BROWN'S CLOSE: Skiing and the Socratic Method

This COVID winter, all of my usual activities were indefinitely postponed. Typically, I spend the cold months indoors with friends. We go to events around town, the movies, and last winter got into a memorable altercation in a local wine bar with a woman who threw our coats on the floor. Faced with the prospect of nothing so exciting to do as that sort of direct communication, I taught myself to ski. I bought a pair of used classic cross country skis from Play It Again Sports in September, and in November I went to Hilltop and puttered around the flat landscape. It struck me as odd that the skiing destination known as “Hilltop” has the flattest land for skiing in the whole city. I was quickly distracted from this thought, however, by the sheer difficulty of cross country skiing. It takes some time to grow accustomed to the movement. One does not walk on cross country skis, or shuffle. One glides. Going straight from zero to glide proved challenging, but I picked up some tips from YouTube. Try to shuffle-shuffle-glide-shuffle. Move up to the shuffle-shuffle-glide-glide. By the time I graduated to the shuffle-glide-glide-glide-shuffle, I’d begun to notice some things about my fellow skiers. For example, the fastest way to annoy a gaggle of cross country skiers is to go the wrong way on the trail. Indeed, most loops are one way, and yet the direction is rarely marked. It’s up to the skier to know the direction. Sadly, as a novice, it is pretty much inevitable I am going the wrong way. Serious skiers, mind you, are not shy about informing you of your mistake, though their corrections could do with a bit more directness. Rather than throwing my coat on the floor, my fellow skiers want to teach me the error of my ways through the Socratic method, trying to get me to reach my own conclusions. One evening while happily skiing the wrong way, I was stopped by a female on skate skis. She was tall and thin, with her skis and poles making her legs and arms look even longer than they actually were. She flapped over. “Is there a moose back there?” Her voice went up at the end of the sentence, and she cocked her head. I frowned, puzzled. “No.” Did she expect there to be? “Oh. Well, like, you’re going the wrong way?” Her voice went up again, and she cocked her head in the other direction. I wondered why she didn’t make it a declarative statement. After all, I was either going the wrong way, or I wasn’t. In my defense, there really is no way to know whether one is going in the correct direction. Much like the skiers themselves, the ski signs communicate opaquely. Periodically, there will be one way signs with alarming stop signs beneath, clearly demonstrating the way. The trouble is, the stop signs are only at intersecting trails, which necessitate more signs with more arrows pointing to the new trails. Many of these arrows point in the direction of the stop sign, thereby instructing novices like me to disregard the one way. Like, do you see my problem? Clear, comprehensible directional signage is not important to the ski community, but signs telling non-skiers they are not welcome on the ski trails are very important. Around Anchorage, it is not uncommon to see trails labeled, “Ski Only in Winter.” While I do give kudos to the skiers for at least labeling these trails, the syntax is wrong; when else during the year would one be skiing? The first time I saw such a sign, I was on a walk in the fresh snow at Service High School. I had not yet attempted skiing myself, so I was not fully indoctrinated in the skiing ethos of restricting trails for skiers only. I read the sign, frowned in confusion, shrugged, and proceeded. I wasn’t sure why Service High School felt compelled to tell me not to bother skiing outside of winter. Perhaps some rogue student went haywire one year, tried to ski in the summer, and caused such mayhem the school administrators took extra steps to prevent similar chaos in the future. I was promptly accosted by a woman on skate skis. She, too, questioned me to show me the error of my ways. How else was I to learn? “Are you taking a walk?” She pulled the skier head cock. “Well…yeah.” “Like, you’re not supposed to walk here?” I frowned. “What do you mean I can’t walk here?” She pulled her head to the other side, and continued to look at me. The Socratic method was not working. Really, what could she do to me. This is America. I could walk on any trail I wished. “Are you telling me you don’t want me to walk here?” She shook her head piously. I waited for her to offer a bit of helpful information, such as, where she wanted me to walk instead. After we engaged in a standoff for several seconds, she motioned me to a different trail system. Many of Anchorage’s skiers are elite athletes, to be sure. Once the city reopens fully, however, they could stand a lesson in direct communication from any number of Anchorage’s bar patrons. Sarah Brown is direct. Write her at [email protected] Tweet her @BrownsClose1. Visit “Close” is a British term for alley or cul-de-sac.

OPINION: Go big or go home

“$1,000 is nothing to sneeze at” That was the title of an opinion piece published in this space on June 8, 2016, as the debate raged over the first legislation that would have authorized use of Permanent Fund earnings and set the dividend at $1,000 or some other amount for a period of three years as the state was facing multi-billion deficits. A subsequent column suggested former Gov. Bill Walker veto half the dividend appropriation — which he eventually did — as a piece of leverage with the House to encourage its members to approve the Senate bill that had passed 14-5. A year later I declared that “the PFD is not a suicide pact” as a divided Legislature remained at an impasse over using Fund earnings before settling once again for filling the deficit with savings from the Constitutional Budget Reserve. At the same time it has been argued here that the PFD should not stand as the first priority of all state spending — I’m of the “Alaska Inc.” perspective in that the dividend should reflect the state’s fiscal health like any other business — I’ve also consistently urged the Legislature to stop the ad hoc dividend setting and reconcile the conflicting statutes between using Fund earnings and the PFD formula. The point of this rambling preamble down memory lane is to provide context for anyone who may assume that because I approach issues from the conservative side of the spectrum I must have always favored paying out a full dividend or that I believe we can cut our way out of budget deficits. The time is now to go big. As a natural resource state, Alaska has endured boom-and-bust cycles from industry to industry over its history, but we are a long way from the oil price crash in 2016 and nearly a year into a once-in-a-century economic disruption brought on by the COVID-19 pandemic. Despite recovering oil prices and several promising advanced projects, the North Slope is under attack from a malevolent federal government, the courts and anti-development NGOs. The tourism industry is staring at a wipeout after several record-setting years thanks to Canadian COVID-19 precautions and a 19th Century protectionist U.S. law that puts our visitor economy under effective control by our neighbors to the east and south. Fisheries face uncertain markets both domestically and overseas and must also cover millions in extra costs for COVID-19 mitigation that as we’ve seen can still not be enough to prevent outbreaks and production interruptions. Construction spending is forecast to be off by one-third this year over 2020 as the private sector hunkers down. Public sector construction spending is typically about a third of spending in a year; this year it is projected to account for half. About the only industry that has been held harmless over the past year are the metal miners who are all expanding in response to demand brought on by inflation expectations tied to trillions in federal deficit spending that shows no signs of slowing down. In short, Alaska is enduring a hurricane followed by a monsoon followed by a tsunami and the conventional wisdom as it relates to our supposed “rainy day” fund is that it can only open its umbrella to cover the state budget and government payroll that has shed almost nothing in the past year. Tens of thousands of others have lost their jobs. The state population has declined for four years in a row. The birth rate is down. K-12 enrollment is ebbing. Graduating high school students who shun the state universities for opportunities elsewhere are unlikely to ever return. We are not simply moving through a predictable economic cycle. We are suffering generational brain drain on a scale unlike any other time in state history. The most common refrain for not exceeding the statutory percent of market value, or POMV, draw is that we must protect the Fund and the dividend for future generations, but what kind of state will actually be left to enjoy if we do nothing to arrest the current trajectory? What good is a $100 billion Permanent Fund if we have a hollowed out education system as families flee, devastated coastal communities of shuttered small businesses and a managed decline on the North Slope while work dries up for Alaska-based support companies? Let us not forget that the reason the Permanent Fund has reached the unprecedented value of nearly $75 billion is because of the largest wealth transfer in the history of mankind from the working class and small business owners to the top percent of billionaire oligarchs and white collar work-from-homers who have seen their 401(k) accounts soar. For that the Fund managers deserve credit, and previous years’ well-founded austerity in dividend setting gave them more resources to work with that have generated these massive returns. Alaska cannot control the federal government, Canada or the 9th Circuit Court of Appeals. But it can control something that is the envy of 49 other states: the ability to provide direct relief to its residents. Combined with a revised PFD formula and his plan to boost the construction sector by getting to work on our billion-dollar backlog of deferred maintenance using a manageable amount of debt, Gov. Mike Dunleavy’s pitch for a significant increase in dividends is an idea whose time has come. The message is simple for a Legislature that still, inexplicably, is showing no sense of urgency: Go big or go home. Andrew Jensen can be reached at [email protected]

