ConocoPhillips demobilizing North Slope drill rigs

Alaska’s largest oil producer announced this week that it will demobilize its drilling rig fleet at its North Slope fields to reduce the number of workers at risk of COVID-19. “(ConocoPhillips) announced yesterday that due to the heightened COVID-19 risk to our North Slope workforce, we are taking action to significantly reduce the number of personnel on the Slope in a managed fashion,” said Natalie Lowman, a spokeswoman with the company. “To do this, we are making the difficult decision to demobilize our rig fleet,” Lowman said in an email. “Given the high degree of uncertainty on how the situation plays out, we can’t say how long these measures will be in place.” While the rigs will be placed in long-term storage, Lowman said, wells already in production will continue to produce oil. ConocoPhillips and other oil companies in Alaska have taken unusual measures to prevent the virus from spreading at the oil fields, including extending multi-week shifts to reduce the number of replacement workers headed to the remote sites. As of Wednesday afternoon, state health officials have confirmed the existence of only one case of COVID-19 on the North Slope. The individual works at Prudhoe Bay, run by BP. Historically low demand during the coronavirus crisis has contributed to the plunge in oil prices, alongside an oil price war between Russia and Saudi Arabia. The low oil prices have hit Alaska producers hard. ConocoPhillips in March announced it would cut capital spending in Alaska by about $200 million, including by mothballing two rigs at the Alpine and Kuparuk fields. The company informed workers and contractors on Tuesday that ConocoPhillips will now demobilize its entire rig fleet, said Lowman. ConocoPhillips’ huge new drilling rig, nicknamed “The Beast," will not start drilling in April as originally planned, she said. Lowman said she could not specify the number of rigs and workers that will be impacted. She also could not immediately provide details on impacts to production. Each rig employs dozens of workers. “Up to five rigs" will be impacted, said Ed King, a private economist in Alaska who tracks oil companies. That does not include the “The Beast," which had not yet started drilling, he said. The decision will at least defer some oil production for a period of time because there will be fewer wells producing oil, King said. On the exploration side, it’s likely to delay the development of projects, King said. The president of Doyon Drilling, which provides rigs and services to ConocoPhillips and other oil companies, said in a letter to employees on Tuesday that the decision will be “severely felt” by all Alaskans and Doyon Drilling employees. “We understand that this volatile environment and (ConocoPhillips) directive is very concerning to our employees,” Ron Wilson wrote. “We are unable to predict how long it will take for the COVID-19 virus or the low oil prices to pass. In the meantime, we will demobilize our rigs in (a) safe and effective manner to ensure we are in position to resume drilling operations upon (ConocoPhillips') directive.” Doyon spokeswoman Sarah Obed declined to comment. BP, operator of the large Prudhoe Bay oil field, previously made a similar decision to lay down two drilling rigs to reduce the number of personnel working on the North Slope.

New data, old well add up to major North Slope find

With one unique North Slope oil discovery already in hand, a small group of explorers claims to have found another prospect on par with one of the state’s largest oil fields that is worth developing even at near rock-bottom prices. Leaders of London-based Pantheon Resources said in an interview with the Journal that a modern evaluation of an old exploration well along with information gleaned from recent nearby drilling gives them the confidence to say they have a roughly 1.8 billion-barrel discovery south of Prudhoe Bay along the Dalton Highway and Trans-Alaska Pipeline System corridor. Pantheon CEO Jay Cheatham said the prospect, dubbed Talitha, could ultimately produce approximately 500 million barrels of oil with peak production nearing 90,000 barrels per day, which would make it comparable to ConocoPhillips’ large Alpine field to the northwest. If the resource estimates prove out, Talitha would be the latest in a series of big North Slope oil discoveries over roughly the past five years, which has led many within the industry to conclude there is a “renaissance” occurring in what was once the country’s premier oil basin. However, while the economics of large North Slope prospects are routinely challenged by remote locations and a lack of infrastructure, Talitha and Pantheon’s nearby Greater Alkaid project avoid those multibillion-dollar hurdles, according to Cheatham. ConocoPhillips and Oil Search, two of the companies advancing major new North Slope oil projects, recently announced a collective $270 million pullback of previously forecasted investments. “We are so advantaged because of our location — being able to be right there along the Dalton Highway,” Cheatham said. The company has estimated the Greater Alkaid prospect, which is believed to hold 76 million barrels of recoverable oil, could produce up to 30,000 barrels per day. The Alkaid-1 well was drilled in 2015 by Anchorage-based Great Bear Petroleum, Pantheon’s predecessor firm on the project. It is just east of the Dalton and about 20 miles south of Prudhoe. Pantheon bought Great Bear and its roughly 200,000 acres of North Slope leases in January 2019. Results from the Pipeline State-1 exploration well drilled by Arco in 1988 also helped form the basis of geologic data that led Pantheon leaders to conclude they have a very large resource. The Pipeline State well is also just east of the haul road and about 6 miles south of the Alkaid prospect. Pantheon Technical Director Rob Rosenthal, a founding member of Great Bear, said the well data from Greater Alkaid was combined with the old Pipeline State well test results and data from a modern 3D seismic shoot of the whole area to give a better picture of what lies beneath. “It’s essentially in the same rocks, in the same stuff, in the same play,” as the Alkaid well, Rosenthal said of the Talitha prospect. He added that even though the 10,000-foot vertical Pipeline State-1 well has a roughly 2,200-foot oil-bearing column over four reservoirs, with the technology and oil prices of the late 1980s it did not add up to a viable prospect at the time. “There would have been no call back at $10 oil to go out and shoot 300-400 square miles of 3D (seismic), but today with the drilling technology, the completion technology, we can make this commercial,” Rosenthal said. Pantheon is so far focusing on the shallowest reservoir. Cheatham stressed the “dual advantage” that being adjacent to the haul road and TAPS provides the company. First, it allows Pantheon to avoid the massive up front costs of installing miles of remote gravel roads, drilling pads and pipelines and the corresponding multi-year environmental reviews that North Slope operators routinely face. It also makes it much easier for Pantheon to produce oil — and cash flow — early to help support full development of Talitha. “It’s not like you’ve got to put in your whole facility. We can get (the wells) online virtually as we drill them,” Cheatham said. Rosenthal added that the location also allows Pantheon to work year-round, while other companies are forced to limit appraisal drilling and early project development to the ice road season. It all adds up to projects that are viable at oil prices in the $30 per barrel range, according to Cheatham. The price for Alaska North Slope crude hovered near $30 per barrel in the second week of April as Saudis and Russian officials worked to end their production and price war that added downward pressure to oil markets already flooded with supply after the severe COVID-19-induced drop in demand started a month ago. Full development is currently envisioned as about 170 wells split roughly evenly between water injectors and producers, a high-level plan similar to what was used to develop Alpine, he said. Company leaders are hopeful development could begin in 2022 or 2023 if the global pandemic and subsequent economic shutdown do not persist for many months. Cheatham and Rosenthal told the Journal in January that they planned to drill one or two more wells this year around Alkaid-1 and initiate a long-term production test, but that work is on hold at least until travel restrictions ease. They acknowledged that Pantheon will need to find a partner to help finance large-scale development and that is challenged right now as well. However, when Pantheon begins in earnest its search for financing for its projects, Rosenthal said he does not believe the company will be hampered by the decisions numerous investment banks have made in recent months to stop funding Arctic oil developments because Greater Alkaid and Talitha aren’t in sensitive or otherwise controversial areas. “When they say ‘Arctic’ they mean offshore or ANWR or things like that,” Rosenthal said. “I don’t think there’s necessarily a blanket ‘we’re not going to fund anything in Alaska,’ but it’s up to us to send out a positive message about what we’re doing.” Cheatham said the project economics — and again, location along existing infrastructure — will be the ultimate deciding factor in whether or not Pantheon gets the money it needs for its work. “We are economic really at prices that are so low that if any large projects get new funding we believe that ours would be right at the top of the list,” Cheatham said. ^ Elwood Brehmer can be reached at [email protected]

