Price war sends oil plunging amid virus selloff

If oil company executives don’t get sick from the coronavirus, the feverish drop in prices is likely causing them aches, pains and chills anyway. The good old days were not much more than two years ago when Brent crude, the global benchmark, was at $85 per barrel in October 2018, its highest point in six years. The bottom of the barrel started leaking and then completely fell out the past few days. Brent lost almost 10 percent on March 6 and then went into a freefall on March 9, losing an additional 24 percent — its steepest one-day slide since 1991 — closing at less than $35. The back-to-back days of double-digit drops are due to a progressive series of events: The economic hit from the coronavirus is reducing global demand for oil; the 3-year-old production-curbing deal between OPEC nations and Russia collapsed; and Saudi Arabia announced on March 8 it was boosting production and curbing prices, launching a price war with Russia. The Saudis are cutting prices by $6 to $8 per barrel for sales to Europe, the Far East and the U.S. in an effort to entice refiners to buy their crude instead of other supplies. “That’s the oil market equivalent of a declaration of war,” Bloomberg quoted a commodities hedge fund manager. “Saudi Arabia is now really going into a full price war,” Iman Nasseri, managing director for the Middle East at oil consultant FGE, told Bloomberg. Analysts see the Saudis wanting to inflict pain on Russia and other producers to bring them back to the negotiating table for production cuts. Meanwhile, Alaska North Slope crude is no longer commanding the $10 premium to U.S. benchmark West Texas Intermediate that it earned in late 2018 and early 2019. As world prices tank they are taking Alaska crude along with it, and North Slope oil is back around its more traditional $2 or $3 bump from WTI, which closed March 9 at about $31 per barrel. Alaska crude generally competes on the West Coast against foreign imports, not U.S. oil, due to the lack of pipelines to deliver the bounty of mid-continent shale over the Rockies to the coast. If the steep fall in prices holds throughout the year, the state of Alaska could lose out on several hundred million dollars of tax and royalty revenues. But there’s not much Alaska can do about it. Prices will depend mostly on Russia, OPEC, the coronavirus and its hit to the global economy. Moscow last week rejected a Saudi Arabia-led proposal to impose cuts of an additional 1.5 million barrels per day on the so-called OPEC+ member nations, on top of the current reduction of 2.1 million barrels per day that is due to expire at the end of March. The combined cutback would have taken about 3.6 percent of the world’s oil supply offline. Russia has less of an incentive to cut production to boost prices as its economy is more diversified and its treasury can get by on $50 oil, whereas the Saudis need significantly higher prices to cover their government spending. In response to Russia’s refusal to join the effort to further limit production, OPEC refused to extend the existing cuts past March 31. “We are in another period of true turmoil,” said Daniel Yergin, vice chairman of global energy analytics firm IHS Markit. Deciding whether and how much to cut supply during the coronavirus virus “really splintered the (OPEC+) alliance,” he said in a CNBC interview March 9. “This is an unexpected development that falls far below our worst-case scenario and will create one of the most severe oil-price crises in history,” Bjoernar Tonhaugen of Rystad Energy, was quoted by Reuters. “This is going to get nasty,” Doug King, a hedge fund investor who co-founded the Merchant Commodity Fund, told Bloomberg. “OPEC+ is going to pump more, and the world is facing a demand shock. $30 oil is possible.” But why stop the depressing predictions at $30 oil? “We’re likely to see the lowest oil prices of the last 20 years in the next quarter,” Roger Diwan, an oil analyst at consultant IHS Markit and a veteran OPEC watcher, told Bloomberg. It was just more than 20 years ago that Brent last fell to less than $20 per barrel. Though Russia did not signal any reconciliation, OPEC said it is willing to talk. “Hopefully they’ll come back,” said Suhail Al Mazrouei, United Arab Emirates’ energy minister. Adding to the supply-and-demand imbalance are continuing gains in U.S. oil output. Annual production in the U.S. set another record in 2019, surpassing 12 million barrels per day for the first time, a gain of 10 percent over 2018. U.S. output has more than doubled since the fall of 2012, due to booming shale production. The U.S. Energy Information Administration predicts 2020 will average more than 13 million barrels per day and more than 13.5 million in 2021. All that oil would be good if the world needed it, but that’s not the case. Goldman Sachs said last week. Goldman Sachs is the first major Wall Street bank to forecast that overall global demand will contract this year. Oil-market consultants Facts Global Energy and IHS Markit published similar warnings. It’s not that the decline forecasts are large: 150,000 barrels a day at Goldman and 220,000 barrels a day at FGE. But if it’s true, it would be only the fourth time in the past 40 years that demand has fallen from one year to the next. Goldman Sachs predicted demand will fall 2.1 million barrels a day in the first half of 2020, recovering somewhat in the second half. The price crash, however, may help stem the growth of U.S. oil production, as investors are increasingly reluctant to write checks. North American oil and gas producers have an estimated $86 billion of rated debt maturing in the next four years, according to Moody’s Investors Service, debt that will be harder to pay off or refinance at low prices — and harder to raise money for new developments. Still, there’s no shortage of opportunities in U.S. shale plays. Chevron on March 3 upped its Permian Basin resource estimate to more than 21 billion barrels of oil equivalent, more than double its estimate of just three years ago. Larry Persily is a former Alaska journalist, state and federal official who has long tracked oil and gas markets and projects worldwide. He is the Atwood Chair of Journalism at the University of Alaska Anchorage School of Journalism and Public Communication.

FERC completes environmental review of Alaska LNG Project

Alaska is a major step closer to securing the key federal license to build a long-sought North Slope natural gas pipeline and export project. The Federal Energy Regulatory Commission on Friday issued the final environmental impact statement, or EIS, for the roughly $40 billion Alaska LNG Project, a massive document that largely affirms the plan proposed by the state-owned Alaska Gasline Development Corp. 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, combined with the tremendous expense of developing a North Slope gas project, 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. 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. The final EIS documents support AGDC’s conclusion that the project should terminate in Nikiski despite prior objections from officials in the Matanuska-Susitna Borough and the City of Valdez who contend their areas were not adequately considered. The end-point location was chosen way back in 2013 when the project was led by a consortium of North Slope producers. Mat-Su officials in particular have argued the borough’s Port MacKenzie was dismissed based on inaccurate information submitted to FERC. The EIS authors wrote that information provided by the Mat-Su Borough regarding the wetland acreage at Port MacKenzie was added to the final EIS but did not change the final decision. AGDC officials have said locating the LNG plant at Port MacKenzie — farther up Cook Inlet than Nikiski — would require more tanker trips over the long-term as well as additional dredging to accommodate the large tankers in the shallow waters of the upper inlet. FERC officials rejected siting the LNG plant at Anderson Bay near Valdez in part because it would require 113 miles of spur pipelines to get gas to Fairbanks and Anchorage, which would have additional environmental impacts, although Valdez leaders insisted the spur lines should not be evaluated as part of the overall project, according to the EIS. Ending the project in Valdez would additionally require building the pipeline through an “exceptionally rugged stretch of terrain” through Thompson Pass as AGDC concluded there is not enough room in the parallel Richardson Highway and Trans-Alaska Pipeline System corridors to accommodate another pipeline, the EIS states. Gov. Mike Dunleavy called the final EIS a “milestone” for the project and commended the work of AGDC officials throughout the three-year permitting effort in a formal statement. “We look forward to reviewing the EIS and receiving the record of decision from FERC, at which point we will evaluate our next steps,” Dunleavy said. “FERC licensure is an important component in determining if Alaska LNG, which must be led by private enterprise, is competitive and economically advantageous for development.” AGDC President Frank Richards said the EIS collates more than 150,000 pages of data. Richards, a longtime engineering executive for the quasi-state agency, was appointed as president by the AGDC board of directors Feb. 28 after interim president Joe Dubler announced his retirement. “Such a rigorous, comprehensive environmental analysis provides assurance that the merits and impacts of Alaska LNG have been carefully vetted by numerous federal regulatory authorities,” he said in a formal statement. Dunleavy 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. As Dunleavy mentioned in his statement, his administration is in the process of refining the project’s costs and economic viability. Several lawmakers also commended the AGDC team on its work to get to the final EIS in official statements. Republican Sen. Peter Micciche, who represents Nikiski, said reducing risk in the project is “key to attracting capital” for the project and ensuring that it generates revenue for the state if it is built. 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 $237 million of that total. AGDC leaders have said they will attempt to sell the project to a private developer once FERC issues its final record of decision, which is expected in June and, based on the final EIS, is likely to be a favorable ruling for the project. “Once we have the final approval from federal regulators — expected later this year — Alaskans will know the true marketplace potential for this monumental LNG export project,” Micciche said. A state-led project was touted as a way to reduce costs by capturing the state’s federal tax-exempt status for LNG sales when AGDC took it over from BP, ConocoPhillips and ExxonMobil in early 2017 following the collapse of world oil and LNG markets. BP and ExxonMobil signed gas sales term sheets with the state in 2018, but those were allowed to lapse under the Dunleavy administration. The companies, which hold the rights to the majority of the gas in the Prudhoe Bay and Point Thomson oil and gas fields, subsequently agreed last May to commit up to $10 million each to help AGDC finance the rest of the complex FERC permitting process. They are also assisting the state in its economic review of the project plan. Elwood Brehmer can be reached at [email protected]

