A billion opportunities: Alaska positioned for major funding boost to state's ferries

Alaska appears to be in prime position to capture well more than $1 billion in federal funding for ferries that many stakeholders hope is the catalyst for long-sought change in the Alaska Marine Highway System and elsewhere. The $1 trillion Infrastructure Investment and Jobs Act signed in November by President Joe Biden establishes new national programs and boosts existing funding to collectively offer nearly $1.6 billion in ferry-specific funding, according to information from the office of Alaska Republican Sen. Lisa Murkowski, who was among a group of 10 senators that negotiated the framework of the bill with the White House. As it turns out, the lion’s share of that $1.6 billion is likely headed to Alaska over the next five years due to the specific language of the provisions. Though it’s not a forgone conclusion all of the money that flows to Alaska will go to the Alaska Marine Highway System, it represents the opportunity for a sharp turnaround from the constant pressures that budget cuts and an aging fleet have put on the state’s ferry system. Less than two years ago, 10 of the then-12 Alaska Marine Highway ferries were laid up for repairs or lack of funding with little prospect of significant changes. “There’s basically a billion dollars set aside for the next five years,” said Robert Venables, executive director of Southeast Conference, a community development group. “It’s historic and game-changing if we use it wisely.” Venables was also the longtime chair of the state’s Marine Transportation Advisory Board, which sunset last year and was replaced by the newly formed Alaska Marine Highway Operations Board. Most of the overall $1.6 billion will go to a new program aimed at improving rural ferry service nationwide. The program will provide $1 billion spread over five years to eligible rural ferry systems that operated between 2015 and 2020, according to the bill. The catch is that the money is only available for rural ferry routes over 50 miles in length, of which Alaska has many and other states very few, staffers to Alaska’s congressional delegation noted. A program to fund pilot project electric or low-emitting ferries also provides up to $250 million for those endeavors across the country, but a provision in the bill requires at least one of those pilot tests be conducted in the state with the most qualifying marine highway system miles — Alaska. The state is also set to receive $73 million from $342 million in grants aimed at ferry vessel and terminal construction through an existing capital program, according to Murkowski’s office. For context, the Alaska Marine Highway System has had an annual operating budget of roughly $140 million in recent years. Alaska Department of Transportation Commissioner Ryan Anderson said the state will be “aggressive” in its pursuit of the available ferry funds but added that DOT officials would also welcome partnering with communities on local ferry projects where appropriate. “We’re going to really be looking hard at how all this can fit together because we want to make the most of all of those funds,” Anderson said in a December interview. According to delegation staffers, the new programs should be established by Oct. 1, the end of the federal fiscal year, but the final timelines will depend on agency rule-making procedures. Regardless, the state is starting to use other supplemented capital funds more quickly available from the infrastructure bill to replace the 57 year-old Tustumena ferry that serves Southcentral and Southwest Alaska communities on some of the longest, harshest runs in the system. The $200 million-$250 million Tustumena replacement vessel has been designed since 2016 but construction of the 330-foot ferry had been on hold as Alaska struggled to deal with ongoing budget deficits. Anderson said a 30-40% increase in annual federal highway capital funds to the state — approximately another $1 billion over five years — because of the infrastructure bill made now the time to move on the new ferry. “People want us to think generational; do those things that are good for the long term of Alaska. This would be one of those things. Replacing a ship is generational,” Anderson said. The Tustumena replacement is just one instance in which Anderson believes the state will be able to leverage the new federal funds to invest in ferry systems along much of Alaska’s coastline. As for AMHS-specific investments, he said he expects to lean heavily on the new operations board, which is expected to hold its first meeting soon, for strategic direction. “DOT participates but really this board is going to be integral in the decision-making process,” Anderson said. Another key provision allows federal highway money formerly restricted to capital projects on roads and ferries to be used for ferry operations, which has been at the center of the debates between Dunleavy and legislators over the AMHS budget. Venables said he and other coastal community leaders are concerned politics will cause much of the ferry money to be used for short-term budget fixes instead of forward-looking investments. “There’s an unprecedented amount of funding available to the Marine Highway System, but it needs to go toward the new Marine Highway System, not the old concepts and models of the last 50 years,” Venables said. Dunleavy’s proposed budget relies on ferry revenue and federal funding for all but $5 million of the $141 million AMHS operating budget for next fiscal year. Cordova Mayor Clay Koplin, an outspoken advocate for changing and investing in the state’s ferries, said he’s skeptical the funding will lead to significant improvements in ferry service and reliability unless bigger, structural changes are made to the system’s governance. Many AMHS stakeholders have long said the current state agency structure does not work for the ferry system because it injects political uncertainty that prevents the long-term planning needed to improve the operations and economics of the state’s ferries. “Every time the (state) administration flips you repeat the cycle. I hate to say it but I’m somewhat pessimistic that we’re going to see real change going forward,” Koplin said of the AMHS. Anderson emphasized that he wants to do his part to improve Alaska’s ferries given the opportunities about to arrive. “The Marine Highway System is another unique piece of Alaska that is necessary,” he said. “It’s a part of the highway system that needs to be taken care of.” Elwood Brehmer can be reached at [email protected]

Halibut commission to set harvest limits with overall biomass increasing

Halibut fishermen across the Pacific coast will be watching the International Pacific Halibut Commission in a few weeks to see what quotas and limits look like this year. The International Pacific Halibut Commission will meet online starting on Jan. 24. The commission, made up of representatives from the U.S. and Canada, sets the annual catch limits for halibut from the U.S. West Coast through Canada out to the Bering Sea. This year, surveys show that the overall biomass increased by 4 percent, a marked turn from the declines seen in recent years. However, survey data showed mixed results for the areas in Alaska, ranging from an 11 percent decline in Southeast Alaska to a 57 percent increase in southwestern Alaska. Southcentral Alaska, the most populous region, saw a 4 percent decline; there was a 6 percent decline in the eastern Aleutians; a 7 percent increase in the western Aleutians; and a 9 percent decline in the central and northern Bering Sea. Overall, the coastwide stock saw a 4 percent increase, with the declines in Alaska balanced out by an 11 percent increase in Canadian waters, according to the stock assessment provided to the IPHC ahead of the meeting. “The current trend in population distribution appears to be shifting back toward Biological Region 3 after more than a decade of decline,” the stock assessment states. The stock assessments have shown consistent decline coastwide for the last four years, with declining catch limits for the commercial and recreational sectors. At the 2021 meeting, the IPHC increased catch limits about 6.5 percent and extended the season by a month, running from March through December. Long-term, the stock declined from the late 1990s to around 2012, driven largely by “a result of decreasing size-at-age,” according to the assessment. The age classes from 2006-2013 were mostly smaller than those from the previous decade, but the 2012 age class appears to be large like the historical ones. In addition to setting the catch limits, the commission has several proposals related to federal halibut management to consider, such as allowing fishermen to use the Alaska Department of Fish and Game’s digital logbook tool to record sport halibut harvest and setting the slot limits and weekly closures in the charter fisheries in Southeast and Southcentral. In Southeast, the proposal recommends a reverse slot limit. If that doesn’t keep the fishery within its allocation, then the charter fishery would be closed on Mondays starting September 19, gradually working its way earlier in the season depending on the charter allocation, with the earliest date being May 19. If the allocation still wouldn’t be reached after closing all Mondays, the annual limit would decrease to four per year, then three. In Southcentral, the recommendations include a two-fish limit per day, with one of any size and the other 28 inches or smaller for charter anglers. Wednesdays would be closed to halibut retention all year and charter vessels limited to one trip per day, and one trip per charter halibut permit per day. There would be no annual limit on retained Pacific halibut for charter anglers, though. The moving piece depending on allocation is Tuesday closures. Like Southeast, depending on the size of the allocation, the number of closed Tuesdays ranges from zero to starting on Feb. 1 and running all season. The recommendations for Southeast and Southcentral came from the North Pacific Fishery Management Council, after it received input from Fish and Game and its Charter Halibut Management Committee. Members on that committee from Southeast are concerned about the potential for allocation cuts in Southeast this year. Some of that has to do with what Canada is willing to do. “One member (from Southeast) noted that without any adjustments the IPHC International agreement to assign a fixed allocation percentage in Area 2B could potentially impact the 2C reverse slot limit by 3 critical inches,” a North Pacific Council memo about the proposal to the IPHC states. Beyond just setting catch limits and evaluating proposals, the commission also considers scientific and economic research. One of the ongoing projects includes a socioeconomic study on the impact of halibut to the regional economies of Canada and the U.S. The study includes industries ranging from directed halibut fishing to processing, manufacturing, retail and charter, among others, and seeks to quantify the benefit in fisheries “from hook to plate,” according to an update on the project provided to the commission. The most recent update estimates that commercial halibut fishing resulted in about $195.9 million in household earnings in 2019. The model does include data from 2020, but because of effects of the COVID-19 pandemic, the numbers aren’t considered typical of past years. “Detailed results are provided for 2019 as this represents a more typical year for the economy. The estimates for 2020 suggest that Pacific halibut commercial sectors’ contribution to households decreased by 25 percent, and output related to Pacific halibut commercial fishing decreased by 27 percent,” according to the report. Of the $23.7 million earned in direct halibut fishing in Alaska in 2019, about 70 percent of that remained in the state, according to the report, with most of that in Ketchikan, Petersburg and Sitka. One of the goals of the socioeconomic work is to highlight the cross-boundary nature of the halibut fisheries as well as the impact away from just direct harvest. It’s also intended to help policymakers understand the vulnerability of communities that are particularly reliant on halibut to stock fluctuations. “A good understanding of the localized effects is pivotal to policymakers who are often concerned about community impacts, particularly in terms of impact on employment opportunities and households’ welfare,” the report states. “Fisheries policies have a long history of disproportionally hurting smaller communities, often because potential adverse effects were not sufficiently assessed.” Elizabeth Earl can be reached at [email protected]

Biden administration wants to return to Obama-era plan for NPR-A oil

Biden administration officials in the Bureau of Land Management on Monday announced their plans to return to Obama-era rules for oil and gas development in the vast National Petroleum Reserve-Alaska on the North Slope. According to a written statement issued by the BLM Alaska office, attorneys for the agency are expected to file a status report in U.S. District Court of Alaska indicating that BLM leaders want to go back to the 2013 NPR-A Integrated Activity Plan, which is essentially the land-use plan for the 23 million-acre reserve. The filing is in a lawsuit brought by conservationists over the NPR-A land-use plan finalized by Trump administration officials shortly before they left office last January. The plan approved under Trump opened an additional 7 million acres to industry leasing, or about 30 percent of the reserve, for a total of about 18.5 million acres on the western Slope open to development. For comparison, the previous NPR-A plan approved in 2013 under the Obama administration allowed BLM to lease just more than 11.7 million acres, or almost exactly half of the reserve. That plan closed to leasing more than 3.5 million acres — much of which is a vast wetlands complex — in the Teshekpuk Lake Special Area. The area is the calving grounds for a distinct population of caribou and is the summer nesting home for large numbers of migratory birds, both of which are important subsistence resources, according to area Tribes opposed to oil development there. However, since 2013 a handful of large oil discoveries have been made around the Teshekpuk Lake area, most notably ConocoPhillips $8 billion Willow prospect. With work currently on hold as its permits currently under a court-ordered revision, Sen. Lisa Murkowski has said keeping the Willow oil project moving toward development is a top priority for her this year. Kristen Miller, acting executive director for the Alaska Wilderness League, said the Trump administration’s changes to the NPR-A plan were rushed and violated multiple federal environmental laws. “Returning to the 2013 management plan is the right move and will restore protections to the reserve’s critical special areas, in particular Teshekpuk Lake. Now, especially as it prepares to take public comment on its ‘America the Beautiful’ initiative, we hope the (Biden) administration recognizes the potential for America’s largest single piece of public land to provide landscape-level protection of ecosystems and sustain healthy and diverse wildlife and habitat for the future,” Miller said in response to BLM’s announcement. For their part, leaders of the Arctic Slope Regional Corp. and the North Slope Borough said in a joint statement that reverting to the 2013 land-use plan “diminishes Alaska Native self-determination by ignoring the needs, concerns and input of the local people who live, work and subsist in and around the NPRA.” ASRC President and CEO Rex Rock, Sr. said North Slope leaders have made multiple offers to work with Biden administration officials on issues such as the NPR-A to no avail. “(Interior) Secretary (Deb) Haaland and President (Joe) Biden have chosen, with this decision, to not only ignore the voices of the North Slope Iñupiat but to exclude us from the decisionmaking process on issues that impact our Iñupiat communities and our culture,” Rock said. ASRC holds joint subsurface mineral rights with BLM to portions of the NPR-A. Gov. Mike Dunleavy called the Biden administration’s decision “another unwarranted hit to Alaska and the nation” in a statement from his office. “The U.S. Department of Interior proposes to lock down Alaska, take away local opportunities, resources and other benefits that the National Petroleum Reserve is intended for. This is another sign of the federal government turning its back on Alaska and hampering domestic energy production,” Dunleavy said. The Trump administration plan mostly opened the Teshekpuk Lake Special Area to industry leasing. BLM Alaska officials said at the time that their plan responds to requests from the state and local governments for increased economic opportunities and uses seasonal restrictions on industry activity and other mitigation techniques to minimize the impacts on wildlife from oil exploration. BLM’s announcement should also essentially end the lawsuit largely filed to keep the 2013 plan in place. In 2017, the U.S. Geological Survey drastically increased its estimate for the amount of recoverable oil in the NPR-A, largely on the belief that additional Nanushuk oil formations are available in and around the Teshekpuk Lake area. The USGS now estimates there are roughly 8.8 billion barrels of available oil in the reserve and adjacent state lands, up from just 896 million barrels in 2010. Elwood Brehmer can be reached at [email protected]

