SPAR fund in fiscal 2019, including a $9.4 million capital appropriation to pay for PFAS cleanup at state-owned airports, while just $16.3 million was collected; the vast majority of which came from the surcharges. The Legislature also spent $5 million from the response account in 2018 to export contaminated oil from a Wrangell junkyard. Brune said he believes the pandemic will exacerbate the funding issue. “With COVID, people are just driving less; they’re working from home and not traveling,” meaning less fuel subject to the surcharge will be sold, he said. He also questioned whether it is appropriate for cleanup of contaminated sites to be paid for with revenue from fuel and oil surcharges given those products may not be the source of the contamination. The long-term solution for the fund is more North Slope oil production to apply the 5-cent surcharge to, Brune said. Spill regs review continues DEC officials are continuing their review of the state’s detailed Oil Discharge Prevention and Contingency Plan, or C-Plan, regulations for possible changes with twice-weekly meetings in which the statutes, regulations and proposed changes are vetted “line by line,” Brune said as well. “We want to make sure that we can justify what we have currently in the regulations,” he said. The department opened a scoping period to solicit comments on the highly technical operational and equipment requirements for companies producing and shipping oil and fuels last December. Numerous groups, including the congressionally mandated citizens’ advisory councils for Cook Inlet and Prince William Sound, expressed concern that changes could be made to weaken protections against a spill or the ability to respond to one by the decidedly pro-development Dunleavy administration. Gov. Mike Dunleavy made reducing the regulatory burden on industry a large part of his campaign in 2018 and his administration has initiated that work across state government. Comments from individuals were solidly against the prospect of changing the oil spill regulations, while associations — including the councils — and companies in the oil and shipping sectors largely suggested detailed technical regulatory amendments. The councils were established by Congress following the 1989 Exxon Valdez oil spill. Prince William Sound council spokeswoman Brooke Taylor wrote in response to questions about the spill regulation scoping that the council is encouraged by Brune’s commitment to hold an extended comment period on any changes that are proposed but is still concerned about the broader process that is in the works. Council leaders contend because DEC has chosen to make the entire 60-page regulatory package subject to review instead of proposing specific changes, the burden of the review has been shifted to the public, which must defend what is on the books rather than the department defending its changes. Brune has said he did not want to potentially taint the public’s review by having the department make its proposal public too early in the process. “Nothing in the regulations we will propose will increase the risk of an oil spill in Prince William Sound or anywhere else in Alaska,” he said to the council. DEC’s Achee wrote that there is no hard timeline for when the review will be complete as it is a “process-driven situation.” “If there are proposed changes, we will ensure that the public has plenty of time to review them and comment,” she wrote. Cook Inlet Citizens’ Regional Advisory Council members were told by DEC officials that the timeline for the review has been pushed back to at least the end of the year, according to the council. Elwood Brehmer can be reached at [email protected] (Editor's note: The original version of this story incorrectly reported that the Spill Prevention and Response team has about 30 individuals. It has more than 100.)

Movers and Shakers for Sept. 27

Northrim Bank announced the promotion of Brian Leonard to Branch Manager II at the Midtown Financial Center; the move of Christina Clayton to Assistant Branch Manager at the Wasilla Financial Center; and the hiring of Johnico Bashford-Blumer as Assistant Branch Manager at the Southside Financial Center. Leonard has been with Northrim Bank since 2011, starting his banking career at the Wasilla Financial Center. He holds a State of Alaska Insurance Producer-Life License. Leonard was awarded the Northrim Bank Customer First Service Award in 2013. Clayton has been with Northrim Bank since 2016. Before joining Northrim Bank, she had more than 30 years of experience in retail sales management. Clayton holds an occupational associate’s degree in retail management. Bashford-Blumer joins Northrim with 11 years of management experience and five years in the insurance industry. He holds an MBA from Colorado Technical University.

OPINION: A dish served cold

“When you see Sotomayor and Kagan, tell them that Lindsey said hello.” That was South Carolina Sen. Lindsey Graham to then-Supreme Court nominee Brett Kavanaugh back in 2018 as he wrapped up an epic rant as chair of the Judiciary Committee excoriating Democrats for their disgusting smear campaign intended to derail Kavanaugh’s ascent from the D.C. Circuit Court of Appeals. The unforgivable attacks on Kavanaugh were the culmination of more than 30 years of Democrats shredding the judicial appointment process beginning with the assault on Robert Bork in 1987 so notorious that “Borking” became a verb when it was turned against Clarence Thomas just four years later. Thomas, vilified by the left to this day in the worst racial terms, called it a “high tech lynching” to the chairman of the Senate Judiciary Committee back then who just happened to be current Democrat presidential nominee Joe Biden. Once they found themselves in the Senate minority under President George W. Bush in 2001, Democrats broke new ground on upending Senate traditions by filibustering D.C. Circuit Court of Appeals nominee Miguel Estrada. No appellate court nominee had ever been successfully filibustered before and Estrada eventually withdrew his name after years of failed cloture votes that drew as many as 55 votes, five shy of the 60 needed. Leaked memos revealed that one of the reasons certain Democrat groups opposed Estrada was to prevent a conservative from being the first Hispanic to make the Supreme Court. Minority Democrats would go on to filibuster nine more Bush nominees, leading to the first talk of employing the “nuclear option” to eliminate the tactic in favor of a simple majority vote. That was averted with the “Gang of 14” deal, but because the Democrats had successfully blocked so many Bush nominees to the D.C. court, President Barack Obama took the step in 2013 of nominating three judges at once to what by all measures was the least-worked panel in the country and while other courts had what were classified as “emergency” vacancies to which he hadn’t nominated anyone. The Republicans’ attempts to block Obama’s power move using the same tactics pioneered by the Democrats led then-Senate President Harry Reid to nuke the filibuster for all judicial nominees below the Supreme Court level in a vote that then-Minority Leader Mitch McConnell predicted the Democrats would regret “a lot sooner than you think.” There can be no question that Democrats regret it now, whether they will admit it or not. Republicans took over the Senate in 2014 and were therefore able to thwart Obama’s pick to flip the court with Merrick Garland to replace the late Antonin Scalia in 2016. McConnell kept his promise to make the Democrats rue their 2013 actions after Donald Trump won the presidential election by eliminating the filibuster to confirm Neil Gorsuch to the Supreme Court. Democrats protested, but replacing Scalia with Gorsuch did not change the ideological makeup of the Supreme Court. That was not the case with Kavanaugh when he was tapped to replace the long-tenured “swing vote” Anthony Kennedy and what followed was the most shameless attempt at character assassination in the history of judicial nominees even when compared against what was done to Thomas. It worked on Sen. Lisa Murkowski, who cited Kavanaugh’s temperament in voting “present” after his righteous display of anger at being labeled a gang rapist by Murkowski’s Democrat colleagues. Murkowski has unsurprisingly come out against the idea of replacing Ruth Bader Ginsburg before the November election, but that doesn’t mean she has committed to actually voting against the eventual nominee. Although she may appear bulletproof after winning as a write-in candidate in 2010 and cruising in 2016, even the proudly independent Murkowski may have to consider the fallout from siding against two consecutive conservative nominees to the Supreme Court. The Democrats retook the House in 2018, but saw their numbers in the Senate shrink after the self-destructive Kavanaugh display as they marched red state Democrats off the cliff in North Dakota, Indiana, Missouri and Florida. They made the Supreme Court a focus of the midterm campaign, and American voters responded by preventing them from taking over the Senate and denying them the power to stop Trump from replacing RBG in 2020. The Democrats’ willingness to spare no tactic in their quest for power has stiffened the spines of even once squishy Republicans like Graham and now Sen. Mitt Romney to respond in kind and yet within the confines of the powers defined in the Constitution. Contrast that with the summer we’ve just seen of Democrat voters — egged on, excused and enabled by their elected leaders — destroying American cities and causing losses totaling billions of dollars in human and economic costs. “Boy, y’all want power,” Graham told Democrats in 2018. “God, I hope you never get it.” From Bork to Kavanaugh and from Portland to New York, and from threats to add Supreme Court justices, add states and kill the legislative filibuster, the Democrats have shown and told us everything we need to know about how they wield power, and why we should hope they have no more. So to Trump’s eventual nominee: Say hello to Kavanaugh for me. Andrew Jensen can be reached at [email protected]