Alaska Angel Conference connects entrepreneurs with investors

Ana Kaiser and her co-founders Alexa Daniels and Jordan Bolton had their sights set on selling their keto/paleo/vegan donuts in the Lower 48.  They launched Fossil Fuel in 2018 after running a successful Kickstarter campaign, and quickly established a solid market base in Alaska. But to reach more customers who embraced the kind of lifestyle their products support, they knew they needed to grow into new markets, which required expertise and capital they didn’t have.   Kaiser had recently heard about a new funding opportunity, the Alaska Angel Conference, or AAC, and she and the team decided to give it a shot.  AAC is a collection of events designed to educate Alaska startup founders and new angel investors over the course of 12 weeks. Startups learn how to position themselves for investment and pitch their companies, while investors learn the ropes of angel investing (many are new to this level and type of investing), pooling their funds and making a group decision as to which participating company will receive their joint investment.  The term “conference” is a bit of a misnomer since the event spans several weeks where the investors conduct due diligence on each company participating, and while the companies simultaneously perfect their pitches, work on their business plans, and learn about tools of the fundraising trade like ‘term sheets.’  The decision to participate in angel investing — when an individual provides financial backing for small startups or entrepreneurs, typically in exchange for ownership equity in the company — is a serious one for both investors and entrepreneurs. Investors are putting dollars on the line in what is a traditionally very high-risk type of investment, and entrepreneurs are potentially giving away ownership in their company in return for receiving funding.  The conference supports both through the process, with the goal of increasing the number of investors in Alaska to spur entrepreneurial growth. Only one company is chosen at the end of the AAC to receive the pooled investment, which averages $100,000.  Previous AAC winners include Sitka-based Ramper Innovations, which developed a compact motorized folding conveyor system for baggage handlers, and Anchorage-based Pandere Shoes, a company making expandable footwear. Gaining financial savvy...with funding at the end Now in its third year, 2021 AAC organizer Mark Billingsley says that although the opportunity to secure funding is a driver for many entrepreneurs to participate, the true value is in the education and the network.  “There’s an incredible amount of access in the conference,” Bilingsley said. “If an entrepreneur wants to sit down with an investor, they’ll get that meeting. If they need help with something, they’ll get it. The mentorship opportunities alone, from people who are experts at building businesses, are immeasurable. There’s money at the end, but it’s more about growing your financial savvy for your business.” Billingsley is the University of Alaska Fairbanks Director for the Office of Intellectual Property and Commercialization, as well as the UAF Center for Innovation, Commercialization, and Entrepreneurship and sees AAC as a foundation of the state’s entrepreneurial ecosystem.  “There are a couple ways to get a startup off the ground; bank loans and bootstrapping are great, but not always viable options, same with borrowing from family and friends,” Billingsley said. “That’s where angel investors come in; they provide that seed funding that can make a real difference for a company. Basically, the AAC helps investors get more savvy, connects them with startups looking for funding to grow, and in the process helps startups reach their goals.” Billingsley is quick to say that AAC is not an Alaska version of Shark Tank, a notoriously cutthroat television show featuring investors and entrepreneurs looking for funding and sparring over dealmaking. “This is a really friendly experience, and I think of it as more a tool for teaching,” he said. “Founders can spend as much time as they want debriefing on their pitches and will have someone walking them through what it means to seek and obtain funding. They’ll gain a network of investors, and receive a lot of really specific feedback on whatever they need, whether that's their financial documents, business model, pitch...whatever is most relevant to the company.” Navigating funding options — especially the diverse and nebulous world of equity investment — can be challenging for entrepreneurs. Resources to help them negotiate, understand deal terms, and make the best decision for their company and themselves are key. Although Ramper Innovations beat out Fossil Fuel for the overall conference investment in 2019, the company used the feedback from AAC to pitch other private investors and successfully obtained funding. “We love to see ‘sidecar’ investments happening because of the conference,” Billingsley said. “It’s happened the last two years and I expect to see it again, especially with such a large pool of investors already signed up! People like to invest in industries they know, so even if a company isn’t the best fit for the overall investment, it might be a really exciting opportunity for one or two people on their own.” Kaiser says that one of the best parts of AAC was learning how to do market research, knowledge that was essential as the company achieved their goal of  expanding into other states. Currently, Fossil Fuel is in grocery stores in Alaska, Colorado, Montana, Utah, and Wyoming, with more to come. The company is currently negotiating with a fairly large supermarket chain.  From entrepreneur to investor to organizer An unexpected benefit of AAC for Kaiser was finding a community she wanted to continue to be part of.  “Entrepreneurship is a solitary road, it’s nice to meet people going through similar things and swap ideas and knowledge with them,” she said.  That community is part of the reason she and her husband signed up to participate again in 2020, this time as angel investors. “The world of starting a business is so interesting, you meet so many passionate people, and from participating in 2019 we realized that we just really wanted to invest in Alaska business. AAC seemed like the best way to get started, there is so much to understand, it’s like drinking water from a fire hose.” Kaiser is participating again this year, this time as an organizer with Billingsley and others. “Each time, the value for me is the learning...and I can’t wait to see what I learn this year!” Alaskans interested in applying to the 2021 AAC  — either as investors or on behalf of their companies — must do so by March 3. It is free to participate as an entrepreneur; investors must commit to making a $5,000 investment. Both entrepreneurs and investors should commit to spending 2 to 4 hours per week on the conference during the finals. 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 Launch Alaska, Vice Chair for Anchorage Downtown Partnership, and a Gallup-certified CliftonStrengths coach.

Private jet travel takes off in Hollywood amid pandemic

When veteran producer Bill Mechanic begins filming his latest movie, “The Divide,” in Australia later this year, he knows he will have to charter a private jet to fly out his lead actor. Under normal circumstances, that would be out of the question. Typically, for a limited budget indie feature, all the cast and crew — even the stars — fly commercial, which is substantially cheaper. But the Oscar-nominated producer is willing to pay the extra costs to fly the actor (whom he declined to identify) from Los Angeles to Australia to reduce the risk of a COVID-19 outbreak on set. “That becomes, even on a tight budget, something you don’t fight, since if your stars tested positive, then you’d be shut down,” said Mechanic, a former Fox and Disney executive who produced the movies “Hacksaw Ridge” and “Coraline.” “There’s more money lost … not being smart. Penny-wise, pound-foolish sort of thing.” It’s not only A-list celebrities who are demanding private flights. Increasingly, requests for use of such perks is coming from a wider group of cast and crew nervous about getting infected with COVID-19 while traveling on commercial flights, or because direct routes have been suspended as a result of the pandemic-related collapse in travel. Some studios and producers have balked at the demands for private jet travel at a time when many are facing additional financial pressure brought on by new safety measures intended to prevent coronavirus outbreaks. But, like Mechanic, many are willing to compromise because of the extraordinary circumstances caused by the health crisis. “If a studio is making a star or makeup artist get to a certain place that requires air travel and the person wants to go, the financier-producer will make whatever accommodation they feel is appropriate. Then it becomes a negotiation,” said L.A.-based veteran talent manager Larry Thompson, whose clients include William Shatner. The willingness by studios to make accommodations is a notable change, he said. “‘There’s not enough money;’ you hear that on every movie,” he said. “You’re not hearing it now.” Private jets aren’t being used just to transport cast and crew. In August, just months after L.A. county health officials approved a restart to filming in the region, the producers of the CBS Network procedural “S.W.A.T.” faced a deadline to get the cast and crew tested for COVID-19 over a weekend to meet its filming schedule. With just a 48-hour window to get the results and only a laboratory in Austin, Texas, available to process them in time, the only option was to use a private jet to carry the samples the thousand miles, according to a person close to the production who was not authorized to comment. None of the cast and crew travels privately for the show, and no one was flown as part of this one-off event, the person said. Producers are required to get the cast and crew tested under a return-to-work agreement with entertainment industry unions. Some shows like CBS’ “The Bold and the Beautiful,” one of the first major series to restart filming, initially struggled to get reliable processing for hundreds of tests, but more labs have since opened to give producers a better choice of services. Some businesses have profited from the growing popularity of private jet travel. “We initially lost a lot of business due to cancellations but ended up booking more than twice as many flights in 2020,” said Richard Zaher, chief executive and founder of Paramount Business Jets, a Leesburg, Va. -based charter broker that arranges private jet flights, including out of Los Angeles. Zaher, 46, estimates that sales more than doubled over the last year, to more than $25.5 million in 2020. He attributes at least some of that to entrepreneurs, corporations and wealthy individuals who’d never flown privately before but now do so because of the pandemic. Zaher says the entertainment industry accounts for a small but growing share of his sales. At the end of December, a production company filming a Super Bowl commercial decided to charter a private plane to transport the crew and stars from L.A. to Milwaukee and Green Bay, Wis., Zaher said. “People in production houses are also thinking about safety of their staff, just like everyone else, so yes, we are definitely seeing an increase in demand in that regard,” Zaher said. One studio client wanted to lease a private jet to transport COVID-19 test samples, while another celebrity client used private jets so her assistant could travel from L.A. to visit family in December, he added, without naming his clients. The hourly cost of renting a private jet varies from $2,000 to $10,000, Zaher said. Flying from Van Nuys to Teterboro, N.J. — one of the most popular routes — costs $26,000 to $32,000 one way, depending on the plane, said Zaher. Flying private can cost at least five times as much as flying commercial, he added. Studios are already nursing billions of dollars in losses from pandemic-related shutdowns in 2020. COVID-19 has meant productions can take longer, as working hours are now limited on set under new safety measures agreed upon with unions. These also require productions to pay for the additional costs for testing and sanitization of sets and gear. That can add $1 million to a regular movie budget. While flying private may seem like an extravagance, the downside of a key crew member like a director or actor getting COVID-19 is an extremely costly production shutdown, which can lead to losses exceeding $100,000 a day. Some Hollywood studios own or lease their own jets, which are also used by executives. Stars like Oprah Winfrey, Jim Carrey and John Travolta have their own. With big budget films, requests to fly private are not unusual. Warner Bros. flew Keanu Reeves by private jet to the “Matrix 4” shoot in Berlin last summer, according to person familiar with the situation who was not authorized to comment. A representative for Reeves declined to comment. Some producers are instead offering perks like LAX’s private terminal service. The terminal, on the outskirts of the airport, allows VIPs to check in for their flight, relax in their own room with access to refreshments and showers, clear security and get driven to their plane without setting foot in an LAX terminal. A boost in demand from the entertainment industry has created a new layer of revenue for the Private Suite at LAX, frequented by the stars such as Gabrielle Union and Jamie Foxx. “Major studios and even smaller production companies are requesting entire terminal buyouts for their production travel,” said Amina Belouizdad, co-chief executive of PS at LAX. “This allows the whole team — talent, camera crews, etc. — to have our private terminal completely to themselves when flying commercial.” Los Andgeles Times staff writer Wendy Lee contributed to this report.