Fish Factor: Cod, rockfish season opens in the Gulf of Alaska and Bering Sea

Wow, there is a lot of fishing going on across Alaska! Salmon is the heart of Alaska’s seafood industry, but winter is when the fishing action really begins. Hundreds of boats are out on the water on the first day of each new year, beginning a predictable rhythm for the seafood industry as millions of pounds of fish begin to cross the docks around the clock at Alaska’s working waterfronts. Here’s a sampler: Starting Jan. 1, boats drop pots and baited lines for cod, rockfish and other whitefish in the Gulf of Alaska and the Bering Sea. Alaska pollock, the nation’s largest food fishery, opens to trawl fishing on Jan. 20. A Tanner crab fishery opens on Jan. 15 at Kodiak, Chignik and the South Peninsula with a combined catch of 1.8 million pounds. Tanner crab and golden king crab fisheries open in Southeast Alaska on Feb. 11. A Tanner crab fishery also opens in Prince William Sound on March 1. Bering Sea crabbers are fishing for Tanners and golden king crab and will start dropping pots for snow crab this month. Southeast divers are wrapping up a nearly 1.9-million-pound sea cucumber harvest; divers also are still digging up giant geoduck clams in some regions. Trollers are pulling up Chinook salmon in a fishery that will close on March 15. They’ve taken 6,219 winter kings so far, each valued at $122.43. Halibut watch - Pacific halibut catches for 2022 will be announced at the annual International Pacific Halibut Commission meeting held online Jan. 24-28, and fishermen are hoping for another year of increased catches when the fishery opens in early March. Last year’s coastwide catch limit was 39 million pounds for fisheries spanning from California and British Columbia to the far reaches of the Bering Sea. Alaska always gets the lion’s share and in 2021fishermen holding shares of the catch took 93% of their 18.5-million-pound limit by the time the fishery closed on Dec. 7, one month longer than usual. Homer, Seward, Kodiak and Juneau and Sitka were top ports for halibut landings. The average price paid to Alaska fishermen for halibut in 2021 was $6.40/lb bringing the fishery value to $109,129,240, according to NOAA data. That compares to a 2020 dock price of $4.12/lb and a fishery value of $61,778,449. COVID cans Ketchikan - The Covid pandemic has derailed the AK Board of Fisheries meeting that planned to meet in-person from Jan. 4-15 in Ketchikan. The Board oversees management of Alaska commercial, sport, subsistence and personal use fisheries in state waters out to three miles. The meeting, set to address 157 Southeast and Yakutat fishery issues, has been “postponed to a future date and location to be determined” according to Doug Vincent-Lang, Alaska Department of Fish and Game Commissioner in a press release. “Cases in Southeast are increasing in almost every community. With the rise in cases post the holiday season, already key staff have contracted COVID-19 and are unable to participate. In addition, the nation and Alaska are facing serious transportation difficulties as weather and the pandemic are seriously hampering travel in the near-term,” Glenn Haight, BOF Executive Director said in the announcement. Adding to the challenge is the resignation of newest BOF member, Indy Walton of Soldotna, who Gov. Dunleavy appointed last September. Walton named “medical issues and his busy business schedule as considerations in his decision.” Walton was named to the BOF by Gov. Dunleavy nearly three months beyond a legal deadline, and he was not yet approved by the Alaska legislature. He has fished for salmon commercially for nearly 40 years at Kodiak and Bristol Bay and also owns a fishing lodge on the Kvichak River. Nominations for Walton’s seat will be accepted until Dunleavy names his appointment, said deputy director of communications, Jeff Turner. The appointee must then be approved by the Alaska Legislature. Good global outlook - “A Rising Tide” for seafood sales is predicted by the Export-Import Bank of the U.S. (EXIM) in a report that outlines performance and opportunities. Driving the push is people worldwide recognize the health benefits of seafood, said Jane Lemons, Business Development Specialist for the Office of Small Business at EXIM, an independent federal agency whose mission is “to support American jobs by facilitating U.S. exports.” Seafood consumption is now growing faster than beef, chicken, and pork; in 2018, the global per capita average was 45.2 pounds per year, and it’s predicted to reach 47.4 pounds in 2030. As populations — and popularity — continue to grow, EXIM projects global seafood sales will reach nearly $140 billion by 2027 (compared to $113.2 billion in 2020). Fisheries based in the U.S. exported $4.5 billion in seafood products totaling nearly three billion pounds in 2020. (Of that, 2.2 billion pounds came from Alaska. Seafood has been Alaska’s top export for decades averaging $3.3 billion annually - over half of the state’s total annual export value.) Top international buyers of U.S. seafood in 2020 included Canada, China and Japan. The bestselling products were live lobster, Alaska pollock surimi, frozen fillets and roe, and frozen sockeye salmon. “As the world continues to emerge from the pandemic and consumer demand continues to evolve, the potential remains for increased export sales in the future,” Lemons wrote. China, for example, cannot meet the demand of its 1.4 billion people and “this misalignment will only increase as years go by, offering substantial opportunities for export sales.” Southern European countries such as Spain, Italy, and France are excellent trade partners because, in addition to their high consumption rates, they are also Europe’s major processing nations and re-export to other destinations. “Fisheries would be wise to consider well located trade hubs, including Hong Kong, which re-exported over 40% of all agricultural products, or the Netherlands, Germany, and Belgium, which act as a gateway to the rest of mainland Europe,” Lemons said. She also touted Canada as the United States’ largest export market for agricultural and related products, including fish and seafood. “The U.S.-Canada open trade border provides opportunities for cross-border collaboration between businesses, and as a result, the two countries maintain the world’s largest bilateral trading relationship,” the EXIM report said.

Oil prices stay high despite demand disruptions

The OPEC+ alliance of 23 oil-producing nations, led by Saudi Arabia and Russia, is continuing along the path of boosting its oil production target by 400,000 barrels a day every month since last summer. That path is supposed to lead to full restoration of pre-pandemic production numbers before the end of this year. OPEC+ members met Jan. 5 and reaffirmed another step-up in output for February. Meanwhile, the rapid and stressful spread of the omicron variant of COVID-19 has flustered the global economy with concerns about factory cutbacks, travel curtailment and a pullback in fuel demand growth. The possibility of less demand normally would prompt a retreat in prices, but despite those worries, and some reports of weakened demand in China, global oil prices continue to stay high. Markets opened Jan. 10 at around $81 per barrel for benchmark Brent, a few dollars under the 2021 high of $85 but staying well above the $65 price of just five months ago. Global market analyst IHS Markit this month lowered its projection for China’s total oil demand in the first quarter of 2022 by 420,000 barrels a day. That’s about a 3% slide from China’s daily oil demand in November, though IHS acknowledges it’s probably only temporary, due to omicron factors. Still, it’s a demand arrow pointed down, not up. Yet prices aren’t following suit. As often in the case with OPEC and its alliance members, numbers don’t lie, but the production numbers don’t always add up. Several + members are increasingly finding it hard to meet their production targets. So, while the headlines say OPEC+ continues to raise output, the reality is not so much. A Reuters survey reported on Jan. 7 that the increase in output announced for December had underachieved the OPEC+ target by more than 250,000 barrels a day. While top producers Saudi Arabia, Iraq and several other nations have upped their output, and can continue to do so, production fell or stayed flat in Congo, Equatorial Guinea, Nigeria, Libya and Iran, the survey found. A shortage of capacity due to underinvestment, a lack of maintenance, civil unrest and unplanned outages were cited as the culprits. The International Energy Agency in December estimated that OPEC+ came up short of its November production target by 650,000 barrels a day, a shortfall of more than 2%. The IEA report cited Nigeria and Angola as among the countries struggling to boost production. Nigeria, Africa’s largest producer, pumped 360,000 barrels a day below its quota in November. “A poor regulatory framework, sabotage and vandalization of oil facilities” are deterring needed spending in Nigeria, the IEA said in its report. Even Russia is having problems, not that Prime Minister Vladimir Putin would ever admit to it. “Russia is temporarily near its limits,” said Bhushan Bahree, an executive director at IHS Markit. Getting past that wall will require changes to tax policies and development of new fields, analysts said. Russian companies pumped an average of 10.903 million barrels per day of crude oil and condensate in December, according to preliminary data from the Energy Ministry, as reported by Bloomberg. That is flat to November. For much of 2021, Russia ramped up production relatively easily by restoring operations at wells that were shut-in or idled in spring 2020 when the pandemic destroyed global demand and oil-producing nations cut back production by millions of barrels per day, including the U.S. That was then, but now any further substantial growth will require drilling new wells, officials at Russian producers Lukoil and Gazprom Neft, the oil arm of gas giant Gazprom, said late last year. Lukoil, Russia’s second-largest oil producer, has said its spare capacity will be used up by April if OPEC+ keeps adding 400,000 barrels a day each month to its production target. Russia reached a post-Soviet production record in 2019 of 11.25 million barrels per day of crude and condensate. Russian producers were back to averaging 10.52 million a day in 2021, according to calculations by Reuters, but the next several hundred thousand barrels per day will be harder to get out of the ground. Deputy Prime Minister Alexander Novak has said that country’s oil output is expected to rise close to its record in 2022, though analysts question the likelihood. That questioning of Russia’s capacity, along with production shortfalls among other members, in part explains why oil prices remain high, even as OPEC+ says it will continue boosting output. December was the seventh straight month that OPEC+ had failed to meet its production targets, Julian Lee, an oil strategist at Bloomberg, reported last week. “That gap’s not going to close any time soon,” Lee wrote. “The deficit won’t ever be recouped unless those in the group with spare capacity are allowed to make up the production shortfalls of those without. This seems unlikely.” OPEC+ members have historically been reluctant to allow the more well-endowed among their group to take away market share from under-producers. They’d rather see the world short of oil and subsequent higher prices. “The deficit is only going to get bigger as the target continues to rise by 400,000 barrels a day each month,” Lee said. A longer-term problem is the lack of investment. New oil and gas discoveries around the world last year totaled 4.9 billion barrels equivalent, the lowest since 1946, Rystad Energy, a respected and worldwide energy research firm based in Norway, said in a report issued last week. The 2020 total was 12.5 billion barrels of oil equivalent, Rystad said. “A reduction in cumulative volume highlights the absence of large individual finds,” the report said. The monthly average of new discoveries in 2021 was a paltry 424 million barrels of oil equivalent, Rystad reported. That’s equal to just over four days of global oil consumption. After spending almost $462 billion on new projects in 2019, the industry cut its development budget to $335 billion in 2020, with only a small increase for 2021, according to an analysis by Canadian bank RBC Capital Markets. That lack of spending is taking a toll on new discoveries. That is making the market nervous about supply meeting future demand. Larry Persily can be reached at [email protected]

State enters court fight alongside feds to keep Cook Inlet fishing grounds closed