BROWN'S CLOSE: Teaching, and the darndest things

I began volunteering with an organization that teaches financial concepts to children. Recruited by a friend I’ve known for 20 years, I trusted her judgment. “Hey! Want to help out?” she plied me over wine at Kincaid Grill. “We go into classrooms and teach kids about economics and financial literacy!” It’s hard to argue with that cause. I agreed to spend one morning teaching fifth grade. The lesson plan introduced the concepts of globalization and business entrepreneurship, and not in a scary way I might add. There were no discussions of the collapse of American manufacturing, or how robots were taking our jobs. Instead, the course encouraged students to pursue careers in science, technology, and math so as to maximize relevancy in the 21st century. Heck yes, I’ll teach kids why capitalism is awesome. Once at the designated school, it only took a minute to remember how small objects in elementary schools are, and why there are separate adult bathrooms; one does not wish to squat with one’s knees in one’s ears. I greeted the fifth grade with enthusiasm. Children are the future. “How many of you like money?” Twenty-three hands went up. One girl’s hand faltered as she studied me, trying to figure out if this was a trick question. “Yeah, me too!” I plunged my hand into the air. “I love money. Money is the best!” “Yeah!” a chorus of voices rang out. “I’ve always wanted a never-ending allowance!” a kid to my right shouted. “Me too,” I agreed, “but in absence of that, we need to start businesses.” A student in the front row raised his hand. “What do you do?” That’s a surprisingly difficult question to answer. “I bundle and pay for surgeries.” I received a roomful of predictably quizzical looks. “But I get to work from home! That’s pretty cool!” The fifth grade agreed. That was pretty cool. A probing young man in the second row raised his hand. “So, you operate on people out of your house? Like, you do surgery on them? That sounds bloody.” I paused. “Well, no, I just schedule the surgeries out of my house.” He frowned at me. “So, you’re like a middleman?” Sensing I was losing my audience’s trust– “What does your dad do?” I countered. “My dad cuts hair,” he answered promptly. Darn that was straightforward. “Well, doesn’t that dovetail nicely into what we are going to discuss today?” I held up my teacher’s manual. “We have some vocabulary for you to learn. Who would like to read the definition of ‘competition?’” Several hands shot into the air. I called on a girl in the second row. “I’ve done this program before,” she promptly informed us. “Oh? Well that’s good!” I encouraged. She nodded in agreement and read the definition. Competition is a rivalry between businesses that make a similar product or provide a similar service. “So, if I open a hair salon, I’m in competition with your father for customers,” I directed my comments to my previous challenger. He stared back, unimpressed.  “Have any of you considered inventing a product?” I tried to bring the lesson plan back on track. “What product would you invent?” Program Veteran raised her hand “I want to invent a saliva bank.” “A what?” “A saliva bank. That way, you can know what dog saliva tastes like if you are curious.” “Huh. Who would be your customers?” She looked at me pityingly; she thought I was surprisingly obtuse for a guest lecturer. “People who want to know what other animal or people saliva tastes like.” There are of course other, sometimes even free, ways to taste the saliva of others. But I neither wanted to broach that subject, nor stifle her creative energy. “You… sure could do that. Anyone else? Any other products?” A small boy in the back row raised his hand. I pointed at him. “What’s your name?” “Alex,” he stammered, quickly setting his hand down and launching into his product. “I want to have a hover bar, where I can put my hands on it, and it will lift me up. Then I can hover.” That seemed more appropriate to discuss with the fifth grade than a volunteer saliva bank. “Perfect! What resources would you need to make that product?” We all consulted the worksheet defining natural and capital resources. “Well, I’d need some metal. And probably electricity.” “Those sound like terrific resources. Now, everyone break into groups, and discuss products amongst yourselves. Specifically, come up with the resources you would need to build these products.” The class gamely divided into groups. “Can I be in Alex’s group?” A little girl with blonde curly hair came up and peered into my eyes. “Uh, sure. You can be in Alex’s group.” She launched into a lengthy explanation. “I have ideas for more resources for his hover bar. He needs carbon and graphite, and –” “Yep, yep, sounds good!” I waved her over to Alex’s group, and consulted the next item in the lesson plan. I had allotted fifteen minutes for the activity, when – “Can we have snack?” A tall kid in the back row named Peter pulled on my sleeve. “Um, sure, we can have snack. Just give me a mome—” I cast my eyes around for the teacher. She was a substitute, and was currently staring dreamily at her computer, happily indifferent to everything around her. Periodically she would pop her head up to tell one of the back rowers to pipe down.  I walked over to her. “What time is snack?” “Now,” she said vacantly, and a tad unhelpfully. “Can we have snack?” Another boy ambled over, looking anxious. Succumbing to the inevitable, I called the class back to order to finish the lesson. The last thing I needed was for the children to unionize and protest the shocking delay of snack in their working conditions. “We have time for one group to present their product and resources.” Saliva Bank's hand shot in the air. She had drawn a diagram of her processing plant. I ignored her, and instead invited up a group of first row boys. “We have invented the Find Me Phone,” the leader informed us, with all the enthusiasm of a small business owner pitching to a venture capital fund. “Never lose your phone again!” he boomed. “We will insert a chip into your leg, which will be connected to the phone. Then, the phone will levitate and find you wherever you are!” I paused, considering all of the privacy concerns these youngsters were raising. Everyone universally, however, appeared comfortable handing over their moment-by-moment location data to third party organizations. Not wishing to crush their dreams of a future police state utopia– “Terrific. What resources do you think you will need?” “Metal and electricity,” they answered definitively. That seemed correct to me. I thanked them for their participation and sent them back to their seats.  “Can I answer any other questions before we break for snack?” Peter raised his hand. “What started the Vietnam War? Was it over oil?” I took a beat to answer this unanticipated question – “No. It was the Nazis. They invaded,” the boy next to him answered matter-of-factly on my behalf. “Well, the Vietnam War was actually started over … politics,” I corrected vaguely. “So, not Nazis?” The boy looked astonished. “No, in this case it was the communists,” I finished abruptly. It was a new feeling to be treated as an expert on foreign affairs and matters of state. Over a juice box and goldfish crackers, I pulled out my own phone to get up-to-speed on the signature global events of the last 75 years. I mustn’t look like an idiot in front of my constituents. Sarah Brown is a childless professor of economics. She can be reached at [email protected], and on Twitter @mesarahjb. "Close" is a British term for alley or cul-de-sac. All names have been changed to protect both the innocent and the guilty.

FISH FACTOR: Coronavirus ensnares global commerce, including seafood

Seafood coming from and going to China is piling up in freezer vans and cold storages indefinitely as the coronavirus continues to cause commerce chaos around the world. About 80 percent of trade of the world’s goods by volume is carried by sea and China is home to seven of the world’s 10 busiest container ports, according to the United Nations Conference on Trade and Development. Virus precautions mean that many ships can’t get into Chinese ports, others are stuck at docks waiting for workers to return, and still more are idling in “floating quarantined zones,” as countries refuse to allow crews of ships that have docked at Chinese ports to leave the boat until they have been declared virus-free. China is the No. 1 trade partner for the ports of Seattle and Tacoma, where ships are typically stacked with containers arriving full of goods ranging from clothing and toys to electronics. Many would normally return to China laden with Alaska seafood and other U.S. products, but operations have slowed dramatically. “Factories aren’t open and goods aren’t being made. We don’t know yet what that impact is going to be,” Peter McGraw of Northwest Seaport Alliance told KOMO news. “There have been a lot of blank sailings. That means a lot of canceled ships.” Alaska seafood exports to China of nearly $1 billion include products for their own markets, but the bulk goes there for reprocessing and shipment back to the U.S. and other countries. “If you have plants that have product coming in and no workers to fill it, you’re going to get that overflowing cold storage situation. So it’s definitely a problem on the reprocessing side. On the consumption side, if people aren’t going out to eat and going out to the market to buy seafood, that’s going to take consumption down as well. So there’s a couple different ways that it’s working against moving seafood through the supply chain,” said Andy Wink, director of the Bristol Bay Regional Seafood Development Association and an economist who has tracked world salmon markets for more than a decade. The situation also is diverting more seafood from elsewhere into the U.S. “The big salmon farming companies are looking elsewhere to direct their products and the U.S. is the obvious choice,” he added. “So we’ve seen salmon prices on average down about 10 percent since the first of the year at the wholesale level.” As the crisis builds potentially into the spring, many major fisheries with year-round selling seasons but shorter harvests, such as Alaska salmon, begin engaging in price negotiations and set dock prices, said market expert John Sackton of “The price setting at the dock is based on packers’ and distributors’ expectations of price for the entire year, the supply and availability of what is landed, and the costs and business expectations of the harvesters,” Sackton wrote in his Winding Glass blog. “Regardless of what price is paid in May or June, packers are looking at what price they expect to get four, five or six months into the future. In normal years, this is fraught with risk … This year, the risk is off the charts, because we simply don’t know how severe, economically or socially, the disruption from this disease may get.” Alaska has worked hard to diversify its seafood markets beyond China since trade tariffs imposed in 2018 by the Trump administration cut into sales with its top customer. But the virus scare is causing disruption throughout new and more established sales regions, said Hannah Lindoff, global marketing director for the Alaska Seafood Marketing Institute. “We have on the ground representatives conducting marketing activities to help raise the value of Alaska seafood products. However, due to travel bans and health concerns, several chef seminars in China designed to boost knowledge of different Alaska species planned for this month have been cancelled. Additionally, events in Singapore and Italy were also cancelled. ASMI continues to prioritize the health of our overseas representatives and partners in these regions and hope for positive news,” Lindoff wrote in an email message. Air cargo operations have been affected differently, and “the cancellation of flights in and out of China has been so extensive that freight forwarders have had a very hard time finding any space at all on planes for their shipments,” according to the New York Times. U.S. shoppers could see items missing from store shelves as early as mid-April, Edward Kelly of Wells Fargo Securities told the Los Angeles Times. Big-box retailers such as Walmart and Target “could be the first to experience out-of-stock issues,” Kelly said. Of note: 80 percent of the drugs that Americans depend upon come from overseas countries, and China is the largest manufacturer. Shrimp still tops! Salmon remains as America’s second-favorite seafood, following shrimp. Third among the Top 10 is tuna, according to the list compiled by the National Fisheries Institute based on data in the 2018 Fisheries of the U.S. report. Americans ate 4.6 pounds of shrimp per capita, a record high. For salmon, 2.55 pounds was eaten along with 2.10 pounds of tuna. That’s followed by tilapia at 1.11 pounds, Alaska pollock at 0.77 pounds, pangasius at 0.63 pounds and cod at 0.62 pounds per capita. Rounding out the top 10 list was catfish at 0.56 pounds, crab at 0.52 pounds and clams at 0.32 pounds. In 2018 Americans ate slightly more seafood: 16.1 pounds, the highest per capita consumption since 2007 and a 0.1 pound increase from 2017. Push against plastics The first ever major lawsuit and a proposed new law both aim to hold companies responsible for the endless streams of plastics they continue to produce. A lawsuit was filed Feb. 23 in California State Superior Court against Coca-Cola, Pepsi, Clorox, Procter and Gamble and several other major companies for polluting waterways, coasts and oceans with millions of tons of plastics. The lawsuit was filed by the Earth Island Institute and Plastic Pollution Coalition. It claims violations of the state Consumers Legal Remedies Act, public nuisance, breach of express warranty, defective product liability, negligence and failure to warn of the harms caused by plastics to humans and animals. The complaint also claims the average person ingests nearly 5 grams of plastics each week, or the equivalent of a credit card. It also says plastics alter the chemical composition of the ocean when it breaks apart into smaller pieces and releases toxic chemicals into the water. Meanwhile, on Feb. 11, a group of congressional Democrats from New Mexico, Oregon, California and New Mexico introduced the Break Free from Plastic Pollution Act of 2020. The law would, among other things, require big corporations to take responsibility for their pollution; incentivize corporations to make reusable products that can be recycled; reduce wasteful packaging; create a nationwide beverage container refund program; reduce and ban certain single-use plastic products that are not recyclable; establish minimum recycled content requirements for beverage containers, packaging and food-service products, while standardizing recycling and composting labeling; and reform the nation’s waste and recycling systems. The Plastics Industry Association calls the bill “misguided” saying it “is more interested in getting headlines than finding solutions.” Today, 14 percent of oil and 8 percent of gas is used to make petrochemicals, the feedstock of plastics. The International Energy Agency predicts that within 30 years, 50 percent of the growth in oil demand will be related to petrochemicals. That means we are extracting fossil fuels, not for energy but for things like plastic soda bottles that we use once. Letters of support for the legislation can be sent to Sen. Tom Udall’s office at [email protected] Laine Welch lives in Kodiak. Visit or contact [email protected] for information.