Movers and Shakers for April 12

Dr. Mary Wegner has been hired to lead the Alaska College of Education’s two educational leadership programs. She will be responsible for the program that leads to a master of education degree, including satisfying the requirements for a Type B Certificate necessary to be a school principal, as well as the superintendent endorsement. Wegner is currently the superintendent of the Sitka School District. Wegner joins the UAS faculty beginning in July. A longtime leader for distance learning, she will be based in Juneau at the University of Alaska Southeast and have student supervision duties throughout Alaska. Wegner earned a Ph.D. in educational technology leadership from Pepperdine University in 2015. At UAS she earned her master of education degree in educational technology in 1995. She also holds a superintendent endorsement in educational leadership from UAS, and an administration endorsement in educational leadership from UA Anchorage. Lisa Morris recently joined R&M Consultants Inc. as a graphic designer in the firm’s Marketing Group. Morris will be responsible for providing print and web/interactive graphic communications in support of R&M’s marketing, communications and project initiatives. Morris has 19 years of professional design experience in Alaska, with 15 of those years spent serving the A/E/C industry. She has provided graphic design services to engineering firms, commercial construction companies, project management firms and non-profits. Her skills include corporate and project branding, visual identities, print and digital collateral design, report design and layout, infographics, historical displays, copywriting and editing. She is also skilled in use of the Adobe Creative Suite. Since joining the firm, Morris has taken the lead on designing several marketing pieces for in-house and external resources. This includes proposal graphics, recruitment collateral, digital graphics, company icons and other company collateral pieces. She has a bachelor’s degree in journalism and mass communications from the University of Oregon. Jaylene Z. Wheeler was selected to fill a vacancy on the board of directors for the Sitnasuak Native Corp. at a special board meeting on March 19. Wheeler, 44, is a shareholder raised in Nome and currently resides in Anchorage. She earned a bachelor’s degree in rural development from the University of Alaska Fairbanks and a master of public administration from the University of Alaska Southeast. She also has more than 15 years of management-related experience with Tribal health organizations and owns a small business, Wheeler Consulting. Wheeler will serve on the board for the remainder of a term through the 49th annual meeting.

Oil price collapse draws more scrutiny for Hilcorp-BP sale

State regulators want more details about Hilcorp Alaska’s “access to capital” as it seeks to buy BP Alaska’s assets after the historic plunge in oil prices. The Regulatory Commission of Alaska issued an 18-page order on April 2 asking, among other questions, if recently altered market conditions have “impaired” Hilcorp’s ability to borrow money to finance the $5.6 billion deal. “Explain whether recent changes in the financial markets have impacted (Hilcorp Alaska and related companies’) access to the capital necessary to fund this transaction,” the state commission asked. As part of the blockbuster deal, the commission is weighing the proposed sale of BP’s stake in the 800-mile trans-Alaska pipeline and related pipelines. The agency expects to make a final decision by Sept. 28. The new order asks for additional details from Hilcorp and BP across a host of areas, including planned upgrades to pipelines, financial protections for “unplanned incidents” and other needs, as well as assurances surrounding funding for the trans-Alaska pipeline’s future dismantlement. The price of oil over the last month plummeted to levels not seen in nearly two decades. Alaska North Slope crude bottomed out at $21.80 a barrel on April 1 amid a price war between Saudi Arabia and Russia as well as the historic collapse in demand amid the economic shutdown caused by the coronavirus. North Slope prices briefly topped $70 a barrel at the start of the year. The plunge has hit oil companies hard, causing cutbacks in Alaska’s oil patch in recent weeks. Major credit rating agencies Moody’s Investors Service and Standard & Poor’s have previously questioned whether Hilcorp will take on too much debt to finance the deal. The agencies have put Hilcorp on notice for a potential credit rating downgrade. The company’s current rating is a good one, they have said. Luke Miller, a Hilcorp Alaska spokesman, did not immediately respond to a request for comment on April 6. BP said in a market update on April 1 that the timing for payments, under its plan to take in $10 billion before 2021, may be “revised” during volatile market conditions. “This includes the sale of our Alaskan business to Hilcorp which we continue to expect will complete during 2020, subject to regulatory approvals,” BP said. “We will provide further information on this transaction going forward, as appropriate.” BP and Hilcorp have previously said they hope to complete the transaction by June of this year. In its order, the commission asks how much “financial reserves” Hilcorp has set aside to fund Alaska operations. The agency raises the question in a section about Hilcorp’s “financial fitness.” “Have the recent turmoil in capital markets affected (Hilcorp Alaska and related companies’) anticipated ability to secure adequate financial reserves to fund Alaskan operations?” the commission asks. “If (Hilcorp Alaska and related companies) are not impacted by capital markets, is it because (they) independently have the capital necessary to fund obligations related to its Alaskan operations?” the commission asks. The Prince William Sound Regional Citizens’ Advisory Council sent a letter to the commission last week addressing the need for updated information from the companies amid the market turbulence. The Alaska Public Interest Research Group also raised those concerns in a letter on April 3. The agency wants a response from the oil companies by May 4.

88 Energy drilling program misses oil, hits condensates

A small Australian explorer is reporting mixed initial results from an exploration well drilled last month in an area south of the largest North Slope oil fields. Leaders of 88 Energy announced April 7 that the Charlie-1 well hit a large pool of natural gas condensates in the Torok sand formation but did not hit the concentrations of oil they were hoping for. The Charlie-1 well was drilled roughly 30 miles west of the Dalton Highway and about 35 miles south of Prudhoe Bay. It is a western step-out from 88 Energy’s Icewine oil project centered on a drilling pad near the Dalton. 88 Energy is the operator of nearly 480,000 acres of continuous leases that run east-west along the southern North Slope and are bisected by the haul road and Trans-Alaska Pipeline. The company works in Alaska under its wholly owned subsidiary Accumulate Energy Alaska. The Charlie-1 well targeted conventional oil prospects in the Brookian geologic sequence largely based off of data from the nearby Malguk-1 well drilled by BP in 1991. 88 Energy Managing Director David Wall said in a statement that samples of the gas condensates will be analyzed for commercial viability over the coming months. “On the one hand, we have confirmed the presence of mobile hydrocarbons in the primary targets of the well, but, at the same time, there are challenges that need to be more fully understood related to whether these can be commercialized on the North Slope,” Wall said. Condensate samples were taken from the Torok formation — a subset of the Brookian sequence — at approximately 10,500 feet and 10,650 feet, according to the April 7 statement. Wall added that shallower targets were found to hold water and not have proper sand accumulations. The total project was expected cost approximately $23 million, according to estimates made prior to drilling. 88 Energy is one of several small independent companies exploring areas south of Deadhorse primarily for Brookian oil targets. 88 Energy’s prior Icewine drilling was focused on shale zones along the Dalton highway. While 88 Energy is the primary operator over the broader Icewine acreage, Charlie-1 drilling was farmed out to London-based Premier Oil for a 60 percent stake in roughly 57,000 acres of leases. However, Premier intends to withdraw from the project because the results did not meet the company’s expectations, 88 Energy officials said in the April 7 project statement. The Charlie-1 well is going to be plugged and abandoned rather than suspended or tested further because additional work this late in the season could result in stranding the Nordic-Calista No. 3 rig used to drill the well at the site if ice road conditions deteriorate and returning to plug the well later if the project is not deemed viable would add further costs, according to 88 Energy. Company officials also noted that personnel needed to conduct future work could be unavailable in the coming months due to the COVID-19 pandemic. Elwood Brehmer can be reached at [email protected]