Gov. Mike Dunleavy’s administration will be fighting in court to keep much of Cook Inlet closed to commercial salmon fishing after a federal judge approved the state’s request to intervene in a lawsuit over the fishery. U.S. District Court of Alaska Judge Josh Kindred granted the state’s motion Jan. 6 to join the National Marine Fisheries Service as a defendant in suits filed last fall by the United Cook Inlet Drift Association and individual fishermen in an attempt to force the agency to reopen the federal waters of central Cook Inlet to salmon fishing this coming season. Often referred to as the EEZ — an abbreviation for its formal name, the exclusive, economic zone — the area currently closed by federal regulations this year covers all of the waters beyond 3 miles offshore in central Cook Inlet. Fishing would still be allowed in state waters up to the 3-mile line. Intervening in the consolidated lawsuits also puts the state in the odd legal circumstance of arguing alongside the federal government in court to prevent what Dunleavy administration officials insist would be a gross example of federal overreach. State attorneys wrote in their intervening motion that if UCIDA were to win their suit, “Alaska would face the prospect of NMFS being forced by judicial order to manage fisheries in Alaska’s sovereign waters, and without the preemption procedure required by the (Magnuson-Stevens Act).” At issue is not just what boundaries will be placed on the Inlet fleet, but likely the fate of the otherwise viable, productive fishery, according to UCIDA President David Martin. “If the EEZ is closed, basically commercial fishing in Cook Inlet is going to be put out of business,” Martin said. The offshore area extending north from roughly Anchor Point accounts for roughly 20% of the total Cook Inlet salmon harvest and nearly half of the drift gillnet fleet’s catch, according to a North Pacific Fishery Management Council analysis of the fishery. The council voted in December 2020 to close the Cook Inlet EEZ to commercial salmon fishing after state officials would not agree to the terms of co-management of the Inlet’s salmon runs or federal oversight presented to them — an attempt to comply with a 9th Circuit Court of Appeals ruling in a prior lawsuit by UCIDA. Commercial fishing in the EEZ remained open last year as the council went through the process to finalize the rule, which happened in November. The 2015 ruling directed the council to draft a fishery management plan for Cook Inlet salmon that covered the entire range of the highly transient species. A prior plan delegated management authority over the EEZ to the state, which spurred UCIDA’s first lawsuit. Salmon management has largely been deferred to the state, in part because the species is managed by escapement goals in the rivers, which are in state jurisdiction. Fish and Game manages salmon returns to a variety of rivers and oversees subsistence, sport, commercial, and personal use fisheries throughout the basin. That’s gotten more complicated over the past few decades as the populations of Anchorage, the Kenai Peninsula, and the Mat-Su have grown, personal-use fisheries have been established, and sport fisheries have become major economic drivers for tourism. Fish and Game officials told the council in 2020 that closing the EEZ might lead to a decline in the drift fleet’s harvest, but the variable nature of salmon fishing made it difficult to quantify the likely impacts. Martin questioned whether the two processors still operating on the Kenai Peninsula would open if the EEZ remains closed this year. “It’s the state systematically putting the Cook Inlet commercial fisheries out of business,” he said. A spokesman for Dunleavy said the administration couldn’t comment on the situation while the lawsuit is pending. Agreeing to close off a large portion of the drift fleet’s fishing grounds is the latest, and likely the most dramatic, step taken by state regulators under Dunleavy to squeeze commercial fishing in the Inlet, Martin said, whether it’s the drifters or east side setnetters. Both groups primarily target sockeye bound for the Kenai and Kasilof rivers. The Kenai River Sportfishing Association was the only group to support the original proposal to shut down commercial fishing in the EEZ when it was before the council. KRSA founder Bob Penney donated more than $350,000 to a political group that supported Dunleavy’s 2018 campaign for governor. Penney’s grandson, Clark Penney, was also issued a since canceled no-bid contract to work on projects for the state���s development bank in the months after Dunleavy took office. The Board of Fisheries also took several steps at its 2020 Upper Cook Inlet meeting to increase in-river objectives for salmon runs on the Inlet’s major river systems and limit the likelihood for commercial fishermen to catch king and coho salmon, citing the need to conserve some stocks and the desire to increase sport fishing opportunities for others. The drift fleet was down to about 250 permits last year, down from a historic peak of nearly 570 participants, according to Martin. Fish and Game Deputy Commissioner Rachel Baker, the state’s representative on the council, acknowledged the situation has put the state in somewhat of an odd position but insisted department officials were faced with two bad options. The challenges of Cook Inlet salmon management were further exemplified by the fact that it took the council nearly six years — right up to its deadline — to reach a decision, she said. The structure of NMFS oversight for management delegated to the state would have interfered with the way the state manages salmon fisheries to the point that “it just wouldn’t work,” Baker said. “We just couldn’t live by those requirements, frankly.” The other alternatives dictated to the state created inefficient and duplicative management structures led by NMFS, an agency with no salmon management experience, according to Baker. “The court didn’t mandate how the council or the National Marine Fisheries Service or the state would manage the Cook Inlet EEZ, all the court order said was that the council’s fishery management plan for salmon had to somehow include the Cook Inlet EEZ,” she said. Baker also stressed that state officials understand the importance of commercial salmon fishing to the Kenai Peninsula’s economy and way of life. More than 75% of Cook Inlet permit holders are area residents based on state permit data, one of the highest rates of local participation among the state’s major salmon fisheries. “I don’t think any of us are glad we ended up here,” she said. “It was just a series of very unfortunate events.” Martin said the drifters just want the state to follow the law. “The Magnuson-Stevens Act has the 10 national standards on how fish are supposed to be managed. We would like the state to manage it but under the legal guidelines of Magnuson and other applicable laws,” said Martin. “They said they don’t want to do it.” Expedited schedule approved Judge Kindred also agreed to an expedited hearing schedule on Jan. 6 in an attempt to resolve the case before the late June start to the Cook Inlet sockeye season, but not on quite as quick of a timeline as the fishing group requested. Kindred scheduled oral arguments in the case for April 15, with a decision following “as soon as practicable, but not later than June 20, 2022,” the scheduling order states. UCIDA had requested the April 15 hearing date but also asked for a ruling deadline of May 15. Elwood Brehmer can be reached at [email protected]

Fish Factor: Picks and Pans for 2021

Since 1991 the weekly Fish Factor column has highlighted Alaska’s seafood industry with its annual “Picks and Pans” - a no holds barred look back at some of the year’s best and worst happenings, and my choice for the year’s biggest fish story. Here are the choices for 2021, in no particular order - Most business potential - Seaweed mariculture. The market value of U.S. seaweed is pegged at $41 billion by 2031. Driving the demand is increased use in pharmaceuticals, health supplements, as a natural thickening agent and in animal feeds. Best fish invention - Lightweight, collapsible slinky pots for catching black cod that solve the problem of whales stripping as much as 75% of the pricey fish from longline hooks. Biggest fish booster - The Covid pandemic continues to push record sales of all seafood with no end in sight. Pre-Covid, most Americans only ate fish and shellfish at restaurants. Now they are buying seafood to cook at home; Online sales also have soared and are expected to grow. Best fish fighters - Reps. Sarah Vance of Homer, Kevin McCabe of Big Lake, Jonathan Kreiss-Tomkins of Sitka. They’ve put partisan politics aside to protect Alaska’s fishery resources. Best fish knowledge builders - Alaska Sea Grant Best fish feeder - Sea Share, with over 250 million fish servings to U.S. food bank networks since 1994. Loudest fish sucking sound - The bulk of Alaska’s catches and revenues go to Washington state residents, who in 2020 took home a .78 share of the $981 million dockside value of all groundfish caught in the Bering Sea and Gulf of Alaska. Seattle is home port to about 300 fishing vessels and all but 74 make their livings in Alaska. Most wasted fish opportunity - Not utilizing the three billion pounds of fish heads, skins, oils, innards, shells, etc. that are discarded after processing. Using such “wastes” could add an additional $700 million or more each year in value to Alaska. Cod skins, for example, produce about 11% collagen; nearly 20% for salmon skins. Speaking of which … Biggest fish WTF? - Icelandic company Kerecis received a third six-figure grant from the U.S. Defense Department to create bandages from intact cod skins. The collagen and omega 3s promote regrowth of healthy human tissue. Most earth-friendly fishing town - Kodiak, for generating nearly 100 percent of its electricity from wind and hydropower, and for turning its fish wastes into oils, meal and fertilizer. Best little known fish fact - Alaska’s commercial fisheries division budget also pays for the management of subsistence and personal use fisheries. Best Alaska ocean watchers - Alaska Ocean Observing System – sea ice, water temperatures, ocean acidification levels, AOOS tracks it all. Best daily fish news sites - SeafoodNews.com, Undercurrent News, SeafoodSource Best healthy fish watchers - Cook Inletkeeper, SalmonState Best mainstream fish pushers - Genuine Alaska Pollock Producers (GAPP) Best fishcrat - Sam Rabung, ADF&G director of the commercial fisheries division Fish head scratcher - Alaska Fisheries Science Center in Seattle? University of Alaska’s College of Fisheries and Ocean Sciences in Fairbanks? How much budget is spent on getting scientists/student to and from the far away sea life they are studying? Best go to bat for their fishery - Bristol Bay Regional Seafood Development Association, funded by a 1% tax on fishermen’s catches. Partnerships with Seattle’s new Kraken hockey team, Bambino’s Baby Food and snazzy, non-stop annual promotions at targeted U.S. regions push the “brand.” Worst ongoing fish inequity - The U.S. continues to buy millions of pounds of seafood from Russia while that country has banned purchases of U.S. seafood since 2014. Russian seafood imports to the U.S. since than have increased by nearly 175%. Best fish planet advocate - Net Your Problem by Nicole Baker-Loke which has so far facilitated the recycling of more than one million pounds of Alaska fishing nets and gear from Southeast to Dutch Harbor. The plastic gear is remade into pellets and fibers and turned into new products. Biggest fish fakes - Plant-based seafoods such as “vegan shrimp” and “Toona.” Also, after nearly three decades of roadblocks, five tons of genetically modified salmon (Frankenfish) was sold by restaurant supplier Samuels and Son Seafood of Philadelphia. Up next- fish fillets grown in labs from their own cells will hit U.S. markets in 2022. The growers tout cell-grown seafood as having no environmental pollutants such as mercury or microplastics, with a longer shelf life and no genetic engineering. Best AK fish writers - Elizabeth Earl, AK Journal of Commerce, Margie Bauman, Cordova Times. Worst fish travesty - Cuts to commercial, sport and subsistence catches while millions of halibut get dumped as bycatch in bottom trawl fisheries. Alaska can’t lay claim to having the “world’s most sustainably managed fisheries” until it gets its bycatch act in order. Best fish assists - Every one of the biologists across the state at the Alaska Department of Fish and Game. Best building future fishermen - Alaska Longline Fishermen’s Association in Sitka. Crew apprenticeships, fishing loans with pay back based on catches, collaborative research are some ALFA initiatives for young fishing entrants. Fishing towns that celebrates their fishing industry the most - Sitka, Cordova Fishing town that celebrates its fishing industry the least - Kodiak Best fish boosters - Alaska’s salmon hatcheries Baddest fish idea - Over one million acres opened to oil/gas lease sales at Lower Cook Inlet, one of the most widely used areas for tourism, sport and commercial fishing. Does fish best with least - The Alaska Seafood Marketing Institute promotes wild-caught fish/shellfish in the U.S. and around the world with zero funding from the state. In contrast, Norway backs its seafood marketing with over $50 million from a small tax on exports. Best fish life savers - Alaska Marine Safety Education Association (AMSEA) Most disliked fish moniker - The term ‘fisher’ is a well-intentioned attempt to be gender neutral. Nearly all fishermen hate it. “Harvester” is a good fit. Best fish boost for babies - New federal dietary guidelines for the first time recommend that babies be introduced to seafood starting at six months because of the health benefits. Biggest fish health failure - U.S. baby food makers who provide ZERO seafood offerings (see above). Most inaccurate fish gaffe - “Official” trade data from the U.S. Trade Representative that still lists “petroleum and coal” as Alaska’s top export. Seafood has been Alaska’s top export by far for decades but the word does not appear anywhere on the trade list. Alaska’s other “top manufacturing exports” are transportation equipment, computer and electronic products and machinery. Top agricultural items are plant and livestock products, feeds and grains, beef and veal. Who knew? Best fish breaking ranks - New Peter Pan Seafoods set a pricing record in mid-May by offering $12.60/lb for sockeyes and $19.60/lb for Chinook at Copper River. Peter Pan and Silver Bay set a base sockeye price at $1.25 at the start of the Bristol Bay fishery. Fishermen typically wait weeks or months before knowing what they will be paid for their catch. Tough way to run a business. Most ominous fish sign - Since 2010 Alaska salmon have been getting smaller. That’s based on 60 years of measurements from 12.5 million salmon across Alaska, excluding pinks. Chinook have shrunk the most averaging an 8% decline, followed by reductions of 3.3% in cohos, 2.4% in chums and 2.1% for sockeyes. Best fish recyclers - Grundens is using recycled plastics from old fishing nets in its rugged wear - the first batch contained fibers from recycled Cordova nets. Grundéns also is using 100% biodegradable packaging. OBI Seafoods, which operates 10 Alaska processing plants, also is using 100% recyclable packaging on all of its canned salmon brands. Best nonstop fish entrepreneurs - Tidal Vision’s new creation Tidal-Tex is replacing metals and chemicals commonly dosed on carpets, clothing, furniture, mattresses, mops, etc. The all-natural liquid protectant is derived from chitosan, a biopolymer found in crab shells. Leigh Fibers, one of the nation’s largest and oldest textile manufacturers, is now using Tidal-Tex, whose origins come from Alaska crab shells sourced at St. Paul Island in the Bering Sea. Biggest fish story for 2021 - Returns of Chinook and chum salmon to the Yukon River were so low that local residents were not allowed to catch a single fish for their subsistence needs. While Chinook numbers have been declining for years, people fear the sudden loss of the more reliable chums is “the canary in the coal mine.” “All of those who have a stake or interest in the Bering Sea should be paying attention to what’s happening within the Yukon River to figure out what’s going on with the salmon. We are experiencing and witnessing a devastating subsistence fishery. And we really don’t know why,” said Vivian Korthuis, head of the Bethel-based Association of Village Council Presidents. “This is a warning shot that we have been anticipating. And we want answers as to why it is the way it is.”