GUEST COMMENTARY: Fair Share Act won’t deliver on empty promises

As president and CEO of the Competitive Enterprise Institute, a non-profit public policy organization, it is my job to promote economic freedom. Free enterprise is essential for entrepreneurship, innovation, and a community’s ability to flourish. Right now, all of this is being threatened in Alaska. At CEI our vision is to remove as much power and regulatory decision-making as possible from bureaucrats and politicians and entrust that authority to families, communities, and free enterprise. The Fair Share Act is neither fair nor does it promote growth. It is a short-sighted attempt to close the state’s deficit by increasing taxes on the energy industry by more than 300 percent. This is simply way too much, way too fast. Alaska’s budget problems are real, but undercutting the state’s largest economic driver is not a real solution and will be a real disservice to hardworking families who are stuck with the next, politically driven, bust in the boom-bust cycle of energy production The energy industry accounts for one-third of Alaska jobs and about half of the state’s overall economy. In 2018, the industry generated $2.4 billion, which was about four of every five dollars in the state treasury. This is an industry that is the backbone of our communities and it is not fair for it to carry one more economic burden in the form of a massive tax hike. Last year, I raised the alarm on another set of proposals that would radically restructure the Alaskan economy. At their core, these proposals, called the Green New Deal, are a blueprint to de-carbonize the American economy. Similar to the Fair Share Act, it makes a lot of promises without considering the significant ramifications for the economy and people’s everyday lives. In a report, I wrote that the Green New Deal “is difficult to read as a set of genuine policy proposals; it is perhaps better described as a far-reaching, aspirational set of guideposts for a resurgent progressive force in American politics.” The same can be said about the Fair Share Act. It won’t deliver what it promises and guarantees a lot of pain for the people who are stuck with the bill. My report, What the Green New Deal Could Cost a Typical Household, included some findings that were specific to Alaska. Most notably, we found that this policy would cost a typical Alaskan household more than $100,000 in just the first year of implementation, $73,000 in the subsequent four years, and more than $67,000 in each year thereafter. The Fair Share Act would similarly threaten Alaskans’ bottom lines. Since Alaska’s Permanent Fund, which is funded by the state’s natural gas and oil industry, began its annual distribution in 1982, an Alaskan family of four has received a total of $133,461. The Fair Share Act is putting this money at risk in the name of a short-term solution and political talking points. The Fair Share Act is also being proposed at a time when Alaska should be taking the opposite approach and investing in its No. 1 business driver. There is more activity on the North Slope right now than there has been in the last 20 years. This means new discoveries and potential oil development projects are right around the corner, which translates to hundreds of thousands of barrels of daily production and tens of billions of dollars in new investment flowing into Alaska. These opportunities are what encourage competition and drive the state’s long-term economy. An unreasonably high, all-at-once tax increase will quickly drive energy companies and outside investments to other states or countries that do not operate with the same track record for clean exploration. There are no denying Alaska’s current budget problems, and those problems require action. But, there is too much on the line for a risky, short-term fix like the Fair Share Act. The stakes couldn’t be higher, and, for supporters of the Fair Share Act, this initiative is only the first step. If the precedent is set that Alaska prioritizes political talking points over the future of its economy today, the Green New Deal will be coming down the road tomorrow. Those who understand and appreciate the value of investment, competition, and innovation in a community must take a stand and oppose this radical proposal. Kent Lassman is the president and CEO of the Competitive Enterprise Institute, a non-profit public policy organization dedicated to advancing the principles of limited government, free enterprise, and liberty.