Gov vetoes $210M; revenue forecast heads south

Gov. Mike Dunleavy made significant vetoes to the state budget for the second straight year before signing it, but he said many of the cuts will be backfilled with federal coronavirus aid the state is expected to receive. In all, Dunleavy announced vetoes of $210 million in unrestricted general funds on April 7 for a final combined fiscal year 2021 operating and capital budget total of just more than $4.5 billion. The roughly $440 million Dunleavy vetoed from the budget last year following an exceptionally contentious and prolonged budget process with the Legislature helped spur an ongoing effort to recall him from office. He also continued to press the Legislature to reconvene as soon as possible to approve an additional Permanent Fund dividend payment that he says is needed to help Alaskans deal with the effects of the economic shutdowns ordered to limit the spread of the virus. He noted that Congress approved direct stimulus checks of up to $1,200 per person as part of the $2.2 trillion Coronavirus Aid, Relief and Economic Security, or CARES, Act legislation passed March 27. “All across the world, leaders and economists are looking to mimic the PFD. Yet here in Alaska, our leaders are doing the opposite. I will continue to call on the Legislature to follow the law, utilize the statutory calculation for the Permanent Fund dividend and get money into the hands of laid off workers throughout Alaska,” Dunleavy said. “Call it a PFD, call it a COVID-19 emergency relief payment; it does not matter. We must act now to help our fellow Alaskans.” The Legislature, which quickly passed the budget March 29 and recessed from the session, funded a single PFD payment of $1,000 per person. While the Senate originally approved $1,000 payments in spring and fall in light of the economic hardships being faced statewide, lawmakers ultimately decided to keep the $680 million needed for the additional payment in the Earnings Reserve Account of the Permanent Fund in light of the increasingly bleak fiscal picture the state as a whole is also facing. Lawmakers who supported the single, $1,000 PFD have since said they did not want to make additional, ad hoc draws on the Permanent Fund that would violate the 5.25 percent of market value, or POMV, annual draw limit on the fund, particularly at a time when financial markets are extremely volatile and the state’s projections for future revenue are also getting worse. The money will likely be needed in the future just to maintain some basic levels of state services, irrespective of PFDs, they stress. As to the vetoes, Dunleavy said the CARES Act funding would cover a “majority” of the individual cuts he enacted. Alaska is set to receive at least $1.25 billion of federal aid to address general economic and health issues that arise from the virus and the governor has broad authority to accept and distribute that money. “We looked over the CARES Act and had discussions with people in Washington (D.C.) so we believe we are going to be able to do what we say we’re going to do” with that money, Dunleavy said in a press briefing. House Speaker Bryce Edgmon said in a formal statement that lawmakers need to hear more details about the discussions the administration had with federal officials about uses for the CARES Act aid and noted the vetoed money the administration wants to replace largely comes from things the Dunleavy has previously battled over with legislative leaders. “From our initial understanding, federal funds can only be used for expenditures incurred due to COVID-19, not expenditures unrelated to the COVID-19 response,” Edgmon said. “There is no guarantee the federal government will pick up the tab. This approach is incredibly troubling to me.” According to a list provided by the Office of Management and Budget, here are the vetoes the administration expects to pay for with the federal aid:$31.2 million in community assistance payments • $66.7 million in combined K-12 education funding • $100 million in school bond debt reimbursement payments to local governments • A $2.7 million COVID-19 response grant to the Municipality of Anchorage • A $5 million homeless grant to the Alaska Housing Finance Corp. • $2.3 million in non-mandatory municipal debt reimbursement payments Dunleavy said the $100 million veto to school bond debt reimbursement, for example, will be eligible for repayment with CARES Act funds because local governments are collecting less in tax revenue as a result of the economic restrictions the pandemic pushed officials to order. However, the money he vetoed was the state’s share of those payments. Dunleavy also vetoed $31 million from a supplemental budget request the Department of Health and Social Services made to Medicaid funding shortfalls for the rest of the 2020 fiscal year as well as $15 million from the Alaska Marine Highway System allocation and a $1 billion transfer from the Earnings Reserve to the corpus of the Permanent Fund. DHSS Commissioner Adam Crum said the vetoed supplemental Medicaid funding will be made up through an increase to the federal match for Medicaid passed by Congress in response to the pandemic. Additionally, Dunleavy vetoed $12.5 million from the University of Alaska budget, money the Legislature approved that funded the system beyond the $75 million in cuts over three years the governor and regents agreed to last year. Revenue forecast goes south In the latest state revenue forecast released April 6, Department of Revenue officials project the collapse in oil prices and lost tax revenue from other sources will result in forgone revenue totaling nearly $530 million for the rest of the 2020 fiscal year, which ends June 30, and $815 million in 2021 versus the revenue forecast released last December. The final unrestricted revenue tally is now pegged at $4.5 billion for 2020 and $4.3 billion in 2021. Legislative Finance Director Pat Pitney has said the state could drain the Constitutional Budget Reserve and be forced to make ad hoc draws on the Permanent Fund by fiscal 2022 based on oil price and financial market projections. Oil prices have crashed since late February in part due to a sharp pullback in oil demand stemming from the travel and work restrictions put in place worldwide, but also because of a price war between Saudis and Russian officials that oil market analysts hope will be resolved soon. Revenue officials last fall forecasted an average Alaska North Slope crude price of $63 per barrel and the guess was largely looking correct until the COVID-19-induced economic upheaval. Now they are predicting an average price of $51 per barrel for the year, with prices averaging just $37 per barrel through 2021 and gradually climbing to $50 per barrel by 2027. Elwood Brehmer can be reached at [email protected]

OPINION: Finance co-chair doesn’t trust rural Alaska with early PFD

“Have you ever been to the villages at dividend time?” That was the question posed to me during a phone call from House Finance Co-Chair Jennifer Johnston of Anchorage on April 1, and it wasn’t an April Fool’s joke. That morning I published an opinion column chiding the Legislature for failing to utilize the Permanent Fund to help Alaskans during the worst economic crisis in the state’s history by first canceling the Senate-approved supplemental dividend and then refusing to move up the distribution of the traditional annual payment to provide immediate relief. Johnston asked me how long I’ve lived in Alaska (I learned 10 years is “not very long”), what I know about state finances and whether I was familiar with the federal CARES Act (I covered it in the column she was calling about). She then asked the question at the top of this piece. Without ever asking to be off the record, Johnston went on to state that part of the reasoning for not paying the dividend early was because it would be too much money in rural Alaska on top of the federal payment that was approved in the CARES Act. She further claimed the congressional delegation actually discouraged the Legislature from paying a spring dividend because they shared the same concerns. Representatives for Rep. Don Young, Sen. Lisa Murkowski and Sen. Dan Sullivan all denied such a message was conveyed to the Legislature either by them or members of their staffs. “We unequivocally deny that anyone in our office — including Senator Sullivan — made such a comment to anyone,” wrote his communications director Mike Anderson. “Furthermore, no one in our office, including Senator Sullivan, holds such offensive views.” (I relayed the denials from the delegation to Johnston in a text message. She never responded.) In Johnston’s view, “social services would be overwhelmed” in the villages and elsewhere if Alaskans were to receive their 2020 dividend now instead of in October. You read that right. A key member of the legislative leadership and the conference committee that crafted the state budget did not favor even paying the PFD early because certain people may not spend it wisely. Johnston’s odious reasoning is bad enough, but it is also a shame that the legislative leadership doesn’t apply the same standard to government spending as it does to the PFD. Imagine if government spending was evaluated on whether it is efficient, effective or necessary. Now that you’re done laughing (or crying), the leadership decided against providing help now so they could have more money available later to not let Alaskans decide how to spend. Johnston’s fellow Anchorage Republican and House Rules Chair Chuck Kopp wrote an op-ed claiming the leadership was being “smart and strategic,” which are evidently not qualities that Alaskans possess for themselves to choose how they would use an early distribution of the dividend to cushion the sudden blows of lost jobs, income and peace of mind. A recent report by SmartAsset found Alaska ranks fifth-highest in terms of the most vulnerable jobs in the current economic crisis with 23 percent. That is almost 71,000 jobs and untold family members. One sector not considered vulnerable in that report are government jobs, and Johnston doesn’t think state employees and their families need a dividend right now either, both in her comments to me and repeated on April 3 during a meeting of Commonwealth North. Apparently Johnston believes they are being held harmless by this because nobody is being laid off. The possibility of spouses losing jobs or new expenses such as childcare with schools closed must not have entered her mind. What Johnston sounds like is she doesn’t know anybody who has been hurt by this, she doesn’t have enough understanding or empathy for the working class to believe additional financial security would provide any benefit, and she doesn’t trust Alaska Natives in particular with an extra $1,000. “Alaskans are very quick to have their hands out,” she said in closing to Commonwealth North. I suppose we should be thankful bakeries are still open for to-go orders so that we may get some cake. Andrew Jensen can be reached at [email protected] Editor's note: Because of technical difficulties moderating individual comments, the Facebook comment feature has been turned off. Thank you for reading.

GUEST COMMENTARY: Alaska’s restaurant and hospitality industry needs help from the governor now