Analysts divided over US aviation outlook, and Boeing’s future

Speakers at a major local aviation suppliers conference Feb. 17 were sharply divided over how quickly the aerospace industry can climb out of the depths of the current pandemic-driven downturn. “We are at exactly the low point and it will get better from here,” predicted Richard Aboulafia, an aviation analyst with the Teal Group for 30 years. “Good times begin to come back in late 2021 and are really back in late 2022.” But Adam Pilarski, aviation analyst and economist with Avitas, who has 40 years in the industry, responded with disbelief. “I can’t see that,” Pilarski said. At airlines, “fleets in a year or two will be much smaller. They didn’t retire the planes yet. But it will be happening.” And whatever the pace of recovery from the impact of COVID-19, another analyst outlined a bleak future for Washington state aerospace if Boeing decides to build its next new airplane elsewhere. In that case, said Michel Merluzeau, an analyst with Bellevue, Wash.-based AirInsight Research, Boeing production from its Everett and Renton assembly plants would dwindle rapidly after 2026, plummeting to only about 48 jets per year a decade later, down from 741 jets delivered at the 2018 peak. Optimism vs. pessimism The annual Pacific Northwest Aerospace Alliance suppliers conference, held virtually this year with about 480 industry and local government participants, convened at a crisis point no one could have predicted at the 2020 conference. Global air traffic last year was one-third of the level in 2019. Almost one-third of the worldwide fleet of commercial jets remains parked. Yet Aboulafia argued the economy is in much better shape than anyone expected when the pandemic took hold last spring. Multiple COVID-19 vaccines with high efficacy rates are being rolled out. Government cash has kept afloat entire industries, including the airline sector. Share prices of companies are riding high and consumers have record savings rates. He anticipates a U.S. airline recovery similar to that in China, which returned almost to pre-COVID levels within a few months of getting the spread of the virus under control. He anticipates people rushing back to air travel late this year and next. “When they can fly again, they have the cash,” said Aboulafia. He concedes that large widebody jets will not be in demand for years. “It’ll be a long time before anyone really needs a widebody,” he said. Ron Epstein, industry analyst with Bank of America, agreed and predicted that Boeing will have to further cut production of its 787 Dreamliner, from five jets per month down to four. Analysts all agree that the recovery will be led by narrowbody models, chiefly the Airbus A320neo and Boeing’s 737 Max. Yet Boeing won’t reap a big cash benefit until next year, despite a rush of Max deliveries this year. Most of those will be from the store of more than 400 Maxes built earlier, and another 100 or so partially built Maxes, with fuselages that have been sitting in Wichita, Kan., for about a year. Still, Aboulafia assured the suppliers in the audience: “We have suffered a terrible slide. We are going to grow out of it.” Epstein, the Wall Street financial analyst, was more restrained in his prediction. “It’s a disrupted world,” said Epstein. “It’s anybody’s guess where we will be economically in a year.” And Pilarski’s take is darker. He said airlines that probably should have gone out of business in this crisis have been held up artificially only by government cash. “I don’t think that can continue forever,” he said. Once it ends, he anticipates a rash of bankruptcies and consolidation among airlines and smaller aerospace suppliers. Bill Alderman, who advises on mergers and acquisitions of aerospace suppliers, agreed that a consolidation wave is likely to hit the industry when government support eventually ends. Pilarski projects it will take about five years for global air traffic to recover to 2019 levels. “So how many additional planes do you need?” he asked rhetorically. The big question for Washington state All the experts at the conference agreed that sooner or later the fundamentals that have driven the rise of air travel for decades will bring the industry back to its previous robust growth trend. They were also unanimous on two key points for this region: To maintain its competitive position against Airbus, Boeing must launch a new plane within a couple of years to go up against the A321neo. And to avoid a serious decline of this region’s aerospace industry, Boeing must build that jet in Washington state. While Boeing spent 18 months throwing resources at fixing the Max, Airbus moved ahead with new products and established a clear market advantage with the A321neo. Then the COVID-19 pandemic hit Boeing hard, draining its cash and requiring a focus on survival. Yet Aboulafia said the case for launching a plane that would essentially be a modernized 757 in size — about 230-plus seats with a range of about 5,800 miles — is a slam dunk. He said the A321 is not even a terrific airplane. It’s an old design with a less-than-perfect wing. Airbus’s success in selling more than 3,000 of them is a matter of “right place, right time,” he said. Boeing has no competitive model and that size and range of airplane is suddenly in high demand as airlines favor taking expensive widebodies off regional international routes and replacing them with such a narrowbody. Aboulafia said Boeing could do it. It would have to spend a couple of extra billion dollars a year to develop it, but that “wouldn’t move the needle much” given the company’s current debt of $64 billion. “If Boeing does nothing, this is an enormous chunk of the market lost to them,” he said. He projects that would mean Airbus taking 60 percent of overall market share, consigning Boeing to permanent second fiddle status. In his presentation, Merluzeau focused on the impact of Boeing choosing to build its next plane somewhere outside Washington, the “worst possible case for the Pacific Northwest.” His analysis shows that Boeing employment in the state would collapse to between 15,000 and 20,000 jobs by 2035, as production essentially disappeared. The remaining jobs would be high-end engineering jobs, designing airplanes and manufacturing systems that would be deployed in other states. An AirInsight Research survey found that industry professionals consider Charleston, S.C. and Huntsville, Ala., as just as likely to be the assembly site for Boeing’s next new jet as the Seattle area. “The issue of cost and taxation will be a driving element,” said Merluzeau. Vago Muradian, editor-in-chief of Defense and Aerospace Report, moderating a panel that included Epstein and Aboulafia, closed by emphasizing the stakes for the local conference participants and for Boeing. “A healthy Boeing is not just good for the Pacific Northwest but for the United States,” said Muradian. “Folks are rooting for Boeing to get it right.”

Satellite-based broadband competition heats up in Alaska

A battle for space internet in Alaska is brewing as companies jockey for the right to deliver satellite broadband, in part to bridge the digital divide between villages and cities. Starlink, a subsidiary of Elon Musk’s SpaceX, is letting Alaskans sign up for inexpensive satellite internet service that it’s targeting for delivery next year. Rural Alaskans who are paying $99 to get in line say the broadband service will be revolutionary, replacing the slow, clunky internet they now receive, with its sky-high costs. But Starlink has competitors, and companies involved in similar efforts, including Alaska-based Pacific Dataport, argue that Starlink’s Arctic plans may not happen safely, if ever. Starlink, Amazon’s Kuiper Systems and OneWeb, owned partly by the U.K. government and working with Pacific Dataport, are just three of the projects hoping to deploy armies of small satellites circling the globe in low orbits, sending zippy internet to Earth. OneWeb, Kuiper Systems and other Starlink competitors have told the Federal Communications Commission that Starlink’s plans could potentially be unsafe and cause collisions that threaten other satellites with impacts from space debris. Starlink declined to comment for this article. The proposals could bring “broadband equality” to rural Alaska, putting internet speeds and costs more on par with urban areas, said John Wallace, who runs a technology support company in Bethel, a transportation hub for dozens of villages in Southwest Alaska. Wallace signed up for Starlink last week, shortly after the opportunity became available. He said many rural Alaskans are forced to use the internet sparingly, and sometimes not at all, because costs can run higher than $500 a month. Data caps lower the price, but can be too restrictive, he said. “Out here you have to pick and choose how you use the internet,” Wallace said. “If you use it for entertainment, you can’t use it for work, because it’s so costly. And it’s worse in villages.” “It will be so exciting when people can just watch a movie, take a class, do some office work at home,” he said. Feds limit how many satellites Starlink can deploy, for now Starlink plans deliver broadband to households and businesses for $99 per month, plus $549 in equipment and shipping, according to its website. In rural Alaska, the costs will quickly pay for themselves, Wallace said. Starlink has already deployed more than 1,000 satellites, and provides the broadband to about 10,000 people in the U.S. and internationally, the company told the Federal Communications Commission this month. But the agency in January declined to approve Starlink’s request to deploy 58 polar-orbiting satellites, a step toward its plan of delivering service in “high latitude geographic areas,” such as Alaska’s most remote areas. Starlink’s broader plans before the agency involve 348 polar-orbiting satellites. The agency, however, did allow Starlink to deploy 10 polar-orbiting satellites to test and develop the service. The partial grant of Starlink’s request gives the agency time to consider the arguments raised against Starlink’s proposal, the agency said in filings. Starlink has also proposed to use lasers to communicate between satellites and reduce the number of ground stations needed, Elon Musk said in a recent tweet. Starlink has a long way to go to meet its Alaska goals, said Shawn Williams, government affairs director at Pacific Dataport. Williams said Pacific Dataport welcomes the competition. “(But) anyone sending in $99 needs to know that legally, Starlink can’t serve Alaska at the moment, and technically they can’t serve Alaska at the moment, so this is all being done on a hope and promise,” said Williams, also a former assistant commissioner in the Alaska Department of Community, Commerce and Economic Development under Alaska Gov. Mike Dunleavy. Alaska competitors keeping a close eye on Starlink Williams said Starlink has applied with the Federal Communications Commission for many waivers and modifications. “It can be surmised that SpaceX is making decisions and developing its system on-the-fly,” Williams said. “If they figure out how to develop their (laser) technology affordably, then build and launch those in 2022, that would be the best-case scenario for rural Alaskans who want Starlink.” GCI, Alaska’s largest telecommunications company, is tracking efforts by Starlink and others, in part because they could be a competitor, said Heather Handyside, a spokeswoman with GCI. “We are watching this closely because it’s really a new technology,” she said. Handyside said about 80 percent of Alaskans, such as Anchorage residents, enjoy access to the same fast internet service available in the Lower 48, one gigabit per second for downloads. But about 20 percent of Alaska’s population, around 150,000 residents, live in remote, small communities where delivering the internet can be difficult, she said. GCI plans to keep working to improve connectivity in those areas, she said. Toward that goal, GCI later this year plans to provide fast, fiber-based broadband internet to Nome and Kotzebue, Western Alaska hub communities, in a partnership with Quintillion, she said. Pacific Dataport, founded by Alaska telecommunications company Microcom in 2017, also has a goal of providing more affordable satellite broadband internet in Alaska, Williams said. Unlike Starlink, it plans to sell broadband in wholesale amounts, such as to telecommunications companies or tribal entities that can then sell the service to individuals, he said. It can also be sold to large consumers like school districts and hospitals. The company has already signed some contracts with wholesale customers, he said. “The market demand has been healthy,” Williams said. A potential ‘game changer,’ says an Utqiagvik music teacher Pacific Dataport plans to sell OneWeb’s capacity. OneWeb has already launched more than 100 satellites, and plans to launch hundreds more to serve regions globally. To deliver broadband in Alaska, it needs to launch 144 more satellites, an effort scheduled to be completed by July, Williams said. OneWeb, recently emerged from bankruptcy in November, plans to deliver broadband to Alaskans this summer, Williams said. OneWeb has committed to delivering service in Alaska first, said Lesil McGuire, a consultant to OneWeb and a former Alaska state senator. Both OneWeb and Pacific Dataport are permitted to deliver service in Alaska, Williams said. Late this year, Pacific Dataport plans to launch the first of its own two satellites, part of what it calls the Aurora Network. The second will be launched in 2023, or earlier, he said. The technology will be next-generation, he said. But, as with more traditional satellites, they will remain positioned high above the equator. The two satellites will also provide fast, broadband internet to Alaska, he said. The OneWeb and Pacific Dataport broadband systems will complement each other, he said. Jake Calderwood, a music teacher at the elementary school in Utqiagvik, said he supports all the efforts to deliver satellite broadband in Alaska. But he paid $99 for Starlink because it has already exceeded expectations outside of Alaska, he said. “This is a game changer,” he said of Starlink. In December, Calderwood sent a letter to the Federal Communications Commission supporting Starlink’s Alaska plans. The agency cited the letter in its decision allowing a test program for Starlink. Calderwood told the agency that the high cost of internet service is why nearly all the school’s 700 students aren’t taking music courses during the pandemic; many families can’t afford the online instruction after the school canceled in-person classes. “In our town Utqiaġvik, Alaska internet is a luxury that many are barred from using,” he wrote. “Being the farthest north city in the United States presents many challenges to access. Everything is expensive here from $10 per gallon milk to internet bills in the hundreds. My own bill … runs in excess of $300 for 10 megabit speed and the cost varies depending on usage.” “Since hearing about SpaceX’s plan to offer affordable internet to the most rural areas of the world I have held out hope that relief may be coming for many in our community,” wrote Calderwood. “Especially that my students might all have equitable access to education during this time.