FISH FACTOR: Tariff relief payment applications now open through Dec. 14

Alaska fishermen can increase their federal trade relief funds by adding higher poundage prices for 15 fish and shellfish species. While it’s welcomed, the payouts are a band-aid on a bigger and ongoing problem. Through Dec. 14, fishermen can apply to the U.S. Department of Agriculture Seafood Trade Relief Program (STRP) if their bottom line has been hurt by the Trump Administration’s ongoing trade standoffs, primarily with China. “STRP is part of a federal relief strategy to support fishermen and other producers while the administration continues to work on free, fair and reciprocal trade deals to open more markets to help American producers compete globally,” said a USDA fact sheet. The damages to fishermen are calculated as the difference with a trade tariff and the baseline without it based on 2019 catches. For cod, for example, that adds up to an extra 14 cents per pound. So, a fisherman who had cod landings last year of 375,000 pounds would multiply that by 0.14 for a trade relief payment of $52,500. Salmon fishermen can add 16 cents per pound across the board. For Alaska crabbers, 47 cents per pound can be added to 2019 catches for Dungeness, king crab, snow crab and Tanners. Geoduck divers can add 76 cents to their total poundage. It’s 10 cents for sablefish, Atka mackerel and Pacific Ocean perch, 15 cents for flounders, sole and turbot, 4 cents for herring, and an extra one penny per pound for Alaska pollock. Eligible fisherman can fill out a “2020 Seafood Trade Relief Program (STRP) Application,” found at www.farmers.gov and at USDA Farm Service Agencies. In Alaska there are three locations at Homer, Kenai and the statewide office in Palmer. Fishermen who have applied reported it was a fairly easy process and took about an hour to complete, according to a statement by the Bristol Bay Regional Seafood Development Association. While the money is a welcomed inclusion for U.S. fishermen, the relief payments do little to advance the administration’s “free, fair and reciprocal trade deals.” Since 2018, for example, the U.S. has paid a 38 percent tax on average for seafood products going to China, previously Alaska’s biggest buyer. According to the Alaska Seafood Marketing Institute, Alaska seafood products were gaining market share prior to the tariffs, with exports to China reaching their highest level in 2017 at $988 million. From 2017 to 2018 the value of Alaska seafood exports to China dropped by $204 million, the largest year-on-year drop on record. By 2019, Alaska seafood exports to China were at their lowest level since 2010, while China saw a 91 percent increase in global seafood imports during the same time period. Meanwhile, the U.S. continues to purchase increasing amounts of seafood from Russia while that country has not reciprocated since 2014 as retaliation against the U.S. and other countries for objecting to its invasion of Ukraine. Federal trade data show that through July of this year, the U.S. has purchased more than 46.3 million pounds of seafood from Russia valued at nearly $440 million, almost duty free. That’s an increase of 42.6 million pounds valued at nearly $382 million during the same time in 2019. Most of the Russian products are red king crab, snow crab, cod and sockeye salmon which are lower priced and compete directly with Alaska seafood on supermarket shelves. Another unfair deal that needs fixing is the Russian-caught/Chinese processed partnership that is growing fast. Last year, it totaled 2 million pounds in the U.S. at a cost of nearly $7 million, said economist Garrett Evridge at the McDowell Group. Most of the halibut comes in through Vancouver, British Columbia to sidestep the tariff between the U.S. and China. “It’s an amount of volume that is trending higher, and for a relatively low volume fishery and markets like the halibut market in the US, 2 million pounds is pretty material,” Evridge said. “So that’s another thing that we struggle with as we look at Alaska produced Pacific halibut. It’s just another factor that is making that competition pretty difficult.” Fish board backup The COVID-19 virus has forced the delay of fisheries meetings planned for this winter in Cordova and Ketchikan until sometime next spring. Six of the seven Board of Fisheries members voted for the delay during a special teleconference on Sept. 16 and agreed to set a schedule at a mid-October work session. New appointee McKenzie Mitchell of Fairbanks was missing from the teleconference. The BOF regulates the management of Alaska’s subsistence, commercial, sport and personal use fisheries in waters out to three miles and focuses on specific regions in three-year cycles. The heavily attended meetings, which can last a few days or weeks, were scheduled in December for Prince William Sound fisheries and January at Ketchikan for the Southeast region. Meetings on hatcheries and statewide shellfish also were scheduled in February and March. A BOF survey this summer drew 234 responses and showed that only about 20 percent favored in-person meetings; many opted for a delay, and a majority suggested trying to do at least some of the meetings virtually. At the Oct. 15-16 online work session the board will discuss holding the PWS and Southeast meetings in March, April or May of 2021, depending on the status of the pandemic, and whether or not to consider some management proposals out of cycle. Also on the agenda is the status of board nominees who have not been confirmed. Chew on this! Jerky made from Alaska pollock attracted the attention of big backers beginning at a buffet table at Fish 2.0, an annual global gathering of innovators and investors hosted by Stanford University to grow the sustainable seafood sector. “It was literally the first major set of about 200 samples that we’d ever made of the product. And the samples disappeared in a matter of minutes. It was a pretty amazing moment,” said Nick Mendoza, co-founder and CEO of Neptune, a former marine scientist turned jerky maker near Seattle. “There were oysters on the half shell and platters of cheese and all this delicious food and the jerky was gone before anything else was really touched. That was kind of the beginning of everything and put some wind in our sails to keep going forward.” The small company started out in 2018 with west coast rockfish and has since spawned a partnership with American Seafoods Company and industry trade powerhouse, Genuine Alaska Pollock Producers, or GAPP. “What really sold us on the story of wild Alaska Pollock is what an amazing, regenerative and abundant food source it is that operates sustainably at a large scale,” Mendoza said. “American Seafoods and GAPP teams brought the data to the table in approaching us about it and I was definitely on board, both because it’s a delicious, high quality product and it’s also a great story that I think resonates with people.” “The most important element in any product launch is to meet consumers where they are,” said Craig Morris, CEO for GAPP. “Neptune’s wild Alaska pollock jerky does just that in two ways: first, by tapping into the incredibly popular high-protein snacking category and second, by delivering the delicious product using e-commerce, thereby quite literally meeting buyers where they are: online.” Mendoza added that Neptune wants to become the “flagship brand for sustainable seafood snacks.” “I think it’s inspiring, both as a founder in this space, but also as someone who cares about the future of seafood in our oceans,” he said. “Not only is seafood consumption in general on the rise, but this awareness is a sort of renaissance in making sure that it is coming from a good source, and understanding what your purchases are actually supporting when you’re buying fish.” The Neptune jerky comes in four flavors and has great reviews on Amazon. Most say it’s not fishy and the texture is similar to beef products. It’s also available online and at 70 retail outlets. Use the code NEPTUNEJERKY20 for a 20 percent discount. Fish Debate is on! The Kodiak Chamber of Commerce is pleased to announce the confirmation of the Alaska US Senator candidate debate between Senator Dan Sullivan and Dr. Al Gross, it said in a Friday release. The fisheries themed debate will occur on Oct. 10 at 5:00 p.m. In an atypical manner, the debate will take place over Zoom and be live streamed to www.KodiakChamber.com, www.ComFishAK.com, and both the Kodiak Chamber and ComFish Alaska Facebook and YouTube channels, as well as statewide public radio stations. The moderator will be Rhonda McBride. Send topics or questions to [email protected] ^ Laine Welch lives in Kodiak. Visit www.alaskafishradio.com or contact [email protected] for information.

Public seeks link between oil taxes and state services

The debate is over changing oil taxes, but much of the public seemingly wants to know how it will affect many of the services provided by state government . Lt. Gov. Kevin Meyer moderated two-hour teleconferenced public hearings Sept. 21 and 22 examining Ballot Measure 1, the initiative to substantially raise taxes on the largest North Slope fields, in which leaders of sponsor group Vote Yes for Alaska’s Fair Share and the business-centric opposition group OneAlaska Vote No on 1 fielded questions from the public about the potential pros and cons of the tax change. Callers from Southeast Alaska largely indicated in the first hearing they will be voting for the initiative and asked about how it could help restore budget cuts to things like the state ferry system, the University of Alaska and the Permanent Fund dividend. The hearings, required for any proposed law change, were intended to spur an “education and informative discussion” Meyer said, and the open question-and-answer forum quickly turned into a lively, if somewhat repetitive, debate. Chair of the Fair Share campaign and longtime Alaska oil and gas attorney Robin Brena stressed that a collapse in oil production tax revenue is the root of the state’s ever-worsening fiscal problems. The ballot measure sponsors estimate the tax change, which would raise both the gross floor and net profits tax rates on the large, mature North Slope fields of Prudhoe Bay, Alpine and Kuparuk, would generate about $1.1 billion per year in additional revenue over the long-term. The Fair Share campaign insists the current tax system, commonly referred to by its legislative name Senate Bill 21, cost the state more than $3 billion per year since it became law in 2014 and as a result Alaska receives about half of the overall oil revenue that other states collect. The drop in oil tax revenue has pushed lawmakers to start applying more than half of the money traditionally used for Permanent Fund dividends to pay for other services, which are still being cut as the state’s deficit continues to grow, according to Brena. He argued legislators heavily influenced by the oil industry have repeatedly blocked attempts to change the law in the Legislature. “There’s nothing you can do that’s better for Alaska than vote for Ballot Measure 1,” Brena said Sept. 21. “Our (oil) taxes are less than 10 percent of what they were before Senate Bill 21.” While the drop in the state’s oil production tax revenue is undeniable — overall petroleum revenue went from $4.7 billion in fiscal year 2014 to $1.3 billion in 2016 — opponents note the steep drop in oil revenue directly coincides with a major fall in oil prices. Oil went from averaging nearly $100 per barrel for several years to bottoming out at less than $30 per barrel in early 2016 as markets adjusted to the influx of Lower 48 shale production, ConocoPhillips Alaska Vice President Scott Jepsen said. Jepsen and former state Division of Oil and Gas director Chantal Walsh emphasized that at current oil prices in the $40 per barrel range the initiative would raise just $250 million, which doesn’t come close to closing the projected $2 billion budget deficit but will deter companies from investing in more oil production in years to come. “If we keep production up, we keep royalties up; that’s also tied to your PFD,” Walsh said, noting that oil royalty deposits largely form the principal of the Permanent Fund. Brena said the issue ultimately boils down to whether or not the state will call the industries’ bluff: the potential to curtail investment on the North Slope, which would increase the rate of production decline and hurt the state’s finances even worse over the long-term. Fair Share advocates believe Alaska will remain a viable oil basin with the additional taxes and if the initiative is not a viable solution, Brena suggested its opponents haven’t offered a better one. “Their solution is that we should tax ourselves to pay for the subsidies we’re paying Texas oil companies,” he said. Petroleum geologist and former Department of Natural Resources commissioner Mark Myers said the state’s poor fiscal outlook does far more to damage the economy than raising oil taxes would and the primary factors that determine companies’ decisions are “good rocks, technology and oil price.” Jepsen argued Ballot Measure 1 would “take the profitability out of doing business in Alaska.” “If this ballot measure passes, I can tell you we will not follow through with the plans we had a year ago,” he said. Other ConocoPhillips Alaska representatives have said the company will not finalize its winter drilling plans until after the Nov. 3 election. The company is scheduled to complete its final winter of work developing its mid-sized Greater Mooses Tooth-2 oil project and has applied for permits to develop its large Willow prospect, which the company estimates could produce up to 160,000 barrels per day and cost $6 billion to fully develop. Additional public hearings were scheduled for Sept. 23-24. Elwood Brehmer can be reached at [email protected]