Dunleavy requests funding for state takeover of wetlands permitting

Gov. Mike Dunleavy wants the state of Alaska to revisit the idea of taking over one of the most complex and contentious development authorizations in the country. The governor included just more than $4.9 million in his 2023 fiscal year state budget proposal for the Department of Environmental Conservation to start work toward taking over Clean Water Act Section 404 permitting for development in wetlands and other water bodies with federal jurisdiction. Section 404 permitting, as it is often known, is currently administered by the U.S. Army Corps of Engineers and overseen by the Environmental Protection Agency across the vast majority of the country. Development-minded state officials have long insisted the national standards for wetlands impact avoidance and mitigation are too onerous in Alaska, which is more than 40% wetlands and contains more wetlands than all other states combined. More specifically, development advocates argue federal standards for compensatory mitigation widely used in the Lower 48 — restoring, enhancing or preserving wetlands likely to be developed — aren’t practical in Alaska given the relative lack of damaged and at-risk wetlands in the state. EPA leaders in the Trump administration urged Army Corps officials to develop Alaska-specific mitigation standards as a means to give permit reviewers more flexibility in approving wetlands mitigation plans for projects in the state. Dunleavy noted during his budget rollout briefing that the state taking primacy of Section 404 permits doesn’t mean any federal standards or requirements will be waived and the EPA will retain oversight. But he claimed Alaska is the best in the nation at hitting permitting deadlines and said his administration is confident it can run the program “more efficiently” than the federal government. Environmental impact statement reviews are often spurred by the need for a Section 404 wetlands permit and for large development projects they typically take several years to complete. “This will allow this (Section 404) permitting process to be under the umbrella of the state, which we believe will have better outcomes,” Dunleavy said. To date, just three states have taken on wetlands permitting from the federal government: Michigan, New Jersey and Florida. Dunleavy spokesman Jeff Turner wrote in response to follow-up questions that state primacy over Section 404 permitting will produce faster decisions on permits that could make development projects more feasible. That should ultimately mean more job growth and improved revenue to the state, according to Turner. Army Corps of Engineers Alaska District officials rejected the proposed Pebble mine’s development plan in November 2020 based on their belief the large project would have significant impacts on the aquatic ecosystem of the Bristol Bay region and could not meet Clean Water Act Section 404 mitigation standards. The Dunleavy administration attempted to appeal the corps’ decision last year on Pebble’s behalf before corps officials ruled the state lacked jurisdiction to do so. Alaska most recently investigated taking over Section 404 permitting in 2013 under Republican Gov. Sean Parnell, when lawmakers passed a bill authorizing the state to pursue the program and providing $1.5 million to do it. However, the funding was cut the following year as the state’s financial situation worsened. This time, the $4.9 million requested from the state’s general fund would cover 28 new full-time positions in the Department of Environmental Conservation to staff the state’s 404 program. An additional four positions would need to be added in 2024 to fully implement the program, according to an Office of Management and Budget report. DEC officials say the Legislature’s 2013 Section 404 program approval is sufficient for today so no additional legislation is needed beyond the budget request. They also acknowledge the plan is aggressive, but hope to have the program implemented in fiscal year 2024. While the plan is to fund it with general fund money to start, the state could shift to an applicant fee-for-service model similar to what is used by the corps or a hybrid of the two, DEC spokeswoman Laura Achee wrote via email. Brian Litmans, legal director for the Anchorage-based environmental law firm Trustees for Alaska, said he believes the effort will prove too costly once again. Trustees attorneys regularly challenge permit approvals for development projects in court. “It’s an incredibly expensive program to administer,” Litmans said. “As a result, there are only three states that have primacy over the program.” The Army Corps Alaska District Regulatory Division typically handles between 600 and 800 regulatory actions per year, according to Corps officials. Litmans added that he would have concerns with the adequacy of the Section 404 permits if the state does take over given the volume of work it entails. “Ensuring that each project that is looking to get authorization to fill wetlands — there’s quite a bit that goes into showing that they comply with the Clean Water Act’s requirements, and the Army Corps of Engineers has always been running the program and is familiar with what is required. It is asking quite a bit of the state of Alaska,” Litmans said. “There’s no indication right now the state is able to take on a program of this size and nature.” Elwood Brehmer can be reached at [email protected]

Movers & Shakers for Jan. 9, 2022

Jennifer Bundy-Cobb is the new managing partner for Wilson Albers as of Jan. 1. Since joining the employee benefits firm Wilson Albers in 1995, Bundy-Cobb has served in various roles, promoting excellence in client services and solutions. She most recently served as the Director of Employee Benefits. Bundy-Cobb’s other work in our community includes volunteer time spent supporting nonprofit organizations both in and outside of our industry. She has served as the president of the board for the Alaska Association of Health Underwriters and has been active in supporting health care reform causes. Jennifer was the Board Chair for Anchorage Community Health Services in 2012 when they opened their new building and is currently the Resource Development Chair for Anchorage Project Access Board. Most recently, she has come full circle as a board member for Alaska Youth Orchestras, where she played the French horn as a teenager. Bundy-Cobb assumes the role following Lon Wilson, who served as the firm’s managing partner since 1995. Wilson will be transitioning his leadership responsibilities over the coming months and supporting Alera group as needed in the region. Bundy-Cobb’s new role is accompanied by additional changes in leadership roles, including promotion of Thomas Showalter to head of client engagement where he will lead Wilson Albers’ consolidated employee benefits, retirement plans, and human resource services.   Krystle Burns assumed duties as the chief of workforce management for the U.S. Army Corps of Engineers – Alaska District in November 2021. In her new position, she is responsible for advising the district leadership and executive staff on substantive procedural and policy matters for civilian workforce management functions. Furthermore, she performs ongoing analysis of workforce resources, organizational staffing requirements and recruitment strategies. Prior to her arrival in Alaska, in July 2020, Burns was promoted to serve as the senior administrator for the Fort Bragg Womack Army Medical Center, Department of Medicine, overseeing all administrative activities to include civilian personnel management, manpower utilization, performance management, clinical data management and budgetary control of the department’s operational objectives. Burns began her federal service career in June 2018 with the Fort Bragg Department of Public Health, serving as practice manager of the Epidemiology and Disease Control Clinic. She played a vital role in the execution of the Fort Bragg COVID-19 response process for contact tracing during the start of the coronavirus pandemic. Burns was awarded the Department of Army Civilian Service Commendation Medal for being actively engaged in the DPH’s successful efforts to become nationally accredited through the Public Health Accreditation board and for authoring the first DPH Workforce Development Plan. She earned her master’s degree in Healthcare Administration from Kaplan University and a bachelor’s degree in Health Science from South University. Burns is a certified Lean Six Sigma Black Belt, which means she is equipped with skills and tools to optimize quality management processes. In 2019, she completed her Army Medical Command Lean Leaders certification at Fort Bragg. Burns is a native of Savannah, Georgia. She has been married to her husband, U.S. Army Warrant Officer Robert Burns, for more than 13 years. Together, they have three children.   McKinley Capital Management, LLC, was named one of the 2021 Best Places to Work in money management. Presented by Pensions & Investments, the 10th annual national survey and recognition program is dedicated to identifying and recognizing the top 100 employers in the money management industry. This marks the second year McKinley Capital has earned the coveted distinction.   The Alaska Railroad Corp.’s year-end Gold Spike employee awards program for 2021 was one of the most diverse, in terms of employee jobs, work environment and location. These top awards are presented to employees who clearly stand out for above-and-beyond demonstration of company values through stellar performance. A number of awards reflected superb performance in reaction to, and in spite of, ongoing pandemic stressors. The 2021 Alaska Railroad Gold Spike Award recipients: Fairbanks Depot Services Team: A trio of hard-working depot service associates met and exceeded the challenges posed by a much larger than expected passenger ridership in 2021. They include: Lead Depot Services Associate Alesia Salmela, and Depot Service Associates I LeaAndrea Smith and Natalie Morgan. Terminal Supervision Team: Working in the Anchorage Railroad Terminal and the Fairbanks Railroad Terminal, these dozen employees are recognized for leading and contributing to the success of multiple rail transportation programs and initiatives aimed at improved efficiency, safety, customer service and employee quality of life. They include: FAIRBANKS: Operations Director Andy Burgess; and Terminal Supervisors Mark Dustin, Katrina Lehse, Joe Mueller, Dale Rageth and Elizabeth Smith ANCHORAGE: Terminal Operations Director Pat Volmer; Field & Train Planning Manager Dustin Kincaid; and Terminal Supervisors Ben Ahrens, Kody Anderson, Rheynan Castro and Wilkie Thompson Facilities Maintenance Mechanic Tony Buma, Real Estate & Facilities (Fairbanks), has taken care of facilities maintenance needs on the north end (Hurricane to Fairbanks), essentially by himself for several months, during an extended co-worker absence. Journeyman Mechanic Steve Conlan, Mechanical (Anchorage), recognized for 30 years of experience critical to diagnosing and troubleshooting locomotive issues, especially traction motors; and a willingness to pass along this knowledge as an exceptional mentor. Contract Administrative Specialist Candice Humphrey, Supply Management (Anchorage), recognized for exceptional performance as a procurement technician, while also serving as the acting fleet manager for eight months until a new fleet manager was named Carman Terry Hunter, Mechanical (Anchorage), recognized for catching a very difficult-to-detect wheel defect on a flat car in the Anchorage Yard, ensuring its removal from the train, thereby preventing a catastrophic and costly derailment. Reservations Inventory Specialist III Erin Kehoe, Passenger Marketing (Anchorage), recognized for admirably performing mission-critical tasks when her workload essentially doubled for a prolonged period as the pandemic forced passenger trains to reduce capacity to 75%.Systems & Analysis Supervisor Willow Peyton, Information Technology (Anchorage), recognized for assisting the reservations team in ways well beyond her duties. Passenger Depot Services Manager John Simmons, Guest Services (Anchorage), for exceptional oversight of depot service staff which allowed ARRC to meet the market demand; while protecting employees and customers through his constant, unwavering approach to work place safety. Retirement & Learning Management System Coordinator Kristine Stone, Human Resources (Anchorage), recognized as an exceptionally valuable and professional pandemic-related resource for the company. Track Repairer Pol Carrera Vilaplana, Maintenance of Way (Portage), recognized for above-and-beyond flagging performance on the challenging MP 52 Rockfall Mitigation project. He demonstrated astounding teamwork, safety and consistent excellence. Transportation Field Manager II AJ Washburn, Transportation (Whittier), recognized for exceptional leadership and data-based efforts to improve Whittier terminal operations.

