Virus leaves the US travel industry struggling to recover

U.S. air travel down almost 90 percent from a year ago. A ghostly emptiness at Hawaii’s tourist hotels. Deserted Las Vegas casinos counting the days to reopening. Few sectors of the economy have endured as much devastation from the coronavirus as the travel business. Surveying the wreckage, economists and company leaders say it will take years to regenerate the $1.1 trillion the industry produced last year, potentially leaving many airlines, hotels, rental car companies and restaurants in peril. And as long as travel remains depressed, the economy could struggle to accelerate. About 10 percent of all jobs flow from the travel sector. Industry-wide unemployment now tops 50 percent, government reports suggest, a level that could presage bankruptcies and business closures. Spending by business and leisure travelers had provided an engine of growth that helped power the economy until the virus struck. “While the rest of the country is moving into a recession,” said Tori Emerson Barnes, an executive at the U.S. Travel Association, “the travel industry is already in a depression.” The industry’s collapse is unrivaled in recent memory. The closest parallel, the 9/11 terrorist attacks, closed airports for four days. The industry needed roughly two years to match its previous passenger levels. The cost this time is estimated at nine times the damage from 9/11, Barnes said. The industry was once a reliable gauge of economic health. From business people on high-priced overseas trips to tourists flying to Disney World, the industry benefited from steady spending. Not this time. Travel might be one of the last sectors to recover. “Usually travel would be a good leading indicator of confidence and discretionary spending,” said Gregory Daco, chief U.S. economist for Oxford Economics. “But in the wake of the global coronavirus recession, it’s likely to be a lagging indicator.” With revenue all but dried up, U.S. airlines are burning through cash and planning for layoffs this fall, when a no-layoffs provision in federal aid to the carriers will expire. That aid includes nearly $25 billion in payroll assistance and an additional $25 billion in loans. Even before then, American and United Airlines have said they will slash management and support staff by 30 percent — about 8,500 jobs between them. Delta has launched an early-retirement offer and warns of layoffs if there aren’t enough takers. Those moves don’t include the tens of thousands of union pilots and flights attendants who are likely to be furloughed in October, The U.S. Travel Association is urging the government to provide more help through individual tax credits worth up to $4,000 for domestic travelers. The industry also wants to make business meals and entertainment fully tax-deductible for companies. Stock market investors are embracing a future with less travel. Shares in Zoom, the now-ubiquitous video conference company, have more than doubled since mid-February. Delta, United and American, the nation’s three largest airlines, are worth — combined — $27 billion less than Zoom. Across the hotel industry, mid-priced companies are managing better than luxury ones. Hotels near beaches and in smaller cities are faring better than urban locations. Lodging that draws nearby tourists is doing far better than those that rely on airports. “We are seeing strength in drive-to destination travel,” said Geoffrey Ballotti, CEO of Wyndham Hotels and Resorts. The Wyndham Grand in Clearwater, Fla., was full Friday, Saturday and Sunday nights over the Memorial Day weekend. Most guests had come from within a three-hour drive. Danny Aderholt runs a company that owns eight hotels along highways in Ohio and West Virginia and one in downtown Pittsburgh that remains closed. Guest cancellations, he said, started in March. Then new bookings stopped. Each of his hotels is operating at an average monthly loss of about $35,000. The hotels that previously employed 20 now have about eight. “We let go of quite a few people,” Aderholt said. Nowhere is the devastation as severe as in Nevada. The state leads the nation with a crushingly high 28 percent unemployment rate — above the worst U.S. jobless rate recorded in the depths of the Great Depression. Once-jammed sidewalks of the Las Vegas Strip are sparse. The gambling and entertainment mecca has suffered a 97 percent drop in visitors in April from a year ago, the most recently available data show. Normally packed hotels had less than 2 percent occupancy, according to the Las Vegas Convention and Visitors Authority. Casinos gaming revenue almost entirely disappeared in April. Casinos reopened on June 4. Hawaii has similarly suffered, with 22 percent unemployment. Other states, especially those with major airline hubs like California, New York, Texas, Illinois and Georgia, have also endured deep layoffs in the tourism sector. Airport officials in Orlando estimate that travel to the home of Disney World and Universal Studios won’t return to previous levels until sometime between 2022 and 2025. The number of passengers screened at airport checkpoints remains down nearly 90 percent from a year ago. The average domestic flight is carrying fewer than 50 passengers. Airlines are hoping for a slow pickup by late summer. But they’re wary of making predictions, not when people like David Ward worry about getting on a plane. A retired investor from Ohio, Ward was stranded in Morocco when it shut down travel in March. He’s still fighting to get refunds for cancelled flights. But to him, flying now feels risky. “You never know who is coughing and sneezing on you in a plane,” Ward said. Mark Miller, an executive in Boston, is accustomed to flying about 100,000 miles a year. He hasn’t ruled out a couple of trips late this summer and around the holidays. But he has no other immediate flight plans. He’s instead planning driving trips around New England. Even travel industry types have qualms. Terry McClintock, a Texas consultant who advises airlines, is taking his first COVID-era flight next week to meet with colleagues in Las Vegas, confident that the plane and airport will be cleaner than ever. He is drawing a line, though, at international travel. He isn’t eager to wear a mask for a long flight or face a possible quarantine overseas. “I’m bullish on getting back in gear, but not crazy,” he said. Neither are many other travelers, which is why U.S. airlines are burning through cash. Airline executives say that after the most immediate threat from the pandemic subsides, the carriers will likely shrink, with fewer jobs and fewer destinations. Already, cities like Erie, Pa., and Peoria, Ill., are losing some of their service, a trend that could accelerate after federal regulation of airline routes expires this fall. In the end, the industry won’t fully recover until nearly everybody feels safe about flying. “Honestly, we don’t think that will happen until there is a vaccine,” said United Airlines CEO Scott Kirby.