Court hears MARAD case to dismiss port lawsuit

After nearly six years in court, a lawsuit against the federal government worth hundreds of millions of dollars to Anchorage currently hinges on whether or not a commonly invoked working pact can constitute a binding agreement. Attorneys for the Municipality of Anchorage and the U.S. Maritime Administration spent Feb. 18-19 in a San Francisco courtroom sparring over the enforceability of a memorandum of understanding officials for the city government and federal agency signed in 2003 to coordinate work on the since-failed Port of Anchorage Intermodal Expansion Project. Department of Justice attorneys representing the Maritime Administration, commonly referred to as MARAD, argued that Congress tasked the agency with managing the project through language in a February 2003 omnibus federal spending bill that allowed MARAD to accept and spend state and local money on the work, according to transcripts of the proceedings. They insist the MOU simply clarified Anchorage officials’ decision-making authority for the project and it was the city’s responsibility to provide requirements and direction to MARAD for the project. Vincent Phillips said on behalf of MARAD that it was the February 2003 spending bill, not the MOU signed the following month, that acted as the “operative agreement” for the project and therefore the federal government is not liable for all of the work that went awry. “Anchorage, in their lobbying efforts convinced — induced Congress to spend $140 million for this project by saying Anchorage was already going to spend $163 million for the project. So what Anchorage wanted the government to then do — wanted Congress to then do was essentially make it a federal project and allow a federal agency to not only spend the federal appropriation to build the project but also spend Anchorage’s money,” Phillips told Federal Claims Court Judge Edward Damich. Anchorage is seeking upwards of $320 million from MARAD to recoup the $163.4 million of state and municipal money spent on the project as well as the more than $180 million that port officials estimate it will cost to partly remove and stabilize 35 acres of fill added to the north end of the port during the expansion project, according to city attorneys. The federal government also contributed $140 million to the project through Department of Transportation grants and Defense allocations. Overall, MARAD accepted $306.4 million of federal, state and local money for the construction project and spent $302 million of that on the work, according to court filings. State lawmakers additionally approved another $128 million in grants and bonds for the project that was matched by $9 million from the port after work stopped in 2010, but that money stayed with Anchorage and was not transferred to MARAD. Port officials have since used part of the remaining money to fund a new design for a port overhaul. Lengthy legal battle The Municipality of Anchorage sued MARAD in March 2014 alleging the agency’s mismanagement of the project ultimately led to improperly installed — and subsequently damaged — steel sheet piling that served as a foundational element of the expansion project dock design. In sum, more than $300 million of public money was spent on the project with little to show for it. The municipality commissioned MARAD to oversee the expansion project; it began in 2003 as a way to direct federal funding to the Anchorage port, which is designated by the Department of Defense as a national strategic port for its importance to troop and equipment deployments from Alaska bases. MARAD, in turn, hired Integrated Concepts and Research Corp., or ICRC, to manage the project. ICRC was owned by Koniag Inc., the Alaska Native Regional corporation for Kodiak, when the project started but has since been sold to a Virginia company. The MARAD-Anchorage relationship ended in 2012. 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. A wholly new set of municipal and port officials have since started work on a scaled-back port modernization program, which aims to replace the existing infrastructure at the port without significantly adding new space, which the expansion project sought to do. A final price for the new project is still being revised — an eye-popping estimate of $1.9 billion emerged last year that is still being whittled down — but city officials acknowledge it will very likely be many hundreds of millions of dollars. The members of Alaska’s congressional delegation have said Anchorage needs to resolve its lawsuit with MARAD before they can seek large amounts of additional federal funding for the port modernization effort. Work resumes without resolution The Anchorage Assembly also officially renamed it the Port of Alaska in 2017 as a means of signifying the city-owned port’s importance to the rest of the state. The port is the primary import terminal for all of the consumer goods, fuel, building materials and other things destined for communities across mainland Alaska. Major work is scheduled to resume at the port next year with the first of two construction seasons to build a new, roughly $220 million petroleum and cement terminal at the port — a full 10 years after the first project was stopped. In November, the U.S. DOT awarded a $25 million infrastructure grant to port officials for construction of the new commodity terminal. MARAD announced a similar $20 million grant to the port Feb. 11. What’s in an MOU? For their part, city attorneys stressed during the two-day “mini-trial” intended to fully vet MARAD’s summary judgment motion filed last June that the 2003 MOU was implemented as a binding contract, even if it wasn’t explicitly titled as one. Anchorage and MARAD also signed a second MOU in 2011 to “more substantively involve” city and port officials in the project, the 2011 memorandum states. Municipal attorney Jason Smith said the MOUs were used in a manner similar to the countless other contracts the federal government enters into in that at its core it contained “consideration,” or one thing in exchange for another. “Consideration, at its most basic, is a promise for a promise and that is exactly what both the 2003 MOU and the 2011 MOU demonstrate. There is no dispute because MARAD admits it agreed to provide the services of federal project oversight, contract management and administration of funds to the Municipality of Anchorage,” Smith told Judge Damich. In exchange for oversight, Anchorage agreed to help fund the project, Smith said. He repeatedly pointed to a common contract clause also found in both MOUs that allowed MARAD to withhold 3 percent of all project funding for administrative costs the agency incurred from managing the project. The administrative fee paid the salaries of contractors working on multiple projects, covered intra-government audit costs and other ancillary expenses, according to Smith. Phillips countered that MARAD actually withheld only $3.2 million for its administrative costs — just more than 1 percent of the total spend — and that money all came from the $140 million federal contribution to the project. A true 3 percent administrative fee would’ve been more than $9 million, Phillips noted. “We’re saying no fee was paid to retain services and Anchorage didn’t actually retain MARAD’s services,” Phillips said. “The 2003 MOU was merely a means by which MARAD implemented its statutory obligation from Congress to administer the project,” he added later. However, Smith rebutted that in his closing arguments by noting MARAD used state and port money in part to secretly settle two contract disputes with ICRC in 2012 and 2017 totaling $15.4 million. According to accounting records submitted by government attorneys, MARAD paid approximately $9 million of state and port money to ICRC 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 municipality wishes that the government had restricted itself to 3 percent of the state (and) municipal funds,” Smith said, adding that Anchorage officials only learned about the 2017 settlement through disclosure of lawsuit-related documents last December. Federal attorney Phillips also argued more broadly that MARAD was not under contract with the Municipality of Anchorage because the agency derived no tangible benefit from the project. The federal benefits, he stressed, were indirect and went to the Department of Defense, as the final design included added developments to account for the military’s needs. Among those was an access road built between the port and nearby Joint Base Elmendorf-Richardson to allow for direct troop and equipment transports without using public roads. Another part of the expansion portion of the project was adding dock space requested by the military. Unique project Former port finance administrator Cheryl Coppe testified that she helped coordinate MARAD’s involvement in the project and agency officials discussed its military uses. But they also saw it as a “demonstration project” to prove up the agency’s project management chops, according to Coppe. “It was a first-of-its-kind project; the Maritime Administration had never before been involved in port infrastructure development. They had never been involved as a federal lead agency, unlike their sister administrations in the DOT,” Coppe testified in questioning from Smith. Congress subsequently tasked MARAD with marine infrastructure projects in Hawaii and Guam after MARAD took control of the Anchorage port work in 2003. A 2013 DOT Inspector General’s audit of the projects concluded that problems arose in the Anchorage and Hawaii projects due to the agency’s narrow interpretation of its responsibilities. “Rather than take on a comprehensive role in developing and overseeing the port infrastructure projects, MARAD’s main role has, until recently, been limited to obligating and distributing funds to contractors for project tasks, such as project oversight, program management, engineering, design, and construction,” the 2013 IG report states. Failing to draft independent cost estimates — a step required by general federal and U.S. DOT regulations — could also have led to cost overruns at Anchorage, Hawaii and Guam, the report states further. Under cross examination by MARAD attorneys, Coppe said it was assumed before federal money became available that only port and state funds would be used on the project. She said city officials — with the help of Alaska’s congressional delegation — went to MARAD for quicker procurement and overall project development once it became clear federal money could be used. MARAD’s attorneys added that even if the military did garner benefits from the project they were indirect and minimal; but Smith countered that MARAD debunked that argument itself. “There’s no dispute that the military gained direct benefits as a result of this contract arrangement. We know it’s undisputed because MARAD all the way up until July of 2019 bragged about all of these benefits on its website and blast it out to the general public,” Smith said in his closing arguments. He claimed statements promoting the Anchorage port project on MARAD’s website were taken down at the behest of the agency’s attorneys. Judge Damich did not indicate when he would rule on the government’s motion for summary judgment, which was the impetus for the two days of arguments and witness testimony. Municipal attorneys have said they’re hopeful the case can reach a bench trial sometime this year. Elwood Brehmer can be reached at [email protected]

$15M Furie sale on hold over dispute with winning bidder Hendrix

John Hendrix was poised to purchase Furie Operating Alaska LLC after winning a December bankruptcy auction for the Cook Inlet gas producer with a $15 million bid, but initial negotiations to close the sale appear to have hit roadblocks, leading the company and its lenders to work on other arrangements, according to court records. A longtime oil industry professional and adviser to former Gov. Bill Walker, Hendrix sought to purchase Furie through his newly formed company Hex LLC. While Hex won the Dec. 5 auction, an apparent misunderstanding or disagreement over the structure of the sale prevented the company from meeting deposit deadlines and finalizing the security purchase agreement for Furie. Hendrix was general manager of Apache Corp.’s operations in Cook Inlet prior to working in the Walker administration. Houston-based Apache left Alaska in 2016 as the company prioritized its global operations during the bottom of the downturn in oil prices. According to a court notice filed Feb. 20 by Hex attorney David Bundy, the auction was advertised as an asset sale but conducted as an equity sale to keep Furie in control of its Inlet operations and eligible to receive outstanding refundable tax credit payments from the state. Uncertainties stemming from a royalty claim filed by three minority owners in the state leases that Furie operates are alleging collectively shorted them an estimated $50.7 million also prevented Hex from obtaining financing for the sale, according to Bundy. “Until that (royalty) issue was resolved, Hex could not forecast its future income and expenses and lenders were unwilling to commit,” Bundy wrote, adding that Furie leaders were not willing to extend Dec. 24 and Jan. 10 deposit deadlines laid out in the auction terms. Attorneys for Furie and its primary lenders claim in separate court filings that Hex did not negotiate “in good faith” during the process, an allegation Bundy disputes. According to the Feb. 20 filing by Bundy, Furie was continually informed of the challenges Hex encountered while trying to close the sale. He said in a brief phone call that discussions to resolve the situation are ongoing but referred further questions to Hendrix. Hendrix and Furie leaders did not return calls seeking comment in time for this story. Furie operates the Kitchen Lights Unit in central Cook Inlet and currently has contracts to supply Homer Electric Association, or HEA, and Enstar Natural Gas. Furie also signed a contract with Chugach Electric Association in 2017 to supply the Anchorage electric utility with firm gas shipments beginning in 2023. Texas-based Furie filed for Chapter 11 bankruptcy protection Aug. 9 in federal Bankruptcy Court for the District of Delaware. According to the company’s bankruptcy petition, Furie owed lenders approximately $440 million when it filed for Chapter 11 protection and was also owed roughly $105 million in refundable tax credits from the State of Alaska. Furie officials estimated the value of the company’s assets at between $10 million and $50 million in their initial bankruptcy filings. The financial challenges were nearly continuous for the company, which had net gas sales of $25.4 million and absorbed a net loss of $58.5 million in 2017, according to the bankruptcy filings. The situation worsened in 2018 when the company sold $42.8 million of natural gas but took a loss of nearly $152 million. Furie lost $21.4 million in the first quarter of 2019, when a freeze-up in a gas production pipeline kept the company from supplying HEA and Enstar with gas for more than a month. Once gas deliveries resumed, Furie was only able to supply Enstar with less-than-contracted amounts for several months as well. The utilities purchased gas from other area producers and drew on reserves stored in the Cook Inlet Natural Gas Storage Alaska facility commonly known as CINGSA. The company installed the Julius R platform in the Kitchen Lights field in 2015, which at the time was the first new development platform the Inlet built since the 1980s. Hex’s struggles to close the auction sale pushed Furie to turn to an “acquisition by foreclosure” with Kachemak Exploration LLC, a newly formed company owned 50-50 by New York-based Melody Capital Partners LP and GFR Holdings LP of Dallas. Melody Capital Partners was one of several lenders that collectively loaned approximately $244.5 million to Furie, according to the original bankruptcy filing. Attorneys for Furie and Kachemak Exploration filed a bankruptcy reorganization plan with the court Feb. 26, which indicates the $50.7 million in royalty working interest owner claims have been settled for $500,000 in total. Furie officials said in 2017 they planned to work on developing oil prospects in the Kitchen Lights gas field, but those plans were largely scuttled because of the state’s delay in repaying millions of dollars in oil and gas tax credits the company earned for its previous work, according to the company’s filings with the state Division of Oil and Gas. Elwood Brehmer can be reached at [email protected]