At its quarterly meeting on March 31 and April 1, and as reported by the Anchorage Daily News, the Alaska Alcoholic Beverage Control Board was faced with the decision to ease alcohol sale rules during the coronavirus pandemic crisis and to temporarily allow to-go alcohol sales. In a recent poll taken on March 23, Alaska President and CEO of CHARR Sarah Oates (Cabaret, Hotel, Restaurant and Retailers Association) told the ABC board that 7 percent of Alaska’s restaurants had permanently closed due to the coronavirus pandemic and never to re-open. By March 30, that number had doubled to 14 percent. Fourteen percent of Alaska’s restaurants had permanently closed their doors due to the economic devastation. Oates suggested that number could double again in a week if we fail to take immediate remedial action. Industry attorney Jessica Brown also expressed concern that if no immediate relief came for the industry, hundreds to thousands of jobs could be lost. On April 1, the ABC board considered postponing our decision by a week to allow more time to think it over, but ultimately decided to immediately respond and unanimously approved to-go sales of factory-sealed beer and wine from any bar or restaurant currently licensed to sell such products on premises, with or without food. The board also unanimously voted to allow curbside pickup of products from liquor stores and other manufacturers, such as breweries. The ABC board recognized the magnitude of the economic loss the hospitality/restaurant industry faces and voted to send an advisory opinion to the governor requesting he allow such to-go sales in the state of Alaska during the coronavirus pandemic. The governor has the authority to approve or deny our emergency request, but to date, no word has been heard from the governor or from his administration. Allowing to-go orders during this pandemic crisis makes sense if we are to be consistent in our “hunker-down” message. This temporary allowance would be a way to support local businesses and hopefully keep them from collapsing, while taking further steps to encourage people to stay home and avoid crowding in stores. We’ve all heard in the news we may be facing the worst economic collapse since the Great Recession in 2007. If we don’t immediately act to try and help the restaurants and others in the alcohol industry, what restaurants might be left for us to enjoy once we come out of quarantine? Someone once said, “Silence screams a message, just as doing nothing is an act. What we do is who we are.” I wonder, what message is the governor sending? I fully appreciate that alcohol needs to be appropriately regulated and, even during a national emergency, all important standards must be maintained. Consequently, the governor was given very specific legal information to help make this decision in confidence. The governor has at his fingertips the legal language necessary to enable the industry to conduct these activities — language that was drafted by his own team of assistant attorneys general in partnership with industry experts. With the possibility that this might save even a few small businesses from going under completely, and the likelihood that it will help prevent the spread of the virus, the governor should take this final small step and concur with the ABC board’s advisory votes. The fact is, 44 other states in the United States have temporarily eased alcohol restrictions to help salvage the industry during this crisis. Alaska is one of only 6 states that remain silent and perhaps even complicit in the downfall of our second largest industry – hospitality. It’s hard to know what kind of positive economic impact this will have on the industry, but perhaps it will help just enough to keep several more businesses afloat during this time. Any hope and assistance we can give to these small businesses during this crisis is not only welcomed but morally warranted. Action is needed now. As a small business owner who was born and raised in this amazing state, I have always believed in fighting for what’s best for Alaskans and Alaskan businesses. I’m here serving as the appointed public member on the ABC board doing my best to support this important industry and the public’s best interest. I am honored to serve as your representative. Sara Erickson is a member of the Alcohol Control Board. The opinions expressed here are solely her own and do not express the views of the board.

Railroad netted $21M in ’19; uncertainty lies ahead in ‘20

The Alaska Railroad Corp. turned a solid profit of $21.6 million last year on improved freight business, but along with countless businesses and industries the railroad’s prospects for 2020 are uncertain at best given the global economic disruption brought on by the COVID-19 pandemic. The $21.6 million net income in 2019 was a 17 percent increase over $18 million in 2018 and marked the third consecutive year of annual profits for the state-owned railroad following an unexpected $4 million loss in 2016, which leaders attributed to a dispute with Municipality of Anchorage officials over splitting federal transit funds. The net return was generated on the back of $203.9 million in total revenue, amounting to 7.5 percent revenue growth over 2018, according to the annual report published April 1. Alaska Railroad operating revenue increased 8 percent to nearly $177.6 million and led to operating income of $4.7 million last year, compared to $1.5 million in 2018. The Alaska Railroad is a public corporation but it does not receive state funding to support its general operations. The railroad does receive federal formula grants largely tied to its passenger service, as is the case for many passenger railroads nationwide. The federal funding has totaled about $52 million to $57 million annually in recent years, according to the report. Aside from its traditional operations, the Alaska Railroad also owns title to about 37,000 acres across the state, roughly half of which are revenue-generating properties. Income from that real estate totaled just more than $14 million in 2019, which accounted for about 11 percent of the railroad’s total revenue and was $1 million more than 2018. Railroad officials noted in a statement accompanying the report that despite just 9 percent annual growth in the volume of freight hauled by Alaska trains in 2019, freight revenue grew by nearly $14 million, or 16 percent to $85.3 million. Gravel accounted for more than half of the nearly 3.5 million tons of freight moved last year but the jump in revenue is largely attributed to increased demand for the railroad’s rail-barge service between Seattle and Whittier from North Slope oil companies. The rail-barge link allows railcars loaded in the Lower 48 to be barged to Whittier where they are added to Alaska Railroad trains. In addition to normal oil production operations, companies are in the midst of developing several billion-dollar-plus new projects on the Slope following a burst of large oil discoveries in recent years. Alaska Railroad spokesman Tim Sullivan wrote via email that there hasn’t yet been a slowdown in demand for freight transit, but company officials are concerned about what current low oil prices may mean for the state and the railroad’s business. Oil Search Alaska, ConocoPhillips and BP have all announced work slowdowns this month with oil prices at the lowest levels seen in nearly two decades — a combination of failing global demand in response to the virus and a subsequent Saudis-Russian price war. In light of that situation, it’s unclear how the railroad’s main business lines will be impacted this year, which CEO Bill O’Leary acknowledged in a formal statement. “We recognize COVID-19 is weighing heavily on the global economy, and the railroad is responding with the ingenuity and durability that are our hallmarks. Whatever the outcome of COVID-19, one thing is certain: The Alaska Railroad is stronger for the gains, triumphs and investments made during 2019,” O’Leary said. “We remain realistic and optimistic that the railroad can bank on that strength, foster growth where it is plausible, and help fellow Alaskans weather the challenges ahead.” While freight service accounted for more than 40 percent of the railroad’s total revenue, passenger service provided nearly 20 percent of its 2019 revenue stream as well. The railroad carried 522,101 passengers last year, which was about 10,000 passengers less than 2018. However, railroad officials attribute the decline mostly to an odd combination of wildfires and flooding along tracks in Southcentral Alaska that both disrupted passenger service for several days in separate events. Prior to last year, passenger volumes had been on a steady annual increase driven primarily by a growing visitor industry in the state. A trip on the railroad is part of many tour packages marketed by cruise companies and other tour operators. Additionally, a focus on marketing winter excursions has also helped the railroad roughly double its “offseason” ridership over the past several years. However regular summer passenger service had been suspended until early July in response to the COVID-19 pandemic, according to information posted on the railroad’s website. Railroad officials also began initial planning work on a $60 million-plus overhaul to the Seward cruise dock and terminal, which the railroad owns, late last summer. Construction of the new facilities was originally planned to run through late 2023. Sullivan said the Seward project is still an “important and critical project” for the railroad, but its pace has been slowed given the uncertain future of the cruise industry. Railroad officials also expect to finally finish the drawn out and costly federally mandated safety program known as Positive Train Control, or PTC, this year to meet a Dec. 31, 2020, implementation deadline. According to Sullivan, the Alaska Railroad has spent $165 million to-date to develop a PTC system on its tracks. That total is likely to reach $182 million by the end of the year, Sullivan said. PTC is a safety system designed to eliminate human error accidents on passenger railroads. The PTC mandate came down from Congress in 2008 after several serious accidents involving passenger trains in the Lower 48. The PTC implementation deadline was first set for December 2015, but Congress extended it to December 2018 with provisions for some railroads to have the deadline pushed to 2020 when it became clear many rail operators across the country were not going to hit the 2015 target. Elwood Brehmer can be reached at [email protected]