Board of Fish postpones Southeast meeting, new time TBD

Update: The Board of Fisheries announced Jan. 11 the Southeast finfish and shellfish meeting will be held March 10-22 in Anchorage to balance the challenges of logistics, other board meetings, the timing of fisheries and the latest surge in COVID-19 cases in Alaska, according to a statement from Department of Fish and Game officials. Original story: The Alaska Board of Fisheries kicked off the new year by postponing its Southeast regulatory meeting. The meeting was supposed to run from Jan. 4–15 in Ketchikan. It would have been the first in-person Board of Fisheries meeting since the COVID-19 pandemic started forcing cancellations in March 2020. A Jan. 1 announcement from the Alaska Department of Fish and Game said the postponement of the Southeast meeting was out of “abundance of caution due to the record-breaking rise of COVID-19 cases in the United States, and a concerning sharp rise in Southeast Alaska.” Like most regions of the United States, COVID-19 cases are on the rise in Southeast Alaska. Several Fish and Game staff members who were supposed to participate in the meeting recently tested positive for COVID-19 as well, according to the announcement. “Conducting this intensely public 12-day meeting with potential attendance of over 200 people from around the state has the potential to cause a significant case spike in Ketchikan and lead to overrunning its hospital capacity already expected to strain from local infections from the holiday season,” the announcement states. ADFG did not announce a new date or location, but the Board of Fisheries intends to finish its regulatory cycle within this year, according to the Jan. 1 statement. Herring Herring management is at the top of the list of concerns for the Southeast Alaska meeting, with a raft of proposals dividing users primarily between the subsistence and commercial groups. The largest commercial herring fishery in Southeast is in Sitka Sound, though there are smaller fisheries spread across the region. They’re harvested in a number of different ways for several purposes, including as sac-roe and for commercial bait or food, and the spawn is harvested on kelp for both commercial purposes and subsistence. The sac-roe fishery and spawn-on-kelp fisheries all typically take place in the spring, when herring are spawning in Southeast, while the bait and food fishery typically takes place in the fall and winter. A set of 15 proposals before the board at this meeting offer changes to the harvest rate strategy, time and area, quota shares, gear and management plans. The Sitka Tribe of Alaska offered several of the proposals to change the strategy for the Sitka Sound fishery, primarily to preserve the stock for subsistence use. All three proposals received dozens of public comments in support from commercial fishermen, subsistence users and tribal members, among others. The Sitka Tribe of Alaska sued ADFG officials in 2018 over the state’s herring management strategies, which Tribe officials contend favor commercial interests. The case is now before the Alaska Supreme Court. The recent biomass in Sitka Sound has been increasing, which means the harvest rate has been near that 20 percent recently, but the amount of remaining harvestable surplus for subsistence users and ecosystem use is based on old data and is not enough, according to the Sitka Tribe. The first proposes to limit commercial harvest of the Sitka Sound herring stock to less than 20 percent of the total spawning biomass, and the other two seek to limit the harvest of the older fish, which are larger. In their rationale, Sitka Tribe of Alaska officials wrote that the demands of the commercial fishery mean larger fish are the ones being most heavily targeted. “Currently, many herring captured by the Sitka Sound sac roe herring fishery are young and small and do not meet market demands,” the Tribe’s proposal states. “Consequently, the Sitka Sound sac roe herring fishery consistently targets and harvests the oldest, largest, most fecund females in the population. These are the very fish we should protect to ensure the long-term health of the population.” A dozen other proposals seek to change the regulations of the herring fisheries as well. Those from the Sitka Herring Conservation Alliance, a fishing industry group, ask for reduced closed areas to commercial fishing in Sitka Sound and a new requirement for a subsistence fishing permit to harvest herring roe on branches in Sitka Sound. Several individuals are asking for an increase in the possession limit for subsistence spawn-on-kelp and the establishment of equal-share quotas for the Sitka sac roe purse seine fishery. Hatcheries Herring aren’t the only topic of contention, though. Several proposals targeting the operation of salmon hatcheries in Southeast would set up a list of requirements for hatchery operations, including limiting straying rates — hatchery salmon that return to nearby streams and mix with wild stocks — and setting controls on production if straying rates exceed a certain amount. The author of the proposal, Pioneer Alaskan Fisheries, Inc., notes concern about the mixing of hatchery salmon stocks with wild stocks out of Silver Bay near Sitka. “This remaining pristine quadrant of (Southeast Alaska) is getting hammered by stray hatchery fish,” the Pioneer Alaskan’s proposal states. The hatchery proposals have both received opposition from commercial fishing interests and hatchery operators, who say the actions could severely limit the ability of hatcheries to operate in Southeast and to support commercial fisheries. King salmon A pair of proposals dealing with the region’s currently scarce king salmon garnered significant attention in comments prior to the meeting. The first, submitted by ADFG, would have the commissioner set limits in the king salmon sport fishery in Southeast based on harvest rate in the winter king troll commercial fishery. The changes would come with the continued objective of providing 20 percent of the annual king harvest set by the Pacific Salmon Commission for the sport fishery, while also keeping the overall harvest within the Pacific Salmon Treaty allocations. Fish and Game notes in the proposal that without modification of the current plan, the sport fishery will exceed its allocation more often and by larger amounts. A proposal by the Southeast Alaska Guides Organization would set the king salmon allocation between commercial trolling and sport fishing to 80-20, aiming for a 20 percent sport harvest allocation over time. The organization says this plan, which could take a variety of forms in bag and possession limits for residents and nonresidents, would help stabilize king salmon fishing opportunity that has been sharply curtailed in recent years. Reach Elizabeth Earl at [email protected]

State regulators fine Hilcorp for more well work violations

State oil and gas regulators hit Hilcorp Energy with two more fines totaling $64,000 to end 2021 for violating well work rules at a pair of its Cook Inlet fields. The fine orders were issued back-to-back by the Alaska Oil and Gas Conservation Commission Dec. 29 for not meeting the conditions of a drilling permit while drilling a well into the Swanson River field in September and failing to test blowout prevention equipment during a well workover conducted in May at the North Cook Inlet gas field. The fines of $39,000 for the Swanson River and $25,000 for the North Cook Inlet violations followed a $10,000 fine imposed on the Houston-based producer by the AOGCC on Nov. 30 for a defeated well safety valve system discovered in September by an agency inspector at the large Prudhoe Bay North Slope oilfield. At Swanson River, Hilcorp workers conducted integrity tests of the casing and shoe of a just-drilled well on consecutive days without giving AOGCC inspectors a chance to witness the tests. Workers then proceeded with additional drilling without also providing the agency with data from the foundation integrity test until AOGCC officials requested it more than a week after the test was conducted, according to the order by the commission. The AOGCC, led by a panel of three commissioners, regulates the highly technical subsurface aspects of the oil and gas industry. The Swanson River order states that “Hilcorp’s lack of good faith in its attempts to comply with the clearly stated conditions of the (permit to drill), the potential seriousness of the violation, track record of regulatory non-compliance and need to deter similar behavior in future operations” were weighed against the company in determining the penalty. Conversely, the fact that Hilcorp gained little from the violation and it caused no human injuries or harm to the environment were mitigating circumstances for the three-member commission. The North Cook Inlet order states that work continued for five days on a well without testing the blowout prevention equipment after activity that could have compromised the blowout preventer’s ability to seal the well bore if a well control incident occurred. The commissioner’s wrote in this case that the regulations for testing blowout equipment are clear and the benefits Hilcorp realized from the violation as well as the potential seriousness of the violation factored into their decision to levy an initial $20,000 fine with an added assessment of $1,000 for each of the five days work went on after the test should have occurred. AOGCC commissioners generally have wide latitude to issue fines against operating companies. State law allows the commission to levy fines of up to $100,000 for an initial violation and up to $10,000 for each day a violation continues. AOGCC chair Jeremy Price said in response to questions about Hilcorp’s recent violations that agency officials are concerned with the company’s ongoing compliance issues. “Small mistakes can lead to big mistakes so we take this seriously,” Price said, adding the company appears to have taken good-faith steps to prevent repeat issues. The commission issued five enforcement orders with fines in 2021; three of them were issued to Hilcorp. Hilcorp Alaska spokesman Luke Miller wrote in an emailed response to questions about the orders that the company has taken steps to improve its internal controls as the company has grown in the state and company officials will continue to work with the AOGCC to maintain safe and compliant operations. “Hilcorp takes seriously AOGCC’s recent orders and is taking proactive measures to ensure similar incidents do not happen in the future, including better contractor management, revising procedures, and dedicating additional resources focused on well integrity,” Miller wrote. Hilcorp entered Alaska in 2012 with the purchase of several mature Cook Inlet fields and has since grown to become the predominant natural gas supplier to Southcentral utilities as well as the operator of the iconic Prudhoe Bay oilfield on the North Slope. Hilcorp currently has more than 1,400 employees in the state. The company did not dispute the agency’s findings and informed AOGCC officials in late November that the North Cook Inlet situation had been broached with all of Hilcorp Alaska’s operating and drilling engineers. The situation is also being highlighted in pre-work meetings with all of the company’s drilling rig crews, according to the order. Hilcorp also AOGCC officials that it would pay what was then a proposed $39,000 fine for the Swanson River drilling permit issues and would advise company personnel on the importance of adhering to permit requirements; hold daily discussions about upcoming steps in drilling work; and clarify the differences in processes between North Slope and Cook Inlet drilling permits to engineering staff, according to that order. Elwood Brehmer can be reached at [email protected]

Brown's Close: 2021 year-in-review

In some respects 2021 was a great improvement over 2020. People were rarely locked at home. Travel resumed. Vaccines and toilet paper were plentiful. In other ways, however, 2021 was disappointingly similar to 2020. Fights broke out in public places over sundry items. The Rockettes again cancelled their Christmas spectacular. One man was sentenced to 10 years in prison in Iowa for beating up and coughing on someone who asked him to pull up his mask. In celebration of New Year’s Eve, let us review some of Brown’s Close's highlights from 2021: January: While there was an obvious riot in the Capitol, there were a few other, much neglected, events. Kim Kardashian and Kanye West broke up; Bernie Sanders wore mittens; and Anne Hathaway demanded everyone start calling her Annie.   February: The Kansas City Chiefs failed to score even one touchdown in the Super Bowl, devastating my coworkers in Kansas City. Also on Super Bowl Sunday, I participated in Alaska Ski for Women dressed as an apple.   March: While murder hornets plagued the world in 2020, a swarm of locusts pestered the citizens of Kenya in 2021. In other, chillier places, I finished near the bottom (but not last!) in the Tour of Anchorage ski race.   April: A blockage in the Suez Canal halted international commerce for six days. This made me wonder, when was the last time the Suez Canal was in the news — 1956?   May: In the normal course of my shopping, a retail store worker informed me Donald Trump was still the president. Her proof was a cell phone video of him walking out to “Hail to the Chief.” The video was presumably filmed in 2018.   June: Twitter was banned by the entire nation of Nigeria.   July: Simone Biles backed out of the Olympics due to a case of the “twisties.”   August: I took my dad to see “The Guess Who” at the Alaska State Fair. The entire week leading up to this event, I kept telling people we were going to see “The No Doubt,” and/or “The Good News.” At the concert, a pair of 60-year-old women seated in the wet section stormed the stage and sat on the edge of it for the remainder of the concert. The lead singer gamely came over and sat with them for a few songs.   September: The QAnon Shaman plead guilty to entering a restricted building. Not only known as the “QAnon Shaman,” I discovered he sometimes goes by “The Yellowstone Wolf.” He’s also the accomplished author of two self-published books.   October: Scared straight by news stories that Christmas would be cancelled by the supply chain crisis, I began my Christmas shopping.   November: I concluded my Christmas shopping, just in time for all gifts already purchased to go on sale for Black Friday.   December: One of my friends is from Minerva, Ohio. In lieu of a traditional Christmas movie, we sat down to watch famed Bigfoot documentary, “Minerva Monster.” The film, with an audience score of 40% on Rotten Tomatoes, does not have a critics rating. Minerva, Ohio, is, apparently, one of the most prominent sites for spotting Bigfoot. In 1978, Bigfoot terrorized the home of the Claytons over the period of several months. The Claytons claimed they mistook Bigfoot for a large hairy man who weighed over five hundred pounds. It’s unclear whether they know an actual person who fits this description. Nevertheless, the residents of Minerva were somewhat unconcerned with ensuring they proved Bigfoot’s existence. For example, one of the Claytons did claim he had photos of Bigfoot bites on his brother’s neck. He did not think to produce these for the documentary. Also, while the residents went through the trouble of collecting a sample of Bigfoot’s fur and sending it to Malone College for analysis, when the sample went mysteriously missing they took no steps to retrieve it. Just as the Claytons quietly accepted their Bigfoot DNA analysis was going awry, I am dutifully plodding into the new year expecting the chaos of the last two years to continue. However, let us be optimistic. From this mighty army of one at Brown’s Close, Happy New Year, and may we all have a more peaceful 2022.   Sarah Brown had an action-packed year. Before she gets too busy in 2022, tweet her @BrownsClose1 or email her at [email protected] “Close” is a British term for an alley or cul-de-sac. For more of Sarah’s musings, visit Browns-Close.com.