‘Historic’ Railbelt electric grid legislation on the move

Lawmakers are moving forward with legislation culminating years of work to better align Alaska’s Railbelt electric utilities in an effort to maximize the efficiency of their interconnected system. Senate Bill 123 was passed out of the special Senate Railbelt Electric System Committee Feb. 26 and testimony on the long-awaited bill was promptly heard in the Finance Committee March 3. Similarly, House Bill 151, an identical version of the Senate legislation moved from House Energy to the Resources Committee Feb. 26 as well. The bills seek to codify the work that the Railbelt electric utilities have done at the behest of the Regulatory Commission of Alaska to better integrate the long-term planning of the six utilities and provide a consistent path for renewable power producers to access the regional transmission system. Matanuska Electric Association spokeswoman Julie Estey told the Senate Finance Committee that it is a “historic time” for the utilities that can’t be missed. “There is unprecedented alignment around this solution, not only from the utilities but also with independent power producers and other stakeholders, with the RCA, with two very diverse legislative energy committees and we hope that this committee will support the passage of SB 123,” Estey said. At a high level the bills would mandate the utilities form an electric reliability organization, or ERO, that would oversee implementation of system-wide reliability standards and coordinate long-term planning amongst the utilities. It also gives the RCA explicit authority to rule on the necessity of large infrastructure projects, such as generation plants, that utilities may pursue. It is the result of nearly five years of work since the RCA issued a sternly-worded letter to the Legislature in 2015 that was largely critical of the utilities’ efforts to work together on broader generation and transmission planning as well as day-to-day power sales that could greatly improve the overall regional electric system efficiency. Senate Finance co-chair Natasha von Imhof, R-Anchorage, noted the utilities are ultimately responsible to their individual members but said the legislation should help facilitate streamlined operations between the utilities and provide an avenue for sharing backup generation, known as spinning reserve, which can be a large cost to utilities. “To me, this is a long time coming and should have significant benefit for Alaska ratepayers,” von Imhof said. The primary end goal for many stakeholders is to achieve “economic dispatch” across the entire Railbelt — from Homer to Fairbanks — or consistently maximizing use of the most efficient power generation through near-constant power sales between the utilities. The RCA’s 2015 letter characterized the Railbelt system as “fragmented” and “balkanized” at the time, as utilities focused on their own service territories with less concern about what was happening throughout the region. Some critical observers of the Railbelt electric system contend the six utilities — spread over a large area but with collective demand less than many individual Lower 48 utilities — have overbuilt generation capacity in recent years while ignoring transmission investments that could make it more cost effective to move lower cost power from one end of the system to the other. The 2015 letter notes the utilities had spent roughly $1.5 billion on new generation facilities over the previous five years. Currently, the Railbelt utilities continuously buy and sell power to each other; however, they also each apply their own transmission, or wheeling, tariffs, when power is sent across the portion of the main transmission lines they own. This can lead to situations where tariff “pancaking” disincentives power transactions that could otherwise maximize the efficiency of the system as a whole. Rate pancaking can also kill the economics of otherwise lower-cost independent power projects that aim to sell power to utilities across the grid. As a result, independent power producers, or IPPs, are strong advocates for a single system wheeling tariff that allocates revenue to the participating transmission owners, usually utilities. A memorandum of understanding signed by the utilities Dec. 18 lays out a path for them to set up the Railbelt Reliability Council, which will act as the regional ERO, and directs them to work on solving the pancaking issue. The council will have a board comprised of the six utilities and six other stakeholder members as well as the council’s CEO — in line with the directives in the legislation. It is the broad composition of the council’s leadership, the push to simplify grid access for IPPs and the assurance that the RCA can clearly require collaboration amongst the utilities if the voluntary efforts to form the council fail that has helped garner support for the bills from renewable power advocates. Renewable Energy Alaska Project Executive Director Chris Rose said in written testimony to Senate Finance that the Railbelt-focused legislation will help residents statewide by at a minimum stabilizing electric prices in the region that is the base for calculating the Power Cost Equalization electric rate subsidy statewide. “More efficient and affordable electricity in the Railbelt means more PCE support for rural communities that still rely primarily on expensive, imported diesel fuel to generate electricity,” Rose wrote to the committee. If passed, the bills would not take effect until July 2021 to give the RCA time to draft accompanying implementation regulations and give the utilities time to set up and start the Railbelt Reliability Council. RCA Commissioner Antony Scott testified to the Senate committee that he hopes and expects the structure of the bills means the commission will need to do little to solidify the ERO structure the utilities are working to form through the reliability council. He also clarified that the mandate to establish an ERO would be limited to the Railbelt because there are few other areas in the state that are sufficiently developed to make such an organization necessary or viable. ^ Elwood Brehmer can be reached at [email protected]

Movers and Shakers for March 8

The Bristol Bay Regional Seafood Development Association hired Lilani Dunn, former head of marketing at Orca Bay Seafoods, as marketing director. Dunn joined Orca Bay Seafoods in 2015, helping the brand to be named among the top 20 seafood brands in 2016. Her roles included leading their foodservice, retail, and direct sales marketing efforts. Additionally, Dunn led Orca Bay’s public relations and philanthropic efforts. Dunn brings extensive seafood marketing experience having also previously worked for the retail and foodservice marketing programs at the Alaska Seafood Marketing Institute. Additionally, Dunn is the current vice chair of ASMI’s Domestic Marketing Committee and sits on the board of the Northwest Fisheries Association. Blueprint Alaska hired Tony Spiroski as a junior account executive. Spiroski has a bachelor’s degree in environmental studies with focuses in sustainability and design and humanities from the University of Oregon. He has five years of experience working as a marketing and communications manager in Alaska’s travel and tourism industry. He currently serves on the executive boards of the Anchorage Chamber of Commerce’s Young Professional Group, Alaska Young Republicans, and the Alaska Travel Industry Association’s Anchorage Chapter.

OPINION: Rush to judgment on recall results in ridiculousness

Perhaps the most monumental case to ever reach the Alaska Supreme Court is turning into a monumental you-know-what show. The decision on whether any or all of the allegations against Gov. Mike Dunleavy are sufficient to allow the first recall of a statewide official will establish a consequential precedent, but the case so far has been marred by rushed rulings and subsequent reversals driven by an artificial political timeline rather than the carefully measured judicial review it demands. To be sure, there are statutory deadlines that must be met as far as procedures for certifying signatures or setting an election; the judicial branch is bound by no such constraints, however, and yet its officers appear determined to squeeze this process into a timeframe that would fit into an episode of Judge Judy as they bend over backward to accommodate the political wishes of the recall proponents who believe they should be able to choose the timing of an election. Starting with Superior Court Justice Eric Aarseth’s decision to rule from the bench after oral argument on Jan. 10 — which came as a surprise to both sides — this case has devolved into a whipsaw of hasty actions that frankly should embarrass the system. Let’s review: After taking a 10-minute recess, Aarseth issued a 20-minute decision allowing all but one allegation to stand. He then told the Dunleavy defense he was not inclined to grant a stay of signature gathering. Stand Tall With Mike attorney Brewster Jamison asked if he should make his stay request right then to have it on the record, but Aarseth told him to put it in writing. After the stay request was submitted, a surprise decision came out from Aarseth’s office granting it. But it turns out that was a mistake from literally phoning in his ruling, and Aarseth withdrew the order the next day much to the joy of the recall proponents. (one can only wonder if Aarseth would consider his mistake to rise to incompetence as he did for Dunleavy’s Medicaid veto he allowed to stand in the recall petition) But then Aarseth heard arguments for the stay and reinstated his mistaken ruling. Subsequently the Supreme Court reversed Aarseth to allow signature gathering, and went on to tell the parties it could also rule from the bench after it hears arguments on March 25. Stand Tall With Mike took both the reversal of the stay and the expressed intent for a quick decision as indicative the recall would go forward no matter what, and promptly withdrew from the case. But we’re not done with the twists and turns. On their way to the door, Dunleavy’s defenders also questioned Chief Justice Joel Bolger’s impartiality in the case based on his involvement and public statements over allegations included in the recall petition. The Supreme Court quickly issued a statement saying Bolger had no conflicts requiring recusal while inviting either side to ask for it if they chose. Then Bolger apparently refreshed his memory of his own comments regarding aspects of the case and recused himself anyway, making both STWM’s decision to abruptly withdraw and the Court’s initial statement of nothing-to-see-here look ill-considered in hindsight. The devolution of this case into farce is entirely the fault of the judges who have presided over it so far. The recall proponents are not entitled to expedited review, nor are they entitled to an election at the time of their choosing, yet the judicial branch has apparently decided they are and now has egg covering its face as a result. Andrew Jensen can be reached at [email protected]

GUEST COMMENTARY: Program on chopping block is vital to workforce development

You may have heard that the environment and society bachelor’s of science program and the Department of Geography and Environmental Studies at University of Alaska Anchorage has been recommended for deletion by the dean of the College of Arts and Science, along with a number of other programs. You might think that the deletion of an environmental program in the University of Alaska system is a good, or at least neutral, thing for people who want to see the natural resources of Alaska developed, but you would be wrong. The environment and society program at the University of Alaska Anchorage is not a training ground for “greenies” engaged in activism focused on saving polar bears. The program is a curriculum aimed at developing environmental professionals who know how to do environmental science and, more importantly, understand how environmental law is applied through the National Environmental Policy Act. When the major was developed just more than 10 years ago, we consulted with and listened to professionals working in the environmental planning field and developed a curriculum that fit the needs of the industry. Our students do take the traditional sequence of environmental science and studies courses, but once they hit their upper level work, they are focused on a set of very specific skills and knowledge that will allow them to help guide the development of the state. They learn how to use geographic information systems, build communication skills necessary in the environmental impact assessment process, study current environmental planning law, and build a focused concentration in a specific field of scientific study. This is all put into practice in two professional development courses and a required internship. And they do this, led by a small team of three faculty members who teach about environmental issues in a fair and balanced manner, allowing for open discussion of the many ways Alaskans value our environment and its rich natural resources. It should come as no surprise that the graduates of our program have found good environmental jobs (according to the State of Alaska, Department of Labor and Workforce Development, as many as 180 positions open annually in fields our major prepares students to work in, or enough to support small, effective environmental programs at UAA, UAF, and UAS) working for agencies, non-profits and private industry. We’ve tracked the progress of many of our graduates. Here’s just a sampling of the places they work and the types of jobs they get: natural resource specialist, State of Alaska, Division of Oil and Gas; environmental science and engineering officer, U.S. Army; environmental program specialist, Alaska Department of Environmental Conservation; land management specialist, Mat-Su Borough; GIS technician, Hilcorp. The news is good. Our students are successful and they are filling environmental and resource jobs in the state, even though our major has only been in existence for a decade. This is what we want and need in Alaska: young Alaskans, being trained for environmental fields in an unbiased way, helping to chart the future of the state and the development of its resources. Now the university is considering cutting this program so that we can go back to previous practices with environmental jobs being filled by people who come from and are trained Outside. Help us to reverse this decision! Please contact Chancellor Cathy Sandeen at UAA by email ([email protected]) and tell her that you want this program retained and enhanced and that the environment and society bachelor’s degree program plays a vital role in ensuring that Alaska’s natural resources are developed by Alaskans on our terms. From March 9 to 18, UAA will hold an official feedback period specifically for the public to make comments. Dorn Van Dommelen is a professor of geography at the University of Alaska Anchorage.