Final Ambler road review out; AIDEA adds $35M for project

Bureau of Land Management officials maintained their support for the most direct proposed road route to Interior mining prospects in their final environmental review of the plan published March 27, the same day leaders of the state-owned development bank moved $35 million for future work on the project amid sharp public criticism. The 211-mile industrial road concept preferred by BLM Alaska officials to reach the Ambler mining district is what the Alaska Industrial Development and Export Authority proposed in early 2017 when officials there submitted federal permit applications for the project. AIDEA is advancing the long-sought link to the remote Ambler mining district in an attempt to spur development of a suite of metal prospects in the area. Estimated in 2017 to cost between $280 million and $380 million for basic gravel construction, the final environmental impact statement, or EIS, for the road now pegs the total construction cost at approximatley $520 million. BLM Alaska Director Chad Padgett said in a March 26 statement preceding the release of the final Ambler road EIS that the roughly 430-page document incorporates information gathered over three years of community and Tribal consultation meetings. “My staff traveled to more than 20 communities in the project area to solicit input and gather traditional knowledge,” Padgett said. “Those efforts contributed to this comprehensive analysis that will help pave the way for Alaska to responsibly develop its natural resources and create jobs.” BLM led the EIS because the agency is responsible for issuing road right-of-way permits to AIDEA if the project is ultimately approved. Agency officials cannot reach a record of decision on the project until at least 30 days after the final EIS is published and it’s unclear exactly when that will happen. The 211-mile industrial-use road would run west along the southern flank of the Brooks Range from the Dalton highway at milepost 161. It would pass near the villages of Bettles and Evansville near its eastern end and terminate among several mining prospects just north of the Kobuk River villages of Ambler, Shungnak and Kobuk. Agency officials dismissed an alternate route starting at mile 60 of the Dalton that would snake 332 miles northwest to the district because although it would avoid Gates of the Arctic National Park and Preserve; its added length would inherently mean more environmental impacts and costs compared to AIDEA’s proposal, the EIS states. Critics have pointed to the cost of the project, and the fact that there is no guaranteed repayment method, as reasons to scrap the plan. The Wilderness Society contends the current estimate for the road does not consider some of the costs inherent to building in remote northern Alaska, such as constructing a road over permafrost. The group suggests the road could end up costing $1 billion or more as a result. The proposed mines have also drawn scrutiny for potential impacts to salmon and whitefish runs in the Kobuk River drainage and many residents of the area villages are concerned about impacts to caribou in the region that are an important subsistence food source. Numerous village and Tribal governments in the area of the proposed road have issued formal statements of opposition to the project. AIDEA officials insist access to the road will be restricted to mining activity because it would ultimately be paid for through tolls under the plan; there would be no public access to currently isolated hunting areas, which has been another concern of area residents worried about increased activity. Currently, Vancouver-based Trilogy Metals Inc. is the only company with advanced prospects in the Ambler area. The company holds two main prospects, Arctic and Bornite, which contain high-grade copper along with cobalt, zinc, lead and precious metals. Trilogy leaders have said the Arctic prospect contains copper at grades up to 10 times greater than many other modern mines and the only thing holding back development is cost-effective access. Interim Trilogy CEO Jim Gowans said in a company statement that the final EIS marks a critical milestone for the road project that will “unlock the incredible mineral potential” of the region. “Trilogy, through its joint venture company, Ambler Metals LLC, is already discussing the next steps for the financing and development of the road with the Alaska Industrial Development and Export Authority,” Gowans said. AIDEA moves $35M for road Also on March 27 the AIDEA board of directors approved a transfer of $35 million from the authority’s Revolving Fund to its Arctic Infrastructure Development Fund to eventually support development of the Ambler road. The resolution directing the funding shift notes that further board action is required to spend the money, but a slew of public commenters made it known they were not happy that AIDEA officials took up the resolution at a short-notice emergency meeting that otherwise dealt with loan and regulatory issues related to the COVID-19 pandemic. Many commenters simply stated their strong overall objection to the road project and the mines it is intended to support, while others questioned whether the authority had violated open meetings laws with its second emergency meeting in as many days. Anchorage Democrat Rep. Andy Josephson testified that he shared in the concerns of others regarding the timing of the meetings and the funding transfer resolution. “I’m concerned that the optics of what you’re doing is so poor given what people are dealing with,” Josephson said to the AIDEA board members, adding that the Legislature’s decision to not capitalize the Arctic Infrastructure Development Fund exemplifies divisions among lawmakers over the Ambler road project. AIDEA’s Revolving Fund held approximately $1.3 billion at the end of the 2019 fiscal year last June 30, according to the authority’s annual financial report, but the vast majority of that money was committed to loans or other investments. The Revolving Fund held approximately $33.2 million in unrestricted cash at the time as well. Attorneys for the Anchorage-based environmental nonprofit law firm Trustees for Alaska also questioned the legality of the $35 million transfer in a memo sent to state lawmakers March 25. The memo asserts than an initial version of the resolution describes that the money would fund “expert engineering, attorney, advisor, and other professional fees to work on permitting, road and bridge design, acquisition of rights-of-way, public outreach, cultural resources evaluations, and other tasks necessary or convenient to reaching a decision point on whether to proceed with construction of the project.” Trustees attorney Bridget Psarianos said in an interview just prior to the March 27 meeting that much of the work outlined in the original resolution should have already been done so it could be included in the EIS for the road. That language was removed from a revised version of the resolution, which states that the authority has the ability to transfer the money so it can continue to advance Arctic infrastructure developments and “pursuing (the Ambler road) through the Arctic Infrastructure Development Fund is in furtherance of the authority’s mission to promote economic development and to create employment opportunities in Alaska.” Trustees argues the transfer is “directly contrary” to both the Alaska Constitution and the Executive Budget Act, which outline the appropriations process through the state Legislature and the governor. “The Ambler road project is a capital appropriation item, and AIDEA cannot increase funding for this project without approval, regardless of the source of that funding. Funds for the project are subject to appropriation by the Legislature, not AIDEA,” the Trustees memo states. “Because AIDEA has been unable to secure additional funding for the Ambler road through the Legislature and the capital budget process, it is now attempting to make an end-run around the authority of the Legislature by unilaterally appropriating money from its Revolving Fund to this project.” AIDEA spokesman Karsten Rodvik wrote via email that “When used for capital expense, money in AIDEA’s Revolving Fund is not subject to the Executive Budget Act. Also, the board has the authority to move money between funds.” The Legislature created the Arctic Infrastructure Fund in 2014 but it had not been capitalized until the $35 million was moved into it. Psarianos wrote in an email after the meeting that the firm has serious questions about the legality of the authority’s actions and “we are considering a variety of options to attempt to right this wrong.” Gov. Mike Dunleavy’s 2020 fiscal year budget plan originally proposed to transfer $84 million from the Revolving Fund to an oil and gas tax credit fund outside of the authority, but the move was not included in the Legislature’s final budget. (Editor's note: This story has been updated to reflect the latest available cost estimates for the road project.) Elwood Brehmer can be reached at [email protected]