GUEST COMMENTARY: Alaskans should be honest with each other

As Alaskans, let’s be honest with each other this election cycle. Under current law, we face a state budget deficit of about $2.3 billion this next fiscal year — the one legislators we elect this November will face when they head to Juneau next January. That’s roughly half of projected spending. Let that sink in. Under current law, next year we are projected to receive only half the revenue we need to cover projected spending. That’s not a temporary situation. According to the Department of Revenue’s Spring 2020 Forecast, it doesn’t get any better the remainder of the decade. And we are facing it without savings. After continuously siphoning from various savings accounts to maintain spending this past decade, the remaining available to the 2021 legislature won’t cover even one-quarter of next year’s deficit. Some suggest we can balance the budget entirely with spending cuts. But again, let’s be honest with each other. Due to the intervening drop in oil prices, even immediately enacting the $600 million in spending cuts Gov. Mike Dunleavy proposed at the beginning of his term in 2019 would cover less than a third of next year’s deficit. Diverting $400 million in local property taxes to the state — another proposal made by the governor in 2019 — would increase that to about 40 percent. Even after enacting both, the state would still face an annual deficit of around $1.3 billion. The legislature wouldn’t pass the governor’s combined $1 billion proposal in 2019. While additional cuts, changes in formula-driven programs and a tightened spending cap are inevitable, it is not being honest with each other to claim that the next legislature will adopt a cuts-led approach nearly two-and-a-half times that amount. Others suggest we balance the budget largely through PFD cuts. Using that approach, however, would effectively eliminate the PFD, at great cost to both most Alaska families and the Alaska economy. Next year’s PFD is projected at $1.9 billion. The deficit is $2.3 billion. Even entirely eliminating the PFD would not cover the deficit. More importantly, relying largely on PFD cuts would cause substantial harm to the 80 percent of Alaska families falling in the state’s middle &lower income income brackets, who would bear a hugely disproportionate share of the burden as a percent of family income. Those in the top 20 percent income bracket would experience a trivial impact and non-residents, nothing. In 2016, the University of Alaska-Anchorage’s Institute of Social &Economic Research warned relying on such a massively imbalanced approach among Alaska families would have the “largest adverse impact on the economy” of the revenue options it considered. In 2017, another ISER report concluded “a cut in PFDs would be by far the costliest measure for Alaska families.” While the top 20 percent push PFD cuts relentlessly and some PFD restructuring is inevitable, especially in these times Alaskans should avoid the very alternative that hurts Alaska families and the Alaska economy most. So, being honest with each other, the reality is the time has come to adopt some additional revenue approaches that are more equitable and have a lower impact on the overall economy — in short, are more balanced — to help close the gap. One such approach is Ballot Measure 1, the oil tax initiative. At current and projected oil prices, however, that only raises about $250 million annually. While that’s a contribution, it only covers a tenth of the deficit. Additional, more personal, broader based revenue measures will be required. Being honest with each other, it will take a significant contribution from all three pieces: spending cuts (along with a tightened spending cap), PFD restructuring and additional sources of revenue to meet the state’s yawning fiscal challenge. In the Office of Management and Budget’s 2019 10-Year Plan, the Dunleavy Administration appropriately referred to that as the “balanced approach.” Listen closely. Those candidates that are being honest with Alaskans this coming cycle will talk about that approach most. Brad Keithley is Managing Director of Alaskans for Sustainable Budgets, a project focused on increasing awareness of key fiscal challenges facing Alaskans at both the state and federal levels, and developing and offering reasoned approaches in response. For more information, go to AKforSB.com.

GUEST COMMENTARY: Ballot Measure 1 proponents are making wild claims. The numbers prove them wrong.

When I served in Alaska’s Legislature, I relied on data and analysis to inform decisions. As most Alaskans know, the numbers have been tough in our state for a few years, and the resulting budget decisions painful as a result. The thing to remember about numbers is even when we don’t want to make hard choices, they persist in guiding us. If we strip away the emotion and anxiety of the moment and focus instead on what the numbers show, Alaskans should vote to reject Ballot Measure 1. Not only do the numbers demonstrate why voting no is in Alaskans’ best financial interest, but they prove how the ballot measure’s supporters are distorting the facts. Let’s examine a few examples, and clarify something. I no longer serve in the Legislature, but work full-time in the non-profit sector. I do not have a dog in this fight other than loving this state and wanting it to succeed. I am speaking up for that reason and that reason alone. No one is paying me to advocate one way or the other. For starters, it is downright false to say that Alaska has received no oil production tax revenue during the last few years. These numbers are plain to see and published by the state’s Department of Revenue. North Slope oil companies have paid state taxes every year since oil was first produced in this state decades ago. For the time period in question, Alaska received over $8.7 billion in taxes, and $13.8 billion in total revenue from oil companies since 2014. Those payments account for approximately 90 percent of Alaska’s tax revenue from business during the time period. Ballot Measure 1’s proponents also claim that during the past five years, tax credits have exceeded revenues. This is an especially gross mischaracterization. To reach this inaccurate number, they are simply subtracting the roughly $2 billion in cash credits paid or owed to companies that wouldn’t even be impacted by this tax. It’s bizarre that Ballot Measure 1’s supporters would mix up these numbers, but perhaps they are doing it intentionally. Either way, it’s inaccurate. Ballot Measure 1’s supporters falsely claim the current oil tax structure, Senate Bill 21, has failed. Again, this is proved untrue using real, publicly available numbers. Our current oil tax structure has resulted in more oil production and more revenue for the state than was projected under the old tax structure, even with the massive drop in oil price that began in 2015. In 2013, the state’s Department of Revenue projected that 2019 North Slope oil production would clock in at 425,000 barrels per day, even with oil prices over $100 per barrel. Instead, we saw production levels reach nearly 500,000 barrels per day in 2019. Doing some quick calculations, the state is more than $1.5 billion dollars to the good in total revenue versus riding the 6 percent oil production decline rate down with the old tax structure. Perhaps the most concerning and misleading argument being made by Ballot Measure 1 supporters is the notion that voting yes is some kind of silver bullet that will solve the state’s fiscal crisis. In short, it won’t come anywhere close to filling the gap, and will make the state’s finances even worse. The COVID-19 pandemic and painfully low oil prices caused North Slope producers to shut down almost all drilling on the North Slope, and significantly cut back on planned investments. That alone should put a chill down the spines of Alaskans, but the question now becomes: when does drilling and investment come back? Does it? Oil price and the ballot initiative will both drive those decisions. Even if oil prices recover, passage of Ballot Measure 1 will slow down Alaska’s North Slope recovery, and with it, the recovery of the state economy. I know we remain in a tough spot here in Alaska. We dealt with many of these same issues when I served, and the challenges just keep coming. Alaskans remain anxious about the future, for good reason. In times like this though, we must, as always, rely on the numbers to guide us, even when our hearts may nudge us in a different direction. A brave, unflinching examination of the facts proves Ballot Measure 1 is a bad idea that should be rejected by voters. Our collective recovery depends on it. Jason Grenn is a former state representative from Anchorage.