AGDC board taps longtime VP for top spot

The Alaska Gasline Development Corp. board of directors has promoted longtime Vice President Frank Richards to lead the agency. The board unanimously approved Richards’ appointment to AGDC president, which is effective March 1, during a brief Friday morning meeting. Richards will replace Interim AGCD President Joe Dubler who announced his retirement Feb. 20. Dubler will remain with AGDC through May 2 to continue supporting the roughly $40 billion Alaska LNG Project that is the corporation’s primary effort through the transition, he wrote in an email to AGDC staff. Dubler asked staff to congratulate Richards, who has been with AGDC for eight years. “We’re in capable and familiar hands for the road ahead through the permitting process and steps beyond,” Dubler wrote. The state-owned corporation is nearing the end of a roughly three-year permitting process with the Federal Energy Regulatory Commission to secure the key construction license for the Alaska LNG Project. A civil engineer by trade, Richards has long served as a senior vice president of program management at AGDC leading the design and permitting of both the Alaska LNG and the in-state Alaska Standalone Pipeline projects. Richards thanked Dubler for his work and said he hopes the work AGDC is doing to optimize the project will ultimately help improve its economics and lead to construction. “I look forward to the challenge ahead of us,” Richards told the board. Richards will be paid $350,000 per year as president of AGDC, in line with Dubler’s salary, he told the Journal. FERC is scheduled to issue the final environmental impact statement for Alaska LNG in early March; a final ruling on the license is expected later this spring. Last summer, BP and ExxonMobil announced they would contribute $10 million each and provide technical assistance to help the state complete the FERC process. AGDC Board Chair Doug Smith echoed Dubler’s sentiment in a formal statement issued following the meeting. “AGDC is fortunate to have someone of Frank’s caliber who is deeply familiar with Alaska LNG (and) ready to take the helm. The board thanks Joe for his service and leadership. Under Joe, Frank and the AGDC team we have made tremendous strides towards realizing Alaska’s natural gas potential, and I’m confident that progress will continue as Alaska LNG advances through the permitting process,” Smith said. Richards will be the third leader of AGDC since the start of 2019. Dubler took over in January 2019 after Gov. Mike Dunleavy made sweeping changes to the AGDC board of directors. The board then quickly acted to fire then-President Keith Meyer, who championed former Gov. Bill Walker’s vision for the state to lead the Alaska LNG Project. Since then, AGDC has ended its active marketing to potential Alaska LNG customers and cut 60 percent of its staff to focus on securing the FERC license. Under the Dunleavy administration the corporation has been directed to transfer or sell the project to a private entity for development once the construction once FERC approves the license. Elwood Brehmer can be reached at [email protected]

Commerce Dept. allocates $35M for P-cod, Chignik fisheries disasters

Fishermen affected by the 2018 Pacific cod and Chignik sockeye disasters will soon have access to about $35 million in relief funding. Secretary of Commerce Wilbur Ross allocated about $65 million to fisheries disaster relief, about $35 million of which is for Alaska, according to a Feb. 27 announcement from the National Oceanic and Atmospheric Administration. Within Alaska, about $24.4 million will go to the Pacific cod fishery disaster and about $10.3 million to the Chignik sockeye fishery. The funding was appropriated when Congress passed the 2019 Consolidated and Supplemental Appropriations Act. Fisheries disasters can be declared under the Magnuson-Stevens Fisheries Management and Conservation Act when natural disasters or management actions significantly negatively impact stakeholders’ ability to participate in a fishery. In the case of the Pacific cod fishery in the Gulf of Alaska, scientists are linking the decline in stock abundance to environmental causes; in Chignik, the salmon decline seemed to be linked to poor environmental conditions for sockeye that summer. Both disaster requests had already been granted, but the amount of funding that the fisheries would have allocated to them was yet to be determined. The National Marine Fisheries Service determines how much funding to allocate to fisheries based on commercial revenue loss information. Affected fishermen will be able to apply for funding to help with infrastructure projects, habitat restoration, state-run vessel and fishing permit buybacks, and job retraining, according to the announcement from the National Oceanic and Atmospheric Administration. Nearly two years have passed since both disasters. At the beginning of 2018, the North Pacific Fishery Management Council cut Gulf of Alaska Pacific cod total allowable catch limits by 80 percent in response to declining biomass. Then-Gov. Bill Walker requested the disaster declaration in March 2018, citing the direct impacts from loss of revenue in the fishery and indirect impacts such as reduced fuel sales and supplies. This year, the same P-cod fishermen in the Gulf of Alaska are facing a complete fishery shutdown, again due to declining biomass. The Chignik area felt the impact in summer 2018 when so few sockeye salmon showed up in the lagoon and Chignik River that commercial fishermen essentially didn’t fish all summer—they harvested an estimated 128 sockeye in 2018 compared to a five-year average of about 1.3 million, according to Walker’s November 2018 letter requesting the disaster declaration. In a rural community with little cash economy, the commercial fishery provides essential cash flow so residents can purchase items like heating fuel. “These funds help impacted fisheries recover from recent disasters and make them more resilient to future challenges,” Ross said in the NOAA release. “This allocation supports the hard-working American fishing communities suffering from impacts beyond their control.” It’s typically a significant amount of time between a fisheries disaster and the actual awarding of funds. For instance, the 2016 pink salmon disaster in the Gulf of Alaska was approved for disaster status in January 2017, but funds didn’t materialize for distribution until 2019 and are still being distributed in 2020. The U.S. Senate is currently considering a bill, S. 2346, that would streamline some of the regulations and processes for determining a fishery disaster and getting funding out to affected stakeholders. The bill was last heard in November 2019, when an amendment was requested by the Committee on Commerce, Science, and Transportation. The funds will be managed by the Pacific States Marine Fisheries Commission. Because the funding for these disasters has already been appropriated, NOAA can start working with the state agencies on distribution, said Karina Borger, communications director for Sen. Lisa Murkowski. “With NOAA’s approval today — NOAA can begin immediately working with the state-level agencies to get the funding moving to fishermen & affected communities,” she wrote in an email. Alaska’s congressional delegation released a joint statement Thursday thanking NOAA for the allocation and encouraging the agency to continue its scientific work to determine drivers of “resource fluctuations.” “Alaska’s fisheries are vital to our state, coastal communities, and families,” they said in the statement. “By restoring these losses, our federal government is following through not only on the commitment we made to Alaska’s commercial fisherman, but also to their families, processors, and coastal communities who were hit hard by these disasters. The economic impact for fisherman and their communities could have been detrimental. This economic relief will go a long way.” Elizabeth Earl can be reached at [email protected]