Fishing community takes precautions as it readies for salmon season

As Alaska’s top doctor put it, “We know the fish are coming regardless of COVID-19 or not and we can’t ask them to stay home.” As a result, government officials and fishing stakeholders statewide are working to ensure Alaska can still have a strong summer salmon season even amidst a potentially prolonged COVID-19 winter. Alaska Chief Medical Officer Dr. Anne Zink made the comment during a March 30 press briefing, adding that the state has a specific fisheries work group trying to figure out ways small communities can handle an influx of fishermen and processing workers while also adhering to important health guidelines that run counter to the realities of a traditional fishing season. While Alaska’s diverse fisheries continue year-round, the famed Copper River sockeye and king fishery that unofficially kicks off the salmon harvest in mid-May each year will be one of the first testing grounds for trying to find that balance. United Fishermen of Alaska Executive Director Frances Leach said fishing groups across the state have been working for weeks to find ways to adjust normal fishing operations in light of the host of challenges the virus — and steps taken to fight it — raises. It started with crowdsourcing to simply identify who was doing what to make sure everyone is rowing in the same direction, Leach said. “Communicating is huge. Commercial fishermen are kind of infamous for not giving away their secret fishing spots so trying to shift gears and make sure we’re all communicating and sharing information during this time is really important,” she said. The goal is to standardize new health guidelines and corresponding procedures for each fishery as much as possible to make sure fishermen and support workers know what is expected of them. Leach said industry leaders are in the process of developing and submitting vessel action plans to the state that detail what steps they will take to prevent the spread of the virus while they are fishing and how they will respond if someone on their vessel develops symptoms during the season, among other considerations. The plans are not special to the fishing industry; each company working in an industry deemed critical by state officials must submit a similar COVID-19 Worker Mitigation Plan to the state Department of Commerce, Community and Economic Development if workers arriving prior to May 1 will not be quarantined for 14 days to monitor for symptoms of the virus. The plan requirement could also be extended beyond May 1 if the virus remains a significant threat to public health in the weeks and months to come as many health experts expect it will. “Just because we’re considered a critical workforce doesn’t mean that we can just run off and start fishing,” Leach said. She’s hopeful the state will adopt operating parameters for each segment of the industry in order to simplify the process because absent that, the state officials would literally have to review thousands of action plans for each individual fishing vessel, Leach said. “We have so many types of fishing vessels and fisheries in the state of Alaska that one plan cannot be applied to every single vessel in Alaska. We’re going through and catering plans to each type of vessel,” she said. At the epicenter of the rapidly approaching Copper River fishery in Cordova, Mayor Clay Koplin said city officials have been doing their best to prepare for the ranging impacts of the virus since late January even though the isolated Prince William Sound community has yet to report a confirmed case of COVID-19. The city’s protective provisions have mirrored the state’s fairly closely, Koplin said, noting the city put its own 14-day self-quarantine mandate on intrastate travelers ahead of health mandates issued by Gov. Mike Dunleavy. “We are acting as if the virus is already here on one hand, so we’re being proactive internally but we’re also acting as if the virus isn’t here and we have to keep it out,” Koplin said. Cordova is also requiring fishermen and processing companies to submit action plans similar to the state, Koplin added, though the state plans will be accepted at the city level. He acknowledged there is a “high state of fear” among Cordova residents about what the salmon fishery might bring. However, fishing also accounts for roughly 90 percent of the city’s economy, so still having a viable season is extremely important, he said. Cordova’s year-round population of approximately 2,300 is boosted by upwards of 860 fish processing workers at the peak of each summer season, according to state Labor Department figures. In addition, roughly two-thirds of the nearly 540 commercial fishing permits for the area are held by individuals from outside the community, Koplin said, and with each vessel comes several crew members. He said many stakeholders have quickly done what they can to ease residents’ concerns as much as possible and assist the city in the COVID-19 fight. Leaders of fish processing companies have been submitting their virus prevention and operating plans and some started doing so even before they were asked to do so, according to Koplin. “They filed very aggressive plans up to and including bringing in their own medical staff for the season and they have lots of bunkhouse space so they can essentially kind of quarantine their entire operation except for the fleet and that’s where a lot of our concerns are,” he said. The city also has Vessel Operator Mutual Agreement forms on its website for both large and small operators to sign that outline the local government’s expectations and requirements for working in the fishing industry amid the ongoing pandemic. Koplin said the situation largely requires more pre-planning by fishermen who typically buy fishing gear, boat parts, groceries and other supplies in Cordova prior to the Copper River fishery. “We would prefer that they do exactly what residents are doing. Don’t engage in any kind of interaction that you don’t absolutely have to,” Koplin said of arriving fishermen. He added that a lot of what fishermen will need to do when, and before, they get to Cordova will depend on where they came from. “If they come up on a seiner and they stop in Ketchikan (where 13 COVID-19 cases had been reported as of this writing) for three weeks and then come to Cordova we’re going to be extremely concerned,” Koplin described. “But if they leave Seattle and they’re in route for two weeks and they don’t really have any human contact then they’ve effectively quarantined before they got here.” With fishermen coming from all over, it can be difficult to communicate with the entire salmon fleet, so city officials are utilizing the state Commercial Fisheries Entry Commission as a conduit to communicate their expectations to fishermen, he said. If a fishermen or processing worker gets sick, Koplin stressed that they should call health facilities instead of going to them to limit their exposure to others if they indeed have contracted the virus. Department of Fish and Game Cordova Area Management Biologist Jeremy Botz said he doesn’t think the measures being taken to limit the spread of the virus will significantly impact management of the Copper River sockeye and king fishery. “Every season is pretty dynamic as far as the fishery goes. Until the fish start returning we really don’t have a clear sense as for what to expect,” Botz said. At this point, he expects managers will have their normal means to assess run strength but if they are put in a position where they don’t have those tools they can turn to their best available historical data to manage the run. Botz said he is planning for a fairly normal season in terms of fishing effort. “It’s hard to imagine a scenario where we wouldn’t be able to go out and have a commercial fishery,” he said. Market uncertainty While everyone in Cordova is working to make the fish catching go off as smooth as possible, the market end of the equation could pose another challenge. The Copper River sockeye and kings are prized as the first fresh salmon of Alaska’s season and some years consumers at high-end restaurants and markets in Seattle pay upwards of $60 per pound for the most sought-after king fillets. This year, however, that market is missing. Alaska Seafood Marketing Institute Executive Director Jeremy Woodrow said ex-vessel prices for early season fresh halibut — traditionally purchased by restaurants — have been depressed and a somewhat similar scenario is expected for Copper River salmon. However, Woodrow said processors should still be able to sell their product if they adapt to the new market conditions. Frozen salmon portions are selling well and canned salmon “is flying off the shelf” these days, he added. “I think Americans are more in-tune about supporting the American economy right now,” Woodrow said, and that sentiment could hopefully translate into buying more Alaska salmon for their own dinner tables this year. “If this challenge continues there’s likely going to be some lessons that can be learned from the Copper River fishery,” he said. Koplin noted that Cordova resembles a ghost town during fishing openers and said ideally the town will look that way as long as the COVID-19 threat lasts, whether folks are out fishing or not. “I guess my preference would be that every day of the week looks like that ghost town — that people are on their boats or they’re going out and doing some sport fishing in between commercial openers; anchoring up in their favorite cove and just not spending the time in town for their own health and that of the community,” Koplin said. ^ Elwood Brehmer can be reached at [email protected]

Movers and Shakers for April 5

Birch Horton Bittner &Cherot announced the hire of Michelle Nesbett, who focuses her practice on federal white collar criminal defense. She also handles civil cases, including professional negligence and complex litigation. She received her law degree from the University of San Francisco School of Law in 2006. After working as a prosecutor, she transitioned into private practice. In 2019, she was awarded the designation of “Super Lawyer,” which recognizes those lawyers who have attained a high degree of peer recognition and professional achievement. The firm also announced it has hired Ella Morozova as a paralegal in its Anchorage office. She received a bachelor’s degree from the University of Nevada Las Vegas; she received an associate’s degree from the College of Southern Nevada; and she studied law at California Western School of Law in San Diego. She has worked as a paralegal in Las Vegas since 2010, but recently relocated to Alaska. AJ Behm recently joined R&M Consultants Inc. as a staff engineer in the firm’s Surface Transportation Group. Behm brings a background in construction to his work at R&M. During college breaks, he interned for Knik Construction and the Alaska Department of Natural Resources. Since joining R&M, Behm has provided engineering support for the Nanwalek/Port Graham Airport Relocation, Skagway State Street Rehabilitation and Airport Way West Improvements in Fairbanks. His work has included creating alignment alternatives, quantities estimates and plan sheets. Behm has a bachelor’s degree in civil engineering from the University of Alaska Fairbanks. Alaska Pacific University announced the appointment of Valerie Nurr’araaluk Davidson as its next president. When Davidson succeeds current APU President Bob Onders on April 25, she will become the 12th president of APU and the first woman to lead the university. Davidson served as commissioner of the Alaska Department of Health and Social Services and then lieutenant governor under Gov. Bill Walker. Prior to that, she worked for more than 15 years as a national policymaker, focusing on matters affecting Indigenous health. The announcement concludes a nationwide search that included 21 applicants from across the country. Davidson previously served as Senior Director of Legal and Intergovernmental Affairs for the Alaska Native Tribal Health Consortium and as executive vice president of the Yukon-Kuskokwim Health Corp. Her current board service includes the First Alaskans Institute, the Foraker Group, the United States of Care Founder’s Council and the Lancet Commission on Arctic Health. Davidson earned a juris doctor with a certificate in Indian law from the University of New Mexico School of Law and a bachelor’s degree in education with a minor in bilingual education from the University of Alaska Southeast. Davidson is an enrolled Tribal member of the Orutsararmiut Native Council. The SMPS Alaska Chapter announced its 2019-20 Board of Directors. The Board of Directors includes the following architectural/engineering/construction, or A/E/C, marketing professionals: Katy Kless, communications and marketing specialist, Coffman Engineers, president; Sarah Hall, proposal specialist at Coffman Engineers, past president; Michelle Pasion, marketing director, AMC Engineers, president-elect; Karma Torres, marketing coordinator, Architects Alaska, secretary; Melissa McCarty, proposal manager corporate marketing, Coffman Engineers, treasurer; Joann Mitchell, PE, civil engineer, public involvement specialist, marketing manager, and an owner, Kinney Engineering; communications director; Pearl-Grace Pantaleone, CPSM, business development and marketing manager, Cornerstone General Contractors, programs director; Melissa Branch, PE, owner and principal engineer, Big City Engineers LLC, education director; Karin McGillivray, public engagement manager, Michael Baker International, sponsorship director; Cynthia Oistad, CPSM, Alaska business development and communications, Arcadis, membership director; Kate Hostetler, director of marketing, KPB Architects, outreach director; Andrea Story, CPSM, vice president of marketing and business development, R&M Consultants Inc., chapter advisor. Bob Warthen has been selected to fill the position of vice president, commercial services administration, business and commercial services for Alaska USA Federal Credit Union. Warthen has more than 25 years of industry experience. He has been employed with Alaska USA since 2005, most recently as credit administration manager. PDC Engineers announced the addition of Jennifer Kemp and Evan Venechuk to its Juneau office. Kemp joins PDC as a CADD engineering technician. Kemp is a 2002 graduate of Centralia College where she earned her associate’s degree in technical arts. Kemp has more than 16 years of experience with Civil 3D modeling, AutoCAD, GPS and GIS technology. Most recently, Kemp worked as a Crew Chief on a survey crew as well as developing the first-ever initiative to locate utility and light poles using GPS and GIS technology. Venechuk joins PDC Engineers as a land surveyor in training. In this position Venechuk will calculate boundary corner search/staking coordinates and provide technical and CADD support for the Land Survey team. Venechuk has more than five years of surveying experience, as well as extensive experience in the mining industry in Alaska. PND Engineers, Inc. announced the following new hires. Forrest Savel earned his bachelor’s degree in civil engineering from the University of Alaska Fairbanks. He has a background in construction, having worked previously as a summer laborer with the Alaska Department of Transportation and Public Facilities, and as an intern with R&M Consultants. Most recently he worked full-time as a distribution designer for Chugach Electric Association. At PND, Savel assists on general civil engineering projects. Jake Randazzo brings 15 years of experience in hands-on primary and secondary soil testing, data reduction, and soil lab operations. He is also experienced in geotechnical investigations, pile driving analysis, wave equation analysis, pile driving inspection, concrete testing, and other inspection work. Randazzo has an associate’s degree in process technology from Kenai Peninsula College; holds ACI, NICET, and Nuclear Gauge certifications; and has done field work all over Alaska, including the North Slope.