Boards of Fisheries, Game contemplate challenges of meeting season

In a fall littered with elections and other political fencing matches, two other political bodies are debating whether to meet at all or just punt until next year: the boards of Fisheries and Game. The boards, particularly the Board of Fisheries, host regulatory meetings every winter that bring stakeholders from all over the state together. Those are problem during the coronavirus pandemic, and the boards aren’t quite sure what to do about it. The Board of Fisheries, for one, is hoping that the situation will be better by the middle of next spring, when it’s still tentatively scheduling its meetings for the Prince William Sound, Southeast/Yakutat, and statewide shellfish meetings. While other governmental bodies have transitioned to meeting on Zoom and taking public comment via phone, the Board of Fisheries process doesn’t fit well into that model. For one, the stakeholders are spread all over the state, where internet connectivity isn’t always reliable or fast enough to cope with video meetings. For another, the board depends on public participation. Throughout the meeting, the board members gather comments from the public in attendance. During breaks, the public also regularly works directly with board members off the record on revisions to proposals or new language. These meetings all happen during the winter, indoors, and depending on the meeting, more than a hundred people may be gathered in a relatively small space for hours. Board of Fisheries Executive Director Glenn Haight told the board during a work session on Sept. 16 that when the staff surveyed the public about what to do, the results were mixed, but most people who attended meetings in the past were not in favor of virtual meetings. The board talked about potentially limiting attendance at an in-person meeting instead, but then staff would be faced with how to decide who got to come. On top of all that, many people who responded said they were fairly concerned about catching the COVID-19 virus as well, Haight said. “These are the middle of the winter, people in close proximity, frequent contacts with all of these participants day in, day out,” he said. “You as board members are speaking with almost everyone in the room … it’s this very organic and human interaction. It’s inconceivable, for those of us who have been to a board meeting, to get through a board meeting where no one gets sick.” The board members were divided on personal feelings but voted unanimously to pass a set of recommendations about how to scheduling meetings this winter. For now, they’ll be holding the Oct. 15-16 meeting via videoconference, at which time they’ll decide what to do about the remaining meetings in the 2020-21 meeting cycle, which are scheduled to start with the Prince William Sound meeting in Cordova on Dec. 11-17. Alaska Department of Fish and Game Commissioner Doug Vincent-Lang said the department had considered the risk to the community of Cordova in brining staff, board members, and other attendees to the community in the middle of a pandemic, especially with the limited health care resources in the small community. At the same time, though, he said it would be difficult for the department to push the meetings off entirely until next year. That would mean that the department would have to double up on meetings with those already scheduled for the next cycle, and that may not be possible with the existing budget. The board generally agreed with that assessment and generally didn’t like the idea of virtual meetings to replace full board meetings. Board member Gerard Godfrey said the quality of participation would not be the same. “Ideally, we should move forward in person if it’s possible and practical and feasible, because I think there are going to be too many essential factors lost in a virtual meeting,” he said. The board members passed a recommendation for staff to bring back recommendations for options regarding the later meetings at the October work sessions as well. Public comments were divided, with some urging the board to take up virtual meetings. The Board of Fisheries doesn’t currently have any way to telephonically or remotely participate other than submitting written comments ahead of time; neither does the Board of Game. Multiple commenters pointed out that even in a normal year, traveling to attend and participate in the meetings can be very expensive, and after a summer with a blighted economy, this year might not be possible at all. But, on the other hand, other commenters — including major fishing organizations like the Southeast Alaska Seiners, Southeast Alaska Fishermen’s Alliance, and the Sitka Tribe of Alaska — agreed with Haight and Fish and Game staff that a virtual meeting just wouldn’t work. Tina Fairbanks, the executive director of the Kodiak Regional Aquaculture Association, said in a letter that holding the full meetings virtually could exacerbate existing inequities. “Taking the process to an online format is likely to create even greater barriers to participation,” she said. “The individuals and communities likely to already be affected by barriers to participation are also likely to be disproportionately disadvantaged compared to more centrally-located, technologically advanced groups and individuals. Those that are most well versed in the board process and/or more well-connected to decision-makers will have even greater access, likely greater time, and thus greater influence on the process by the simple fact that so many others will be unable to participate in the process.” Rep. Louise Stutes, R-Kodiak, wrote in a letter to the board that she didn’t support hold the October work session either online or in person, as both have “insurmountable challenges.” She asked the board to postpone all meetings to see how the pandemic develops in the state. The board is scheduled to meet virtually on Oct. 15-16 for a worksession dealing with agenda change requests, non-regulatory proposals, and escapement goal reports from Fish and Game staff. Elizabeth Earl can be reached at [email protected]

Bank income reflects PPP loan processing

Being the conduit for large amounts of government aid helped Alaska’s banks largely weather the first months of the pandemic. The largest local banks in the state all grew their net income in the second quarter compared with the start of the year, some substantially. Anchorage-based Northrim Bank increased its net income several fold from $2.3 million to $10.4 million in the second quarter, while Denali State Bank of Fairbanks more than doubled its net profit, going from $552,000 in the first three months of the year to more than $1.4 million in the second quarter, according to figures published by the Federal Deposit Insurance Corp. First Bank in Southeast nearly doubled its bottom line for the quarter, also netting more than $1.4 million. First National Bank Alaska, the largest in-state bank, saw more modest income growth of 2.9 percent to $14.4 million, in line with recent quarters. Northrim Chief Financial Officer Jed Ballard said the bank tried to take full advantage of the “tremendous opportunity” presented by the Small Business Administration’s popular Paycheck Protection Program, which was administered by financial institutions of all sizes across the country for the SBA. “We really boxed above our weight class in terms of the volume of PPP loans that Northrim did,” Ballard said, noting the bank distributed more than 2,500 PPP loans totaling about $350 million — loans that converted to grants if businesses followed the program guidelines — which accounted for 28 percent of the more than $1.2 billion distributed statewide. Northrim holds about a 12 percent market share among Alaska’s banks, according to Ballard. The bank also attracted new customers by offering PPP loans to everyone, whether they were already Northrim customers or not, according to Ballard. It all added up to several months of weekend work for many bank employees. “It was several years worth of loans in a three-month period,” he said. “All departments of the bank kind of transitioned into the lending department. It was a great team effort all the way around.” Denali State Bank did the most PPP loans in Interior Alaska, its region, which helped drive the bank’s revenue, CEO Steve Lundgren said in an interview. He said the bottom line results for Alaska’s banks could have been greater yet if not for a general move in the industry to increase loan loss allowances, or the amount of money set aside to cover uncollected payments, which eats directly into a banks profitability. “That’s taken a big jump because we just don’t know what’s going to happen,” Lundgren said. Underlying asset growth was also strong during the quarter. Denali State Bank grew its total assets by 22 percent to $376 million, while Northrim and FNBA both grew by 19 percent. Northrim eclipsed the $2 billion mark in the second quarter while FNBA is approaching $4.6 billion in assets. The widespread negative effects of the coronavirus pandemic showed up in some, but not all of the banks’ underlying indicators. FNBA saw the total of its loans one to three months past due go from $5.7 million in the first quarter to $15.5 million in the second, which President Doug Longacre said in a prepared statement was the direct result of government-mandated economic and travel restrictions aimed at slowing the spread of the virus. FNBA loan officers were consumed by a backlog of loan modification requests and PPP applications and could not reach out to other customers in need of help before problems making payments arose, according to Longacre. “Now that we’ve moved past the flurry of loan modifications and PPP loan production, our officers are again proactively working with customers to help them mitigate potential loan payment issues. And, I’m pleased to note, our current past due loan volume is greatly improved,” Longacre said. Northrim’s Ballard and Denali’s Lundgren said their banks have not experienced the same challenges FNBA has, at least for now. Both said the situation has not been as bad as they once expected. The amount of past due loans held by Northrim fell 75 percent in the quarter to $861,000, while Denali State Bank saw its total fall 35 percent to $784,000. Total loans in nonaccrual increased 24 percent for FNBA to more than $12.7 million, while the metric generally held steady for Northrim and Denali State bank at about $15 million and $1.7 million, respectively. First Bank saw both its past due and nonaccrual totals drop significantly during the quarter. “Our delinquency and repossessions and foreclosures have just been so much better than we could’ve predicted,” Lundgren said. He anecdotally attributed part of the disparity between the downright bad raw economic indicators of unemployment and job losses and Denali’s strong performance to the belief that people who are still employed are still spending money, much of it within the state given the current risks and challenges of travel. Ballard said historically low interest rates are encouraging home and business owners to refinance mortgages and other loans, which is also a fortuitous way to save money when faced with an uncertain future. “We’ve had really just incredible, incredible production over there at our residential mortgage (department),” he said. Lundgren added that he’s seen a significant spike in home renovation projects in the Interior as well. Ballard additionally surmised that while many businesses in the state continue to struggle — particularly those in the tourism sector — for a multitude of reasons, some business owners who were able to access part of the roughly $3.5 billion of federal aid that came to the state have used that money to buy time to revamp their business. “Companies have restructured their operations to help with cash flow needs. Entrepreneurs are very resourceful,” he said. “You see this around the country. Companies are just doing business in different ways to generate revenue and meet the needs of customers.” Elwood Brehmer can be reached at [email protected]