Fund continues bull rush, nears $75B in value

Alaska’s Permanent Fund has continued its rapid growth into 2021 with a value quickly approaching $75 billion. The fund had a value of nearly $74.8 billion as of Feb. 22, according to unaudited figures from the Alaska Permanent Fund Corp., which equates to growth of 4.3 percent in just the first roughly seven weeks of the year. It ended a tumultuous first half of 2020 — that also marked the end of the 2020 state fiscal year — with a total balance of $65.3 billion for a net value increase of about $9.5 billion, or 14.5 percent, in less than eight months. The APFC board of trustees has an annual target return of 5 percent more than inflation; over the last 10 years the fund has averaged annual returns of 8.4 percent, according to corporation figures. Much of the growth is attributable to the fund’s $30 billion public equity, or stock, portfolio. The Dow Jones Industrial Average is similarly up more than 20 percent since June. The particularly strong stock returns have also led to a larger Earnings Reserve Account, the subaccount of the Permanent Fund that is spendable by the Legislature and provides the roughly $3 billion annual percent of market value draw to help fund state services each year, according to CEO Angela Rodell. The Earnings Reserve held $14.9 billion on Jan. 31, of which approximately $9 billion was uncommitted realized earnings immediately available for spending. Another nearly $3.1 billion is committed to the current 2021 fiscal year POMV draw while the remainder is accounted for as unrealized gains on invested assets, according to APFC financial statements. As recently as early September the Earnings Reserve held just less than $6 billion in uncommitted, realized gains and $10.5 billion overall. Rodell said in an interview that the recent ballooning of the earnings reserve is largely due APFC managers attempting to maintain discipline regarding the fund’s total asset allocations. The corporation has a target allocation for stocks to make up 37 percent of the fund’s total investments and when its stocks perform as well as they have in recent months they gradually become a larger portion of the overall fund, which pushes managers to sell a portion of those stocks — and generate income — to maintain a stock portfolio more in-line with the target allocation, according to Rodell. “All of the benefits of the growth fall to the Earnings Reserve,” she said. “The exact reverse is also highly possible and that’s what happened in March of 2020.” Public markets contracted sharply in the early days of the pandemic from the general uncertainty as to what the world was dealing with at the time. Then, managers pulled resources from other investment types such as bonds that were over-weighted at the time and put them into stocks. “While this is a really great thing that’s happening right now, it’s not something that happens continually or is forecasted to continue over the next 10 years,” Rodell added. Gov. Mike Dunleavy’s latest state budget proposal calls for drawing roughly $3.2 billion from the Earnings Reserve this year in addition to the annual POMV draw to pay for spring and fall Permanent Fund Dividend installments meant to inject cash into the state’s struggling economy. Rodell once again told lawmakers during a Feb. 23 House Finance Committee hearing that she fully understands the desire to provide Alaskans additional cash to help the state recover from the last unprecedented year but noted that it would have long-term consequences as well. “It reduces your market value draw every year hereafter,” she said of spending from the Earnings Reserve beyond the POMV. “You have to be thinking about how you’re going to replace this revenue or how you’re going to adjust spending as a result. She additionally noted that APFC’s advisory firm, Callan Associates, expects the fund’s real return — total minus inflation — to be in the 4.2 percent range over roughly the next decade. If that forecast is close to accurate it would likely mean the current 5 percent annual draw on the fund would be too large to maintain its real value. “It does imply that if this forecast is correct you would be taking out more than you are saving and the fund would contract; it would not grow,” Rodell said in response to questions from legislators. Some legislators who generally support the annual draw have said they are concerned a 5 percent draw is too large, though the APFC trustees for years have consistently endorsed a draw up to that level. As it stands, the POMV accounts for roughly 70 percent of unrestricted annual state revenue. Elwood Brehmer can be reached at [email protected]

Movers and Shakers for Feb. 28

Daniel Fenza was appointed president and chief operating officer of Chugach Alaska Corp., effective March 1, 2021. He will succeed Sheri Buretta, who will remain Chugach’s chairman of the board and interim CEO. Fenza has a 20-year tenure with the corporation’s largest government contracting business, Chugach Government Solutions and most recently served as vice president of Business Intelligence and Innovation, during which he pioneered technology transformation efforts designed to reduce costs and streamline efficiencies for the organization. Prior to that, he advanced through a variety of operations and subsidiary president roles. He has a bachelor’s degree from University of Central Florida and an MBA from Florida Institute of Technology. GCI announced additions to the company’s leadership team with the promotion of William Wailand to senior vice president; Heather Handyside to chief communications officer; Duncan Whitney to chief product officer; Holly Henningsen to vice president of Consumer Sales and Operations; Manoj Manoharan to vice president of Internet and Business Products; and Tyler Samples to vice president of Business Finance and Administration. Wailand will lead strategic negotiations with major customers, vendors and telecommunication partners inside and outside the state. Wailand formerly served as GCI’s vice president of Corporate Development and associate general counsel, and has worked for the company for seven years. He brings 15 years of business and legal experience to his new role. Handyside will continue in her role as GCI spokesperson and as co-executive sponsor of GCI Gives, the company’s philanthropy program. Before joining GCI in 2015, Handyside worked as emergency manager and deputy municipal manager for the Municipality of Anchorage and as press secretary for former U.S. Sen. Mark Begich. Whitney will continue to lead GCI’s product strategy and development functions for both Business and Consumer segments. Whitney has been with GCI for 28 years in a diverse set of roles including leading the product organization since 2015. He has served on the Cable Labs Technical Committee, an industry group made up of chief technology officers from large U.S. and international operators, since 2014. Henningsen will be responsible for Consumer customer service, sales and operations. She will oversee several key customer-facing groups including Consumer Call Center and Technical Support, Combined Service Delivery, Consumer Debt Collections, and Quality Assurance. Henningsen has been with GCI for more than 25 years. Manoharan will lead product management and development functions focused on GCI Business and consumer internet services. Manoharan’s experience includes a diverse set of roles managing and growing products over the last decade within the cable and telecommunications sector. Samples will lead the finance team for the GCI Business Division which includes financial planning and analysis, billing, and collections. He brings 12 years of finance, operating and accounting experience to his new role, having served for five years as both vice president of the Tourism Division and director of corporate development at Air Methods, a privately held health care services company, as well as seven years with KPMG. Deborah Vo has joined Rasmuson Foundation as a program officer. She most recently worked as special assistant for rural affairs to U.S. Sen. Lisa Murkowski. Vo was born and raised in St. Mary’s on the Lower Yukon River and started her career as her hometown’s first female city manager. She also served as a Tribal administrator, a health planner facilitating tribal management of statewide Alaska Native health services, and executive director of the Alaska Inter-Tribal Council, a former statewide advocacy group for Alaska’s 229 federally recognized tribes. Vo also worked for two companies in the Community Development Quota program that channels investments from fisheries into jobs, education and other benefits in 65 Western Alaska communities, and she managed rural energy planning for the Alaska Energy Authority. She has a bachelor’s degree in business management from Elms College in Chicopee, Mass., and an MBA from Alaska Pacific University. Cornerstone announced two new hires: Jordyn High as an accountant and Kyler Dias as a project manager. High brings several years of experience in the Alaskan construction industry, including work for both general and specialty contractors. She earned a bachelor’s of business administration degree with a concentration in accounting at the University of Alaska Fairbanks and is currently working towards her MBA. Dias joins Cornerstone with more than a decade of Alaska construction experience. His professional career has focused on large federal and commercial projects as a civil engineer, project manager, estimator, and quality control manager. He will be responsible for leading Cornerstone’s efforts in federal contracting opportunities. He holds a bachelor’s degree in civil engineering from the University of Alaska Anchorage.