House bill would establish health care payment database

Amid the ongoing effort to control Alaska’s ballooning health care costs, the Legislature is considering a bill that would establish a central repository for pricing data. House Bill 229, sponsored by Rep. Ivy Spohnholz, D-Anchorage, would establish an all-payer claims database for Alaska, along with the Alaska Health Care Transformation Corp. to manage it. Insurers in the state would be required to work with the corporation, which would be independent from the state government, to report all claims paid for health care services with the goal of making the information more transparent. Health care costs are higher in Alaska than anywhere else in the U.S. and have grown at a faster rate per year over the past three decades than the U.S. average, increasing about 7.9 percent per year, according to the bill. Approximately 13.6 percent of Alaskan adults reported not being able to see a doctor because of costs in 2018, according to the Alaska Department of Health and Social Services. The high costs are in part due to Alaska’s geography and limited competition, and legislators have been debating how to control those escalating costs for the past decade. “Understanding the underlying cost drivers and market pressures of the cost of health care is important to developing policies and solutions,” Spohnholz wrote in her sponsor statement for the bill. “An Alaska Health Care Transformation Corporation tasked with establishing an (all-payer claims database) will provide a foundation for ongoing analysis, development, implementation and support for health care policy. Payers would report medical claims, pharmacy claims, dental claims and eligibility information to the database, said Sandra Heffern, owner of consulting firm Effective Health Design and the project coordinator for the Alaska Health Care Transformation Project. The database would include information from private insurers that other data sets, such as Medicare or Medicaid payments, do not currently include. The APCD would provide apolitical data that would inform policy recommendations, she said. One of the thorny things about incentivizing competition in the health care industry is that even determining what a service costs can be a complicated question. Providers have varying charges based on an individual person’s insurance, and the itemization of services can be unclear until the bill arrives. In 2017, the Municipality of Anchorage passed a health care cost transparency ordinance that required providers in the municipality to disclose cost information to patients who requested it. In 2018, the state Legislature passed a similar law, slated to go into effect in January 2019. However, DHSS announced it would not impose penalties on providers or health care facilities by that date, giving them more time, with the expectation they will comply with the law. The project committee that developed the idea for an Alaska APCD began meeting in 2017, the same year the final results for an Alaska Health Care Authority feasibility study were published. However, the two efforts were not connected, Heffern said. Provider stakeholders have been involved in the process from the beginning, as have legislators, she said. “The project grew out of a discussion with senators, representatives, the administration and providers who all wanted to ‘do something’ about reforming the Alaska healthcare landscape,” she said. “The project brought these often disparate voices together to approach a solution from the multiple perspectives of payers, providers, policymakers and patient advocates.” Alaska would join a growing group of states amalgamating data in the hopes of improving transparency about health care service charges and using it to develop policy recommendations designed to control the costs of health care. Nationally, health care spending grew about 4.4 percent in 2018, reaching about $3.6 trillion, and under current law is projected to reach nearly $6 trillion by 2027, according to the Centers for Medicare and Medicaid Services. Alaska’s health care spending was worth approximately $7.5 billion in 2011, and has grown in the nearly 10 years since, according to a University of Alaska Anchorage report. APCDs have been around for some time; Maine, one of the first states to do so, implemented one in 2012. Maryland, another state with a database in effect, has been using its data to establish a baseline for charges to understand cost drivers and costs in the state versus other regions. Sen. Sen. Lamar Alexander, R-Tennessee, introduced a bill in 2019 that, among other changes, would require health insurers to make information like cost estimates available to enrollees through technology. The existence of the database alone may not be enough to drive down costs, but it may help Alaska analyze to how to at least hold down costs—even a 2 percent reduction in the average annual growth rate would save about $150 million, Heffern said. Dr. Norm Thurston, the executive director of the National Association of Health Data Organizations, told the members of the House Labor and Commerce Committee in a Feb. 21 hearing that small states were the first to do these databases, in part because of how complex the health care payer systems are in the more populous states like California and New York. “This traditionally has been a movement coming out of small states and moving into larger states,” he said. “I’m shocked that … New York is in the process of developing one, because of the level of complexity in doing it in those states.” Thurston said many states have chosen to use an outside vendor for the actual technology side of the database, as the solutions already exist and don’t have to be developed by the state itself, but that presents a higher up-front cost. Other states, like Arkansas, built it entirely within state government. The corporation that would manage it would be an independent, state-formed entity with its own governance and structure, like the Alaska Railroad Corp. In the bill’s current form, the corporation would be governed by a council of 17 governor-appointed voting members and four nonvoting. The seats for the voting members would be divided among providers, payers, policy makers, consumers, and state officials from the Division of Insurance and the Division of Retirement and Benefits. The reason the project committee was interested in a third-party corporation managing the database was in part because they wanted to create a “trusted entity” to handle the data that wouldn’t be beholden to the state, Heffern told the committee. “In order to make these types of changes in our health care system, we have to have this kind of information, and there has to be a trusted entity so that everybody in the health care industry would trust what the trusted entity is saying,” she said. The bill has had two hearings and is currently in the House Labor and Commerce Committee. Elizabeth Earl can be reached at [email protected]

Proposed budget seeks increase in homeless service funding

After a back-and-forth over funding for state homelessness services last year, Gov. Mike Dunleavy’s proposed budget would keep the peace by providing about $43 million in funding to various agencies and nonprofits. Approximately $43.5 million is included in Dunleavy’s proposed fiscal year 2021 budget, spread among the Alaska Department of Commerce, Community and Economic Development, the Alaska Department of Health and Social Services, and the Alaska Housing Finance Corp. The proposed funding level would be about a million dollars more than the 2020 fiscal year budget ended up providing to the same agencies. Homelessness is a chronic issue in Alaska, amid ongoing economic strife, substance abuse, mental illness and elevated housing costs. In 2019, Dunleavy’s administration proposed cutting funding for a number of programs that offered shelter and housing for homeless individuals, which led to Anchorage declaring a state of emergency to access extra funding because of the impact of the number of homeless individuals in the city no longer receiving services on the city. The funding was eventually restored by the Legislature, but the concern over how to address the issue of homelessness in the state remained. Over the last 10 years, the number of homeless individuals identified in the state has stayed roughly level, from 1,992 in 2009 to 2,016 in 2018, according to the point-in-time count data from the Alaska Coalition on Housing and Homelessness. The point-in-time counts are taken annually on a single day, and are not comprehensive, but rather meant to capture a snapshot of individuals identifying as homeless at a single time, taken by surveyors contacting as many individuals as they can. Most of the funding is level from the fiscal year 2020 budget, but some have been increased or moved around. For instance, the governor’s proposed budget increases the line item for Alaska Housing Finance Corp.’s homeless assistance program by about $2.75 million, while $2 million would be cut out of the line item for AHFC’s beneficiary and special needs housing program. About $1.5 million would be moved from one AHFC line item into another item for teacher and professional housing as well, with another $250,000 included, according to documents provided by the governor’s office. At the recommendation of the Alaska Mental Health Trust, the House Finance Committee proposed an amendment at a Feb. 18 hearing that would increase some of the AHFC line items as well: the homeless assistance line item would increase from $7.3 million to $8.15 million and the beneficiary and special needs housing program from $1.7 million to $3.7 million, according to legislative documents. The homeless assistance program would see a significant increase from the last fiscal year under the proposed budget, wrote Stacy Barnes, the director of government relations and public affairs for AHFC in an email. In the current fiscal year 2020, the homeless assistance program received about $4.55 million; under the proposed amendment from House Finance, that would nearly double, to $8.15 million. “(The) Homeless Assistance Program provides funds to agencies that provide emergency or transitional housing and/or services to rapidly rehouse those who have been displaced or otherwise prevent homelessness,” Barnes wrote. The same kind of increase would be true for the beneficiary and special needs housing program, which provides funds for planning and construction for nonprofits and developers and may provide for congregate, supportive or transitional housing, Barnes said. Last year, that program received about $1.7 million. Last year presented challenges for AHFC, including the wildfires and earthquakes in Southcentral Alaska, Barnes said. Approximately 41 homes financed by AHFC were affected by the November 2018 earthquake that struck Anchorage and rippled throughout Southcentral Alaska, with 13 of those severely damaged, according to AHFC’s 2019 annual report. However, the overall dividend the corporation was able to provide back to the state based on its mortgage activity, investment activity and federal dollars increased, Barnes wrote. “In spite of all of that, the financial performance of Alaska Housing Finance Corporation is healthy as evidenced by the dividend we pay annually to the state, increasing $6.6 million from FY18 to $45.6 million,” she wrote. “Dividends are often used by the governor and legislature to pay for capital project priorities established by our board of directors, and are based on a calculation in state statute that reflects 75 percent of our annual income.” The Department of Commerce, Community and Economic Development administers a pass-through federal grant that provides for community assistance projects, which will ultimately go by grant to Rural Alaska Community Action Program, or RurAL CAP. The funding goes to assist housing programs serving low- and middle-income households as well as neighborhood programs, among other services. RurAL CAP could not be reached for comment on the proposed funding levels. The amount is determined by population and appropriation by Congress, said Glenn Hoskinson, the special assistant to the commissioner for the Department of Commerce. The amount named in the governor’s proposed budget is $3 million, slightly more than the approximately $2.6 million provided in fiscal year 2020. “The funding will be determined through the budget process; as of yet we do not know the funding level for FY21,” she said. “Our department will work with RurAL Community Assistance Program (CAP) to develop the State of Alaska CSBG State Plan for FY21 funding.” In addition to the Commerce Department funding, the Department of Health and Social Services administers part of the funding through programs such as emergency youth shelter services and opioid recovery housing. The DHSS did not respond to requests for comment on the funding. ^ Elizabeth Earl can be reached at [email protected]