Shell files plans to return to the Slope; ConocoPhillips awaits initiative outcome

A supermajor is looking to advance its position on the North Slope and ConocoPhillips says it will likely wait until the results of the oil tax initiative are known before planning next year’s work. Shell Offshore Inc. has applied to form the West Harrison Bay Unit in state waters just offshore from the National Petroleum Reserve-Alaska with plans to drill the area in search of oil in the coming years, according to documents submitted to the state Division of Oil and Gas. If the Dutch oil industry giant can secure a partner to share in the costs and risks of remote offshore North Slope exploration, it expects to drill exploration wells in the West Harrison Bay Unit with at least one sidetrack each in 2023 and 2024, Shell’s initial unit plan of exploration states. According the application, Shell has been trying to find a partner to work on the West Harrison Bay leases for at least a year, and the company was making progress towards that end before the coronavirus pandemic hit in late winter. As a result, Shell is asking the state for its exploration plan to be valid for five years, which would allow the company to secure a partner and better analyze the area’s development potential. Shell holds a 100 percent working interest in 18 leases covering more than 78,000 acres in the proposed unit. The wells would target the popular Nanushuk oil formation first pinpointed by the Repsol-Armstrong Energy partnership in the Pikka Unit. The shallow, conventional Nanushuk formation also forms the basis of ConocoPhillips’ large Willow oil prospect to the south of Harrison Bay and is believed by many in the industry to be prolific across much of the western North Slope. A U.S. Shell representative did not respond to questions in time for this story. Shell infamously spent more than $7 billion to drill the Burger J exploration well much further offshore in the Chukchi Sea before abandoning its domestic Arctic drilling program in 2015. The work was beset by legal challenges and protests where vessels and equipment were staged at Pacific Northwest ports, as well as the grounding of the Kulluk drilling rig near Kodiak Island in 2013 while being towed south from Unalaska.. Elsewhere on the Slope, Great Bear Petroleum Ventures and Borealis Alaska LLC have partnered in hopes of forming the Talitha Unit south of Prudhoe Bay along the west side of the Dalton Highway. In the unit application submitted Sept. 4 the small independents committed to drilling two vertical wells, Talitha A and B, over the next two exploration seasons. The Talitha A well, tentatively planned for next winter, would be approximately eight miles west of the Dalton and be drilled about 10,200 feet to the base of the Kuparuk formation, according to the application. London-based Pantheon Resources purchased Anchorage-based Great Bear Petroleum — the project operator — in 2019 along with the roughly 200,000 acres of leases Great Bear held at the time. Great Bear first started working the area in 2012 and drilled several wells targeting unconventional shale plays but largely shifted to a conventional oil focus in 2015 when oil market conditions deteriorated and new prospects appeared in 3-D seismic data, company leaders have said. Pantheon directors have said the logistical advantages of being near the haul road should help the economics of Talitha and other nearby prospects. And while companies such as Shell and Great Bear are preparing for exploration work over the coming years, the state’s largest oil producer and most active recent explorer says it is waiting to firm up its drilling plans. ConocoPhillips Alaska spokeswoman Natalie Lowman wrote via email that the company had not finalized its exploration or capital plans for next year as of Sept. 15. “Our capital plans will depend on our outlook for prices and the outcome of the ballot measure,” Lowman said in reference to the Fair Share Act, a citizens initiative to raise oil taxes that will be Ballot Measure 1 in the November election. Ballot Measure 1 sponsors stress that the tax increase will not impact project development because it would only apply to the large and more profitable North Slope fields of Alpine, Kuparuk and Prudhoe Bay; ConocoPhillips operates or has a significant stake in all three. The company typically announces its work plans for the coming winter in late summer or early fall. Last winter the company planned to drill seven exploration or appraisal wells at its prospects across the Slope; however, concerns about spreading COVID-19 in remote drilling camps and the concurrent collapse in oil prices caused the company to cut its winter work season short and indefinitely lay down its North Slope rig fleet, part of an effort to cut up to $400 million from its 2020 Alaska spending plan. Far to the south on the edge of Cook Inlet, Hilcorp Alaska is also asking Division of Oil and Gas officials to form the Seaview Unit encompassing the town of Anchor Point on the southern Kenai Peninsula. Hilcorp, the primary natural gas supplier for Southcentral utilities, drilled the 10,000-foot Seaview 8 well in 2018 that led to a gas discovery in the Tyonek formation. The company initiated permitting for a short gas pipeline within the proposed unit earlier this year to tie the Seaview pad into Enstar Natural Gas Co.’s network. According to Hilcorp’s application recently published by the Division of Oil and gas and dated July 31, the company could have production from the Seaview 8 well by Oct. 1 if all of the regulatory requirements can be met in time. A Hilcorp spokesman declined to comment on the status of the project. The company plans to drill another, shallower directional well targeting gas accumulations from the Seaview pad later this fall. BlueCrest Energy produces small amounts of oil from the Cosmopolitan development just offshore from Anchor Point, but Hilcorp’s work indicates Seaview is solely a gas development at this point. ^ Elwood Brehmer can be reached at [email protected]

OPINION: Don’t call them Democrats

The Alaska Democratic Party is calling “bullshit” on winners of the Democratic primary being affiliated with the Democratic Party on the November ballot. Apparently the party’s brand in Alaska is so bad that its leadership doesn’t want its candidates to actually be associated with it. The latest outrageous outrage involves a simple change on the general election ballot that has removed the official party affiliation, or lack thereof, of all candidates and instead shows their name and whether they made the ballot through the Republican or Democratic primary or through the petition process. Republicans aren’t complaining about the change because candidates over the years have often adopted the “R” designation in order to have a better chance to win. That’s why the party’s elected representatives range across the ideological spectrum from Sen. Gary Stevens to Rep. David Eastman while Democrats range from Sen. Bill Wielechowsi to, well, Bill Wielechowski. Democratic Party Executive Director Lindsay Kavanaugh pitched a fit over the change revealed Sept. 14 on the Division of Elections website, calling it “unconscionable.” “I am increasingly concerned about the ability of the Lt. Governor to make informed, unbiased, decisions about the election, and of the integrity of those running the DOE,” Kavanaugh told the Anchorage Daily News. “Alaska voters, especially the majority of those voters who are undeclared and non-partisan, need to call bullshit.” Kavanaugh shouldn’t hold her breath waiting for an uprising from those undeclared voters. Yes, Alaska’s voters are famously averse to aligning with either political party. They are also among the most consistent Republican voters in the country. The state hasn’t chosen a Democrat for president since LBJ in 1964 and has only sent two Democrats to Congress in the last 50 years with both of them named Begich. While many state Democrats are pro-resource development and favor gun rights, the national party is rabidly anti-Alaska and anti-Second Amendment. Alaska voters have long since figured this out and vote for national offices accordingly regardless of how they choose to register their party status. Defeat after defeat for national office has led the state Democrats to adopt a recent strategy of claiming “independent” status and our two congressional races this year reflect that with Al Gross and Alyse Galvin taking on incumbents Sen. Dan Sullivan and Dean of the House Rep. Don Young. Despite clearly favoring the politics of the Democrats and soliciting their financial support, the Democratic Party wants Gross and Galvin to have a “U” or an “N” next to their names in a transparent attempt to convince voters they aren’t filling the oval with a choice that will keep Nancy Pelosi as Speaker of the House and/or hand over the Senate to Chuck Schumer. The House under Pelosi has already voted to overturn development of the Arctic National Wildlife Refuge coastal plain, and Democrats are talking about ending the filibuster should they retake the Senate. That means Galvin and Gross would help enact disastrous policies for Alaska no matter how they classify their political status. Republicans, especially in the Senate, routinely break ranks to vote independently (look no further than Sens. Mitt Romney, our own Lisa Murkowski or Rand Paul for examples), but there is no such freedom on the Democrat side where even their most endangered member Sen. Doug Jones of Alabama never dares to cross Schumer. To think that Galvin will vote against Pelosi as the 435th-ranked member of the House or that Gross will take the Democrats’ money and then vote to uphold the filibuster are huge gambles Alaskans will be rightly hesitant to take no matter what letter follows their names. Andrew Jensen can be reached at [email protected]

Can technology make flying feel safe again?