FISH FACTOR: Report estimates 2021 Russian salmon to double Alaska’s 2020 output

Alaskans are preparing for another salmon season of poor to average runs to most regions. The big exception once again is at Bristol Bay where another massive return of more than 51 million sockeye is expected. Managers predict that surge will produce a harvest of more than 36 million reds to fishermen. Bristol Bay is home to the largest wild sockeye salmon run in the world and typically accounts for 42 percent of the world’s sockeye harvest. Those fish and all wild salmon compete in a tough worldwide commodities market, where Alaska salmon claims 13 percent of the global supply. Farmed salmon production, which outnumbers wild harvests by nearly three-to-one, is Alaska’s biggest competitor; the other is Russia. According to global seafood trading company Tradex, Pacific salmon catches from Russia are projected to top 1 billion pounds in 2021. As a comparison, Alaska’s 2020 catch of nearly 117 million salmon weighed in at just more than 500 million pounds. The Russian catch breaks down to more than 700 million pounds of pinks; nearly 206 million pounds of chum; 70.6 million pounds of sockeye; more than 24 million pounds of coho; and 8.8 million pounds of chinook. Sockeye are Alaska’s big money maker, comprising well more than a third of the salmon fishery’s total value each year, and the market outlook continues to be encouraging. “The global sockeye market continues to strong and it continues to be a popular and a sought after product,” said Tasha Cadence, a Tradex spokesperson. That is borne out at home, said Rising Tides Communications of Anchorage which handles marketing across all platforms for the fishermen funded/operated Bristol Bay Regional Seafood Development Association. “Despite a wild ride during a global pandemic, the BBRSDA marketing program had an incredibly successful year,” Rising Tide wrote in its annual report. “On the retail side, in spite of several pandemic-related retail promotion cancellations, we grew from 800 retail promotions in 2019 to 2200 in 2020 — a 175 percent increase. The average ‘lift’ experienced by our retail partners during our promotions grew from 34 percent in 2019 to 52 percent in 2020.” Tradex’s Cadence recommended that buyers “purchase enough sockeye for your future requirements if you want to continue to have a salmon program” and added that “prices are high but remain steady and we should expect pricing to remain this way until the 2021 salmon fisheries in Alaska and Russia start up.” In 2020, the U.S. imported nearly 4 million pounds of salmon from Russia worth more than $14 million. More than half was sockeye salmon, valued at nearly $9 million. And the competition from the “Great Bear” will only get tougher. Russia is making huge investments to increase and modernize its fishing capacity by building more than 20 new processing plants and 90 new vessels by the year 2030. The plan also includes the launch of a new marketing and supply chain strategy called “the Russian Fish.” And while that imported fish will compete directly with U.S. catches at retail counters and restaurants, sales have not been reciprocated and Russia has not purchased an American-caught pound since 2014. (The snub stems from a politically motivated embargo over U.S. objections to Russia’s incursions into Ukraine.) According to the Alaska Seafood Marketing Institute, the value of Russian seafood imports to the U.S. has grown 70 percent since 2014 and has more than tripled to nearly $700 million in 2019, an increase of $11.5 million over 2018. And the Russian seafood comes into the U.S. almost entirely duty free. Water worries Alaska salmon stakeholders are expressing concern over the state’s plans to change the rules that regulate the use of water in salmon streams, and they are hopeful Alaskans will weigh in on the side of the fish. A Jan. 15 “Letter to Alaskans” from the Department of Natural Resources says the changes are needed “to provide clarity and consistency in the Division of Mining, Land and Water’s processes. “We absolutely agree that the rules need more clarity,” said Lindsey Bloom, campaign strategist for the advocacy group SalmonState based in Juneau. “The problem is that they’re proposing to roll the regulations back in the absolute opposite direction and create a lot more red tape and hoops for Alaskans to jump through who want to reserve water and streams for fish to ever achieve that.” For decades, water rights advocates have proposed a simple solution, Bloom said: a blanket reservation that states that a reasonable amount of water will automatically be reserved for fish. The onus would fall to developers to study the hydrology of a water system to prove their project would cause no harm. “Unfortunately, the Dunleavy administration is choosing to take it in the opposite direction, and make it very, very difficult to reserve the water for fish,” she explained. “They’re saying the assumption is there are no fish in a stream, and the fish don’t need the water. And if Alaskans want that water to stay in the stream, they have to prove it with up to five years of specific hydrological data and make an application to the state. “One of the things this does is take away my right or a Tribal government’s right or a fishing organization’s right to hold the certificate for the in-stream flow reservation. “And it says that even if I go through all of the investment and the work of perfecting an application and getting a reservation of water, then DNR will hold that water right. If that were ever to be challenged in any way, I don’t have any assurance or security that DNR would protect that water right into the future.” The Alaska Miners Association, in its 2018 policy statement, blamed “anti-development entities” for using in-stream flow reservations to stop projects. The AMA said the solution is to “place an immediate moratorium on processing applications and pursue regulatory changes to ensure that only state agencies can hold reservations of state water.” Alaskans were invited by DNR to make comments through Feb. 26 to Brandon McCutcheon at [email protected]/ ‘Frankenfish’ correction The statement in last week’s column that genetically tweaked salmon will not be clearly identified for U.S. consumers was incorrect. For years, fish maker AquaBounty Technologies has pushed back against labeling requirements identifying the fish as genetically engineered due to severe and ongoing backlash from Americans and major supermarket chains. But “Frankenfish” has lost that battle. In late December 2020, Sen. Lisa Murkowski secured language within the Fiscal Year 2021 Agriculture, Rural Development, Food and Drug Administration Bill that requires the term “genetically engineered” to be included in the market name of any GE animal approved for human consumption by the FDA prior to February 2019. This requirement will therefore apply to GE salmon products, which were approved by FDA in 2015, Murkowski press secretary Hannah Ray said. ComFish is on! ComFish at Kodiak is Alaska’s longest running commercial fisheries tradeshow and the 41st event will take virtual meetings to a whole new level. ComFish Alaska is scheduled for March 30 and 31 and will feature a new platform called “Hop In” that allows participants to interact and socialize with vendors, presenters and friends far beyond what remote users have experienced so far. “It’s a truly social platform that’s as close to being there as you can get,” said Sarah Phillips, executive of the Kodiak Chamber of Commerce that hosts ComFish. Exhibitors on the trade show floor and forums all will be live and interactive, and attendees can provide instant feedback and break into their own chat rooms with friends among other special features, Phillips added. ComFish is still being organized and more information will be available soon. Send questions to [email protected] Laine Welch lives in Kodiak. Visit or contact [email protected] for information.

ConocoPhillips requests July decision on Willow suit

ConocoPhillips is asking the federal judge overseeing both of the lawsuits seeking to stop one of the largest North Slope oil developments in decades to determine the near-term fate of the project by the summer. Attorneys for the Houston-based major that has grown its presence on the Slope in recent years proposed to U.S. District Court of Alaska Judge Sharon Gleason that she rule by July 1 on the merits of the nearly identical lawsuits challenging the federal permits for its Willow oil project. A midsummer decision would hopefully allow ConocoPhillips and Interior agencies time to remedy any issues ahead of the 2021-22 winter construction season, they wrote in motions filed Feb. 22. Separately, the Bureau of Land Management and the coalition of national conservation groups suing the agency over its approval of ConocoPhillips’ development plan for Willow jointly submitted a motion Feb. 22 in one of the suits laying out an agreed-upon schedule that would have the last briefs filed by June 1, ahead of a ruling by Gleason. The Sovereign Inupiat for a Living Arctic and conservation groups that filed the other suit against BLM had not filed a proposed schedule as of Feb. 23. ConocoPhillips was prohibited from starting work Feb. 6 on access roads to the $6 billion oil project the company expects to eventually produce upwards of 100,000 barrels per day after Gleason issued temporary injunctions in the suits until the 9th Circuit Court of Appeals could rule on an appeal of her Feb. 1 decision that initially rejected injunction requests. The company had planned to open a gravel mine and construct up to 2.8 miles of gravel road extending west from its smaller Greater Mooses Tooth-2 oil project, which is also under construction and is expected to start producing oil late this year. Significant work was set to start in mid-February before the order halted it. In explaining the temporary backpedal, Gleason wrote that there is likely to be irreparable environmental consequences once ConocoPhillips begins blasting for a gravel pit to supply its road construction and the 9th Circuit Court could have a different interpretation of statutes she believes time-bar the permit challenges. She had previously concluded that the early gravel work in the National Petroleum Reserve-Alaska was not likely to “irreparably injure” the population of south Beaufort Sea polar bears that are protected under the Endangered Species Act before she could rule on the broader merits of the lawsuits as the conservation and Alaska Native groups argued. A panel of 9th Circuit judges subsequently granted the injunction in an order filed Feb. 13 on the grounds that they could have a different view of the applicability of a 1980 statute that limits challenges of at least some NPR-A environmental impact statement reviews to within 60 days after a notice of the EIS is published. At the heart of the matter is whether the law applies to all EIS reviews relating to the NPR-A or just broader reviews for things such as oil and gas leasing programs. Then-Interior Secretary David Bernhardt signed the record of decision approving the Willow plan with some modifications to the company’s original plan Oct. 26, 2020. Bernhardt and BLM Alaska Director Chad Padgett also signed the record of decisions for a new land management plant meant to open more of the NPR-A to oil and gas leasing this past December. The lawsuits arguing BLM officials under the Trump administration failed to conduct a sufficiently rigorous review of the oil project’s environmental impacts were filed Nov. 16 and Dec. 21; the final EIS reviews for Willow and NPR-A land-use plans were published in Aug. 13 and June 25, respectively. ConocoPhillips attorneys wrote in their schedule motions that preparing for next winter’s construction season “requires ramping up to as many as 300 employees in the second half of 2021 to work on engineering and logistics, as well as entering into numerous contracts for the construction, fabrication and transportation of pipes, culverts, bridges and other equipment to the North Slope for use next winter.” ConocoPhillips Alaska spokeswoman Rebecca Boys wrote via email that the company is reviewing its options to determine if the delay this winter will impact the overall development timeline for Willow. The company previously hoped to start producing oil from the large project in 2026. Boys wrote that she could not put a dollar figure on the expenses the company is incurring due to the injunction but did note that it has impacted approximately 120 jobs this winter. The members of Alaska’s congressional delegation said in a joint statement that they are “deeply troubled” by the 9th Circuit ruling that stalled work on one of the few current bright spots in the state’s economy. In December, the 9th Circuit invalidated the EIS for Hilcorp Energy’s Liberty oil project offshore from the North Slope because Bureau of Ocean Energy Management officials failed to estimate the greenhouse gas emissions from the project’s oil that would likely be sold overseas. Sen. Dan Sullivan has long championed splitting the San Francisco-based Ninth Circuit into two courts on the hopes a new court for Alaska and other resource-dependant states could be more favorable to resource extraction projects. CP drilling Elsewhere on the Slope, ConocoPhillips currently has one drill rig actively working at its highly productive CD5 drill pad. The company suspended all drilling on the Slope for most of 2020 while oil prices remained low as a result of the pandemic. However, oil prices have rebounded quicker than many analysts expected and are back to pre-pandemic levels of more than $60 per barrel. Doyon Drilling Rig 25, which is currently at CD5, will move to GMT-2 in the second quarter in preparation for first oil from the mid-sized NPR-A project later this year, according to Boys. Doyon 26, dubbed “The Beast” for its extended reach drilling capabilities, will also start drilling in the Alpine field in the second quarter, Boys wrote. ConocoPhillips Alaska leaders previously said they plan to have four rigs working on the Slope by the end of the year. Elwood Brehmer can be reached at [email protected]