FISH FACTOR: Crucial fish surveys curtailed by COVID-19 precautions

Surveys of Alaska’s fish, crab and halibut stocks in the Bering Sea have been called off or reduced due to constraints and dangers posed by the coronavirus. In what they called an “unprecedented” move, NOAA Fisheries announced in late May that five Alaska surveys will be cancelled this summer “due to the uncertainties created by the COVID-19 pandemic, and the unique challenges those are creating for the agency.” NOAA said in a statement that they found “no way to move forward with a survey plan that effectively minimizes risks to staff, crew, and the communities associated with the surveys.” The annual surveys are the cornerstone of Alaska’s sustainable fisheries management and provide data on how fish stocks are trending, where they are and, ultimately, how much will be allowed for harvest each year. The cancellations include bottom trawl surveys at the Aleutian Islands, the eastern Bering Sea and the northern Bering Sea, the Bering Sea pollock acoustics survey, and the fall ecosystem survey. To reassure stakeholders, NOAA said “we are fortunate to be working in a robust management system with a long time series of fisheries and ecosystem data and stock assessment models which helps ensure there is limited conservation impact from the loss of survey data this year.” The agency also plans to use three wind-powered Saildrones equipped with echosounders to survey Alaska pollock stocks, which over 60 days will cover nearly the same area done by research vessels. NOAA also will gather data from state and industry partners and from fisheries observers. That’s small comfort to some, notably, fishing towns that count on cod. The Gulf of Alaska cod fishery was closed this year due to a collapse of the stocks from extremely warm water temperatures over several years that killed off two age classes. “We are concerned that with no surveys, the stock assessment will remain status quo and the GOA Pacific cod federal fishery will again be closed for 2021,” Alvin Osterback, mayor of the Aleutians East Borough, wrote in a letter to the North Pacific Fishery Management Council, which oversees the stocks from three to 200 miles offshore. Likewise, Bering Sea crabbers are feeling uneasy. While they “understand the constraints the agency is under given this pandemic,” crabbers worry the lack of surveys could result in more conservative catch levels. “We’re very disappointed and concerned given the status of many of our crab stocks,” said Jamie Goen, executive director of Alaska Bering Sea Crabbers, a trade group. “Our bairdi Tanner fishery was closed this past year and our red crab fishery is approaching thresholds of closing. We rely on having a survey every year.” The complex process of setting crab harvest limits already includes a myriad of built-in protection buffers, Goen said, and the lack of one data point should not add more. Goen credited NOAA’s “crab team” for working closely with the industry and said ABSC already is looking towards next year. “How can we start planning now so that this doesn’t happen again if we’re still under the same restraints with a pandemic?” Goen asked. “Generally, the government only allocates survey money for one year. Can they guarantee that we’ll have that money next year? What if there’s constraints on government staff? One of the things we can do in advance is a lot more planning for next season.” “We all need to be understanding that the whole world is adjusting to a different situation right now,” Goen added. “Our fishing industries in Alaska are suffering and it’s a lot more expensive and stressful just getting our operations out the door. We’ve all got to roll up our sleeves and help each other out and find solutions to make sure we can continue to put food on people’s tables.” Halibut surveys reduced Similarly, the annual survey of the Pacific halibut stock also will have a “reduced footprint” this summer. A total of 898 stations will be surveyed, down 385, or 30 percent, from the originally planned 1,283 stations “as a result of the impacts and restrictions that the COVID-19 pandemic has had on our field operational capacity and concern for our fishing communities coastwide,” according to a May 29 announcement by the International Pacific Halibut Commission. There are a total of 1,890 set line halibut survey stations ranging from the west coast states and British Columbia to the far reaches of the Bering Sea, and typically 1,100 to 1,200 are assessed each year, said IPHC Executive Director David Wilson. About 17 longline vessels are usually contracted to conduct the surveys; this year 11 boats will participate. The survey duration also is reduced to July 1 through Aug. 31, instead of starting in June. The areas that will forego surveys this summer include waters off California, Oregon and Washington. For Alaska, areas 4CDE in the Bering Sea near the Pribilof Islands were cut, along with Areas 4A and 4B of the Aleutian Islands near Unalaska and Adak. “We also thinned out a little bit in 3B, the Western Gulf of Alaska, and we also removed the stations off Vancouver Island,” Wilson explained. He added that low halibut prices also affected their decision to reduce stations. The fish caught are sold to cover the costs of the surveys. “We’re looking at getting paid about 25 percent to 30 percent, less than in 2019,” Wilson said. Wilson agreed that when annual survey data is missing, it increases the level of uncertainty in stock assessments. But the IPHC believes it is acceptable for one year, Wilson said, adding, “we don’t have to sample every station every year.” “We’re going to maintain sampling in the core regions where about 74 percent of the known distribution and biomass of the halibut stock resides. So it’s still going to be a robust survey,” Wilson said. “The other thing to note is that we do this on an annual basis, and I don’t think there are any other surveys of this nature on this scale which then feed into annual stock assessments. We actually ran the scenario of what happens if we don’t survey this year at all and we would still feel confident that we would have very robust estimates of spawning stock biomass and mortality limits (catch limits) for 2021.” Free salmon updates More Alaska salmon fisheries are opening up around the state and weekly updates track catches and trends in every region. “We email them out at the beginning of every week that cover the prior week’s salmon harvests statewide, broken out by region,” said Garrett Evridge, a fisheries economist with the McDowell Group in Anchorage. “The goal is to provide context for what our state is harvesting relative to the prior year and historical averages and to highlight interesting things that are happening in near real time throughout the salmon season.” His team compiles the weekly salmon send outs under contract with the Alaska Seafood Marketing Institute, and they work closely with the Alaska Dept. of Fish and Game to get the weekly numbers out as quickly as possible. “Over the last few years, we’ve narrowed the delay from about a week to 10 days to just a few days,” Evridge said. “Fisheries are happening statewide that conclude on the weekend and by Monday and Tuesday, we’re getting that information out to everybody. So it’s near real time.” Sign up for the free weekly salmon updates at [email protected] Fish subscriptions and feeding the needy Alaskans Own, the state’s first ever Community Supported Fishery, or CSF, is celebrating 11 years of its subscription service to seafood lovers. “A Community Supported Fishery project relies on forward funding from subscribers who pay in the beginning of the season and then receive fish on a regular basis, in our case, it’s once a month,” said Linda Behnken, executive director of the Alaska Longline Fishermen’s Association in Sitka. Up to 80 local boats supply a mix of salmon, halibut, rockfish, lingcod, sablefish and more to the program. “And the idea behind it is that consumers are getting to support the small scale, community-based fishermen who are bringing them the highest quality product, and we’re keeping more of that great Alaska seafood in Alaska,” Behnken added. Just 1 percent of Alaska’s billions of pounds of seafood remains in-state, and while many of their nearly 300 subscribers are from the Lower 48, Behnken says Alaska residents make up a good chunk of supporters. Subscribers also get seafood cooking lessons via Zoom. “Most people in this country eat seafood more at restaurants than anywhere else, and many people still are daunted by cooking seafood at home,” Behnken said. “So, one of the benefits we offer to our customers is that after they get their fish, a chef will make dinner with them through Zoom.” All CSF proceeds fund ALFA’s Fisheries Conservation Network in which fishermen and scientists partner on projects like mapping bycatch hotspots, testing electronic monitoring, fuel efficiency projects and strategies to avoid longline predation by sperm whales. Shortly after the coronavirus hit, Alaskans Own also started working with the Seafood Producers Cooperative and Sitka Sound Seafoods to donate fish to needy families. “We’ve set up a system where people can contribute to support the cost of processing, the cost of delivery and the fish is donated,” Behnken said. “We’ve been supported by the Sitka Legacy Fund, Silver Bay Seafoods, Slow Fish, along with 25 individual donors.” More than 800 pounds have been delivered to local families so far and Behnken said the donations will continue into the fall. Learn more at Laine Welch lives in Kodiak. Visit or contact [email protected] for information.

Travelers confused, uncertain about Alaska testing requirement

Gov. Mike Dunleavy’s announcement May 29 that Alaska will require COVID-19 tests for incoming travelers set the phones ringing at the Denali Lakeview Inn in Healy. Not in a good way. At the 21-room hotel 10 miles from Denali National Park and Preserve, owners Daryl and Tara Frisbie estimate they’ve lost more than $700,000 so far this season as tourists sacrifice Alaska trips amid the uncertainties of the coronavirus pandemic. Bookings were already down by 85 percent when the governor held his press conference on May 29, according to Daryl Frisbie. “The 15 percent left were kind of hanging on to see what the governor was going to say,” Frisbie said June 1. “That next morning, Tara was taking nothing but cancellations.” Dunleavy that day announced that travelers entering the state could avoid the existing quarantine if they get a COVID-19 test within 72 hours of a trip, starting June 5. Without one, they could submit to a rapid test at the airport upon arrival or, failing that, comply with a two-week quarantine on the books since March. No other states are asking for COVID-19 tests around travel. But confusion is high among potential travelers. There’s been no additional guidance on the specifics of the new mandate and how it dovetails with the existing 14-day quarantine mandate due to expire June 5, which is not being enforced but instead relies on voluntary cooperation. The governor said he’d hold a press conference June 1 to answer questions. The event was canceled. He said the state would publish an updated travel mandate June 2 making the new policy clear. As of June 2, the state had posted this on the COVID-19 mandate website: “Additional information about updates for the mandatory self-quarantine order for international and interstate travelers will be released later this week. Travelers should continue to self-quarantine for 14 days upon arrival to Alaska.” The Alaska Department of Health and Social Services tweeted a message about details coming this week late Monday: “Travelers, changes are afoot! Beginning June 5, proof of a negative result on a qualifying COVID-19 test obtained before arriving in AK allows visitors, workers &residents to enter without a 14-day quarantine.” Travelers weighing trips to the state this summer have far more questions than answers. So many questions. How do I get a COVID-19 test when doctors in my community are only referring people with symptoms? What’s the point of a 72-hour window when I can get exposed to more people on the flight than anywhere else I’ve been for months? How do I get test results back in such a short time? If I wait and get tested at the airport in Alaska, how long do I have to wait there? What happens if I test positive after I arrive? The test itself also has false-negative issues for people without symptoms. Physicians say someone can test negative right after they’re exposed to the virus, only to test positive a week later — or become exposed en route to the state. Sheri Woodbeck was supposed to fly to Alaska June 9 from her home near Minneapolis. She had a motor home rented and a three-day halibut charter booked. Her doctor told her she could get tested June 7. “But I wouldn’t get the results back until maybe Tuesday (June 9). By then I’m going to be on the plane,” Woodbeck said. “What happens if I did test positive? I would be in trouble.” She canceled her flight this week. Camille Hammond decided to cancel her family’s trip to Alaska from Oregon rather than deal with the testing requirement. Hammond called her doctor. She was told she couldn’t get tested without symptoms. She and her husband would be traveling with their three children, ages 7, 10 and 11. She didn’t want to submit them to invasive nasal swab testing at the Anchorage airport, if that’s what it came down to. She wondered why the state can’t require temperature screening or mask-wearing like other places do. “We were planning on camping and fishing, doing things that are outside,” Hammond said. “But the bottom line is right now in Oregon, we can’t get tested if we don’t have symptoms and it just seems foolhardy to wait till we get up there and cross our fingers it all works out seamlessly.” Blaze Baker, a civilian flight chief at Buell Air Force Base in Northern California, still hopes to visit family in Alaska. An annual event for two decades, the trip hinges on camping, fishing, berry picking and — this year — celebrating Baker’s 50th birthday. Baker originally planned two different trips, one in July and one in August. He’s still hoping to come but is waiting to see what the state decides. Maybe he’ll forgo the test and quarantine for a couple weeks, then head out. Baker said the idea of forcing a test on someone is “kind of creepy” and raises constitutional questions but also said he couldn’t get tested anywhere near his home community. “I’d be more comfortable if I knew everybody on the plane was tested, but it’s simply not available. I don’t know what to do. I’ll probably play it up to the last minute,” he said June 2. “It was a nice idea but practically I just don’t think it’s implementable.” Travel reductions in the face of the pandemic have crushed the state’s tourist industry. More than 1.4 million visitors — just less than twice the state’s total population — were expected to arrive here this summer, many on cruise ships that canceled most sailings. Most of the rest come on planes experiencing drastic passenger reductions. Health officials say Alaska benefited from its ability to curtail the flow of visitors from states with more virus cases through a ban on non-essential travel and the 14-day quarantine enacted in March. A number of physicians in the state urged the governor to ban travel as much as possible. There were just over 100 active cases here this week out of a total of 487. About 10 percent of the state’s total cases, 47 people, have gotten sick enough to require hospitalization. Ten Alaskans with the virus have died. In Juneau, where the loss of cruise ships has hammered the economy, the Juneau Assembly held a public hearing June 1 about enacting a local 14-day quarantine for people coming from Outside to Juneau. Martin Stepetin testified that 500 respondents to a Facebook poll supported the quarantine and 100 opposed it. Several others testified in support of testing if it allowed travelers to avoid a lengthy quarantine, including Dr. Steven Greer, who travels for work between Juneau and Oregon. Greer suggested a policy where travelers get tested before they fly to Alaska, and then again upon arrival, with a quarantine of about three days while they wait for the results from the second test. The assembly postponed a decision until a special meeting June 3. “We really need to hear the specifics of the governor’s plan,” said assembly member Maria Gladziszewski. Alaska’s chief medical officer, Dr. Anne Zink, and state Department of Health and Social Services Commissioner Adam Crum have agreed to participate in the meeting, officials say. The only other state with similar isolation and travel policies is Hawaii, where an enforced, 14-day quarantine remains in effect. Last month, Lt. Gov. Josh Green proposed a “Travel With Aloha” initiative: Anyone wanting to travel to Hawaii must first get a rapid turnaround test for COVID-19 or undergo a test upon arrival. A negative result could exempt them from the mandatory, 14-day travel quarantine. As of this week, the initiative remains a proposal only. There is no set date for Hawaii to revise its quarantine requirements. At the Denali Lakeview Inn on Monday, Tara Frisbie continued fielding phone calls from frustrated visitors canceling their trips north. She said a comment from a guest that day summed up her frustration: “It’s like your governor doesn’t want people to come visit your state.”