Across the world, the aviation industry is scrambling to find ways to keep the COVID-19 risk out of airplanes with high-tech filtration and advanced cleaning. American Airlines has partnered with medical advisers at Vanderbilt University and its competitors have made similar moves. Every airline is requiring masks. Southwest Airlines has adopted the “Southwest Promise,” which includes limiting capacity on flights to allow passengers to social distance. As the COVID-19 pandemic continues to turn the airline industry upside down with no end in sight, suppliers are preparing for the inevitable future where cleanliness and germ-fighting is a high priority for customers. North Texas manufacturer Aereos thinks antimicrobial plastics may be one solution to help cut the risk of spreading COVID-19 on commercial airline flights. And Dallas-based Allied BioScience has gotten government approval to spray a disinfectant coating in planes that’s billed as killing germs for up to a week. With commercial air traffic still at historic lows and passengers continually wary of flying, Aereos says it has brought antimicrobial technology to high-touch surfaces inside commercial jetliners, such as tray tables, armrests, door handles and toilets. The antimicrobial technology can cut down on the growth of germs and virus such as COVID-19, Aereos partner David Baker said. “It’s just starting to catch a lot of interest,” said Baker, whose company recently released the line. “Especially considering that it’s a pandemic, it’s one way of making them feel comfortable. This provides them with a layer of protection.” Fort Worth-based American Airlines and Allied BioScience received emergency approval last month from the Environmental Protection Agency for a spray-on coating product that is intended to protect against COVID-19 and other germs for at least a week. The perception of heightened cleaning and hygiene on commercial aircraft is a “huge deal” to consumers during the COVID-19 pandemic, said Jamie Larounis, a travel consultant and writer for Upgradedpoints.com. “This, in combination with social distancing efforts, is what is building consumer confidence that the airlines are doing their part to provide a safe experience,” Larounis said. It’s unclear how much of the novel coronavirus is spread via surfaces, but airlines are still touting enhanced cleaning procedures along with state-of-the-art air filtering technologies, face masks and social distancing. Companies are experimenting with ultraviolet lighting to help kill COVID-19 and Southwest is testing thermal imaging cameras to detect fevers among passengers. “The primary and most important mode of transmission for COVID-19 is through close contact from person-to-person,” according to the Centers for Disease Control and Prevention. “Based on data from lab studies on COVID-19 and what we know about similar respiratory diseases, it may be possible that a person can get COVID-19 by touching a surface or object that has the virus on it and then touching their own mouth, nose, or possibly their eyes, but this isn’t thought to be the main way the virus spreads.” Aereos, based in Euless, makes replacement interior airplane parts and custom cabin items, such as tray tables, latches, toilet seats and window shades along with carts and other items used by flight attendants. Baker said the company started experimenting with antimicrobial additives on those parts in May and has them ready for sale to airlines looking to replace aircraft parts. Aereos makes the parts at its North Texas manufacturing facility. The company also does work in the aerospace sector in maintenance, overhaul and defense, but the COVID-19 pandemic has created problems for nearly every corner of the airline industry, Baker said. The antimicrobial technology has grown popular over the last decade in hospitals to cut down on infections and in some medical supplies and devices. The plastics don’t completely kill viruses such as COVID-19 on contact but instead work to inhibit the growth of viruses and germs, slowing down the life of contagions. “Current evidence suggests that SARS-CoV-2 may remain viable for hours to days on surfaces made from a variety of materials,” according to the CDC’s website. That leaves airlines, airports and even government agencies working to reduce touch points during the air travel experience at security screening points, at gates and on airplanes, evidence at least that there is concern that touching objects can spread viruses. Baker said he doesn’t have any independent research on how effective the plastics are, but tests within the company have been promising. “Very little had to be changed about what we do, and it essentially costs nothing extra,” Baker said. “We don’t expect airlines to go out and replace every single part, but you could start replacing parts as they break or on an airplane one at a time until your whole fleet is done.”

Movers and Shakers for Sept. 20

PND Engineers Inc. in Anchorage announced three hires. Tanner Stephens joined PND’s civil team in Anchorage in March following a year as a project engineer with the Alaska Department of Natural Resources Department of Design and Construction. At PND, he has been working on the California Creek Fish Passage and Connecting Anchorage Trails projects. Stephens earned his bachelor’s degree in civil engineering with a minor in mathematics from the University of Alaska Anchorage in 2019. Previously a project engineer and design engineer for the Alaska Department of Transportation, Addison Yang’s projects since joining PND have included a Washington Department of Transportation project with Kiewit to replace a culvert under the I-5 highway with a fish passage, while minimizing impact to motorists and the local community. Yang earned his bachelor’s degree in civil engineering from the University of Alaska Fairbanks in 2015 and is currently completing his master’s degree remotely. Obadiah “Obi” Dawson, EIT, earned his bachelor’s degree in civil engineering from UAA this past spring. His recent assignments include structural calculations for the Wendell Avenue temporary trestle. Cornerstone announced two hires: Brittany Larson as an accountant and Macki McDonald as a project engineer. Both join the company with years of experience in the Alaskan construction industry. Larson joins the team with more than three years of Alaskan construction accounting as well as an extensive customer service background. She is currently in her final semester at Wayland Baptist University to receive her associate’s degree in accounting and will then pursue her bachelor’s degree in accounting and finance. McDonald brings more than 16 years of project procurement, logistics, and Alaskan construction experience, along with a strong grasp on remote and complex projects. His construction background began at as a laborer for a general contractor in Redmond, Wash., and soon worked for an Anchorage engineering firm until managing his own construction administration business. Julie Schrecengost has been named tax practice leader of KPMG LLP’s Anchorage office, effective Sept. 1. Schrecengost will be responsible for supporting the career development of tax professionals and the strategic direction and growth of KPMG’s Anchorage tax practice. Schrecengost joined KPMG in 2001 and was promoted to tax managing director in 2012. She provides federal and state tax compliance and consulting services to a variety of corporate and partnership organizations and has extensive experience working with Alaska Native corporations and their unique tax matters including natural resources and settlement trusts. She has nearly 20 years of experience serving clients in Alaska with federal and state tax planning and structuring, special consulting projects relating to acquisitions and divestitures, tax provision preparation, and broad tax compliance services. In addition to her client responsibilities, Schrecengost serves as a tax process and technology leader certified under KPMG’s Lean Six Sigma Program, participates in quality and peer reviews, and serves as the leader of KPMG Anchorage’s Mentoring Committee and Network of Women. Michael Baker International announced three hires. Collin Dey, PE SE, joins Michael Baker as an engineering manager, leading the Oil &Gas and Structural departments in Alaska. Dey has more than 30 years of project and engineering experience, previously, serving key leadership roles at BP Alaska. Dey is a licensed civil and structural engineer, expert in design and oversite of industrial infrastructure, pipelines, tanks, commercial buildings, integrity management and arctic engineering. Dey completed his executive engineering and business management from University of Manchester, and a bachelor’s degree in architectural engineering from University of Colorado.Steven Orizotti transitions from intern to fulltime civil engineering associate. He has a bachelor’s degree in geological engineering from University of Alaska Fairbanks and will support the Water Resources Team in conducting hydrologic and hydraulic monitoring, hydrologic assessments, water quality monitoring, and surface water modeling. Erin Tracy returns to Michael Baker as a civil engineering associate in the Anchorage Transportation Department. Tracy holds a bachelor’s degree in civil engineering from Utah State University. Previously, Tracy supported the Transportation Group for the Michael Baker’s Virginia office, working on roadway infrastructures, traffic count studies, drainage plans, and street improvements.