OPINION: Forrest phones it in

No shortage of ink, electrons or carbon dioxide have been expended over the past several months at Anchorage Assembly meetings as a dedicated group of citizens have organized — often to no avail — against destructive policies and fiscal irresponsibility enacted in the name of public welfare. Yet all it took was 34 words from a constituent on Feb. 9 to tear down the façade of the chronically absent member and mayoral candidate Forrest Dunbar as the body took public comment on a proposed ordinance to require masks in statute rather than rolling emergency orders issued through the mayor’s office. “If masks are safe and effective, and we’re required to wear them, and those requirements are being enforced in this building, then why have you not been present for an Assembly meeting for months?” Although Dunbar was free to answer the question, his line remained dead as this gentleman gave him more than two minutes to respond (I assume someone added the Final Jeopardy soundtrack during post production). Perhaps Dunbar was pounding out a snarky message to fellow member Chris Constant, but probably not over email after public records requests shed light on the contempt they have for some constituents that they rarely bother concealing anyway. Without him being physically present at the meeting, there is no reason to believe he was even listening. He could have been watching Netflix or clipping his toenails for all we know. For a perennial office climber who thinks he is the best person to lead Anchorage it is quite an interesting strategy. But then again, hiding from the public behind the COVID-19 pandemic worked out quite well for Joe Biden, who lost the state by a mile but won Anchorage despite his openly anti-Alaska policies and mental acuity that rivals a bowl of mashed potatoes. The fact Biden won Anchorage should be a giant red flag for any candidate from the center to the right who believes they can tap into the disaffected population for enough votes to defeat Dunbar in an expected runoff for mayor once a crowded field is whittled to two after the April regular election. Based on the presidential election outcome in Anchorage, there are obviously tens of thousands of residents, if not an outright majority, who are content with the status quo of the pandemic response at both the local and federal level that has widened the municipality’s class divide between remote workers who have prospered without missing a paycheck and the devastation wrecked on working class and single-parent families. Not that there isn’t reason for hope Anchorage could head in a different direction from its current arrogant and insensitive leadership. The Assembly unanimously tabled both the mask ordinance as well as the attempt to punish member Jamie Allard for an abstract if poorly constructed free speech argument over license plates. Censuring Allard while letting Constant skate for a line of questioning last August that implied a rabbi was advocating placing the homeless in concentration camps, not to mention his routinely obnoxious behavior on social media, was apparently a bridge too far for even this group of leftists. Combined with the looming recall of Chair Felix Rivera appearing on the April ballot, the opposition forces can rightly claim a few victories after months of losses. If it is true that 80 percent of success is just showing up, the people Dunbar derides have obviously figured out something he hasn’t. Andrew Jensen can be reached at [email protected]

Tax season has begun. What to know before you file

What will likely be a challenging tax season kicked off Feb. 12 as the Internal Revenue Service finally began processing 2020 federal income tax returns. The tax season started about two weeks later than last year, reflecting the extra time the IRS said it needed to program and test its systems after last-minute tax law changes in Washington provided a second round of Economic Impact Payments and other pandemic relief benefits. “We are ready,” said IRS Ken Corbin, the new IRS chief taxpayer experience officer, a newly-created position that is designed to better help the agency address taxpayer problems. Corbin also serves as commissioner for the IRS wage and investment division. The IRS is encouraging people to avoid the possible headaches and holdups that can take place when you’re filing a paper return during the pandemic. Corbin said choosing to file electronically is the safest way to file a return and the quickest way to get a refund. As for those stimulus payments, the IRS had some thoughts there too. The likelihood of a third stimulus payment of up to $1,400 for individuals is on the table now. If all goes smoothly with passing the necessary legislation, some speculate that payments could be out as early as mid-March. Yet buzz is already building on how one might game that system. If you lost a job and had a sizable drop in income in 2020, some speculate that you’d want to file your 2020 federal income tax return early this year so that the IRS can base the next stimulus payment on your low income last year. It’s one way that some might get a bigger stimulus check, possibly. But Corbin cautioned that people don’t want to rush into filing a return, just to file as soon as possible. The best bet, he said, is to avoid any mistakes and only file when the correct paperwork and information that you need is available. If you don’t have the correct W-2 forms or 1099s, for example, the return is likely to face delays in processing. “We always encourage taxpayers to file the most accurate return they can,” Corbin said. The tax filing deadline is April 15 this tax season. Corbin said the IRS is not anticipating extending the deadline as it did last year due the widespread shutdowns early in the pandemic. Last year, the IRS extended the deadline all the way until July 15. Here are a few tips to consider as you prepare to file those returns: • If you collected state unemployment but did not pay enough income taxes into the system last year, you could face a penalty if you owe more than $1,000 in federal income taxes on your 2020 return. The IRS’s Corbin said Feb. 11 that the IRS does not have current plans to issue “blanket waivers” to those collected unemployment benefits but did not have enough taxes withheld. But Corbin left open a door that some taxpayers may be able to request a waiver of such penalties individually. He noted that “reasonable cause” waivers can be granted on a case-by-case basis. He said the IRS will be monitoring the situation involving taxable jobless benefits and any possible penalties relating to the lack of withholding enough in taxes throughout 2020. • Triple check your paperwork. While mail service seems to have improved in some areas, some people are still seeing mail delays. So the IRS is reminding taxpayers to make absolutely sure they have all of their tax documents, including Forms W-2 and 1099, before filing a tax return. Review last year’s tax return and consider your sources of income in 2020, especially if you did freelance jobs. Some forms may be found online through an employer or bank. “When other options aren’t available, taxpayers who haven’t received a W-2 or Form 1099 should contact the employer, payer or issuing agency directly to request the missing documents before filing their 2020 federal tax return,” the IRS said. Corbin said taxpayers should try to resolve issues first and not contact the IRS until late February if there continue to be problems with these forms, many of which should have been received already. • Crooks are still out to file phony tax returns. As part of a hot scheme in 2021, identity thieves increasingly are targeting tax professionals by sending an email that appears to be from the IRS. The phony email refers to “IRS Tax E-Filing” and verifying key e-file information. Crooks say things like: “In order to help protect both you and your clients from unauthorized/fraudulent activities, the IRS requires that you verify all authorized e-file originators prior to transmitting returns through our system. That means we need your EFIN (e-file identification number) verification and driver’s license before you e-file.” If tax pros fall for this one, the IRS notes that fraudsters can use information that’s disclosed to them to file fraudulent returns by impersonating the tax professional. The email attempts to bait tax preparers into opening a link or attachment. The threat is that if they fail to do so, their ability to e-file would be disabled. Yet these links or attachments are set up to steal information or to download malware onto the tax professional’s computer. Individuals are reminded to be wary of unscrupulous individuals who may offer to prepare your taxes but also steal important ID information from you — or part of your tax refund from you — along the way. Susan Tompor is the personal finance columnist for the Detroit Free Press. She can be reached at [email protected]