FISH FACTOR: Dutch Harbor still No. 1 in landings; Naknek No. 2 in value

Dutch Harbor remained the top fishing port in the USA for the 22nd year in a row with 763 million pounds crossing the docks in 2018 valued at $182 million. And Naknek ranked as the nation’s second-most valuable port for fishermen with landings worth $195 million. (Naknek also ranked No. 8 for landings at 191 million pounds.) Empire-Venice, La., held the second spot for fish volume (569 million). The “Aleutians” was close behind (539 million), thanks to Trident’s plant at Akutan, the largest processing facility in North America. Kodiak fell to fourth place with landings dropping from 530 million pounds to 391 million in 2018. Those are just a few of the gems in the annual Fisheries of the U.S. Report, described as “a yearbook of fishery statistics on commercial landings and values, recreational fishing, aquaculture production, imports and exports and per capita consumption” by Cisco Werner, chief scientist at NOAA Fisheries who gave highlights at a Feb. 21 press conference. “U.S. fishermen landed 9.4 billion pounds valued at about $5.6 billion, an increase of $150 million, or 2.8 percent from 2017. That’s on par with recent years with economic benefits both up and down depending on the seafood supply chain,” Werner added. New Bedford, Mass. claimed its 19th consecutive title of bringing in the most valuable catch at $431 million, due mostly to the sea scallop fishery. Other Alaska related highlights: Alaska provided 58 percent of U.S. wild seafood (5.4 billion pounds), more than all the other states combined. Alaska also led all states in the value of landings at $1.8 billion, 32 percent of the total U.S. value. Alaska accounted for 97 percent of U.S. salmon landings; the average Alaska price per pound for all species was 99 cents, an increase of 34 cents from 2017. The 2018 average price paid to U.S. fishermen across the board was 59 cents per pound compared to 55 cents per pound in 2017. The six highest value U.S. seafoods were lobster ($684 million), crab ($645 million), salmon ($598 million), scallops ($541 million), shrimp ($496 million) and Alaska pollock ($451 million). The value of U.S. farmed seafood totaled $1.5 billion in 2017, about 21 percent of the value of total seafood production. The top marine aquaculture species were oysters, clams and salmon. As much as 85 percent to 95 percent of seafood consumed in the U.S. comes from elsewhere. For 2018, the U.S. imported $22.4 billion worth of edible seafood and exported $5.6 billion, a $16.8 million trade deficit. Production of U.S. seaweed increased 186 percent from 2016-17 to (just) 69,053 pounds valued at $68,698. Data indicate the rapid rise in farmed seaweed production will continue. (Kelp production from Kodiak reached nearly 90,000 pounds in 2018.) Americans ate slightly more seafood – 16.1 pounds, the highest per capita consumption since 2007 and a 0.1-pound increase from 2017, but still well below the government’s recommendation to eat two seafood meals every week. Kodiak kelp goes retail Dried kelp from Kodiak is the first Alaska seaweed poised to make a splash at hundreds of retail stores across the U.S. It’s the debut product for Kodiak growers in their partnership with Blue Evolution, the California-based company that has pioneered the kelp industry in Alaska. The strips of dried ribbon and sugar kelp can be rehydrated or broken up and tossed in salads, rice or broths. The new product’s snazzy, biodegradable packaging promotes the nutritional power and purity of Alaska kelp and support for local, family owned farms. Founder and CEO Beau Perry said of all Alaska regions, Kodiak fits the bill. “Geography, currents, growing space, local stakeholder attitudes, the large fleet, logistics capacity, and we want to be accessible to processing for fresh delivery of raw material. Kodiak ended up ranking the best despite it being very remote, even by Alaska standards,” Perry said. Kodiak growers will expand from 40 acres to 100 acres this year with more in the works around the island. Perry said drying kelp is a challenge in Alaska because large volumes are landed in short periods of time and the bulk of the pack is going into a completely new market. “I would say well over 90 percent of our product is going into a blanched frozen product that you may not see on the shelves, but that we’re starting to move to high end restaurants, food service and manufacturing down in the Lower 48,” Perry said. Alaska’s fledgling kelp industry faces a lot of organizational challenges in the short term, Perry added, but he believes the possibilities are limitless. “I think Alaska can be one of the great seaweed producing regions on the planet and that it will have a transformative effect within the state,” Perry said. “That’s the vision we’re pursuing. I’m sure we won’t be alone in that, but we definitely have put ourselves in a leadership position and we want to spread that vision and build a business around it. Because if we do it right, it could be a very big deal indeed.” Find store locations or order the Alaskan dried kelp online at Blue Hatchery updates Salmon that get their start in Alaska hatcheries are intended to enhance wild runs and the program will again be featured during the Board of Fisheries final meeting next month in Anchorage. A hatchery committee was formed last year to better inform the Board on operations of the state’s 25 private, nonprofit facilities. “It’s to educate themselves about the hatchery program and if hard decisions have to be made about allocations or where fish can be released or harvested, it’s to their benefit to understand the program and the science behind it so they can make informed decisions,” said Steve Reifenstuhl, general manager of the Northern Southeast Regional Aquaculture Association. On March 6, a 12-member science panel will present to invited board members and to the hatchery committee, which will hold its meeting the following day. Reifenstuhl said most of the presentations will come from state managers on regulations and oversight and what the hatcheries produce each year. “For the coastal communities the hatchery program is a lifesaver for many of the people who fish for a living. It gives about 25 percent of the salmon harvest and that supplementation is a critical component for their business model,” he added. Critics of the hatchery program claim that too many tiny salmon are released each year and pose threats to the purity and health of wild stocks. The science panel will update research that has been underway since 2013 on pink salmon in Prince William Sound and chums in Southeast that aims to answer those questions. Reifenstuhl said the salmon study runs through 2024. “Why it takes so long is that we are looking at two full life cycles of chum salmon, which is roughly five to six years, and we’re also doing two full life cycles of pink salmon which just ended last year. Those results should be out by year’s end,” he said. Alaska’s hatcheries in 2018 contributed 34 percent of the statewide commercial salmon harvest and 30 percent of the dockside value. The hatcheries are funded by a fishermen’s tax and sales of a portion of the returning fish and receive no state dollars. You can tune in online to hear both the March 6 presentation and the hatchery committee meeting on March 7. Laine Welch lives in Kodiak. Visit or contact [email protected] for information.

GUEST COMMENTARY: Youngest Alaskans deserve the educational opportunities to succeed

In this legislative session, we have set out to build upon past efforts to transform how we view public education by providing new opportunities for our youngest Alaskans. To achieve success, we know that all of us — the Legislature, the governor, education leaders, and the Alaskan public — must put aside political labels and work across party lines. If anything should transcend politics, it’s investing in our future leaders. We see three primary pillars where the Legislature can have a direct impact on education: (1) Establish and fund universal, voluntary pre-Kindergarten with a strong K-3 reading policy; (2) provide continued opportunities for teachers to advance their knowledge; and (3) establish forward-funding of education as routine policy. The markers for a child’s adult success develop early in life. Science underscores that how we use our brains in our crucial early years has a direct impact on how successful we are as adults. Research tells us that those who have a high-quality preschool experience succeed academically and professionally. By investing in our youth when they are young, we reduce the financial burden of remedial education, public assistance, and criminal justice services when they are older. Research further reinforces that if our investment in high-quality pre-K is to truly succeed, it must be coupled with a strong commitment to reading and student growth. That is why this year, with the support of educational leaders in our communities, the Department of Education and Early Development, the governor, and other state leaders, we introduced Senate Bill 6, known as the Alaska Reads Act. In addition to universal voluntary pre-K, this bill includes a strong reading component, significant support for schools that are struggling, and evidence-based reading instruction. We also recognize that our teachers have not received the support or training they need from the state for far too long. Partially because of this lack of support, we are now experiencing historically low teacher retention. Teachers stay in their jobs when they are supported, properly trained, and integrated into the community. It is imperative that we address the systemic factors of teacher attrition and refocus our efforts on teacher retention and recruitment. That is why we supported an amendment from Sen. Mia Costello to the Alaska Reads Act establishing a Teacher Retention Task Force. In 2018, the legislature took the lead and fully funded public education for two years, providing stability and predictability for our students, parents, and teachers. Months after passing the budget, Alaska’s attorney general challenged the legislature’s authority to forward fund. Late last year, the Superior Court of Alaska reaffirmed the Legislature’s constitutional authority to forward fund. Now we are looking for ways to ensure stability and predictability of education. Because of this, a bipartisan group now supports Senate Joint Resolution 9, which seeks to amend Alaska’s constitution to require the legislature to early fund public education as a priority. This will assist districts in recruiting teachers, help them plan their budgets, and provide districts an opportunity to prepare for the upcoming school year. Ensuring funding predictability gives our schools the tools necessary to focus on what really matters: educating our future leaders. Together these components — pre-K supported by strong evidence-based reading in early grades, support to retain and recruit our teachers, and early funding of education to provide stability and predictability — are necessary to advance high-quality public education in Alaska. Some things are more important than our political disagreements, and the ability to provide the best education for our children is one of those. We are proud to say we are working together on these issues because our kids deserve the best opportunities to succeed. Tom Begich, D-Anchorage, represents Senate District J.

Alaska Chamber begins year with new energy for business advocacy

Alaska lawmakers convened in Juneau late last month and the Chamber kicked the session off with face-to-face meetings with the governor, members of the administration, and nearly every legislator. This year’s Chamber team combines fresh energy with some familiar faces. At the top of that list, and leading the Chamber’s efforts, are Kati Capozzi and Allen Hippler. Alaska Chamber President and CEO Kati Capozzi is a career advocate for Alaska business. Capozzi took the helm at the Chamber in 2019. In many ways, assuming leadership of Alaska’s premier business association is a homecoming for Capozzi. She once led the Chamber’s advocacy events and communications before focusing on resource development issues and ballot initiatives. Capozzi brings a statewide network of contacts along with a wealth of regulatory and policy knowledge. Allen Hippler, vice president at Northrim Bank and longtime Alaska Chamber board member, took over as chairman at the Chamber’s annual fall forum last October. Hippler has served as treasurer, on the Executive Committee, and as the Legislative Affairs Committee Chair. Kati Capozzi, President/CEO, Alaska Chamber I love that we start the year with business leaders from across the state converging on Juneau. The challenge this year is to advance business issues with a legislature fraught with how to address the lack of a fiscal plan. Not to mention what should prove to be an eventful election year. But we have the team to do just that. I think the Alaska Chamber will be able to make great strives this year. We have sharp, hardworking legislators on both sides of the aisle and a governor that’s willing to listen to the business community and is bullish on growing the economic pie. We have an Alaska delegation in Washington that is fighting and winning on resource and regulatory issues here at home. No other state is enjoying the federal ‘wins’ like Alaska is right now. I’m excited for 2020. Allen Hippler, Board Chair, Alaska Chamber The Alaska Chamber’s mission is statewide, and we take that mission very seriously. We have a number of meaningful positions that impact every employer in our state. Look at our natural resources, for instance. We’ve been working to ensure that Alaska has the best, most scientifically sound, permitting process in the world. I see the tremendous impact of our natural resources when I visit my family in the Valley. I see it with my friends and previous coworkers in bush Alaska. And I see it with the businesses coming into the bank. Alaska is one of the few states that doesn’t have a personal finance or economic education requirement at the K-12 level. Providing access to financial learning is a business issue, it’s a social welfare issue, and it’s a workforce development issue in every Alaska community. It’s an issue that businesses, educators, families, and legislators can all get behind, and there’s no reason why we can’t get that requirement in place this year. What do I want to accomplish as board chair? I want visibility. Front-of-mind awareness. I want the economic issues that let families live and work in Alaska to be the most discussed topics in the legislature and in the media.” ^ For a complete review of the Alaska Chamber’s 2020 advocacy platform, visit


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