FISH FACTOR: After surveys canceled by COVID-19, crabbers await catch limits

Bering Sea crabbers will soon know how much they can pull up in their pots for the upcoming season that opens Oct. 15. This week the Crab Plan Team, advisers to state and federal fishery managers who jointly manage the fisheries, will review stock assessments and other science used to set the catches for Bristol Bay red king crab, Tanners and snow crab. Normally, the biggest driver would be data from the annual summer trawl surveys that have tracked the stocks for decades. But this year, the surveys were called off due to the COVID-19 virus and that has crabbers worried. “There are certainly some added uncertainties,” said Jamie Goen, executive director of the trade group Alaska Bering Sea Crabbers, which represents harvesters. Goen said the fleet is anticipating an opener for red king crab, likely less than the 3.8 million pounds taken last season. “Our preliminary indication is that there is possibly going to be a small red king crab fishery. However, we’ve heard from scientists in the past that there has not been good recruitment into that fishery for over a decade,” Goen said. On the brighter side, the snow crab stock has been on a steady upward tick. “We’ve been seeing a lot of recruitment of young crab into this fishery, so even without a survey I think the outlook is good. It’s hard to say, though, given the lack of a survey whether the TAC (total allowable catch) would end up being about the same as last year, which was 34 million pounds, or if it would go up or down,” she added. Bairdi Tanners, snow crab’s larger cousin, also could be in play after a two-year closure. That fishery produced 2.4 million pounds in 2018, and nearly 20 million pounds prior to that. The volatility of the crab stocks and the missing updates from the canceled surveys has the fleet fearing it will result in extra, unnecessary fishing restrictions. “We’re concerned that without a survey, managers will be adding extra buffers for uncertainty which would further reduce our TAC,” Goen said. “We’re already a heavily buffered fishery because of the variability in our stocks. We don’t even come close to approaching our existing buffers, so we don’t think more need to be added.” The total 2019-20 Bering Sea crab catch was 44.4 million pounds for a value of $199.2 million, according to NOAA Fisheries in Juneau. Goen had high praise for the collaborative research being done by the industry and scientists to improve understanding and management of the crab stocks through the Bering Sea Fisheries Research Foundation. The Crab Plan Team meetings ran from Sept. 14-17. The agenda and documents are on the North Pacific Fishery Management Council website. More crab One of Alaska’s most stable fisheries, golden king crab from the Aleutian Islands, has been underway since August and will produce more than 6 million pounds. In waters closer to home, Dungeness crab fisheries at Southeast and Kodiak are producing some of the best catches in decades. At the Panhandle, a fleet of 192 permit holders hauled up nearly 6 million pounds of Dungies during a summer fishery that ran from June through Aug. 15 and will reopen on October 1. Managers base the seasonal catch on the first week’s performance, which produced a quick 1.4 million pounds, compared to 772,000 in the first week last summer. “We did pretty good right off the bat,” said Adam Messmer, regional shellfish manager for the Alaska Department of Fish and Game in Douglas. At an average price to fishermen of $1.67 per pound (down from $3.01 last year), the summer fishery was valued at nearly $10 million at the Southeast docks. The Dungies were big and full, Messmer added, referring to fewer soft-shelled crabs that are in the molting process and can’t be sold. The region’s lousy salmon season could mean more boats will be out on the water when the Dungeness fishery reopens in a few weeks, he added. Messmer advised that with the closure of the ADFG office in Wrangell where many crabbers reside, they need to register at the Petersburg office. “They should get on top of that sooner rather than later because not having that Wrangell office is a new thing we’re dealing with,” Messmer said. And more crab Kodiak crabbers are having their best Dungeness fishery in 30 years, with the catch since May at nearly 2 million pounds taken by 25 vessels and five good weeks of fishing left to go. “And we’re seeing similar good production through the Alaska Peninsula and Sand Point area where they are at 810,000 pounds so far. That’s more than in any recent season,” said Nat Nichols, area shellfish manager for ADFG at Kodiak. The higher catches are due in part to “more horsepower on the grounds” as opposed to a higher abundance of crab, and Nichols added that the current Dungie cohort could be the tail end of a peak. “We’ve got 50 to 60 years of history to look at and Kodiak Dungeness crab are very cyclical. In the past these harvest peaks have lasted three years or so and then we kind of go down until we get another big group of crab coming through,” Nichols explained, adding that there does not appear to be many small Dungeness crab coming up behind the current crop. What is coming up are lots of Tanner crabs. Nichols, fresh off the summer survey vessel, said the largest group of tiny Tanners they have ever seen “is still out there” and the crabs appear to be growing fast. Biologists have been tracking the new pulse of Kodiak Tanners since 2018 and next year’s survey could see a significant portion of them reaching legal size, he said. Only legal-sized male crabs can be retained for sale. Meanwhile, local crabbers might not see the expected slump between the 2013 year class of Tanners they’ve been tapping on and the arrival of the 2018 cohort. “At first glance it looks like we’ve met the minimum threshold of 100,000 pounds in each of three different sections so having a fishery in January is a possibility,” Nichols said. “I would not have predicted that a year ago.” On a related note: Tanner crab is spelled with a capitol T because the species was named after its discoverer, Lieutenant Zera Luther Tanner, commander of the research vessel Albatross that explored Alaska waters in the late 1800s. Clean up! The third Saturday of September is International Coastal Cleanup Day, started in 1986 by the Ocean Conservancy. Since then, millions of volunteers have collected and categorized over 300 million pounds of trash from beaches and waterways worldwide. For the 2019 pickup, more than 940,000 volunteers in 116 countries collected nearly 32.5 million pieces of trash of which a record 4.7 million were food wrappers for candy, chips, etc. They also picked up 4.2 million cigarette butts, 1.8 million plastic bottles, 1.5 million plastic bottle caps, and more than 940,000 straws and drink stirrers. Last year was the first time food wrappers beat cigarette butts as the most collected item. Nick Mallos, director of Ocean Conservancy’s Trash Free Seas program, said over 35 years the cleanup has revealed the switch to single-use plastics and its detrimental impact on ocean pollution. In the early days, Mallos said glass bottles, metal caps, and paper bags were most prevalent in the list of top collected items. By 2017 the entire top 10 list included all plastic items (cigarette butts count as plastic trash because the filters are made of plastic fibers) and it has remained that way ever since. Mallos called the issue of single-use plastics, especially food wrappers, both a design and a recycling problem that highlights the need for different types of packaging and better waste management. “Cleanup efforts are only a band-aid, not a complete solution,” he told Fast Company magazine, which focuses on innovation in technology and “world changing ideas.” “With food wrappers taking over the No. 1 pollution spot, it really underscores the unsustainable production of single-use disposable foods and beverage packaging that’s not recycled or nonrecyclable in most cases, as well as the gross inadequacies to responsibly manage this plastic waste in almost all communities around the world,” Mallos said. “We need to solve this problem upstream so that plastics never enter our waterways and never reach the beaches in the first place.” ^ Laine Welch lives in Kodiak. Visit www.alaskafishradio.com or contact [email protected] for information.

Ballot Measure 1 wins final battle at state Supreme Court

A brief Supreme Court order assured that the oil tax initiative will truly be on November ballots. The court on Aug. 31 affirmed a Superior Court decision in July to dismiss a lawsuit by industry groups against the state Division of Elections. The groups, led by the Resource Development Council for Alaska, attempted to have signatures in support of putting the initiative on the ballot invalidated, which would have kept it off the ballot this fall. They argued the Division of Elections certified petition signatures that were collected by signature gatherers paid in excess of what is allowed by state campaign finance laws. Attorneys for the state and Vote Yes For Alaska’s Fair Share, the sponsors of Ballot Measure 1, responded that the state is required to interpret laws regarding citizens’ initiatives broadly to promote the public process and following to the industry group’s claims would make running an initiative campaign impractical. “Alaskans should be offended that an industry group funded by international oil producers based in Texas would try to take away our rights to engage in free speech, our rights to have our valid signatures counted on the initiative petition, and our rights to vote on Ballot Measure 1,” Vote Yes chair Robin Brena said in a prepared statement. Brena, an oil industry attorney, also argued the case for the citizen group. The Supreme Court order did not contain an opinion on the matter, but stated that one will be drafted. But while Vote Yes or Alaska’s Fair Share won in court, the campaign is losing badly in the race for cash. OneAlaska–Vote No on 1, the industry-backed group formed to oppose the initiative, raised more than $9.8 million through July 7, the most recent reporting period published by the Alaska Public Offices Commission. More than $6 million of that was raised since mid-April. The largest contributions to OneAlaska have come from the large oil producers in the state, with the since-departed BP Exploration Alaska contributing more than $3.6 million to the campaign. Vote Yes for Alaska’s Fair Share, in contrast, had raised $664,330 through the same period, according to APOC records. OneAlaska spent more than $1.8 million on media placements during the April to July reporting period. Vote Yes Campaign Manager David Dunsmore said the group will be running radio spots in rotations until the election. “We don’t have the level of resources that the opposition does, of course,” Dunsmore said. Anchorage Economic Development Corp. CEO Bill Popp, a co-chair of OneAlaska, said part of the reason the group has garnered the support it has is the broad recognition from the state’s business community of the “destructive” impact the initiative’s oil tax increase would have on Alaska’s already beleaguered economy. “We view it as a significant threat to any kind of meaningful economic recovery if (Ballot Measure 1) passes,” Popp said in an interview. He emphasized that while North Slope oil production has declined overall since the most recent oil production tax, known as Senate Bill 21, was enacted in 2014, initiative supporters ignore the reality that Alaska oil developments are years in the making. “These are long lead time projects,” Popp said, adding several large developments are currently in the works by Oil Search and ConocoPhillips. He added that AEDC typically stays out of policy debates as specific as oil taxes, but the issue is too fundamental to the state’s economy to remain neutral. “We just can’t risk such a draconian change in tax policy,” Popp said. Dunsmore said Alaska’s economy would be best served if the state got the roughly $1 billion per year the Fair Share Act is expected to generate over the long-term and its supporters simply have a differing view in that regard to AEDC leaders. Elwood Brehmer can be reached at [email protected]