Movers and Shakers for June 7

Bering Straits Native Corp. hired Viktor Baklanov as vice president of Finance. Baklanov is an experienced Certified Public Accountant with a background in operational, financial and accounting management. Before joining BSNC, Baklanov spent the last 10 years working across multiple departments within Arctic Slope Regional Corp. and its subsidiaries. He most recently served as the director of Operations at ASRC supporting the strategic direction of the company while assisting in investment analysis. Prior to serving ASRC, Baklanov worked as the senior audit associate for KMPG LLP. Baklanov graduated cum laude with a bachelor’s degree in accounting from the University of Alaska Anchorage and completed multiple executive education courses at Northwestern University’s Kellogg Business School.

FISH FACTOR: Grundens partners with Alaskans for recycled net fishing gear

Recycled fishing nets from Cordova will soon help launch a new clothing line by Grundens, the maker of the iconic foul weather gear “built by fishermen for fishermen for over a century.” The Copper River Watershed Project is “refreshing” its net recycling program underway for a decade that’s been backed by the Pacific Marine States Commission. Now, the program wants to broaden its base and stand on its own, said operations manager Shae Bowman. “The vision with a new program is to create a self-sustaining recycling program that is a valued asset to the commercial fishing fleet. We also want to provide a high quality product to recyclers. And we don’t want to have to be constantly chasing down grants and sources of funding,” Bowman said, adding that the project has recycled more than 200,000 pounds over 10 years. Enter Nicole Baker, founder of Net Your Problem, who since 2015 has jumpstarted net recycling programs across Alaska. Her work so far has included gathering and shipping primarily plastic trawl nets to Europe where they are recycled into pellets for sale to makers of a myriad of products from skateboards to cellphone covers. “I think the gillnet fleet is pretty dialed in, but seines are made out of the same type of plastic that gillnets are, so those two gear types can be recycled together,” Baker said. A goal is to fill a 40-foot shipping container this summer. But changes in the recycling market mean that unlike before, the nets must be clean and stripped before drop off. “You have to collect a really high quality product that somebody wants to buy,” Bowman explained. “We don’t want to collect something that’s full of garbage and that’s the problem we’ve been struggling with. I really want to get the word out that we need to recycle nets better. Our nets coming in need to be clean and stripped of any non-nylon material; that’s the cork lines, the lead lines, the hanging twine, all that needs to be removed to increase our quality.” European recyclers will turn the Cordova nets not into pellets for making other plastics, but yarn for clothing. Enter Grundens. “Our statement as a brand is ‘we are fishing,’” said Mat Jackson, Grundens chief marketing officer. “We believe it’s really important to use our brand voice and strength to help protect and maintain healthy marine environments and to lend a hand where we can. But at some point, you’ve got to just start doing it and making the process happen. And when talking with Nicole, Cordova became something that seemed like a tangible opportunity.” Jackson said the net recycling project also dovetails nicely with Grundens new clothing line. “In 2021 we are launching a full line of products from technical outerwear to more lifestyle casual items like shorts built out of “Econyl” regenerated nylon, which is largely comprised of recycled fishing nets and has been a main source that Nicole has been pursuing in terms of shipping this gear out of Alaska and into a recycler supply chain,” Jackson said, adding that he believes it is “a really powerful package.” “Our consumer base is commercial fishermen, but it also includes recreational fishermen and delivering them a product that fits their needs, performs at a high level, and is built from recycled material that our core customer uses to make a living, we just feel is an incredibly powerful message to help put the spotlight on these efforts and hopefully build a coalition around this process,” Jackson said. “Because it’s going to take more than just our brand getting involved. This really has to become an effort that the whole industry starts to embrace.” Bowman agrees. “My big hope,” she said, “is that if we can get this program to work out, it can serve as a model for other commercial fishing communities in Alaska as they look into setting up a recycling program. Seafood Council redux “Got Milk?” … “Beef – It’s What’s for Dinner!” … “Pork – The Other White Meat” … “The Incredible, Edible Egg” … those are familiar brand slogans, all backed by the producers who pitch their products with a unified voice. From livestock to fruits and dairy, most U.S. food makers have some sort of national marketing board supported by federal and industry dollars to promote their products. Seafood could soon be among them. Reviving a dormant National Seafood Council is gaining steam among industry members, especially as Covid-19 upends markets. About a year ago, Seafood Source reports that the Marine Fisheries Advisory Committee brought up the idea to restart the council. MAFAC is a federal advisory committee to the Secretary of Commerce and NOAA Fisheries. Since then, the idea has met with lots of enthusiasm, and MAFAC has formed an 11-member task force to move forward. A National Seafood Council was created by the U.S. Fish and Seafood Promotion Act in 1987. It operated for five years before running out of money and becoming quietly defunct. MAFAC members agreed that if any food could now benefit from more consumer education, it’s seafood. A National Seafood Council could help with marketing, research, and educational awareness for all U.S. fish and shellfish products, both farmed and wild. It also could improve consumer confidence by allaying concerns about seafood safety and sustainability, and highlighting its many proven health benefits. The MAFAC committee’s first task is to define what direction a promotional council could take. Another is checking the language in the 1987 Act to make sure it is meeting the needs of today. The core mission would be simple: to get Americans to buy and eat more seafood. Patron saint of salmon As Alaska’s salmon season gets underway, it seems appropriate to acknowledge the patron saint of salmon: Saint Kentigern of Scotland. Born long ago in 518, Kentigern was the illegitimate son of a king’s daughter. He trained as a priest at a monastery, where his sainthood evolved around a dangerous love-triangle. Legend has it that the king suspected his wife of having an affair, because she had given one of her favorite rings to a court favorite. The king took the ring when the man was sleeping and threw it far out into the River Clyde. When he returned home, the king angrily demanded that his wife show him the missing ring and threatened her with death if she could not produce it. In her misery, the queen beseeched the priest Kentigern to help her. Kentigern took a fishing rod to the spot where the ring had been flung into the river and quickly caught a salmon. Amazingly, upon cutting it open the ring was found in the salmon’s belly. The queen was able to deliver the ring to her doubting husband and peace was restored. From the time of his death in 603, Kentigern was regarded as Scotland’s patron saint and the cathedral at Glasgow was built in his honor. To this day Kentigern’s figure and symbols, including a salmon, make up that city’s coat of arms. So who knows? Perhaps a quick prayer to the patron saint of salmon will lead more fish to your nets. ^ Laine Welch lives in Kodiak. Visit or contact [email protected] for information.

Small improvement seen for Copper River run

The Copper River sockeye run has improved after an abysmal start, but not enough for managers to allow for normal fishing periods in the famed early season fishery. Alaska Department of Fish and Game biologists appear to have correctly predicted a smaller than normal 2020 Copper River sockeye run, but it is shaping up to be even less than expected. Fish and Game Area Management Biologist Jeremy Botz said June 2 it was unlikely the drift gillnet fishery would be opened for a regular 12-hour period June 4, as sockeye passage past the Copper River sonar at Miles Lake was only about half of what managers expected it would be. Through June 1 just 79,482 sockeye had been enumerated at the sonar in the lower river. Comparatively, more than 220,000 sockeye had moved past the sonar by the same time last year despite additional fishing time in the commercial fishery. The low sockeye escapement figures continue despite managers closing the regular, 12-hour Thursday fishing periods during the second and third weeks of the fishery. The Copper River District normally opens in mid-May with 12-hour fishing periods on Mondays and Thursdays. “We’re just going to be watching that sonar real close and hoping to get a few days of 20,000-plus (sockeye),” Botz said. Botz said the sockeye run appears to be late and small, while the Copper River chinook run — expected to be strong this year at roughly 60,000 fish — also appears to be smaller than forecasted, although getting an accurate early read on the chinook return is more difficult, Botz noted. Overall, department biologists forecasted a smaller Copper River sockeye run of 1.5 million fish this year compared to a 10-year average of 2.1 million wild fish. The Gulkana Hatchery supports a small portion of the annual Copper River sockeye run. The department’s official forecast estimated a commercial sockeye harvest of 771,000 fish versus a harvest of 1.2 million sockeye last year. The Copper River chinook return and harvest was initially expected to be strong with a total run of 60,000 fish and an all-fishery harvest of up to 36,000 fish possible. Fishing improved for the gillnet fleet during the May 25 and June 1 openers, with 33,777 and 31,522 sockeye taken during the respective periods. The larger catches followed drastically low catches in the first two openers of the season in which the combined harvest was just 6,071 sockeye, which led to the restrictions on fishing time. According to Botz, ground prices for the prized Copper River salmon have improved somewhat from initial low prices of $3.25 per pound for sockeye and $6.25 per pound for chinook, but only to the $4 per pound range for sockeye and nearly $7 per pound for chinook. Widespread restaurant closures in the Lower 48 have greatly reduced the traditional primary market for Copper River salmon. The run is still better than 2018 when low sockeye returns forced managers to greatly restrict fishing time to achieve sufficient escapement. Just more than 44,000 sockeye were harvested during the entire 2018 Copper River season and only 45,000 fish had passed the sonar by June 1 of that year, compared to the 79,000 fish this year. Chinook catches have also been low this year, with 5,751 fish caught during the first five openers, but with no other way to track the Copper River chinook return until the fish reach counting stations at upriver tributaries, Botz said the time restrictions put on the fishery because of the low sockeye counts could have allowed a significant number of fish into the river. It’s just too soon to know for sure. Cordova District Fishermen United Executive Director Chelsea Haisman said the fishery has been disappointing so far, but fishermen understand the need to restrict time and allow for adequate fish passage into the river. “We certainly wouldn’t want to see the run put in jeopardy in the long-term,” Haisman said. ^ Elwood Brehmer can be reached at [email protected]