Erotica, pot firms join oil patch to keep fair access bank rule

Disparate industries that have found themselves shunned by banks are collectively defending a Trump administration policy on equal access to financial services that President Joe Biden may soon overturn. The rule, released by the Office of the Comptroller of the Currency late last year, would prevent banks from denying service for non-financial reasons to certain politically disfavored sectors such as firearms sellers and oil producers. It’s set to take effect April 1. The rule came after the largest U.S. banks said they would stop financing oil exploration and drilling projects in the Arctic, citing environmental concerns. Goldman Sachs Inc. was the first to announce its stance, followed by JPMorgan Chase &Co., Bank of America Corp., Citigroup Inc., Wells Fargo &Co. and others. Congressional Democrats oppose the rule, saying it forces banks to provide the fossil fuel industry with financing for environmentally damaging oil exploration. Biden put it on a 60-day hold until new agency heads can be appointed and those rules reviewed. Republicans including Rep. Patrick T. McHenry of North Carolina, the ranking member on the House Financial Services Committee, have said the rule is needed to ensure that companies cannot be shut out of the financial system simply because of the nature of their business. While the measure may have been aimed at helping oil and gas producers, other industries such as cryptocurrency or those having to do with sex or marijuana say they have also been denied credit and would be helped by a rule that ensures equal access to bank services. “Many of these websites and businesses aren’t violating the law,” Rainey Reitman, chief program officer for the Electronic Frontier Foundation, told CQ Roll Call in an interview. “Often they’ve had financial services in place for many years, and then find themselves suddenly cut off. It can be devastating.” Smashwords Smashwords Inc., an online platform for self-published e-books, found itself cut off from payment services provided by PayPal Holdings Inc. several years ago. This publisher of erotica and adult content used the service to pay authors when they sold books through the platform. The publisher had worked with PayPal for years before the sudden cutoff, Smashwords CEO Mark Coker told CQ Roll Call. It was a major blow because the payment system couldn’t be redesigned overnight. “If the fiction is legal, if these books are not banned by some government authority, then I felt like we needed to protect this category of fiction, because PayPal was threatening to take us down a very slippery slope,” Coker said in an interview. A PayPal spokesperson did not immediately return CQ Roll Call’s requests for comment. EFF and other civil liberties groups successfully pressured PayPal to reinstate Smashwords, framing the argument as a First Amendment issue. The publisher was lucky in that it had the contacts and resources to fight to get its services reinstated, Coker said, adding that smaller publishers or independent authors selling their own work online need to be able to access online financial services to survive. Coker said he favors the OCC rule, known as Fair Access to Financial Services, or similar measures that level the playing field. “We don’t want financial firms deciding these social issues — what’s comfortable and what’s not,” he said. “I think financial firms should focus on if they are supporting a legal operation or not, and beyond that they shouldn’t moralize on it.” Crypto crunch The Blockchain Association, whose members include exchange platforms for virtual currencies such as Bitcoin, supports the rule because, it claims, many industry firms are denied credit or access to financial services. “It was disappointing to see this rule come so far and then not get across the finish line,” said Kristen Smith, the Blockchain Association’s executive director. She said there still is a need for the rule or something like it. Smith said that while much of the ire against the OCC’s rule is directed at the fossil fuel industry, emerging industries like cryptocurrency have dealt with financial discrimination for years. This is partly because “crypto is politically unfavorable,” she said, and banks don’t want to take on anything perceived to be risky. “Companies are building these really cool crypto networks, but they still need to process payroll and they still need to pay vendors,” Smith said. “There have been situations where it’s been very difficult for crypto companies to actually access these services.” One early challenge that banks had with cryptocurrency businesses was its novelty — there was no existing framework for them to weigh regulatory risks. This fact, coupled with the false assumption that the cryptocurrency industry was illegal or unregulated, led banks to deny services to many businesses, she said. Although there are signs of recent improvement as cryptocurrencies and networks became more mainstream in the last year, she said there is still a need for some kind of rule to make banks treat businesses individually. “There are a lot of really good players that have a lot of really great ideas and have need of financial services,” Smith said. Pot problems One industry that has been starved for access to traditional bank financing is cannabis. The inability to get loans or any kind of services affects small pot businesses, which have to pay steep state licensing fees just to get started, said Byron Bogard, a California-based cannabis dispensary owner and grower. Although licensed, his dispensary, Highway 33, has relied on private loans from individuals, often at much higher interest rates than banks, to get up and running. Lack of financing also affects how he can expand his business and make it difficult for him or his employees to get bank accounts or cash checks. Banks operating in the U.S. are insured by the Federal Deposit Insurance Corporation, and companies that violate federal law will not be insured. Despite decriminalization in many states, marijuana remains a Schedule 1 controlled substance at the federal level, and most banks won’t loan to dispensaries or other cannabis businesses. Bogard’s experiences are common across the industry, according to Morgan Fox, a spokesman for the National Cannabis Industry Organization, a trade association. Fox said without access to traditional lending many marginalized communities involved in the industry have difficulty raising capital to start a business and the Fair Access to Financial Services rule would be step in the right direction. “I just want to be treated like everybody else,” Bogard told CQ Roll Call. “I don’t want or need any special treatment, but I don’t want any extra hurdles to overcome just because I’m running a cannabis business.” Laura Weiss contributed to this report.

Biden’s brakes on lease sales continue with Gulf cancelation

Oil and environmental interests reacted Feb. 12 to the federal government’s cancelation of March’s oil lease sale in the Gulf of Mexico. The action was widely expected after President Joe Biden signed an executive order Jan. 27 halting new leases in the Gulf as his administration makes plans to deal with climate change. The Bureau of Ocean Energy Management cited the order in canceling the lease sale, in which companies bid for the right to explore for and produce oil in specific areas offshore. Officials had been scheduled to open bids March 17 in New Orleans. “We remain hopeful that the administration will proceed with the lease sale upon completion of its review,” said Erik Milito, president of the National Ocean Industries Association, which represents oil service companies across the U.S. Business and industry officials have expressed concern that Biden’s restrictions will cost Louisiana and other oil-dependent states jobs and damage their economies. The Obama Administration subjected the oil and gas leasing plan for 2017-22 to numerous environmental reviews, Milito said in a prepared statement. The Interior Department determined greenhouse gas emissions “would be higher without these lease sales because energy production would be outsourced to foreign counties resulting in a higher carbon footprint,” he said. “Offshore oil production has the lowest carbon intensity of the oil-producing regions and supports more than 345,000 jobs, many of which are accessible, high-paying and cannot be easily substituted,” Milito said. Environmentalists counter such restrictions are an essential step toward fulfilling Biden’s pledge to reduce the pollution, rising seas and other ill effects greenhouse gasses from fossil fuels are wreaking on the planet. “Canceling this huge offshore Gulf oil auction helps protect our climate and life on Earth. President Biden understands the urgent need to keep this oil in the ground,” said Kristen Monsell, oceans legal director with the Center for Biological Diversity. “This is a great step toward phasing out all offshore drilling and bringing environmental justice to the Gulf Coast and Alaska. We need to help restore coastal communities and marine life.” Biden’s actions are a stark contrast to the policies of President Donald Trump, who touted a push for “American energy dominance” and rejected calls to address climate change or acknowledge fossil fuels’ contribution to greenhouse gas emissions. The Trump administration opened all of the Gulf’s available tracts to drilling, but oil companies routinely submitted winning bids to lease less than 1 percent of the tracts. The Gulf rig count, a barometer for Houma-Thibodaux’s offshore oil-based economy, stands at 17, up one for the week but down six compared to a year ago, according to figures released Feb. 12 by Houston-based oilfield services company Baker- Hughes. The count is down 70 percent from the 56 rigs drilling in August 2014, before a years-long oil bust fueled by a global crude glut and falling prices vanquished an estimated 25,000 local jobs. Discussing Biden’s actions Jan. 27, oil industry officials noted that the relatively low interest in Gulf drilling was a response to reduced energy demand during the coronavirus pandemic and, before that, a prolonged dip in global crude prices. Monsell, however, said the Trump administration held those lease sales without carefully analyzing their impact on climate change or on species like critically endangered Gulf of Mexico Bryde’s whales or Cook Inlet beluga whales, already threatened by existing oil and gas activity. The center and other environmental groups have called on Biden to permanently withdraw all unleased portions of the Outer Continental Shelf, halting all new oil and gas lease sales for good. Peer-reviewed science estimates that a nationwide federal fossil fuel leasing ban would reduce carbon emissions by 280 million tons annually, ranking it among the most ambitious federal climate-policy proposals in recent years, the group said. “The damaging effects of fossil fuel pollutants have become clear from record-breaking global temperatures, extreme weather events becoming more frequent and severe, rising seas and coastal flooding, ocean warming and acidification and degraded habitat, including the loss of Arctic sea ice relied on by polar bears and other endangered and threatened species,” the center said in a news release Feb. 12.

GUEST COMMENTARY: Texas grid failure shows need for reliable electricity

Right now, the United States is suffering some brutally cold weather. Northern states like North Dakota and Minnesota have seen night-time temperatures dropping below zero degrees Fahrenheit. And Duluth is currently chasing a record for the coldest sustained weather, set way back in 1912. These Arctic conditions are extremely challenging, and Americans are turning up their thermostats to stay warm. As a result, the current “Polar Vortex” is pushing America’s power grid to the limit. The Midcontinent Independent System Operator, or MISO, which oversees power transmission in 15 central states, reports that coal is currently generating more than half of its overall electricity. In fact, a Feb. 15 snapshot of MISO’s grid showed coal producing roughly 45,000 megawatts of electricity, with natural gas coming in second at 25,000 megawatts. Essentially, during the current Arctic blast, coal is proving to be the sturdiest fuel for carrying the load. MISO data shows just how lopsided this electricity portfolio is. On Feb. 15, MISO’s customers were drawing roughly 88,000 megawatts of electricity. Coal’s 45,000 megawatts covered more than half of this demand. In comparison, wind and solar power hardly contributed. Solar panels delivered roughly 287 megawatts, and wind turbines topped out at around 4,900 megawatts. That means these much-vaunted renewable energy systems produced only around 5 percent of the electricity needed across 15 states. MISO has now posted alerts warning of extreme weather conditions and potential “fuel restrictions.” But all of this pales in comparison to Texas’s current troubles. Stunningly cold weather — including sub-zero temperatures — have led to a massive spike in electricity demand across the state. However, much of the Texas power grid now relies on wind turbines. And in the current Arctic blast, half of the state’s wind turbines have frozen, taking at least 12,000 megawatts of power offline. Even worse, home heating needs have drained the state’s natural gas capacity, leaving some gas-fired plants without fuel. As a result, Texas is now seeing blackouts. On Feb. 15, up to 2.5 million Texans were without electricity. This is the inevitable result of policies that favor intermittent wind generation while pushing aside the fuel-security and reliability provided by coal plants. Worryingly, Texas’s shift to wind-generated power is being replicated across the nation. President Biden hopes to eliminate all coal and natural gas plants from the U.S. power grid by 2035. This is deeply concerning if one tries to imagine a Polar Vortex in 15 years when none of the current coal plants are still available to do the heavy emergency lifting. As Texas scrambles to pull together needed power, it’s clear that baseload power must remain a key component of reliable electricity generation. The United States should continue to pursue an “all-of-the-above” fuel mix. Wind and solar can certainly contribute to the nation’s power grid. But smart future planning dictates that coal, natural gas and nuclear power will still be needed to help with the heavy lifting during uncooperative weather. Terry Jarrett is an energy attorney and consultant who has served on both the board of the National Association of Regulatory Utility Commissioners and the Missouri Public Service Commission.