Fish Factor: Alaska U.S. senators propose task force to better understand salmon declines

The Alaska Salmon Research Task Force Act was introduced in Congress last week by Alaska Sens. Lisa Murkowski and Dan Sullivan. It aims to gain better understanding about causes of salmon declines, especially in the Northwest regions. The task force of up to 19 people would conduct a comprehensive review of salmon science and management in Alaska. The bill also would establish a working group focused on salmon returns in the Arctic-Yukon-Kuskokwim region of Western and Interior Alaska. The group would include members from the National Oceanic and Atmospheric Administration, the North Pacific Fishery Management Council, the Pacific Salmon Commission, and two to five Alaska representatives including subsistence and commercial or recreational users, five academic salmon experts and one state representative appointed by the governor. Within one year, the group would publish a report identifying knowledge and research gaps and would advance policies that might result in more salmon abundance and stability. The action follows a salmon roundtable discussion the Alaska congressional delegation hosted two weeks ago with tribal leaders and state fishery managers and scientists. Many agreed there is a need for better data, but most called for action. “We don’t have time to sit on our hands and wait for these research projects to start and finish. Precautionary management needs to happen now. Adaptive management needs to happen now,” said Mary Peltola, director of the Kuskokwim Inter-tribal Fish Commission. Managers need to look at salmon habitat in rivers and oceans in a more holistic way, Peltola said, pointing to policies that allow large ocean vessels to capture chinook and chum salmon as bycatch while local river residents are not allowed any fish. “We have got to find a way where we manage as a whole system and not these silly, man-made jurisdictional issues,” she added. “And the fact that the Department of Fish and Game says their hands are tied when it comes to salmon bycatch in the Bering Sea, because that’s under the purview of the North Pacific Fishery Management Council -- having both agencies pointing at the other is unfair to all of the users.” In announcing the task force, Sen. Sullivan said: “Our existing management system, with the state’s authority to manage Alaska’s salmon harvest and the federal government managing federal fishery salmon harvest and much of the at-sea research, has created a clear gap in research and research prioritization that urgently needs to be addressed.” Murkowski has dedicated a line and a questionnaire for public comments through Jan. 14. Meanwhile, a group of Alaska tribes and groups representing Bering Strait communities has filed an emergency petition with the U.S. secretary of commerce to eliminate chinook salmon bycatch and cap the number of chums taken by trawl gear. Under current rules, the pollock fleet in 2022 is allowed to take up to 45,000 chinook salmon and an unlimited number of chum salmon while no salmon is available for local subsistence harvests. “Our salmon runs and our communities are at the breaking point. We can’t risk the chance of high bycatch in these dire times. We need to do everything possible to save our chinook and chum salmon runs, and we all need to do our part to restore our salmon runs, and eliminating bycatch is critical,” said Brooke Woods of the Yukon River Inter-Tribal Fish Commission. Petitioners also include Nome-based Kawerak Inc., the Association of Village Council Presidents, the Aleut Community of St. Paul Island, the Bering Sea Elders Group, and the Kuskokwim River Inter-Tribal Fish Commission. Salmon sperm spawns plastic, LEDs – Salmon sperm is being used to make biodegradable plastic cups in China. Researchers at Tianjin University created the item by extracting DNA from salmon sperm and dissolving it in water with molecules commonly found in adhesives. It produces a gel that can be made into various forms and freeze-dried. The bio-plastic can be created from genetic material from any living things, the researchers said. Other applications for the substance include electronics and packaging. Salmon sperm also made headlines a few years ago for its ability to intensify LED lights that are used today in products from digital clocks to home lighting and electronics. Dr. Andrew Steckl at the University of Cincinnati, one of the world’s leading experts in photonics, collaborated with Air Force scientists to make a first bio-LED device. Steckl said the magic stems from the double helix shape of salmon DNA. “The double helix has some interesting properties in regard to light emission which is not well known by the general public but is known by some practitioners,” he explained. “Because of the way it is shaped, you can insert light emitting molecules within it that operate more efficiently than in other host materials.” The sperm comes from wild salmon from Japan, where it is widely harvested for its DNA, Steckl said. In the case of LEDs, it is refined into pure fibers and made into thin films of tightly controlled dimensions that produce light. Steckl said the organic material is abundant and readily available for other uses. “To me it is a powerful argument that we have one of the biggest and most competitive industries in America in agriculture and fishing and it produces a huge amount of biomaterials which can be used in many different ways,” he said, adding that they also reduce the need for heavy metals or other hazardous materials. “This is not the sort of material that people have a lock on -- in other words, it’s not a mine somewhere in some country that produces a particular metal,” he said. “People in the semiconductor and in flat panel display industries are quite concerned that certain specialty metals that are critical to device fabrication are going to begin to run out. And this is not 100 years from now, this is maybe less than 10 years from now. Fish grants - NOAA Fisheries/Alaska Region has launched a new web page dedicated to sharing Alaska Aquaculture Grant Opportunities. The page will provide up-to-date information on funding opportunities for aquaculture stakeholders in many categories. Also included on the new webpage are writing resources to help improve grant applications.

Environmental group threatens feds with lawsuit to halt drilling in NPR-A

A national environmental group is planning to sue the Interior Department to stop oil exploration work in a broad swath of northwest Alaska congressionally designated for the activity, citing risks to polar bears. Attorneys for the Center for Biological Diversity on Dec. 22 filed a Notice of Intent to Sue Interior and Bureau of Land Management officials over alleged Endangered Species Act violations in the agencies’ approvals of 88 Energy’s exploration drilling in the southern portion of the 23-million-acre National Petroleum Reserve-Alaska. “Continued oil and gas exploration and development is fundamentally incompatible with polar bear survival and recovery,” the notice states. The 60-day notice, which is required before suing federal agencies over many regulating statutes, states that the authorizations for 88 Energy’s drilling program don’t include incidental take approvals for polar bears. The notice says the best way to fix the violations is to immediately order the company to stop work and not approve its drilling permit application for this winter. 88 Energy applied Dec. 4 with BLM for the permit to drill its Merlin-2 well. Attorneys with the environmental group additionally contend that comprehensive scientific studies project most of the world’s polar bear populations, including the Southern Beaufort Sea population at the center of the lawsuit, will go extinct in the next century due to a loss of sea ice without aggressive actions to curb global greenhouse gas emissions. According to the center, 88 Energy’s planned five-year exploration drilling program is likely to impact bears in the area through noise and on-the-ground development associated with long-term industrial activities, which includes building more than 80 miles of ice roads each winter. Changes to this winter’s planned ice road route compared to last winter also add to the “amount of road constructed in potential polar bear denning habitat,” the notice states. The Center for Biological Diversity intends to sue BLM if the agency doesn’t rectify the ESA problems, or at the very least consult with U.S. Fish and Wildlife Service officials to ensure that proper polar bear impact mitigation methods are implemented in the work and the proper incidental take authorizations are in place, according to the 10-page notice. 88 Energy has been exploring the southern edges of the North Slope for years, previously on state land. The small Australia-based operator has one of the largest lease-holdings on the Slope; 88 Energy holds rights to more than 440,000 net acres through its state and federal leases. The company’s Merlin project in the NPR-A is near the legacy Umiat oil prospect in the southeastern corner of the federal reserve. The Umiat prospect, despite being long-known to hold oil, has not been developed, in large part because of its remote location far west of the Dalton Highway. 88 Energy is targeting the popular Nanushuk sand oil formations roughly 50 miles south of ConocoPhillips’ large Willow oil project largely based on Nanushuk formation discoveries. North Slope geologists have said the Nanushuk oil plays predominantly run north-south. 88 Energy expects to drill the Merlin-2 appraisal well starting in February. It is planned slightly east of the Merlin-1 well drilled early this year, which the company insists hit significant oil. 88 Energy leaders and a BLM headquarters press representative did not respond to questions in time for this story. Also in the NPR-A, early fieldwork on the $8 billion Willow project was suspended via injunction by the 9th Circuit Court of Appeals last February after a group of Alaska Native and local environmental groups similarly sued BLM, in part over the agency’s polar bear-related ESA authorizations for the work. A U.S. District Court of Alaska judge then formally invalidated portions of the Willow environmental review over the summer, prompting the company and agency to begin working on revised plans and permits. Elwood Brehmer can be reached at [email protected]

Murkowski ‘optimistic’ about progress on Alaska priorities in 2022

Making an important but temporary exemption for Alaska-bound cruises permanent, prioritizing salmon and keeping one of Alaska’s largest oil projects in decades moving forward are among Sen. Lisa Murkowski’s objectives for the coming year, all while campaigning for reelection. It’s going to be a busy 2022 for Alaska’s senior senator, but she says she’s welcoming it. “I am so done with 2021,” Murkowski said in a Dec. 23 call with the Journal and the Anchorage Daily News. “There are some good reasons to be hopeful and optimistic in 2022,” she said, despite what appears to be yet another wave of COVID-19 cases nationwide as we approach the new year. And while inflation is presenting its own challenges, job markets are robust and the national economy continues to recover. Alaska’s congressional delegation continues to push for resolution on a time-sensitive issue: a permanent Alaska-specific waiver from the Passenger Vessel Services Act, a 19th century law that Alaskans in the tourism business have become very familiar with over the past year. The PVSA, as it is often known, requires foreign-built, crewed or flagged passenger vessels sailing between U.S. ports to make at least one stop in a foreign port — an attempt to buoy the nation’s shipbuilding and maritime industries. Last spring, Alaska’s congressional delegation successfully propelled the current, temporary exemption through Congress to President Joe Biden’s desk via Rep. Don Young’s Alaska Tourism Restoration Act. The exemption was needed this year because Canadian transportation officials in February announced they again would not allow the ships to dock in the country’s ports in 2021 after similarly banning cruise ships in 2020, in an attempt to limit the spread of COVID-19. All told, a little more than 100,000 passengers toured the Inside Passage via large cruise ship late last summer, representing about 10% of pre-pandemic cruise traffic to Alaska. Southeast Alaska lost approximately 45% of the nearly 8,400 tourism-dependent jobs it had in 2019 when no ships sailed in 2020, according to state Labor Department figures. Murkowski said she has not spoken to any Canadian government officials regarding the likely status of the country’s ports and borders next summer, but she believes stakeholders in British Columbia are concerned about a permanent PVSA exemption after assuming the temporary waiver wouldn’t pass. “I think now they’re paying attention a little bit more,” she said. “If COVID is still active (next spring), right now our borders with Canada are in a much better place than they were in 2020, but what happens if Canada decides, nope, we’re not taking any risks with omicron so we’re going to put in place the same limits on our passenger vessels and (in Alaska) we’re stuck again. I want to address this and I think the proposal that I have is absolutely one that is worthy of advancing.” She submitted a bill for a permanent Alaska PVSA waiver in September. The legislation includes a provision that reinstate the foreign-stop requirement on Alaska cruises if a large, U.S.-built cruise ship were to enter service. Currently, all of the world’s large cruise ships are foreign-built vessels. Rep. Don Young also submitted legislation exempting Alaska cruises from the PVSA in the House. Under the water, Murkowski said it’s past time for more resources to go toward learning more about the North Pacific and what changes in the ocean environment are doing specifically to salmon runs in Alaska, many of which are in concerning, downward trends across the sate. “We’ve seen incredible abundance in Bristol Bay with our salmon and then absolute crashes on the Yukon and the Kuskokwim,” she said. “We need to know and understand better what is happening.” She noted that while more marine research funding alone is not likely to provide a total solution, it could help fill in data gaps from harvest surveys and other research work not done over the past two years because of the pandemic. “We need to know that when we’re operating, we’re working with sound science and ensuring that we are funding (fisheries) research appropriately, and in my view, we haven’t placed the priority that we need on that,” Murkowski said. She and Sen. Dan Sullivan are attempting to start rectifying that with the Alaska Salmon Research Task Force Act earlier this month. The bill that would establish a task force of 13 to 19 state, federal and stakeholder members with the directive to produce a report detailing current shortcomings in marine research and ways to improve Alaska salmon research and management. On the North Slope, Murkowski said she will also be pressing Interior Department officials in the Biden administration to fix the issues in the federal environmental review for ConocoPhillips’ $8 billion Willow oil project identified by a U.S. District Court of Alaska judge earlier this year. “Willow really is a huge and significant priority for me,” she said, adding that she’s been told progress is being made on the permit revisions needed before fieldwork can get started on the massive oil project in the National Petroleum Reserve-Alaska. The delegation collectively thanked President Joe Biden and administration officials for defending in court — though ultimately unsuccessfully — Willow’s permits approved under the Trump administration. ConocoPhillips estimates Willow could generate more than 2,000 construction jobs over several years and oil production from the prospect could peak at upwards of 160,000 barrels per day. More broadly, she expects congressional Democrats to pitch more targeted initiatives and legislation next year, which could help them gain more bipartisan support for some of what they want to do after the $1.75 trillion budget reconciliation bill failed in the Senate earlier this month. To that end, Murkowski contends West Virginia Democrat Sen. Joe Manchin “gave the country a gift” when he said he would not vote for the reconciliation bill, which included a repeal to the Arctic National Wildlife Refuge Coastal Plain oil and gas leasing program. Manchin, whom she considers a friend, didn’t buy the “budget gimmicks” in the reconciliation bill, according to Murkowski. She estimates it would’ve ultimately cost more than $3 trillion after short-term funding streams for many of the proposed programs would have run dry. “I think he was reminding (Congress) that if you want to have legislation that is going to be enduring for the country — that you’re going to have to figure out not just how to count to 50 Democrat votes, but how to get bipartisan support,” Murkowski said. She acknowledged that Republicans have used similar tactics to push legislation through in the past, but “it doesn’t make it any better.” She would be open to discussions regarding some Democrat priorities, such as extending the child tax credit, if legislation follows its normal course, she added. “Let’s sit and talk about it, let’s see what we can do,” Murkowski said in regards to the expiring child tax credit. Elwood Brehmer can be reached at [email protected]