Banks issuing deferrals as economic impacts arrive

Alaska’s banks generally had a solid start to 2020 but what’s in store for the rest of a tumultuous year is anyone’s guess. First National Bank Alaska, the state’s largest local bank, ended the first quarter of the year with assets totaling nearly $3.86 billion, up from approximately $3.81 billion to start the year. FNBA netted $14.1 million in the first quarter, which is in line with the bank’s performance in recent quarters, according to figures in reports published by the Federal Deposit Insurance Corp. Anchorage-based Northrim Bank held more than $1.67 billion in total assets on March 31 — a 2.4 percent increase during the quarter — and generated $2.3 million in net income during the first quarter. In Fairbanks, Denali State Bank surpassed the $300 million mark in assets, finishing the first quarter with $306 million in total assets for an increase of 3.4 percent in the first quarter. Denali also netted $552,000 during the quarter. Denali State Bank CEO Steve Lundgren said in an interview that the community bank finished the first quarter “on budget” and has since seen its loan portfolio grow by nearly 20 percent, largely due to participating in the Small Business Administration’s Paycheck Protection Program, which provides low-interest loans to small businesses seeking help for payroll and other fixed costs to weather the coronavirus-induced economic upheaval the country is facing. According to Lundgren, Denali has processed about 430 PPP loans totaling roughly $41 million. He said most of that cash went into the bank in the form of deposits. The vast majority of PPP loans are expected to convert to grants as long as borrowers use the financial aid on qualifying expenses and don’t reduce their workforce after receiving the funds. Despite the ostensible economic shutdown that caused Alaska’s unemployment rate to jump from 5.2 percent in March to 12.9 percent in April, according to the state Labor Department, Denali has not seen a corresponding spike in loan delinquencies or charge offs, according to Lundgren. “I tell my staff, I tell my board that’s because we process a significant amount of loan deferrals,” he said, adding that most of the deferrals are for three months. Lundgren said Denali customers have mostly been proactive and requested help if they saw personal financial trouble on the horizon. The true test to the effectiveness of the bank’s help — and that from government on all levels — will be in late summer when those payment deferrals expire. Denali leaders in May used an increase in revenue to fund their loan loss reserve for the entire year, according to Lundgren. The bank had a loan loss allowance of $3.3 million in the first quarter, according to the FDIC reports. “I’m cautiously optimistic that as the state continues to open up we won’t see many delinquencies,” he said. Northrim Chief Lending Officer Michael Huston said he couldn’t speak to what bank leaders are seeing internally in the second quarter until the final numbers are published, but added there is a general concern among financial analysts nationwide about banks’ ability to handle the stress that could be coming. “I think there’s a fair amount of concern about credit quality among banks,” Huston said. Wells Fargo Alaska Commercial Banking Market Executive Joe Everhart said in an interview that he was among the many close observers who had a very positive view of the Alaska economy as recently as late February. However, he now expects the state’s economic recovery from the pandemic to lag behind the rest of the country because Alaska’s economy is largely built on industries that have been hit hardest by the global shutdown — oil and tourism. Wells Fargo loan officials began reaching out to borrowers early and processed many 90-day loan deferrals, according to Everhart. He said they’re starting to work on the steps for the next 90 days if business conditions don’t quickly improve. Officials for the very large national bank are adapting their policies to where they’re working, Everhart said, noting the bank is even processing some 14-month payment deferrals for businesses, such as those in the tourism sector, that might not have meaningful revenue until a year from now. “To expect a customer to have income to make payments when they don’t have revenue is challenging,” he said. There are still reasons to be optimistic amid the challenges and uncertainty, according to Huston. “I think most of our customers are working with their customers. We’re all in this together,” he said. Everhart also noted that through various aid programs Alaska residents, businesses and local governments are cumulatively expected to receive roughly $3 billion in federal assistance — a lot of money for a small state. “I have to think that’s going to provide a great backstop in this (economic) storm,” he said. Elwood Brehmer can be reached at [email protected]

Biz community seeks expansion of grant program

Lawmakers are looking for ways to expand the number of small businesses that can qualify for $290 million in COVID-19 aid just as the state’s program set up to disperse the funding is getting up and running. Anchorage-based Credit Union 1 began taking applications from small businesses for pandemic relief grants June 1 through the AK CARES program that is being administered by the Alaska Industrial Development and Export Authority, the state’s development bank. At the same time, legislative leaders were in discussions with officials in Gov. Mike Dunleavy’s administration on ways to reverse limitations on eligibility for the grant pool codified only a few weeks ago when the Legislature briefly reconvened in Juneau to appropriate pandemic aid funds on May 20. The $290 million available to small businesses through AK CARES is part of the roughly $1.5 billion of federal money allocated to the State of Alaska through the federal CARES Act approved in late March by Congress and President Donald Trump to help businesses and individuals impacted by the economic restrictions imposed to limit the spread of COVID-19. When Dunleavy administration officials began writing the rules for the AK CARES program in late April they excluded small businesses that had already received some sort of federal pandemic aid from being eligible for the state program — seeded with federal money — in order to spread assistance to as many businesses as possible. But state officials and lawmakers have since heard from many small business owners that they need to be able to get help at both the state and federal levels to survive, and even that may not be enough for some. As it stands, Alaska-based and operated small businesses, sole proprietorships and many nonprofits that employ 50 or fewer full-time employees that have not received other federal COVID-19 aid can apply to Credit Union 1 for AK CARES grants between $5,000 and $100,000, according to a checklist provided by the state Department of Commerce, Community and Economic Development. Credit Union 1 was chosen to lead the program through a competitive bidding process that will be reopened soon for other lenders interested in assisting with grant administration, according to AIDEA spokesman Karsten Rodvik. The grants can be used to cover payroll; utilities; rent or mortgage payments; personal protective equipment; re-opening expenses and short-term loan payments or credit debt incurred as a result of the pandemic, according to the Commerce Department. Marijuana businesses, those that are a secondary source of income for the owner and businesses that have previously filed for bankruptcy are not eligible for AK CARES grants. Alaska Senate President Cathy Giessel said in an emailed statement that the Senate is “deeply concerned” about the availability of grants to small businesses and is working with administration officials to expand eligibility for AK CARES. “We must ensure Alaska small businesses receive this money as soon as possible,” Giessel said. House Majority coalition spokesman Austin Baird similarly wrote in an emailed response to questions that House leadership wanted to expand the pool of businesses eligible for AK CARES assistance when the total $1.5 billion was appropriated in late May, but the Legislature ultimately decided to approve it with the administration’s sideboards rather than delay the release of the funds. Giessel believes the rules can be amended administratively or through the Legislative Budget and Audit Committee and will not require the Legislature to reconvene. The Budget and Audit Committee generally handles fiscal matters when the Legislature is not in session. House leaders are less confident that a legal fix to the issue can be made as easily, but lawmakers are consulting with the Legislature’s attorneys on a possible remedy, according to Baird. Dunleavy spokeswoman Lauren Giliam wrote in an email that the governor wants to see eligibility for the AK CARES program expanded and it was limited because the rules were drafted when the PPP loan fund was depleted. “There were many Alaskan businesses that had not been able to access federal funding, so the program was structured to ensure access to some type of relief for as many businesses as possible,” Giliam wrote. She also noted that while the rules currently restrict access to AK CARES funds, local governments can still use their federal CARES Act funds to provide similar small business aid. It’s unclear exactly when the issues might be resolved but Anchorage Economic Development Corp. CEO Bill Popp said many small business owners need all the help they can get as soon as they can get it. “We have thousands of businesses that are in a cash crunch right now,” Popp said. He emphasized that grants are necessary because even low-interest loans put businesses at a significant disadvantage at a time when cash flows are uncertain to nonexistent. And while Dunleavy has lifted most of the state’s health mandates and allowed all businesses to reopen, the customers are not always returning. “Consumers are not flocking to businesses like they have before,” Popp said. He cited an April survey by AEDC of more than 250 business owners that found 38 percent of those surveyed feel it is likely or possible that they will go out of business soon. “Even with all this assistance a lot of businesses are going to go away,” Popp said. Anchorage Chamber of Commerce President Bruce Bustamante largely echoed Popp’s sentiments, adding that he’s hearing from business owners concerned that the assistance isn’t being made available quickly enough for some to survive. “If you’re a business in trouble you need cash immediately,” Bustamante said. Through May 30, the federal Small Business Administration had processed 10,135 Paycheck Protection Program loans in Alaska totaling just more than $1.2 billion, which was just 95 more loans than had been handled a week prior, according to SBA figures, indicating demand for the program is dwindling. The vast majority of PPP loans are expected to convert at least partially to grants as long as businesses apply the funding to qualifying expenses, such as payroll, utilities and rent; 75 percent of the loan amount must be spent on payroll in order to be converted to a grant. Alaska had nearly 72,000 small businesses in 2018 that accounted for 99.1 percent of all Alaska-based companies according to the SBA. Michael Huston, chief lending officer for Northrim Bank said the Anchorage-based lender, which has processed more than 2,400 PPP loans, has had to decline a “pretty small number” of PPP applications, mostly for businesses that either didn’t qualify for the program or had incomplete or dual applications through other lenders. Without firm numbers, Huston estimated Northrim has denied less than 5 percent of PPP loan applications. Credit Union 1 received 470 AK CARES applications in the first day of the program, according to spokeswoman Jessica Gallagher. Elwood Brehmer can be reached at [email protected]