N.D. worried federal rulings, policies could affect oil output

North Dakota’s oil production fell 3 percent in December — and the state is now grappling with potential federal restrictions that could hurt future output. The drop in December production “wasn’t unexpected” given relatively low oil prices during that month, Lynn Helms, director of North Dakota’s Department of Mineral Resources, said in webcast Feb. 12. West Texas Intermediate, or WTI, the benchmark U.S. oil price, hovered below $45 per barrel in December, less than the level needed to drill and frack new wells. WTI has strengthened significantly since then on the heels of OPEC-led global oil production cuts. WTI was at $59 per barrel Feb. 12, a high since the global economy tanked because of the coronavirus pandemic and oil demand was decimated. At oil’s current prices, “we are hearing positive things about drilling,” Helms said. But North Dakota’s oil industry — and a state government dependent on oil tax revenue — is quaking about the prospect of a shutdown of the Dakota Access pipeline, its main transportation artery. Last year, a federal court in Washington, D.C., threw out the Dakota Access’ permit to cross Lake Oahe, saying the U.S. Army Corps of Engineers failed to do a thorough environmental review of the project. Whether the pipeline can continue operating while a proper review is done has not been settled. There is a key federal court hearing on the matter in late April. “That is of enormous concern to the state,” Helms said. Since 2016, the Standing Rock Sioux Tribe has fought the pipeline — which is very near its land — in court. Indigenous and environmental groups have called on President Joe Biden to shut down the pipeline. The Biden administration has put a moratorium on new oil well leases and drilling on federal lands — except for tribal lands held in trust by the U.S. government. The Fort Berthold Reservation in North Dakota — home of the Mandan, Hidatsa and Arikara Nation — is a major oil-producing area. Helms said the moratorium wouldn’t have much impact this year and next on North Dakota as a whole, but would in 2023 if it holds. “The long-term impact would be a 14 percent reduction in total North Dakota well count,” he said. Lost royalties from those wells would cost the state $285 million over 15 years, Helms added. North Dakota, the nation’s second largest oil-producing state, churned out 1.19 million barrels of crude per day in December, down from 1.23 million from December 2019. Natural gas production, however, was up 4 percent in December over a year ago due to increasing corporate investments in gas processing. North Dakota companies captured 94 percent of all gas produced in December, flaring only 6 percent and meeting the state’s environmental goals. “Every single area of the state is in compliance,” Helms said, adding that he couldn’t recall the last time that occurred.

State moves ahead without emergency status

Alaska became one of two states in the United States without a formal COVID-19 public health disaster declaration on Feb. 14 and the only state without any disaster-related provisions, at least right now. The physically isolated and medically fragile state is also seeing a sharp reduction in coronavirus cases. But without the declaration, everything from hospital coronavirus treatment units to space for large vaccination clinics is in limbo, observers say. In place since March, it provided legal backing for state health orders, as well as flexibilities to respond to the virus and deliver vaccine to Alaskans. “Alaska is definitely in uncharted territory here,” said Emily Ford, government relations director with Providence Alaska Medical Center, the state’s largest hospital in Anchorage. Gov. Mike Dunleavy, in a news conference Feb. 14, the day the declaration expired, said it was time to start moving Alaska past restrictions. Alaska boasts one of the highest vaccination rates in the country. Declining daily case counts have been followed by dropping hospitalization and death statistics. The expiration led to the immediate closure of a popular drive-thru COVID-19 testing site at Lake Otis Parkway on Providence property operated in partnership with the municipality. The “alternate care site” was authorized by federal waivers granted by the declaration, hospital officials say. That site was dismantled Feb. 16, according to Providence spokesman Mikal Canfield. Starting Feb. 17, a new testing site will open at the municipal permit center, located at 4700 Elmore Road, according to an alert. All other testing sites are operating normally. The end of the declaration is also expected to change the way Providence and Alaska Regional Hospital care for COVID-19 patients because temporary building configurations required federal waivers that hinged on the emergency, hospital representatives say. At Providence, administrators wonder if Alaskans who need out-of-state care can still make use of telehealth visits with Outside providers. Another major change: the relaxation of travel policies that required incoming travelers either show a negative COVID-19 test result or quarantine for five days, policies credited with helping reduce the spread of the virus in a state with a vulnerable health-care system isolated from the Lower 48 by ocean on one side and Canada on the other. In place since June, mandatory airport testing had so far identified more than 2,350 positive COVID-19 cases, according to legislative testimony this month. Now officials lack the authority to mandate those restrictions, which become voluntary. At Alaska Airlines, messaging to the public will adopt the state’s new language, a spokesman said Feb. 15: the word “recommend” and “encourage” will replace “required” and it will be made clear that nonresidents can get airport testing for free instead of paying $250, as announced Sunday. State officials also said last week said the end of the emergency means losing a third of the state’s $23 million monthly food stamp aid from the federal government. Now people in various sectors are waiting to see what happens next. Some are celebrating. Steve Perrins, who owns Rainy Pass Lodge in the Alaska Range, said he was “very happy” to hear about the governor’s decision when a reporter told him about it Monday. Perrins hosted Dunleavy at the lodge last year when the governor accompanied a veteran on a hunting trip through the Wounded Warrior program. Perrins said both he and his wife, Denise, who are in their mid-60s, came down with COVID-19 last fall around Thanksgiving. His son, a medic in Anchorage, got the virus in October. None of them got severely ill. But, Perrins said, the virus has taken a toll in a different way. The lodge lost a $9,000 booking recently after Iditarod officials cancelled the race’s ceremonial start and other spectator favorites due to coronavirus concerns. Last year, a group of four booked a trip but one of them tested positive though he had no symptoms and was out $4,500 for the trip. “It’s really destroying our economy,” he said. Others are disappointed and frustrated that the disaster declaration was allowed to expire. “Everyone’s scrambling trying to figure out what is allowed, what is not allowed,” said Jared Kosin, president and CEO of the Alaska State Hospital and Nursing Home Association. “It’s a mess. It’s a total mess.” The association lobbied hard for the declaration to continue starting in November, when Dunleavy signalled he might not sign the first of several 30-day extensions including the one that expired over the weekend. It’s possible the state will no longer have the authority to hold mass vaccine clinics at Alaska Airlines Center in Anchorage, Kosin said Feb. 15. It’s also possible that out-of-state medical providers who received licensing flexibility to work here temporarily and boost limited staffing need to apply for an Alaska license to continue. “Is not having a declaration worth not having $8 million on a monthly basis? We’re in a fiscal crisis … I don’t understand,” Kosin said, referring to the projected loss of food stamp funding. “We’re obviously frustrated by this, that it didn’t get done. Now we’re trying to clean it up.” Dunleavy and his top health officials had urged the Legislature to use its authority to extend the declaration until September, saying the administration lacked the authority for a 30-day extension. A dysfunctional Alaska Legislature failed to renew the declaration. Some critics in the Legislature incorrectly linked the statewide emergency to locally imposed school closures and actions like the monthlong hunker down in Anchorage in December. The expiration of the state declaration does not change locally adopted coronavirus restrictions. Most House members asked the governor to issue a new declaration, and the Alaska Senate backed a resolution asking the governor to act. The governor’s decision to let the declaration expire makes Alaska the only state in the country without any kind of broad statewide public health emergency declaration. A declaration by Michigan’s governor was allowed to expire last year following a state supreme court decision but the state’s health department enacted a series of orders that mirrored those in the governor’s declaration. In Alaska, state officials on Feb. 14 released three new health advisories addressing travel and also the seafood industry, where requirements have been replaced with recommendations that “should” be followed on fishing vessels and in processing plants. At least one industry member — Trident Seafoods, the Seattle-based company with numerous plants and vessels operating in Alaska — said there would be no changes at any of their facilities. Trident’s Akutan plant experienced a serious COVID-19 outbreak last month and several company vessels also reported cases. Dunleavy issued a memo to state commissioners Sunday telling them to continue following policies in place under the declaration. It’s possible the Legislature could take action to make up for some aspects of the emergency declaration. By the end of day Feb. 16, the governor said, he wants commissioners to provide his administration a summary of how the declaration “affects your department so that we can prepare to address them in an orderly fashion and conduct a methodical return to normal state operations in a manner that prioritizes the health and safety of Alaskans.”

ConocoPhillips to cut 100 Alaska jobs

ConocoPhillips Alaska said Feb. 15 that close to 100 of its Alaska employees will either be laid off or accept voluntary severances. Somewhere around 95 of the company’s 1,100-member workforce in Alaska will be impacted, according to an email from Natalie Lowman, a spokeswoman with ConocoPhillips, the state’s largest oil producer. “Affected employees will receive severance, outplacement services, and other benefits offered under existing (human resources) policies,” Lowman said. The decision was related to the company’s $9.7 billion acquisition of Texas oil and gas company Concho Resources, according to Lowman. “This past year has emphasized the need for our company to stay focused on cost and become more efficient in what we do,” Lowman said. “With the acquisition of Concho Resources, we have revisited our overall structure and that has resulted in job losses company-wide.” Lowman said the workforce reduction is unrelated to recent court decisions. The 9th Circuit Court of Appeals on Feb. 13 halted winter work at ConocoPhillips’ large oil prospect in northern Alaska, the Willow field in the National Petroleum Reserve-Alaska. The halting of that work will affect 120 ConocoPhillips employees and contractors, the company has said. Alaska’s oil industry has had a tumultuous year. Oil giant BP’s exit from the state following the sale of its Alaska assets to Hilcorp resulted in the loss of hundreds of jobs. The onset of the COVID-19 pandemic meant some North Slope projects temporarily ground to a halt. Most recently, there was the court ruling stopping work on ConocoPhillips’ Willow project and a new, less oil-friendly presidential administration taking charge, impacting oil and gas lease sales and delaying at least one project. Oil prices have plunged and then steadily recovered during the nearly yearlong COVID-19 pandemic, but jobs in the oil industry have not recovered. Pre-pandemic, early last year, the state counted about 10,000 oil and gas jobs. In December, the job count was 6,800. The jobs that ConocoPhillips is cutting may be some of the best in Alaska’s oil patch, since large oil producers typically pay more than smaller oil companies or support companies. ”Those are a loss of quality jobs that are year-round, and in some cases, have been around for a while,” said Neal Fried, an economist with the Alaska Department of Labor and Workforce Development. But the cuts are relatively small compared to the losses the state has already faced, Fried said. The sale of BP’s Alaska assets to Hilcorp involved many more employees, he said. Lowman said she did not have information on how many of the impacted employees are Alaska residents, or how many of the positions being cut are jobs on the North Slope versus jobs in Anchorage. Alaska residents make up about 85 percent of ConocoPhillips Alaska’s workforce, she said. “The announcements began today,” Lowman said. “Workforce changes like this are always difficult, but we care about every employee affected and will assist them with out-placement services and other associated benefits.”


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