FISH FACTOR: Seafood industry gets $300M in relief under disaster bill

The U.S. seafood industry received a $300 million assist from the $2 trillion COVID-19 relief package passed by Congress on March 27, and a wide coalition of industry stakeholders is hoping for more. Fishery recipients in the relief bill include Tribes, persons, communities, processors, aquaculture and other related businesses. SeafoodNews.com reports that those eligible for relief must have “revenue losses greater than 35 percent as compared to the prior 5-year average revenue, or any negative impacts to subsistence, cultural, or ceremonial fisheries.” The funds will be provided on a rolling basis within a fishing season through Sept. 30, 2021. Two percent can be used for administration and oversight activities. The package follows a bipartisan letter sent on March 23 to Congress by Democratic Sens. Elizabeth Warren and Edward Markey of Massachusetts and Alaska’s Republican Sens. Lisa Murkowski and Dan Sullivan. They asked, among other things, that fishermen be able to collect unemployment insurance, get help with vessel loan payments and ensure that the global pandemic does not compromise management of U.S. fisheries. Also last week a coalition of nearly 200 seafood stakeholders sent a 12-page letter to the White House and Congress asking the government to purchase at least $2 billion worth of seafood and provide another $1.5 billion in relief for businesses and fishing communities. The letter states that nearly 70 percent of the more than $102 billion that consumers paid for U.S. fishery products in 2017 was spent in dining out as opposed to eating it at home. As a result, they said that for many fisheries the sudden shutdown of restaurants and other storefronts has caused demand to evaporate overnight, “threatening the economic viability of the entire supply chain.” Undercurrent News reported that the letter also asks the government to appropriate a minimum of $500 million to purchase surplus seafood that can be shipped overseas or supplied to U.S. hospitals and state and local government programs. And while the Department of Homeland Security has declared that fishermen and processing workers are “essential critical infrastructure,” the letter asks that support staff also receive the same designation in order to continue operations amid any self-quarantine orders. The stakeholders also urge the government to launch a “Buy American” campaign to promote consumption of seafood, along with expedited visa plans that will help to quickly staff and reopen businesses and fishing operations when travel restrictions are reduced. Meanwhile, in Alaska the Governor’s Economic Stabilization Task Force is organizing a fisheries subcommittee to address safety provisions. Staff at the office of Rep. Louise Stutes, R-Kodiak, is in contact with Gov. Mike Dunleavy’s administration about forming groups to report on the needs of each region. Fish for the needy Eighteen truckloads of more than a half-million pounds of donated breaded pollock portions went to 16 food banks in 12 states this month, and more seafood is on its way. “We did a press release and it’s actually grown to the point that another company, Gorton’s Seafood, has come up with 120,000 pounds at cold storages around the country. Our donors are so generous and everybody’s calling and asking how they can help. It’s rewarding to be in this business right now,” said Jim Harmon, executive director of SeaShare, a nonprofit that works with fishermen, processors, logistics and distribution partners to provide top quality seafood to Feeding America, a network of 200 large food banks in every state that services up to 500 smaller agencies. SeaShare dates back to the early 1990s when Bering Sea industry members banded together to turn mandatory discards of groundfish (bycatch) into frozen portions for food banks. “We’ve been doing it for 25 years and grown to the point where bycatch represents only about 10 percent of our total donations,” Harmon said. Products have broadened to include a wide variety of species, such as salmon, shrimp, rockfish, halibut, catfish, and tilapia. Most are frozen although canned and other shelf stable items are included. SeaShare also distributes seafood throughout Alaska where industry donations have put freezers in hub centers such as Bethel, Dillingham and Juneau. The fish is then sent to over 30 remote communities. During the coronavirus crisis the less fortunate are especially at risk, Harmon said, and SeaShare is getting requests for fish from all over the world. Anyone with products available in any quantity as a donation or at a low cost is encouraged to contact SeaShare as it has some resources to help access seafood that might not be available for free. “We’re asking everyone we know to pull on the oar with us,” Harmon said. “We’re hoping that getting the message out about the 18 truckloads of pollock and the 120,000 pounds from Gorton’s will resonate with others and get people thinking about how they can get on board.” “I’m so thankful and proud of our seafood partners who really come together when emergencies happen. It also takes financial support along with the efforts by seafood processors and fishermen,” Harmon added. A donation of just one dollar provides eight servings of seafood. See more at www.seashare.org. PWS aims to expand fisheries Prince William Sound’s Tanner crab fishery has been underway since March 2 for the third year running. Sixteen boats have pulled up more than 54,000 pounds so far fetching $3.50 per pound. That’s about half of last year’s 124,000-pound catch. “Things are going well and we’ll just let it click along and we’ll be monitoring it every day,” said Jan Rumble, PWS and Cook Inlet manager for shellfish and groundfish for the Alaska Department of Fish and Game at Homer. A test fishery also is underway in unfished areas in hopes of eventually expanding the Tanner fishery. “We’re collecting information and we’re hoping to combine that with our trawl survey data and historical harvest information to provide a more expansive harvest strategy than what we have in regulation currently,” Rumble said. Tanner crab fishermen also are recording the numbers and where they pull up golden king crab to provide more data for a potential fishery. Goldens appear to be on an upswing in some areas, but no stock assessments have been done since 2006. Two proposals to open a commercial fishery were denied this month by the Board of Fisheries but Rumble said ADFG and local harvesters are committed to gathering more information. ADFG already manages 25 shellfish and groundfish fisheries in the region and there’s no money in the budget for surveys, but Rumble said a test fishery, hopefully this year, might help get the data they need. “People bid on the test fishery and that could provide us with revenue where we could send observers aboard a vessel to collect biological and abundance information. So that’s kind of the route we’re pursuing right now,” she said. Another potential fishery for Prince William Sound is sea cucumbers. Rumble, a former diver for the state’s largest cuke fishery in Southeast Alaska, is working with local fishermen on a pilot survey for this summer. “With dive fisheries, you’re allowed to tax the product, it’s in the state statutes. So that creates a situation where you are providing funds for stock assessment through the taxation of the fishery,” she explained. “If things go well with the survey, we’re hoping to expand it throughout the Sound, and to continue stock assessments and development by using proceeds from anything that’s sold.” In 2018, sea cucumbers in Alaska averaged $5.29 per pound and a harvest of roughly 1.4 million pounds was valued at $7.4 million to divers. Up next in Prince William Sound is the popular pot shrimp season starting in mid-April with a harvest of 68,100 pounds. Registration is open through April 1 and shrimpers must first get a Commercial Fisheries Entry Commission card before they sign up with ADFG. The big spot shrimp can pay fishermen $10 to $16 per pound in what Rumble calls a very local fishery. “We provide shrimp to people on the street and people sell it through Facebook and to local restaurants,” she said. “It’s local sales that drive this fishery and I think that we would all say that we’re pretty proud of it.” ^ Laine Welch lives in Kodiak. Visit www.alaskafishradio.com or contact [email protected] for information.