‘Enough is enough’: Commissioners and execs urge CDC to let cruising resume

MIAMI — Five months after South Florida became a hotbed for COVID-19 cruise outbreaks, Miami-Dade commissioners and cruise executives are urging the U.S. Centers for Disease Control and Prevention to give the cruise industry the OK to restart sailings as soon as possible. At a Sept. 10 virtual tourism and ports committee meeting, Commissioner Rebeca Sosa scolded the federal health agency charged with the country’s public health response to COVID-19, saying it has been too slow to communicate with the industry and must work quickly to get cruising up and running again. The deadly virus continues to claim thousands of American lives every week. “The problem is it’s not fair that the CDC is not paying attention and communicating with the cruise industry,” Sosa said, citing the time between when cruise companies submitted plans to the agency regarding how to mitigate COVID-19 spread among crew in mid-April and the finalizing of those plans in late July. “We cannot wait another 14 weeks.” The meeting, which included packaged videos promoting the cruise industry and live shots with cruise CEOs, did not touch on safety concerns. Commissioners didn’t ask executives for details about how to avoid the disease spread and complications that left hundreds of passengers at sea for weeks and the Coast Guard overwhelmed by medevac requests. The CDC first banned cruises in the U.S. in mid-March amid COVID-19 outbreaks on several ships. The following six months have been marred by disagreements between the industry and the agency. During the ban on cruising, companies have suffered record financial losses and had to lay off large numbers of staff. Thousands of people who support the industry, including longshoremen, shuttle drivers, industry vendors and travel agents, remain out of work. The CDC has banned cruises in the U.S. until at least Oct. 1; most companies have said they will not resume cruises in the U.S. until at least Oct 31. Sosa and Norwegian Cruise Line Holdings CEO Frank Del Rio said cruise ships are no more dangerous than hotels or airplanes. That claim has been refuted by the CDC, which has repeatedly noted the unique challenge in preventing COVID-19 spread at sea. “A cruise is a hotel in the middle of the ocean that the doors and windows open all the time, and we have an incredible amount of wind coming in and out making it a safer place,” said Sosa. Said Del Rio, “It’s unconscionable what’s happened to the cruise industry. We’ve been quiet for too long.” Two cruise companies with U.S. headquarters in Miami started cruises again in Italy this month: Carnival Corp., with its Costa Cruises brand, and MSC Cruises. The cruises are only available for Italian passengers and all passengers and crew are undergoing COVID-19 rapid antigen tests before boarding. Carnival Corp. CEO Arnold Donald said he expects the company’s AIDA brand to begin cruises in Germany soon. Del Rio said Norwegian Cruise Line Holdings will be submitting its health protocol proposal, created in conjunction with Royal Caribbean Group, to the CDC within the next 10 days. “We’ve got to get to work,” he said. “Enough is enough. It’s been more than six months. We’ve learned a lot.” At odds with CDC In its most recent no-sail order, the CDC said it spent 38,000 man-hours working to manage the COVID-19 crisis on cruise ships as of July 10. After the CDC first warned the public to avoid cruise travel because of the increased risk of COVID-19 spread on March 8, cruise companies continued to operate. Nervous passengers boarded cruises after the CDC warning because companies were not offering refunds. Companies did not screen disembarking passengers at PortMiami, in some cases after learning about previous passengers who had tested positive. On March 13, the industry announced it was canceling all U.S. cruises. The CDC issued its industry-wide no-sail order the next day. In March and April, several ships still carrying passengers became trapped at sea with nowhere to dock and eventually found refuge in Florida ports where dozens of passengers and crew were evacuated; some died on board before the ships arrived, others died in South Florida hospitals. At least 110 passengers and crew members have died from COVID-19, at least 38 in Florida, according to a Miami Herald investigation, and at least 86 ships have been affected, or approximately one-third of the global cruise fleet. In April, seven cruise companies submitted plans to the CDC detailing how they would protect crew from the virus while the ships were out of service. The CDC said the plans largely failed to meet the agency’s requirements to prevent the spread of COVID-19 and staffed two people to work with each company on redrafting the plans. Norwegian Cruise Line continued to house crew in shared cabins with shared bathrooms until July, according to the agency, and took more than two weeks to sign the required form confirming it has a complete and accurate plan. Most companies needed two revisions to their plans before they were deemed complete; one needed seven, the agency said. In the interim, the CDC said cruise companies would be allowed to repatriate crew members through the U.S. using private transportation if their executives signed an agreement with the agency assuming responsibility for following all health protocols, like requiring traveling crew to wear masks. Royal Caribbean told its crew that the CDC had banned all crew repatriation, delaying sending them home. After the Herald reported the company knew the CDC was allowing for repatriation on private transportation, the company reversed and signed the required agreements. In June, the CDC unveiled a grading system for cruise ships based on their level of infection. Ships with complete plans for preventing COVID-19 spread and no COVID-19 cases within 28 days can repatriate crew using public transportation. The only cruise company to have a complete plan at that time was Bahamas Paradise Cruise Line. Crew continue to contract COVID-19 aboard laid-up ships, according to CDC data obtained by the Miami Herald via a Freedom of Information Act request. At least seven ships in U.S. waters during the month of August reported COVID-19 or COVID-like illnesses to the CDC that month. Carnival Corp. pulled its ships out of U.S. waters before the grading system debuted, in part because it disagreed with the agency’s requirement that asymptomatic crew members remain in their cabins as much as possible. Virgin Voyages pulled its ship out the following week. Disney Cruise Line and Norwegian Cruise Line have now pulled most of their ships out of U.S. waters. Ships outside U.S. waters are no longer required to report illnesses to the CDC. Hundreds of crew members are still stuck on cruise ships without pay, waiting to be repatriated. A spokesperson for Carnival Corp. said it still had 400 crew to repatriate at the start of this week, after sending home 80,000. A spokesperson for MSC Cruises said it still has around 700 waiting to go home, after repatriating more than 17,800. A spokesperson for Royal Caribbean Group said as of July 17 the company still had 2,815 people to repatriate and did not provide an update. Spokespeople for Norwegian Cruise Line Holdings did not respond to a request for comment.

GUEST COMMENTARY: Ballot Measure 2 replaces fair elections with political trickery

You’ve likely heard the saying that politicians are like diapers: they should be changed often, and for the same reason. All joking aside, if we Alaskans want to change public policy, we have to change the people who control it. Voters of all political stripes understand this simple concept. We Alaskans use a time-honored process for “changing diapers,” and it’s easy to understand: each person gets one vote, and the candidate who earns the most votes wins. But this November, Alaskans will be asked to vote on Ballot Measure 2, which would throw our election system into chaos. First, nearly all the money behind Ballot Measure 2 comes from out-of-state billionaires and special interest groups unknown to most Alaskans. I know from experience that outsiders rarely have Alaskans’ best interests at heart. That’s why I fought the federal government at the US Supreme Court twice when they wrongly tried to assert control over Alaska’s waterways. So naturally, I became worried when I learned that 99 percent of the $1.1 million spent in support of Ballot Measure 2 comes from outside our state. This alone should ring alarm bells in voters’ minds. Perhaps the most sweeping change proposed in Ballot Measure 2 is to toss aside our “one Alaskan, one vote” system and replace it with a scheme known as ranked choice voting. It’s so complicated, it’s hard to explain, but here’s the gist: voters would be forced to rank every candidate on the ballot, regardless if they wanted that particular candidate to win. Fail to do that, and that vote is at risk of being thrown out if no candidate receives over 50 percent of votes cast. In this situation, a computer system (yes, you read that correctly) would calculate the winner using an algorithm that takes many pages to explain to voters. Under this nightmare scenario, the candidate who is declared the “winner” of an election could be someone who received far fewer votes than the first-place candidate, but instead received a significant number of second, third, or even fourth-choice rankings. Confusing? Yes. And that’s the intent. Backers of Ballot Measure 2 claim this will ensure that each election produces a victor who has the support of a “majority” of voters. But they fail to explain how a tortured majority that was Frankensteined together by adding everyone’s third or fourth-place preferences is really what voters want. Bottom line, this new system is unnecessary; our time-tested system of the candidate with the most vote wins works just fine. Former Republican Gov. Sean Parnell and former Democrat Sen. Mark Begich agree on this issue, admitting it’s a mess. They wrote in a Wall Street Journal editorial that ranked choice voting “encourages political trickery.” Special interests with political savvy will run wild, free to unleash unsavory candidate and ranking strategies aimed at forcing a computerized runoff and manipulating the final outcome. The political elite will benefit from these rigged elections while average Alaskan voters will lose their voice. The swamp is the only winner in this scenario. Stick with me, as there’s even more to attempt to explain. Another massive change proposed by Ballot Measure 2 is to completely throw out Alaska’s traditional primary elections and impose California’s “jungle primary” system. Candidates from all political parties, as well as nonpartisan candidates, would all appear on the same primary ballot. The top four vote-getters from this process would then advance to the general election. Once again, voters would be disenfranchised, because this process eliminates their right to select a political party nominee for the general election. In areas that are dominated by a single political party, multiple candidates from the same party would appear on the ballot, while smaller minority parties could lose their ability to advance a candidate to the general election. This could leave many voters with no desired candidate on the ballot. While I can’t speak to the motives of the New York and California billionaires funding Ballot Measure 2, I can tell you that the sweeping changes proposed by this initiative would disenfranchise Alaskan voters, invite voter manipulation and political trickery, and further erode trust in our democratic process. It’s our responsibility to step up, speak out, and inform our neighbors about everything they stand to lose if Ballot Measure 2 becomes law. Sure, we may not have a ton of cash from out-of-state billionaires, but we still have something they don’t: the right to cast a vote in Alaska. Together, let’s protect the integrity of our elections and our votes by voting no on Ballot Measure 2. ^ John Sturgeon is chairman of Defend Alaska Elections-Vote No on 2. He previously spent 12 years fighting to reverse federal intrusion on Alaska’s public lands, achieving victory at the U.S. Supreme Court twice.

Pages

Subscribe to Alaska Journal RSS