Biden administration tightens rules for government-backed energy projects

A new policy from the Biden administration increases the country’s pressure on the rest of the world to move away from fossil fuels. The policy “rules out” U.S. government support for most new coal-fueled power generation projects overseas, as well as limiting assistance for carbon-intensive oil and gas projects, too. In addition to denying financial assistance, the policy also ends diplomatic and technical help. Intended to speed up the transition to renewable energies in the global battle against climate change, it was explained in a Dec. 10 cable to U.S. embassies and obtained by Bloomberg and other news organizations. It follows through on President Joe Biden’s January 2021 executive order calling for directing more funding to energy projects aligned with the administration’s goal to fight climate change. The new guidance hits hardest at coal-fueled power plants. “Engagements related to coal generation must be related to full abatement of emissions and/or accelerated phase-out,” the policy said. “Our international energy engagement will center on promoting clean energy, advancing innovative technologies, boosting U.S. clean-tech competitiveness and providing financing and technical assistance to support net-zero transitions around the world,” according to the cable. The new policy makes a distinction based on greenhouse gas emissions. For example, a traditional combined-cycle gas-fueled power plant could exceed emissions standards and still lose access to U.S. assistance, according to the guidance sent to embassies. But a combined-cycle gas plant that employs carbon capture and sequestration to keep the carbon dioxide emissions out of the atmosphere could avoid the restrictions and receive U.S. help. In one of several exemptions, U.S. support will be allowed for oil and gas projects, including pipelines, power plants and liquefied natural gas import terminals, if they significantly advance compelling national security concerns or foreign policy considerations. Expanding energy access for vulnerable populations around the world also rates an exemption. Environmental groups question the exceptions. They are particularly upsetting to Friends of the Earth, which said the policy allows the U.S. Export-Import Bank — which helps finance projects worldwide that promote U.S. goods, services and jobs — to seek an exemption for “financing the sale of certain U.S.-made goods.” The finance agency “will merely need to say that not funding a fossil fuel project will hurt the interest of a U.S. company and then it can support the project,” the environmental organization said in its analysis. Federal agencies can seek exemptions on a case-by-case basis through a formal review process that will ask, among other questions, whether there are cleaner options for developing or delivering the energy. The policy took effect immediately and applies to “infrastructure directly related to the production, transportation or use of fossil fuels.” The new policy does not apply to existing projects that are already receiving U.S. government support. The federal government provided an average of $16 billion a year 2017-2019 in public finance, including equity, loans and loan guarantees, for natural gas projects, four times as much as wind and solar, according to a recent report from the International Institute for Sustainable Development, a 31-year-old think tank based in Canada. For example, U.S. international financing agencies have committed more than $6 billion for two liquefied natural gas export projects in Mozambique. LNG import projects that have not already lined up U.S. government financing could be hit hardest, such as plans for new receiving terminals in the Caribbean and Eastern Europe, growing markets for U.S. LNG suppliers. One paragraph of the policy seems to hold the door open for U.S. businesses to work and make money on overseas energy projects, even without federal assistance. “As long as there is demand for fossil energy products, technologies and services in global markets, the U.S. government will not stand in the way of U.S. companies that are ready and able to meet those needs,” said the guidance to embassies. “The U.S. government will continue to help U.S. energy companies, especially small- and medium-sized businesses, achieve their commercial objectives without compromising global climate ambitions.” Some projects are automatically exempted, such as those designed solely to stop or limit methane leaks from gas pipelines and other infrastructure. The guidance also would allow U.S. support for some projects that reduce greenhouse gas emissions. The policy provides an automatic waiver for projects if agencies can “demonstrate with confidence that there is a binding and enforceable guarantee” that average emissions over the development’s entire lifespan will be below predetermined thresholds. In addition to questioning the exemptions, the anti-fossil fuel Friends of the Earth said the policy does not go far enough. “The guidance put forward today looks like it was written a decade ago when climate change’s severity was less understood,” Kate DeAngelis, international finance program manager at Friends of the Earth U.S., said in a prepared statement. Another environmental group, Oil Change International, was less cynical in its assessment of the policy. “If the exemptions are implemented in good faith, this guidance should end almost all U.S. international finance for fossil fuels,” Bronwen Tucker, global public finance campaign co-manager at Oil Change International, was quoted by Bloomberg. Tucker added in an interview with S&P Global Platts: “We are still missing the fine print.” The U.S. is expected next year to move into the No. 1 position among the world’s LNG exporters, as the nation’s gas producers and LNG terminal operators continue expanding on a profitable business. Supporters of the industry are skeptical — but not surprised — of the new Biden administration policy. The president of the U.S. LNG Association said the policy is about what the industry expected from the administration, though he also called it a “sea change” in comments to the news media. Fred Hutchison, president and CEO of U.S. LNG, told S&P Global Platts the policy is “a tightening of the rules on fossil fuel engagement abroad with some limited exceptions.” Until specific projects are reviewed for exemptions, “it is tough to judge how this will affect foreign LNG and natural gas infrastructure development,” he said. “It’s not closing the door to gas but setting the bar a lot higher than it had been set in the previous administration,” Hutchison said. Larry Persily can be reached at [email protected]

FISH FACTOR: Demand for Alaska sockeye has pushed prices to near record highs

Strong global and U.S. demand for sockeye salmon has pushed prices to near record highs and boosted fishermen’s paychecks. Silver Bay and Peter Pan Seafoods a few weeks ago increased their base prices to fishermen to $1.45 per pound, a 20-cent increase from the summer, and other Alaska companies are likely to follow suit. That compares to a final price in 2020 of just $1.06. “Obviously, the base price is announced earlier in the season. Now that we can see where sales are going and really have a confident look, we’re excited to celebrate that with our fleet,” Abby Frederick, a spokesperson for Silver Bay, told KDLG in Dillingham. Alaska’s total 2021 sockeye catch was 57 million fish, with a preliminary value topping $361 million – more than 56% of Alaska’s total dockside value. Over 42 million of the reds came from Bristol Bay, worth more than $248 million to fishermen before final settlements are paid out next year. Most of Alaska’s fish goes to market frozen, headed and gutted, and strong demand by global buyers pushed wholesale prices for Bristol Bay sockeyes this summer to $4.37 a pound, up $1.07 from last summer. Sockeye fillets were wholesaling at $6.61 a pound and averaging $12.94 at retail counters this fall, up nearly a dollar from a year ago. The market is tight, which underscores increased demand, said Andy Wink, director of the Bristol Bay Regional Seafood Development Association. Bristol Bay’s sockeye run this year set a record, topping 71 million fish. The run is projected to be even bigger in 2022 and could mean a catch of 60 million fish. “It’s the largest we’ve ever forecasted,” said biologist Greg Buck at the Alaska Department of Fish and Game. Wink told SeafoodSource: “If you lined those fish up nose to tail, that’s enough to encircle the entire Lower 48 twice.” Fish profile - Bycatch will continue to dominate headlines as more Alaskans and lawmakers engage like never before. The increased awareness can be credited in great part to one man from Homer. “If we don’t step up and keep an eye out for it now, who will? It seemed like all the Alaskan resources were infinite for so long, but now we’re coming up to where fisheries are being shut down. It’s either step up or step out of the way,” said David Bayes, a longtime charter operator who said the waste and habitat damage by trawlers made him step up. Bayes has used social media to educate more Alaskans via a Facebook page called “STOP Alaskan Trawler Bycatch” founded a year ago by Jody Mason of Whittier, who calls Bayes “an encylopedia.” “David Bayes has helped pivot the bycatch discussion from one of behind closed doors and buried information to mainstream Facebook posts and dinner table conversations,” said Maddie Lightsey of Alaska Boats and Permits in her weekly Fish Ticket report. In 2020, the trawl sector in Alaska took 92 million pounds of various species as bycatch, according to NOAA Fisheries data. Bayes uses NOAA fishery managers’ numbers on bycatch and fishing overages to make his points. “Every week they update and you can click and see what the new info is,” he said. “But I don’t think a lot of people have done that. Because once we started to post those numbers, we’d run into trawl captains and crews and people affiliated with the NPFMC that would say I was crazy. Those numbers are too huge. And then you show them and say, well, those are your numbers.” Bayes also has exposed how catch overage numbers are juggled and often don’t add up. “In the Bering Sea, for one example, a catcher processor trawl fleet was about five million pounds over its Pacific cod quota. You can see this progression through the year that these guys are past their cap but they adjust the quotas. And then a few weeks ago, NOAA reallocated and simply erased that overage on paper,” he explained. It was Bayes who pointed out this fall that Bering Sea trawlers are allowed more crab as bycatch than the crab fleet can take, even in the red king crab fishery that is closed for the first time in 25 years. “It’s gotten again and again to where the North Pacific Council system has said, OK, we’re going to shut directed fisheries but the trawlers can’t help it because of the gear type and they must have this quota,” he said. “That does so much to prevent the stocks from ever bouncing back. They’ve shut off directed fisheries, but the trawl fleet keeps hammering it a little bit at a time and the small local boats just sit there and twiddle their thumbs and wait.” The STOP platform has its critics. Heather Mann, director of the Midwater Trawlers Cooperative of Oregon, said the site “happily hosted bomb threats to individual decision makers, fishermen using gear they didn’t like and more misinformation about a very difficult topic than we’ve ever seen.” She added the platform “actively hosted and encouraged hate for fisheries, groups and individuals. It is the antithesis of civilized discourse.” Dennis Moran is president of Fishermen’s Finest, the bottom trawl fleet that starting in 2023 will be required for the first time to reduce its take of millions of pounds of halibut bycatch. [Fishery council approves new restrictions on Bering Sea trawl fleet’s incidental take of halibut] Moran added: “The Facebook page has had multiple posts calling for violence against trawl vessels. If you speak up on the page to share the truth and provide sources to accurate information, you are blocked. What Bayes posts is either purposely taken out of context or flat-out misinformation and rhetoric. They allow personal attacks on Council members and others. Let’s have a real discussion about incidental catch and the fact that incidental catch occurs in every fishery and every gear type.” Those critics are all wet, believes state Rep. Kevin McCabe of Big Lake, who calls Bayes “an honest broker.” “He takes pains to post links to his data and has often provided amplifying information,” McCabe said. “The discussion gets more complicated by the players and power brokers who seem intent on discrediting any information or purveyor of information that does not fit the narrative they are trying to sell. “I find that ‘following the money’ is the best avenue to determine the veracity of claims. When a fleet feels like they can waste $8 per pound halibut for other fish that is worth a few cents, it demonstrates the level of money involved.” McCabe added: “They come to Alaska for what are essentially Alaskan fish, they sue us to not have to pay the very small landing tax required, and then throw away five times more fish than we are allowed to keep in the state fisheries? And the regulators seem to be in collusion by hiding the true data and parsing it out to the public in differing metrics. “Half of the management council has ties to the trawl fleet that would make their participation on a state board a violation of the state ethics laws. This level of anger from Alaskans is not going to go away just because 20 boats homeported in Seattle want it to.” Bayes said he knows the trawl sector is not “going away” but believes it’s time to “tap the brakes.” Stakeholders need to come up with better fishing solutions as other states and countries have done, he said, before it’s too late. McCabe, who said he also is driven by “the total waste of the resource,” added: “I can and will work with anyone to solve problems. But the first step in resolving any problem is recognizing there is one. I am not sure that the trawl fleet thinks there is a problem.” Correction: Last week’s column incorrectly stated some catch limits and has been updated. Cod catches for 2022 in federal waters of the Gulf of Alaska were increased by nearly 40% to 54 million pounds; pollock catches were boosted to 310 million pounds, a 26% increase.