King Cove land swap rejected once again

President Donald Trump’s Interior Department is now 0-2 attempting to get a land swap to facilitate a road out of the village of King Cove through the courts. U.S. District Court of Alaska Judge John W. Sedwick threw out a July 2019 land exchange agreement between Interior Secretary David Bernhardt and King Cove Corp. leaders on June 1, marking the second time in just 14 months that the courts have rejected such a deal that is a precursor to building a long-sought but contentious emergency access road through what is now wilderness-designated territory in the Izembek National Wildlife Refuge on the Alaska Peninsula. Sedwick ruled that Bernhardt rushed the process to complete the land deal with the Alaska Native village corporation and in doing so violated both the federal Administrative Procedures Act and the 1980 Alaska National Interest Lands Conservation Act, or ANILCA, that largely guides federal land-use policy in the state. The ruling is similar to one issued in late March 2019 by Federal District Court of Alaska Judge Sharon L. Gleason for a nearly identical agreement approved by Bernhardt’s predecessor, then-Interior Secretary Ryan Zinke in 2018. Both judges ruled that the Republican Interior leaders did not adequately justify their rationale for reversing the department’s policy from a 2013 decision by Obama-era Interior Secretary Sally Jewell to deny a land exchange for the road in the interest of preserving the wilderness area of the Izembek Refuge. In both instances Trump’s Interior secretaries were sued by a coalition of conservation groups led by the Anchorage-based nonprofit environmental law firm Trustees for Alaska. Trustees attorney Bridget Psarianos in a prepared statement called land swap deals “failed attempts to dodge the laws mandating protections of our national wildlife refuges.” “We are thrilled the court rejected this corrupt and illegal land exchange, finding that it is contrary to the purposes of Izembek and ANILCA, and that such an exchange could not be done without congressional approval,” Psarianos said. “We hope this is the last time we need to ask a court to reject such an exchange.” An Interior Department spokesman wrote in an emailed statement that, “The Secretary firmly believes that the welfare and well-being of the Alaska Native people who call King Cove home is paramount, and the Department stands behind its decision.” A spokeswoman for King Cove Corp. was not immediately available for comment. King Cove leaders and Alaska lawmakers have long petitioned federal officials to approve the 11-mile gravel road extension through the Izembek wilderness; they see it as an essential link for emergency services when bad weather prevents flights out of King Cove or boat travel across Cold Bay. Opponents to the road argue allowing a road of any kind through what is now congressionally-designated wilderness would set a terrible precedent for future development of public lands and King Cove leaders and administration officials have arbitrarily rejected all other transportation options. In late 2013, then-Interior Secretary Sally Jewell rejected a land swap deal passed by Congress in 2009 after a U.S. Fish and Wildlife Service environmental review determined the road would irreparably damage critical waterfowl habitat in the 315,000-acre Izembek Refuge. In summer, the refuge is home to 98 percent of the world’s population of Pacific black brant, a goose that breeds there, according to the Interior Department, as well as other sensitive wildlife and waterfowl. With a paved runway longer than 10,000 feet, Cold Bay’s airport has one of the longest civilian runways in the state and is the area’s main link to Anchorage 600 miles away. The old military post was built during World War II. King Cove’s airport has a 3,500-foot gravel runway for the community with roughly 950 year-round residents. Over the years 18 people have died in plane crashes or waiting to get medevac service out of King Cove, according to the Interior Department. However, no one has died trying to leave since 1994. Sen. Lisa Murkowski, who was enfuriated by Jewell's decision in 2013 and has largely led the effort in Washington to get the road built, called the ruling "another bitter disappointment" for the people of King Cove in a statement to the Journal. "I continue to believe the Department of the Interior has full authority under existing law to complete this land exchange, that the federal goverment has an obligation to protect local residents' health and safety, and that a gravel, one-lane, life-saving road is the best way to meaningfully accomplish that," Murkowski said. "I refuse to give up on helping the people of King Cove." The initial agreement signed by Zinke contained no rationale for the policy change — which led to the court’s conclusion that it violated the Administrative Procedures Act — but Bernhardt attempted to remedy the situation by attaching a 20-page memorandum outlining the reasons for the policy reversal to the agreement. According to Bernhardt’s agreement, the land swap would be an equal-value trade not subject to acreage limitations. However, King Cove Corp. would agree to relinquish its rights to 5,430 acres of land it had selected within Izembek under the Alaska Native Claims Settlement Act but has yet to be conveyed. The Native village corporation would still have rights to other yet-to-be-conveyed selections outside of the refuge. Sedwick ruled that despite the memo, in which Bernhardt argued other options are unreliable and human safety should be prioritized over wildlife habitat, the secretary failed to support the policy change with new information and did not offer to restrict use of the road. Prior agreements stated the road would be open only to emergency-use by residents to counter opponents’ claims that it would benefit fish processors in the region wanting to ship their products out of the Cold Bay airport. “The Secretary offers no new information or data to justify his contrary finding that the value of the added acreage to the refuge system (from King Cove Corp. lands) counters the negative effects of a road through Izembek,” Sedwick wrote of the APA arguments. Attorneys for King Cove Corp. also argued in supporting briefs that the land exchange is a new policy instead of a change in old policy because it does not specifically authorize construction of the road. However, Sedwick concluded that the argument does not hold water because Interior officials have explicitly stated that the reason for the agreement is to build the road. Regarding ANILCA, he also concluded that Bernhardt did not provide enough justification for reversing Jewell’s 2013 decision. Interior attorneys stressed in written arguments that the latest land swap would advance the economic and social interests of King Cove residents who regularly engage in subsistence activities in the refuge, but Bernhardt’s memo does not address the issue, according to Sedwick. “The 2013 (record of decision) indicated that the effects on subsistence use stemming from a land exchange would be neutral,” the judge wrote. “The Secretary does not point to evidence that counters this finding, nor does he provide analysis to explain why a road’s benefits would outweigh its detriments in terms of effect on subsistence users and uses.” ^ Elwood Brehmer can be reached at [email protected]

Lawsuit against MARAD may proceed

A federal judge denied the U.S. Maritime Administration’s motion for judgment in Anchorage’s lawsuit against the agency over more than $300 million in failed construction at the city’s port done more than a decade ago. U.S. Court of Federal Claims Judge Edward J. Damich rejected the Maritime Administration’s arguments that memorandums of understanding signed in 2003 and 2011 outlining the city’s and agency’s roles in the Port of Anchorage Intermodal Expansion Project were cooperative, and therefore not binding agreements. Agency attorneys argued that the MOUs were more ceremonial in nature and did not make the government responsible for the project. The Anchorage port was renamed the Port of Alaska by city officials in 2017. Damich concluded that the MOUs are “binding and valid contracts” that have not been voided largely because the Maritime Administration, commonly known as MARAD, spent at least $14 million in Municipality of Anchorage and State of Alaska money on non-construction project costs such as legal fees, audits, salaries and contract claims out of a total of $163 million transferred to the agency for the project. MARAD was tasked with participating in the city port construction project — a first for the agency — partly as a means to more easily direct federal funding to it following discussions between the members of Alaska’s congressional delegation and former governor and Port Director Bill Sheffield, according to court documents. The port expansion work also benefited Joint Base Elmendorf-Richardson, which is adjacent to the port. Damich wrote that the costs MARAD paid with city and state money “clearly fall within the guise of administrative expenses” and well exceed the 3 percent administrative fee the agency was to receive under the 2003 MOU. Attorneys for Anchorage argued the administrative costs supported their assertion that the municipality “hired” MARAD to oversee the project and therefore is liable for the work that went wrong. According to accounting records submitted by government attorneys, MARAD used approximately $9 million of state and port money fund a settlement with Integrated Concepts and Research Corp., the prime contractor on the project, in October 2012 as part of an $11.3 million settlement and another $1.6 million of nonfederal project funding in a $4.1 million January 2017 settlement. Municipal attorneys allege those settlements were deliberately made without the city’s knowledge, which MARAD’s lawyers don’t dispute. The city is seeking more than $320 million from MARAD to recoup the $163 million of local money spent on the project as well as the money port officials estimate it will cost to fix what is left from the failed work that ended in 2010. ICRC was owned by Koniag Inc., the Alaska Native Regional corporation for Kodiak, when the project started but was sold to a Virginia company in 2007. The municipality first sued a suite of contractors, including ICRC, involved in the dock design for the expansion project in March 2013. That lawsuit netted $19.3 million for Anchorage through seven individual settlements made in early 2017. The dock designer maintains faulty construction methods caused sheet pile facings supporting the new docks to fail nearly immediately after installation at the port. Damich’s ruling followed a two-day “mini trial” held Feb. 18-19 in a San Francisco courtroom in which attorneys for both sides called witnesses to make their arguments in the complex and drawn out case. It sets the stage for a full trial, which municipal attorneys have said could be held this year. The current members of Alaska’s congressional delegation have said resolving the lawsuit is important if the city hopes to capture very large sums of federal money for the scaled back port modernization program that is currently underway. MARAD awarded the port a $20 million in grant Feb. 11 to help fund the new petroleum and cement terminal under construction at the port, which is expected to cost more than $200 million. Elwood Brehmer can be reached at [email protected]