OPINION: Legislature misses chance for immediate help to Alaskans

Faced with the biggest threat to Alaska’s economy in state history, the Legislature failed to meet the moment with a move that would have offered the most immediate relief. The operating budget approved after midnight on March 29 stripped out a supplemental $1,000 dividend payment originally added in the Senate and did not move up the traditional date for distributing the PFD from October while setting the amount at $1,000 per Alaskan. Rather than paying Alaskans a distribution from the Permanent Fund Earnings Reserve to help them pay their bills, the Legislature’s solution was to make it illegal to collect bills for three months. Such a scofflaw strategy isn’t surprising after five years of the Legislature avoiding tough decisions by simply not paying bills whether it has been the statutory PFD formula, oil tax credits or its own lease on the office building it commissioned. Instead of taking advantage of Alaska’s unique financial position to help itself, the Legislature is doing another thing it does well: relying on the federal government to foot the bill. Congress passed the CARES Act with a $1,200 per person and $500 per dependent appropriation for certain income levels, and added $600 per week to those now forced into unemployment. That is apparently good enough for the legislative leadership that negotiated the conference committee budget. Paying a supplemental relief check or an early PFD would have required exceeding the 5.25 percent of market value draw from the Permanent Fund, which is the only law the leadership treats as binding. Adhering to the formula is backed by the Permanent Fund Board of Trustees, but much like the laws it passes, the Legislature also picks and chooses what advice to follow from the board. On March 5, the board passed a resolution calling on the Legislature to take one of two actions: either combine the principal and the Earnings Reserve account into one with a fixed 5 percent annual draw, or failing that to maintain a balance in the ERA of at least four times the annual draw that would be roughly $12 billion. Given the rapidly unfolding circumstances of the coronavirus spread, there was no chance of attempting a lift that would be difficult in the best of times such as combining the Permanent Fund accounts. However, the Legislature gave no thought to reversing the $4 billion transfer from the ERA to the principal approved last year, and even went a step further by appropriating another $1 billion to the corpus under the nebulous purpose of “inflation proofing.” If Gov. Mike Dunleavy doesn’t veto that $1 billion transfer — and he should — the total budgetary and supplemental transfers out of the ERA would likely lower its balance to less than $7 billion, or just about half of what the Board of Trustees recommended. After attempting to move $9 billion from the ERA to the corpus last year (Dunleavy vetoed $5 billion of that), the need to move another $1 billion for “inflation proofing” doesn’t hold a colander’s worth of water. What it looks like is the legislative leadership is tired of hearing from constituents and the governor that “the money is there” in the ERA to pay Alaskans a statutory dividend or even a supplemental “true-up” to the 2019 check. By refusing to follow the Permanent Fund board’s advice to keep a 4-times buffer in the ERA, and in fact taking affirmative action to reject it with the latest $1 billion transfer, what it looks like is the leadership is attempting to starve the PFD out of the budget. Moving $5 billion to the untouchable corpus of the Fund at a time when Alaska is staring down economic ruin is actually far more irresponsible than paying a supplemental dividend. Our two sources of revenue — oil and investments — are being hammered in tandem. New projects that promise thousands of jobs, hundreds of thousands of barrels per day and billions in revenue are on hold. Our biggest private sector employer — fishing — is likewise in limbo with nearly three-quarters of its harvest typically bound for restaurants that are now shuttered across the globe. Our one bright spot in the recession — tourism — is on the brink of having no cruise season based on federal distancing guidelines, Canadian restrictions and one headline after another about outbreaks on ships that will surely discourage travelers even if sailings begin. Those four industries alone account for more than $10 billion in state revenue and economic activity, to say nothing of the destruction of the state’s hospitality sector that is also ongoing through mandated government closures. In their effort to save the Permanent Fund from themselves by slashing the ERA balance, this Legislature is taking financial options off the table that other states would love to have, and ones we may yet need. Andrew Jensen can be reached at [email protected]

GUEST COMMENTARY: Help Alaska by supporting your local businesses

Alaska was just pulling out of a recession; the future was looking bright and then the invisible enemy attacked: COVID-19. Watching many businesses close and leave the state in the past few years was difficult, let’s do what we can to keep those that stayed viable for the future. Our businesses have a hard time in a normal winter, and this current situation goes beyond anything we have experienced in recent history. Alaska has amazing communities — some of the finest in the country — and we have wonderful local businesses. Now is the time for us to come together and support those local businesses, and the vitality and diversity they bring to our lives. I believe in the people of this state, I believe in Alaska’s future. My grandmother came to this state as a missionary nurse in 1920, lived in Nenana during the Diphtheria epidemic in 1925, and went on to raise her family there. It’s hard to imagine the challenges everyone endured. We had strong communities then and we have strong communities today. We are fortunate that we now have more tools and information at our disposal that enable us to provide economic support within the guidelines of the health mandates. It is critical that we abide by those mandates to ensure the safety of our residents and our frontline workers. Implementing necessary closures of businesses throughout the state during this COVID-19 emergency, although necessary, has been difficult on everyone. None more than on the people who have put their hearts and souls into their ventures or the employees that make the magic. These are our friends, neighbors, co-workers, and people we see at our stores and churches. They are our community. The actions we take now can have a significant positive impact in helping sustain these enterprises over the next few weeks. Let’s instill hope and confidence in our community. Utilize the take-out or delivery options at your local restaurants, breweries, and distilleries, or put a deposit down with your favorite hair dresser to get in the front of the line when they re-open for business. For those local businesses with an online presence, purchase birthday and Christmas presents, whale watching tours, or memberships to the Botanical Gardens or the museum. Support your local food bank and provide meals for those in need. If you can afford it, please don’t cancel memberships to gyms and other businesses right now; and consider donating to a local business that could use the money to stay open and keep their workers employed. Remember those small businesses that supported local fundraisers? Now it’s our turn to do the same for them. There are innumerable ways we can help keep our economy, our friends, and our neighborhoods sustainable. We are a creative bunch here in Alaska, let’s use that creativity to support our economy! To our local businesses, we appreciate you! Our team at the State Department of Commerce, Community, and Economic Development is here to support you. Please take a moment to look over the newly launched Alaska COVID-19 Economic Recovery Resource Portal for Business page on our website. I encourage all business owners to check this page periodically, as it will be updated as new tools become available at the State and Federal Levels. During these uncertain times, it’s crucial that we all support each other however we can. Be a good neighbor, share your resources, and assist your local businesses where you can. Julie Anderson is the Commissioner for the State of Alaska Department of Commerce, Community, and Economic Development.

GUEST COMMENTARY: University of Alaska wants your input on academic reviews

As we face the rise of the COVID-19 health crisis in our state and our nation, the leadership team at the University of Alaska is addressing the pandemic with strength and care for our staff, faculty and students. In response to the crisis, when students returned to classes this week, our university looked much different than it did just three weeks ago. Our university communities, like those throughout our state, now must study, work, and live differently. These new conditions bring new responsibilities for all of us, and a new way to serve our friends, neighbors and colleagues. Our new reality also includes the mandate to reduce our operating costs by $45 million as of July 1, 2021. When the Board of Regents signed a compact with Gov. Mike Dunleavy last August, we averted a catastrophic $135 million budget cut this fiscal year. The compact has given us three years to reduce our operational expenses by $70 million: $25 million this year, $25 million by July 1, 2020 and another $20 million by July 1, 2021. We achieved $25 million in reductions this year, but still have the remaining $45 million in cuts to achieve. Months ago, the Board of Regents established a process to make the remaining reductions, and tasked the university chancellors to review and further reduce academic programs and administrative costs. Due to our notice and “teach out” requirements, those decisions need to be made by the Board of Regents in early June 2020. The added costs and reduced revenues caused by the rapidly spreading COVID-19 make these decisions even more critical and urgent. The recommendations from each university provided this week have been very difficult to make, but they were made in the spirit of transparency and with input from staff, students, faculty and community members at each campus either by attending a forum, writing an email or letter, or expressing your views personally. As we evaluate the choices over the next several months our commitment to you is to continue to be transparent, inclusive, and to work together to best position the university to serve the needs of our students and the state. Now the second phase of the review process begins. The chancellors’ recommendations will be reviewed by the president before being sent to the university’s Academic Council. From there, a committee of the Board of Regents will review the recommendations and draw up a list of final reductions to present to the full Board of Regents in June. At every decision point, we know there are students, faculty, donors, community members and employees who have an interest in the outcome. As we go through this review process considering cost, demand, and other data, as well as qualitative factors, we will do so with compassion. We also recognize that as we make decisions about what programs to reduce or discontinue, we must preserve what is core to our mission so we can adapt to this fast changing demographic, technological, economic, and epidemilogical world. Between now and the board’s decision in June, there will be many opportunities to provide input and testimony. Virtual town halls will be held and all the relevant program and budget information will be posted at https://alaska.edu/research/review/index.php. Additionally, each university has a website with university-specific information. We urge you to check the websites often and add to your calendar the dates for virtual town halls, committee meetings, and public testimony opportunities. We are all living in difficult and stressful times, with multiple forces pressing on us all. Rest assured, the University of Alaska — UAA, UAF, and UAS — is strong. We will weather these unprecedented times, using all tools available to do what’s right for our university, for the students we educate and the communities and state we serve. ^ Jim Johnsen is the President of the University of Alaska; Rick Caulfield Is the Chancellor of University of Alaska Southeast; Cathy Sandeen is the Chancellor of UA Anchorage; Dan White is the Chancellor of UA Fairbanks.

Pages

Subscribe to Alaska Journal RSS