Hilcorp gives each employee a $25,000 philanthropic bonus to give to a cause of their choice

Hilcorp Energy is upping its giving game as the company continues to expand its presence in Alaska. The Houston-based oil and gas producer is giving each of its employees a $25,000 philanthropic bonus to give to the causes and nonprofit organizations of their choice. Alaska Community Foundation CEO Nina Kemppel said the philanthropy should result in more than $16 million for the company’s Alaska-based employees to grant to nonprofits in their communities. She called coming funding injection a “huge” deal for the state’s nonprofits. “I think the nonprofit sector is going to be pleasantly surprised with all the support they’re going to get,” Kemppel said. For comparison, the popular Pick.Click.Give program that allows Alaskans to donate a portion of their Permanent Fund dividends to hundreds of nonprofits in the state generates roughly $3 million most years, Kemppel added. The Alaska Community Foundation began administering Hilcorp’s giving program in early 2020 as the company was seeking regulatory approval of its $5.6 billion buyout of BP in Alaska, which included the operator position at the large Prudhoe Bay oil field. Companywide, Hilcorp will offer nearly $50 million for its employees to give as they see fit. Hilcorp employs more than 1,400 people in Alaska, and the vast majority reside in the state, according to company leaders. BP was known in the state for having a strong corporate giving program, and Kemppel acknowledged there was concern when BP announced it was leaving Alaska among some in state’s philanthropic sector, largely due to the unknown that came with the quickly growing and privately held Hilcorp. The typically quiet company, through its giving program, provides each new employee with an individual giving account seeded with $2,500. Hilcorp then matches all employee contributions up to $2,000 per year. The $25,000 will go into to those accounts. In the roughly 18 months since Hilcorp took on BP’s assets, its employees have given more than $6.7 million to the community foundation and nearly 850 other Alaska charitable organizations and nonprofits with the support of the company, according to Kemppel. Any nonprofit with a charitable IRS status is eligible to receive a donation through Hilcorp’s Giving Program after they are screened by the ACF, she said, and there are thousands of them. Nearly 100% of Hilcorp’s Alaska employees have also made their own contributions beyond the $2,500 from the company, according to Kemppel. “For a lot of the nonprofits who are really stretching to offer more services and more help for their communities right now, $2,500 or $1,000 goes a long way,” she said, adding the money is granted to everything from social service providers to community art projects to youth sports programs. “It’s really inspiring to see the thought that goes behind a lot of the gifts. It’s changing the way philanthropy is done in Alaska.” In the field, Hilcorp has stemmed production decline if not boosted output from the mature Cook Inlet oil and gas wells it has acquired over the past decade and the North Slope oil fields it more recently took over. However, the company has experienced several operational and environmental issues with the aging facilities it chooses to operate, most notably the prolonged early 2017 natural gas leak from one of the company’s Cook Inlet subsea pipelines. The $25,000 contribution to each employee’s individual charitable fund is part of a $100,000 overall performance bonus announced in mid-December that Hilcorp employees have earned for increasing the company’s production rate by 275,000 barrels of oil equivalent per day and its equity value to more than $10.5 billion, according to Hilcorp representatives. Employees also earned up to $75,000 in direct bonus pay. The benchmarks were set in 2016 and were known internally as the Northbound 275 Goal, the latest in a series of long-term, companywide performance objectives Hilcorp leaders have set in recent years. Hilcorp leaders said the multi-year growth targets have helped create alignment among the company’s employees. “From our receptionists to our geologists to the men and women in the field, we truly have the smartest and hardest-working team in the business. Despite the many hurdles over the last several years, everyone worked hard — and importantly together — to tackle every problem,” Hilcorp Senior Vice President for Alaska Luke Saugier said. “This spirit is what I think makes this a special place to work and what drives success. This is about celebrating their success and sharing it with the communities where we live and work.” Kemppel said the Alaska Community Foundation wants to “ride the momentum” of the $25,000-per-person philanthropic bonuses to encourage Hilcorp employees to become even more engaged in philanthropy work. To that end, Hilcorp and the foundation are planning to host nonprofit giving fairs this February and March in Anchorage and Kenai to give the company’s employees more information about local causes and organizations they can give to. “It’s going to be a great opportunity for our state and growing philanthropy in general,” Kemppel said. Elwood Brehmer can be reached at [email protected]

In building community, even the littlest things can make a big difference

On Halloween, Tina Chapman’s daughter found a rock with a painting of Charlie Brown in a ghost costume hidden in the snow with the words, “You got a rock” written on the back, along with instructions to “Keep or hide, but post to FB @AnchorageRocks.” Chapman was thrilled. Not only was her daughter delighted by her discovery, the rock is part of a communitywide rock painting movement founded by Chapman and Angela Gray 2015. Inspired by a rock painting club in Texas, Chapman and Gray created the Anchorage Rocks Facebook group as a way to celebrate rocks painted, hidden, and eventually discovered and shared, in Anchorage. The concept was slow to catch on at first; the duo remembers being thrilled when their group hit 100 members a few months after they started, but has since ballooned to its current membership of nearly 14,000 people. Rocks painted in Anchorage have traveled the world, and have been found as far away as New Zealand, Australia, Guam, South Africa and England. A quick scan through the group shows art ranging from classic cartoons to detailed landscapes, with plenty of holiday-themed designs like Santa Claus or the Grinch. Chapman says that people participate for different reasons. Some enjoy painting to slow down from the busyness of life, while some are artists simply wanting to share their creations with the community. Others are drawn to hiding rocks and another group to the competition of finding and collecting them. Noting that their membership “jumped crazy high,” during COVID-19, she attributes their growth to providing a collective experience people can participate in while staying safe. Regardless of why people first join Anchorage Rocks, they become part of the greater purpose to “spread kindness and joy in our community.” As communities rebuild and reshape themselves in a post-pandemic world, encouraging community connection can help combat the mental health impacts of the pandemic. Emphasizing opportunities to strengthen social ties – which range from close friends to online connections, and can dramatically shape our health, happiness, and even how long we live – will aid in collective resilience and recovery. Two groups, the Anchorage Park Foundation and Best Beginnings, partnered to bring Little Free Libraries to parks as a way to connect kids to literacy, parks and recreation. The libraries were built during the pandemic, and have become well-used community resources. Stephanie Schott, the early literacy director at Best Beginnings, a child literacy nonprofit, says one of her favorite parts of Little Free Libraries is offering kids a book when they pass by. “We were restocking a library in Campbell Park, and a little girl was playing nearby. She came over, and picked up a book. Her parents came over to see what was going on, and then they started looking through the books too,” says Schott. “It’s immensely gratifying to tell them there’s no limit on how many books they can borrow, how long they can keep them, or times they can go back for more.” Libraries are often built and decorated as a community project, giving each one its own personality. For example, Creekside Park’s Little Free Library is painted with book titles in Hmong, Spanish and Samoan, featuring books by authors who represent the community. Titles include “Molly of Denali,” “Water Protectors,” “Sulwe,” and “I Am Enough.” Each Little Free Library has volunteer community stewards who care for the library, adding books when inventory is low and assisting with simple maintenance needs. Community members are invited to add their own books to the libraries as well, and Schott delights in seeing all of the different structures around town. Some were created through a partnership Best Beginnings has with the Anchorage Parks Foundation partnership, and others were built by individuals or other organizations. Schott dreams of a little library in every park, school, bus stop or grocery store. “Little Free Libraries belong in all parts of our community, it is all about sharing and access.” When building community, even the littlest things can make a big difference. Gretchen Fauske is a marketing-minded economic developer fueled by a passion for innovation and entrepreneurship. She is the associate director for the University of Alaska Center for Economic Development, Board President for Anchorage Downtown Partnership, and a Gallup-certified CliftonStrengths coach. Rhiana Gay is a kindergarten teacher at Creekside Park Elementary School, and was recently awarded 2021 African American Educator of Excellence through the Alaska Black Caucus. Fauske and Gay participate in the Women’s Power League of Alaska Mentorship Project.

As oil and investments earn more for Alaska, the state could see its first deficit-free budget in 10 years

Using higher estimates for oil revenue, millions of dollars in aid from the federal government and a lower amount for the Permanent Fund dividend, Alaska Gov. Mike Dunleavy proposed a state budget on Wednesday that could be the first in a decade to be balanced without spending from savings. The governor’s proposal includes $6.3 billion for state services, construction and dividends in fiscal year 2023, which begins July 1 and ends June 30, 2023. That’s an increase of about $1 billion from the current spending plan, with the additional funding going to the Permanent Fund dividend. Spending on services is held flat. The proposed budget calls for the increase to be covered by federal aid and revenue increases from oil and the Alaska Permanent Fund. “We do have good news. Our fiscals are looking good,” Dunleavy said. In a written statement, House Speaker Louise Stutes, R-Kodiak, said the governor’s proposal needs to be reviewed carefully. “It is important to remember that a slight rise in the price of oil, changes in the stock market, and one-time funding from Washington do not fundamentally change Alaska’s fiscal reality. We need to make the tough decisions on a fiscal plan in order to provide sustainability in budgeting and the PFD,” she said. Under the governor’s proposal, the 2022 dividend would be $2,564, the product of a new distribution formula proposed by the governor but as yet unapproved by the Legislature. It’s the first time since entering office that the governor has not proposed a dividend that follows the traditional — and since 2016, ignored — formula in state law. The governor is also proposing an additional $1,250 spring dividend (funded by money from higher-than-expected oil prices), the split of the Department of Health and Social Services into two separate agencies, and a $309 million borrowing plan for new construction. The governor’s ideas are subject to revision and approval by the Alaska Legislature, and Dunleavy’s prior proposed budgets have been extensively revised. Sen. Bert Stedman, R-Sitka and co-chair of the Senate Finance Committee, said he wants to better understand whether the governor is using one-time federal money to cover recurring costs. Budget documents published by the Office of Management and Budget indicate the governor’s proposal would use $375 million in federal aid in that way, an act that could create a budget hole in future years. “We’ll dissect it and start with budget clarity like we did the last couple years,” Stedman said. Higher oil prices and investment returns boost available cash Wednesday’s budget proposal relies on a new revenue forecast from the Alaska Department of Revenue that predicts oil prices will average $71 per barrel between July 1 and June 30, 2023. Since July 1 this year, prices have averaged $76.81 per barrel. The new FY23 forecast is less than forecasters had projected earlier this fall but much more than they predicted in the spring. The new estimate raises projected oil revenue by $675 million when compared to the spring. “Petroleum revenue increases for the next two years are largely a function of a higher oil price forecast, as well as an increased outlook for Alaska oil production,” they wrote. Since 2014, hopes of long-term higher oil prices have been short-lived. In 2018, shortly before he left office, former Gov. Bill Walker proposed a “balanced” budget that relied upon higher oil prices. Those estimates were obsolete within weeks, and Dunleavy was confronted with a continued deficit. This year’s estimate, unlike the one in 2018, is based on global markets that buy and sell future oil production. Rep. DeLena Johnson, R-Palmer and a member of the House Finance Committee, said she thinks the revenue estimate is reasonable, and her initial impression of the budget is positive. “I thought it was straightforward. It looked like a realistic and straightforward, honest budget, I thought,” she said. Revenue forecasters also raised their estimate for the amount of money that will be available under the annual transfer from the Alaska Permanent Fund. State law calls for that transfer to be limited to a sustainable limit, and the governor’s proposal stays within the limit. Earlier this year, Dunleavy had called for temporarily breaking the limit in order to pay for a larger dividend. Higher investment returns by the state’s pension funds have also allowed the state to reduce the amount it must contribute to those funds. Federal aid bolsters budget Dunleavy’s proposed budget keeps overall state spending on services flat when compared to what was approved this spring. Federal aid, provided through a variety of programs approved by Congress over the past year, replaces state money in some places. The Alaska Marine Highway System is a prime example. Dunleavy’s budget proposes funding it entirely with federal money, freeing about $60 million in state dollars for other uses. The governor’s budget also proposes using $375 million in other federal money to replace state dollars. That allows the governor to propose spending more state money in targeted areas without changing the bottom line: • The University of Alaska would receive $4 million in extra state funding, ending years of Dunleavy-endorsed budget cuts; • The state would fully fund school bond debt reimbursement payments to local governments, an increase from the 50% reimbursement previously endorsed by Dunleavy; • $10 million more for legal action against federal restrictions on mining, drilling and land use; • The Department of Public Safety would receive a $24 million funding increase, allowing the department to hire more state troopers and implement a public safety program he proposed earlier this week. “I applaud the governor for his focus on public safety, especially for the victims of domestic violence,” said Rep. Sara Rasmussen, R-Anchorage, a member of the House Finance Committee. “I think we have a good starting point, and I know this is just the first step as it works its way through the legislative process,” she said. Proposal includes a $309 million borrowing plan Speaking to the Alaska Federation of Natives annual conference earlier this week, Stutes said members of the coalition House majority want to see a budget that uses federal money for additional infrastructure work, not just to replace state dollars. Other states have used federal aid to install broadband infrastructure and reconstruct roads and bridges, among other projects. Dunleavy’s budget calls for some of that work. Included in the governor’s capital budget — used for construction and renovation — is $200 million for rural airports and $670 million for road construction, as well as millions to replace the ferry Tustumena. The governor is also proposing to borrow $308.6 million for construction projects across the state, including $22 million for the controversial U-Med road and $175 million for either the Port of Alaska or Port Mackenzie. The governor proposed a similar borrowing plan last year, but the Legislature rejected it, citing the possibility of federal infrastructure aid. “I’m looking forward to seeing the general obligation bond package that was put together this year. The administration said they worked hard to make it better and more traditional,” said Rep. Kelly Merrick, R-Eagle River and co-chair of the House Finance Committee. DHSS split intended The governor again intends to propose splitting the Alaska Department of Health and Social Services into a state Health department and a state Department of Family and Community Services. That split was proposed in late 2020 but was withdrawn this spring after legislators uncovered technical problems with the executive order creating the split. Dunleavy is expected to issue a new executive order once the legislative session begins in January, and the split would take place automatically unless lawmakers specifically vote it down. Under the health budget, the state will spend $46 million more on Medicaid, while funding for public health and public assistance is held flat. Budget documents show a significant decrease in the federally funded line items for emergency programs, such as the state’s pandemic response.


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