Change of course for Pebble reignites access issues

The U.S. Army Corps of Engineers has changed the course of the Pebble project but what it means for the fate of the highly contentious development remains to be seen as area landowners vow to prohibit access. David Hobbie, Army Corps of Engineers Alaska District regulatory chief, confirmed during a May 22 conference call with reporters that the lead permitting agency had changed the project’s transportation corridor from a southerly route across Iliamna Lake to one along the lake’s northern shore that also ends at a new site for a west Cook Inlet port. The total re-route is part of the least environmentally damaging practicable alternative, or LEDPA, identified by Army Corps Alaska officials, and combines aspects of other development alternatives evaluated in the draft environmental impact statement released in February 2019, according to Hobbie. Other details of the LEDPA will be discussed in the Corps’ record of decision that will follow the final EIS, which is currently scheduled to be published later this summer. Numerous groups opposing the project allege the north road route is a late-stage move to appeal to the Pebble Partnership’s ultimate desire to build a much larger 78-year mine instead of the 20-year mine plan the company is advancing because the Iliamna Lake ferry that is part of the south alternative could not support the larger operation. That’s in part because an April 24 memo from representatives of AECOM — the global engineering firm hired to write the EIS — indicates Pebble changed its preferred alternative from the southern ferry route to the northern road-only transportation corridor from the mine site to the port. However, Hobbie said Pebble changed its plans to conform to what the Corps had already determined: that the north road-only corridor was ultimately the best option for the environment. The Corps’ decision was based on widespread public concerns that the year-round ferry across the massive lake could disrupt winter travel across lake ice for residents of lake villages and impact Iliamna’s unique population of freshwater seals, among other issues, according to Hobbie. “We did exactly what the public asked us to,” he said of the Corps amending the plan for the project. Pebble leaders routinely stress that the company has applied for permits for its 20-year mine plan and any subsequent plans expand the project would require a whole new round of permitting while Pebble’s parent company, Vancouver-based Northern Dynasty Minerals Ltd., has advertised the project as a multi-generational opportunity and cites the metal resources in the total Pebble deposit — not just those that would be extracted via the 20-year mine — in its investor pitches. Pebble CEO Tom Collier noted in a prepared statement that the north route was Pebble’s preferred option for most of the project’s history and said the company initially selected the ferry route because it was thought regulators would prefer the smaller wetlands footprint it offers. “The choice between the two transportation alternatives for Pebble has always been a close call,” Collier said. “Now that the (Army Corps of Engineers), working closely with the Environmental Protection Agency, the U.S. Fish and Wildlife Service and other cooperating agencies, has indicated that the northern corridor is the preferred approach we look forward to seeing the final EIS for the project.” He added that the company also supports using a pipeline instead of trucks to haul concentrate from the mine site to tidewater. According to Northern Dynasty, the pipeline would cut truck traffic on the mine access road by roughly half. However, the Corps’ change of plans does not account for one potentially significant complicating factor for Pebble; the landowners along the north route, at least for now, want nothing to do with the project. Alaska Native village corporation Pedro Bay Corp. owns much of the land along Iliamna’s northeastern corner and Iliaska Environmental LLC is a majority owner of a rock quarry at Diamond Point, the new location for the Cook Inlet port needed to supply materials to the mine and export its metals. Iliaska Environmental is owned by the Igiugig Village Council and along with Pedro Bay Corp. and Bristol Bay Native Corp., which controls subsurface rights to the village corporation lands, strongly opposes the project. The Igiugig Village Council issued a statement May 25 contending the Diamond Point quarry is a “critical component” of the north route that Pebble will not have access to. “(Pebble’s) plan for Diamond point presented in the EIS does not fit with our plans for Diamond Point, and should not be considered an acceptable alternative,” the statement reads. In contrast, the south ferry route allowed Pebble to utilize lands owned by Alaska Peninsula Corp., which the junior mining company has an access agreement with, for the roads and ferry terminals on the north and south sides of the lake to access a port at Amakdedori on Cook Inlet. Pebble spokesman Mike Heatwole wrote via email that the company intends to work with each of the landowners along the north route and believes “we will be able to gain the right-of-way needed to build the transportation corridor.” Pedro Bay Corp. CEO Matt McDaniel wrote to Corps of Engineers Pebble project manager Shane McCoy last July to reiterate that the company “has not, and will not, consent to the Pebble Limited Partnership’s use of its lands for the Pebble project.” As such, the north route should not be considered practicable in the final EIS, McDaniel wrote. McDaniel’s letter quickly spurred a memo from the Corps to Pebble requesting an analysis of feasible northern corridor options around Pedro Bay Corp. lands, but a consultant to Pebble determined there isn’t one. While Pedro Bay Corp. owns most of the land along the northeast portion of Iliamna Lake; there is a mountainous strip of state lands to the north that is bordered by Lake Clark National Park and Preserve. The brief alternative route report concluded that a route around Pedro Bay lands would require up to 15 miles of tunneling or “extreme mountain road construction” and would be much longer than the proposed route across Pedro Bay lands. “Given the adverse nature of the terrain that exists north of PBC land, and the constraints imposed by design criteria for a road to serve the proposed Pebble mine; it has been determined that construction and operation of a road that would pass north (of) PBC lands is not practical or reasonable,” the July 2019 consultant report states. Several other Cook Inlet-area Native corporations including CIRI also own parcels around Diamond Point. BBNC leaders have also criticized Corps officials for advancing the north route as viable despite the landowners’ consistent opposition to the project. BBNC Lands and Natural Resources Vice President Dan Cheyette wrote in a May 21 letter to Corps of Engineers Alaska officials that the LEDPA must be the least environmentally damaging development alternative but must also be practicable, and a route across lands owned by entities that don’t support Pebble is not. “In defining the LEDPA for the Pebble project, BBNC demands that the Corps remove from consideration all alternatives that would require use of its subsurface or surface estate, as our lands are unavailable to (Pebble),” Cheyette wrote. “This includes the eastern terminus of the northern transportation corridor at Diamond Point,” which is also partly owned by a BBNC subsidiary. Cheyette and other opponents to Pebble argue that Corps officials should draft another EIS that would focus the public’s attention on the updated plan for the project. The Corps’ Hobbie said there are no plans for a new or supplemental Pebble EIS because the LEDPA doesn’t contain anything that wasn’t in the first draft. “There’s nothing in the current LEDPA that has not been evaluated in the EIS,” Hobbie said. Elwood Brehmer can be reached at [email protected]

FISH FACTOR: Fishermen weigh in on best coronavirus relief ideas

A rapid response by nearly 800 Alaska fishermen will provide a guideline for giving them a hand up as the coronavirus swamps their operations. An online survey from April 14 to May 3 by Juneau-based nonprofit SalmonState asked fishermen about their primary concerns both before the COVID-19 outbreak and in the midst of the pandemic in April. It also asked what elected officials at local, state and federal levels can do to help them directly. More than half of the 817 responses came in over four days, said SalmonState communications adviser Tyson Fick. “Clearly, people were interested to have their stories heard and to weigh in. In several ways we feel like we had a very broad swath of regions and gear types and fishermen,” he said. A total of 779 responses (95 percent) were accepted of which 50 percent were Alaska residents, 28 percent were from the Lower 48, and 22 percent did not provide resident information. Nearly 95 percent said they participate in a salmon fishery, with the majority fishing for both salmon and a mix of nearly all other species commercially harvested in Alaska. Some takeaways: Prior to COVID-19, the top three concerns among fishermen were fish prices (65 percent), the Pebble mine (60 percent), and climate change (53 percent). After COVID-19 hit, concerns shifted to loss of income (75 percent), preventing the spread in coastal communities (69 percent), and bad policy decisions being made while fishermen are distracted (58 percent). Fishermen are combatting the negative impacts by using a combination of strategies while doing more work with less time and resources. More than half said they would look for non-fishing related work, 27 percent said they would fish a longer season, and 26 percent plan to fish with fewer crew. Nearly a quarter expect to venture into direct marketing or increase dock sales. Just more than 4 percent said they would sell their fishing businesses. By far, affected fishermen said giving them direct payments from emergency relief funds would be the biggest help (82.7 percent). The second- and third-most popular options were favorable debt consolidation opportunities (33.2 percent) and debt forgiveness (28.6 percent). Fishermen provided thoughtful responses when asked about actions of policy makers that revealed several themes. At both the congressional and state levels, stopping the Pebble mine was the most frequent request, at 24 percent and 18 percent, respectively; keeping fisheries open also was a top issue. For Gov. Mike Dunleavy and the Alaska Legislature, respondents said they should focus on COVID-19-related health and safety support for fishermen and provide help with marketing. Fishermen also shared their perceptions of the Dunleavy administration, saying it favors other interests over commercial fishermen, naming mining, oil and gas, and sport and personal use fishing. At the local level, fishermen expressed confusion over unclear guidelines for following local health mandates and suggested that signs at airports and boatyards along with a one-page guidance document would be helpful. They also mentioned that local communities should do all they can to support processors and their workforce. Fishermen also shared ideas on local taxes and harbor fees, and changing infrastructure to include things like cold storages in recognition of dynamic market patterns. Less than half of the fishermen respondents are members of a commercial fishing organization or trade association and the survey brings their voices into the conversation, said Fick. “These are frontline workers, small business owners who are pretty tight lipped and they don’t have fancy spokespersons or lobbyists speaking on their behalf. So they often just get left out,” he added. The goal now is to get the goods into the hands of those making the decisions on how COVID-19 relief funds are spent and invested. “Our commitment was to help get these results to decision makers on behalf of fishermen,” said SalmonState campaign strategist Lindsey Bloom. “We will do our best to get the information out as far as wide as possible for the fleet.” The fishermen’s survey is a project of the group’s Salmon Habitat Information Program. Find it at Kelp farms sprout Interest continues to grow for startups of shellfish and seaweed farms, and in more remote regions of Alaska. Eighteen growers put in applications for new or modified farms in the 2020 time slot that runs from January through April, an increase of three from last year. Fifteen plan to grow kelp only, two aim to grow oysters, and one will farm kelp and geoduck clams. Most of Alaska’s growing operations occur in Southeast, near Homer and at Prince William Sound, but the trend is heading west, said Karen Cougan, Aquatic Farming Program Coordinator for the state Department of Natural Resources, which leases the farm tidelands. Kodiak pioneered the first kelp harvests in 2017 and could soon have more than five farms operating around the island, including one by the Afognak Corp. Sand Point is the first to grow kelp on the Alaska Peninsula, and this year an application came in from Adak. In all, Alaska has 70 open farm permits, which include eight with nurseries and five hatcheries to provide seed stock to aquatic farmers. In 2019, Pacific oysters were the biggest crop, making up 95 percent of sales of $1.5 million, up slightly from the 10 year average. For sugar and ribbon kelp, a crop of 112,000 pounds — up from about 17,000 pounds two years ago — was valued at $60,000. The advantage of kelp is the short grow-out time, said Flip Pryor, Aquaculture Section Chief for the Alaska Department of Fish and Game, which issues the permits. “While interest is high, kelp farming production is just starting to come online,” Pryor said. “The growing process is pretty straight forward, but it sometimes takes a couple of tries to work the proverbial bugs out of each farm site. I expect to see that value increase significantly in the next couple of years.” Alaska’s mariculture task force predicts a $100 million industry by the year 2040. Halibut scholarships High school students who feel a special pull for halibut might merit a scholarship to a university or technical college. Every two years the International Pacific Halibut Commission funds several $4,000 scholarships to U.S. and Canadian students connected to the halibut fishery. The IPHC and its scientists have been stewards of the Pacific stock from British Columbia to the Bering Sea since 1923. “If I was to highlight some of the candidates who’ve been successful in receiving the scholarship, it’s been those who are dependents of active fishers within the directed Pacific halibut fleets, but we will certainly consider others if they are involved in charter or recreational fishing,” said IPHC executive director David Wilson. “We look at candidates from a broad spectrum of backgrounds, and somebody who expresses the desire or is more likely to come back to the industry postgraduate.” The scholarships are renewable annually for the normal four-year period of undergraduate education. The IPHC also offers other outreach teaching tools for all school ages. An Ocean Literacy Program package is downloadable, including lesson plans. And the colorful Flat or Fiction booklet is a keeper for any halibut lover! For example, did you know that the treaty that formed the IPHC was the first international treaty in the world for the protection of a marine resource? Back to the halibut scholarships: they will be available for school entrance or continuation this fall. Deadline to apply is June 30. Find applications at the IPHC website under opportunities. Questions? Contact [email protected] or 206-634-1838. Laine Welch lives in Kodiak. Visit or contact [email protected] for information.

Pandemic startups: Two Alaska entrepreneurs take the leap

At a time when businesses across the state are forced to close their doors or are scaling back operations, it seems counterintuitive to launch a business. But is it? As our economy dives back into a recession caused by the combined global forces of COVID-19 and the low price of oil, new businesses are more important than ever. High rates of business closures leave gaps in the market for newcomers ready to fill them, and for those that find themselves suddenly unemployed and facing an uncertain future, launching a business may be a good option. Startups have long been an essential part of Alaska’s economy, responsible for 89 percent of net employment growth in the private sector. Over the last decade, startups in our state consistently added 4,000 to 6,000 jobs to the economy each year. Although experts caution that accessing traditional capital will be more difficult than ever, many founders can launch lean, test the market, and look for funding in the future when they’re ready to grow. And, with unemployment rates at an all time high, there’s no shortage of workers looking for new jobs. Nationally recognized startup accelerator Y Combinator is reporting 15 to 10 percent increase in applications for its summer program, which serves early stage entrepreneurs launching and growing their businesses. In Alaska, the opposite is true: economists are seeing rates of businesses hiring for the first time (most likely startups) declining by a third when comparing April 2019 to April 2020. Entrepreneurship comes in many flavors, but can be sorted into two primary categories: necessity and opportunity. To date, 85 percent of entrepreneurs in Alaska are “opportunity” entrepreneurs, which is about average compared to other states. However, economic downturns are associated with more necessity entrepreneurship, and rates of startups launched because of need may begin to increase. Entrepreneurship born of necessity Like many Alaskans, Seth Stetson was laid off from his job in March. Although returning to his position as director of Marketing and Business Development for Kaladi Brothers Coffee in Anchorage might be a possibility in the future, he didn’t want to wait to find out. Instead, Stetson launched Anchorage Grocery, a special order, bulk food delivery service. Customers place online or phone orders throughout the week, and Stetson delivers their groceries to their doorsteps every Friday. Anchorage Grocery is Stetson’s first business and is a direct result of the pandemic: he needed an income and a way to satisfy his creative drive. While watching consumer behavior change during quarantine, he determined that delivery is the future of grocery shopping. Along with bulk online ordering and delivery, Stetson provides packaging and sanitation services with each order. “I’m giving customers peace of mind by limiting the risk that their food is exposed to COVID-19 and other infectious diseases, bacteria and germs found in traditional public grocery stores,” Stetson said. Before launching, Stetson thought that starting a business took years of planning, saving capital and working with banks. After he was laid off, he decided he was just going to launch and figure it out. It took him 2½ weeks to create a Shopify website, set up an LLC, get an EIN number, open a Sysco account, figure out product margins, and populate the website. “It was really interesting to start a business this way, without having prior experience and doing it in such a short time period,” Stetson said. “I just keep moving forward and getting things done, picking off what I need to do next. And, I’m still adjusting to the fact that if I stop, the business stops. It’s just me keeping it going.” Stetson says he’s getting a lot of feedback from customers that want more Alaska Grown options, which he intends to explore in future. Currently his local partners include Arctic Harvest, Copper River Seafoods, Kaladi Brothers Coffee and Molly B’s Bingerz cookies. He also closely tracks website activity to discern customer interest. “Right now it’s all about the meat — ribeye, ground beef, seafood — along with rice, and some fruit and vegetables,” Stetson said. “These aren’t your grocery store quantities, this is stocking up: 15 pounds of ribeye, 50 pounds of rice. My customers want to fill their freezers and their pantries.” Entrepreneurship born of opportunity When Ross Johnston of Anchorage noted images of sourdough starter and bread flooding social media during quarantine — combined with a nationwide shortage of packaged yeast — he quickly launched a new venture: Ötzi Premium Sourdough Starter. Sourdough, made by the fermentation of a flour and water mixture using the flour’s naturally occurring yeast, is a lengthy process of “feeding” the starter with additional flour and water for hours or days before mixing in other ingredients and allowing several hours of rising time before baking. When store-bought yeast is unavailable for bread, sourdough provides a tasty alternative and has captivated home bakers’ attention in recent months. “I got really into sourdough sometime near the end of summer 2019, and toyed with the idea of selling starter at a Saturday market booth,” says Johnston. “But then I started thinking about how people pay more for unique and novel products, and how sourdough bakers are fascinated by the origin story of their yeast.” Hence Ötzi, named after a mummified man who lived between 3400 and 3100 BCE discovered in a glacier in the Ötzal Alps between Austria and Italy. Ötzi’s stomach contents included processed wheat brain, believed to possibly have been eaten in the form of bread. Johnston thinks the market is ripe for a premium product and likens sourdough to wine, with many varieties and prices points available. Hoping to tap into a customer segment attracted to a high-end product, his starter sells online for $24.99 on its own, or $49.99 for a kit that includes starter, water from glacial ice melt, and stone ground flour, along with instructions for upkeep and how to bake sourdough bread and pancakes. Johnston hopes his products will appeal to people in the Lower 48, hungry for a taste of Alaska’s wide open spaces, pristine wilderness and good bread. He’s already reached a few out-of-state customers and continues to refine his product based on their purchasing preferences and product feedback. Ötzi is one of Johnston’s many entrepreneurial endeavors. As he gauges whether or not the market opportunity he suspects exists is real, he’ll scale the company accordingly. “This specific type of business is fantastic for right now. People are finding time to engage in lengthier rituals like baking sourdough bread and seem to have a greater affinity for the creative process,” says Johnston. “But any time you launch a business, whether you’re in the midst of a global pandemic or not, it’s risky.” Both Johnston and Stetson are gambling that their risks will pay off. For Johnston, that means seeing an idea scale to outside markets. For Stetson, it’s being in control of his future and providing for his family. And for Alaska, it’s the beginning of an economic rebuilding, the glimmering hope of a prosperous future. You can watch Seth Stetson and Ross Johnston present more information about Anchorage Grocery and Ötzi on Wednesday, May 26, at 9 am via Zoom: Gretchen Fauske 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.

GUEST COMMENTARY: Keep energy affordable during COVID recovery

In the wake of nearly 40 million jobless claims in recent weeks, Americans are clearly struggling to pay the bills. In fact, a new national poll found that nearly 50 percent of registered voters are increasingly worried about paying for household expenses, including electricity. This isn’t surprising given the havoc that the coronavirus pandemic has wreaked on the country. But it reinforces the fragility of the U.S. economy, and why careful decision-making will be needed to get the nation back on its feet. So, what to do when millions of Americans are hurting in a way not seen in generations? One step is to ensure that the basic necessities of life do not become unnecessarily more expensive. And that starts with families being able to pay for the electricity needed to keep their homes livable during lockdown this summer. A pandemic requires exactly this type of blunt, realistic thinking: “How do we make sure families can stay in their homes? How do we hold down costs and make sure budgets aren’t stretched beyond the breaking point?” It’s likely that we’re only in the early stages of the pandemic and recovery. But the financial toll to date suggests that we’re already facing several years of a potentially serious economic downturn. And so, common sense dictates that we start planning right now to ensure families can keep paying for basic expenses over the next few years. Here’s one approach that public officials should consider: Right now, we simply don’t have the luxury of tinkering with the nation’s power grid. In recent years, there’s been plenty of well-intentioned talk about emissions targets and renewable energy mandates. But lawmakers, utilities, and public service commissions will need to change how they think about energy for the foreseeable future. Their priority must shift toward ensuring that the American people still have access to affordable, reliable power. What will that mean? For starters, families can’t afford to see their electric bills start climbing simply because baseload power plants — like reliable coal plants that have kept their electricity bills steady and manageable — are pushed into premature retirement to meet arbitrary renewable energy targets. Yet that’s already happening across the nation, with utilities marking up their rates and raising consumer prices to cover the expense of building new energy infrastructure. Even before the current pandemic the U.S. Energy Information Administration warned that one-third of U.S. homes were facing challenges in paying for electricity. Does anyone doubt that this burden will now increase? Compassion for our fellow Americans means recognizing that literally millions of families can’t afford to have their electricity bills rise by even a few dollars a month. And they certainly can’t face power outages or brownouts during peak demand. Reliability and affordability have suddenly become more important than ever in the shadow of an epidemic that has turned the U.S. economy upside down. The nation must pursue an energy policy that ensures balanced, secure, and affordable electricity. Matthew Kandrach is the president of Consumer Action for a Strong Economy, a free-market oriented consumer advocacy organization.

Alaska businesses receive $1.2B in PPP loan with funds still available

There is still nearly $150 billion left in the federal government’s primary program to help small businesses through the worst of the COVID-19 pandemic. The Small Business Administration handled 4.4 million loan approvals totaling $511 billion nationwide through May 23 from the $660 billion Paycheck Protection Program, according to a summary report provided by the agency. Intense demand caused the initial $350 billion approved by Congress to jumpstart the program in the CARES Act to be exhausted in mid-April after being available for just two weeks as small businesses across the country applied for the financial relief. Congress subsequently approved another $310 billion in PPP loan funds April 24. Michael Huston, chief lending officer for Northrim Bank said the Anchorage-based lender has processed more than 2,400 PPP loan applications and continues to but demand has waned. “There is money available. Those applications have slowed significantly since the first few weeks of the program but we do stand ready to help businesses that need the assistance,” Huston said in an interview. Across Alaska, the SBA tallied 10,040 PPP loan approvals totaling just more than $1.2 billion before Memorial Day weekend, according to the report. The program is meant to provide small employers — primarily those with less than 500 workers, with some exceptions — payroll funding for up to eight weeks following the receipt of the loan. Sen. Dan Sullivan has stressed the desire in Congress to maintain the employer-employee relationship as much as possible through the worst of the pandemic-induced economic restrictions in multiple interviews and briefings following the passage of the CARES ACT and the PPP loans are meant to be a vehicle for that. Huston said there are very few “fine print” restrictions as to what small businesses — and 501(c)3 nonprofits and Tribal organizations as well — qualify for a loan. “For the most part it’s one-size-fits-all as long as you are an eligible business,” he said. Seasonal employers, who make up a major portion of Alaska’s economy, can now choose to use any 12-week period between May 1 and Sept. 15, 2019, to calculate their PPP loan amount instead of the prior limitation of Feb. 15 to June 30, according to updated SBA rules. The change is especially important for businesses that have peak activity in the summer, such as many tourism businesses in the state, as many do not have a full complement of staff early in the year but will still be hit hard by virus-related travel restrictions and consumer fears throughout the year. There are a few more hurdles to get the loan forgiven, such as using at least 75 percent of the money for payroll or other fixed costs, but generally businesses that were eligible for a loan should be eligible to have some portion of it forgiven, as Congress intended, Huston said. “Whether they’ll be able to get all of the amount forgiven is directly tied to how they used the funds,” he added. Employers can also have their total of forgiven funds reduced if they have fewer employees on June 30 than during their reference period used to tally the loan amount, but SBA rules indicate exceptions for laid off employees who did not accept rehire and other circumstances. Huston described the SBA’s 11-page PPP loan forgiveness application as being “a little bit like completing your 1040 tax return. They walk you through it and sure there’s going to be some questions that aren’t answered, but as the SBA and as the financial institutions are running into them on a consistent basis they’ll be able to get some answers to those FAQs that will help everybody else as they continue the process,” he said. He also noted ongoing discussions in Congress regarding extending the loan forgiveness period beyond eight weeks along with changes to the repayment terms and 75 percent payroll expense threshold. Currently, payments on unforgiven PPP loan amounts are deferred for six months and the loans have a maturity of two years with a 1 percent interest rate, according to the SBA. Elwood Brehmer can be reached at [email protected]

Alaska LNG Project gets major federal approval

Alaska has cleared the biggest regulatory hurdle to developing a long-sought North Slope natural gas pipeline project. The Federal Energy Regulatory Commission on Thursday issued a record of decision authorizing construction of the state’s plan for the many-billion-dollar Alaska LNG Project, concluding a three-year-plus environmental impact statement process. AGDC President Frank Richards called it a “momentous day for the project” and thanked FERC for largely sticking to its timeline for the EIS during a Thursday morning meeting of the AGDC board. AGDC submitted its application for the massive project to FERC in April 2017. “As anybody in the infrastructure development process knows, to go through the (National Environmental Policy Act) process in three years is an exceptionally fast time,” Richards said. Since the current iteration of the project began in 2013, the three major Slope producers and the state have spent more than $600 million to reach this point, with the state share about $240 million of that total. At its core, the project consists of a large North Slope gas treatment plant; an 807-mile buried natural gas pipeline from the Slope to the Kenai Peninsula; offtake points for state use, and a three-train liquefaction plant at Nikiski capable of producing up to 20 million metric tons of LNG per year for export to Asian markets. If developed, the project would generate upwards of 18,000 jobs during construction and roughly 1,000 new jobs during its 30-year operational life, according to AGDC and state Labor Department estimates. It would also provide natural gas to the Fairbanks area and other communities along the pipeline route that currently rely on fuel oil for heating and in some cases power generation. Gov. Mike Dunleavy and the members of Alaska’s congressional delegation commended AGDC for securing the construction permit in formal statements. Sen. Lisa Murkowski, who chairs the Senate Energy and Natural Resources Committee, called it a “capstone moment” for the project and said the FERC certificate and order are extremely valuable assets for the state. Sen. Dan Sullivan, who was Department of Natural Resources commissioner when the state, BP, ConocoPhillips and ExxonMobil began early-stage work on the project, said getting North Slope gas to world markets through the LNG export plan would benefit not only Alaska but also the entire country. “Producing more energy responsibly strengthens our economy, is good for the environment, and dramatically increases our country’s national security. I thank FERC for their diligence in completing this work, and thank all of the Alaskans who, throughout the years, have worked to move this project forward,” Sullivan said. The Alaska LNG Project is the latest attempt to commercialize the large volumes of North Slope natural gas. State and energy company officials have tried since the late 1970s to put together a plan to produce and sell the gas that is considered “stranded” based on the location lacking infrastructure to access global or even local markets. However, frequently changing market and political conditions and the tremendous expense of developing a North Slope gas project — the cost of the pipeline — have scuttled prior efforts. To that end, it’s also unclear at this point if the Alaska LNG Project is economically viable, especially at current low prices amid a global oversupply. While Alaska Gasline Development Corp. officials still have several other state and federal authorizations to secure, the favorable record of decision, or ROD, means confirming Alaska LNG’s economic viability is the next major task for the state-owned corporation. Dunleavy said an ongoing economic review of the project will go a long way toward determining where it goes from here. The governor has been sharply critical of the state leading the project through AGDC — a structure championed by former Gov. Bill Walker — but has followed the recommendation of the large North Slope producers and others who urged the administration to finish the permitting that was already well underway when Dunleavy took office in late 2018. Many observers and insiders view securing the FERC construction license as a way to de-risk the project for potential investors and developers. In April AGDC board approved a strategic plan calling for the state to find a new project sponsor by 2021 or put the project assets, such as its permits and engineering work, up for bid. According to Richards, Flour, an international engineering and construction firm, has completed an updated class 4 cost estimate for the project, which AGDC — with help from BP and ExxonMobil — is running through economic models. In 2016 AGDC pegged the project at about $43 billion including significant contingencies. Many industry experts believe the $43 billion estimate to be high given the rapid expansion and technological evolution of the LNG industry. A better picture of the project’s economic viability should be available in June, Richards said. Elwood Brehmer can be reached at [email protected]


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