GUEST COMMENTARY: UFA disappointed with celebration of losses for commercial fishermen

Gov. Mike Dunleavy’s state-run Facebook page recently published a message from the Alaska Department of Fish and Game commissioner speaking to a clear allocative preference for sport and personal use fishery users over others – particularly commercial fishermen. While the Board of Fisheries is tasked with making allocative decisions, the State of Alaska manages and conserves a vibrant diversity of fisheries for the benefit and well-being of all Alaskans – whether they are subsistence harvesters, recreational users, commercial harvesters, seafood consumers or personal use fishermen. United Fishermen of Alaska, Alaska’s statewide commercial fishing trade association, is disappointed at this recent departure from the department’s longstanding policy of remaining neutral on allocative decisions. The lead-in text of the post reads, “Alaskans in southcentral had some big wins from the recent Board of Fisheries meeting” but failed to note that such “wins” are allocative, as was described by ADFG Commissioner Doug Vincent-Lang. The posted video lauded Board of Fisheries decisions that would decrease harvest opportunities for Alaskan commercial fishermen in the Cook Inlet region in order to create a new personal use fishery in the Susitna River and increase sockeye and king salmon escapements to the Kenai River. UFA supports Alaskans’ ability to put food on their plates in a variety of ways. For those Alaskans who don’t have the time, money, desire, or ability to sport or personal-use fish, the commercial fishing industry is their access to Cook Inlet’s shared sustainable salmon resource. In Cook Inlet, 82 percent of drift and setnet salmon permit holders are Alaska residents who provide local salmon to thousands of Alaskans. All told, in 2019 Cook Inlet commercial fishermen and three local processors provided more than 2.6 million pounds of seafood to markets and restaurants on the Kenai Peninsula, Anchorage and communities in the Valley for Alaskans’ consumption. Additionally, 258 Alaskan commercial fishermen, many of whom fish in Cook Inlet, provide seafood access for individual residents: their families, friends and neighbors in Alaskan communities across the state. With only 160,000 resident sport fishing licenses sold across the state each year, Alaskans best access to seafood resources is through the commercial fishing industry. Alaska’s seafood industry employs nearly 60,000 workers annually in Alaska making it the state’s largest private sector employer. It further contributes $2.1 billion in labor income, second only to oil and gas among private sector industries. There are 6,600 resident-owned fishing vessels in the state with each fishing operation representing a business that is generating income from a 100 percent renewable resource. The Alaska Department of Fish and Game commissioner stated in his recorded remarks, “All in all this was a win for recreational fishermen and personal fishermen in the state — and a win for conservation because we ended up not only providing some additional harvest opportunities, but we took some real solid steps in conserving these fish stocks for future generations.” UFA is disappointed the commissioner chose to celebrate through a state-sponsored communication platform the positive outcomes for recreational and personal use fishermen, without even acknowledging the associated cost to other user groups. The remarks communicate a blatant disregard for the losers in this scenario, namely Alaskan residents who depend on commercial fisheries in the Cook Inlet Region, and the individual Alaskans who access the resource by purchasing commercially harvested fish. Alaskans trust that the Alaska Department of Fish and Game is providing the Board of Fisheries the best available fishery science while remaining neutral on allocative issues so the Board of Fisheries can make the best possible decision for all Alaskans. The Board of Fisheries is a public process; statements from the department that indicate they favor one user group over another erodes the trust of the public. “The celebration of allocative decisions that result in winners or losers is an inappropriate response for the governor’s office and the Alaska Department of Fish and Game Commissioner to declare, especially when it is their responsibility as state officials to represent all Alaskans, which includes many user groups and economies,” said UFA President Matt Alward. “There are winners and losers at virtually every Board of Fisheries meeting… it is imperative that the department remains neutral on allocative issues while providing the best available science and advocates for the resource, not individual user groups.” Alaska’s commercial fishing industry is as committed to sustainable wild runs and conservation efforts as their sports and personal use fishing counterparts. The implication of this statement, and the use of a state-sponsored platform, suggests a strong preference towards certain user groups, agendas, and regions, and sends a message that Alaska is not “open for business” for commercial fishing.

JPMorgan Chase follows Goldman Sachs in Arctic exit

JPMorgan Chase says it will no longer finance new oil and gas projects in the Arctic. “JPMorgan Chase is expanding its commitment to a low-carbon economy and further supporting the clean energy transition,” the bank said in an email to reporters on Feb. 24. It is the second big U.S. lender to back away from potential support for projects such as drilling in the Arctic National Wildlife Refuge in recent months. Goldman Sachs in December said it would stop financing new oil exploration in the Arctic. Goldman Sachs’ announcement prompted Gov. Mike Dunleavy’s administration to retaliate, removing it from a billion-dollar plan to borrow money to pay tax credits to Alaska oil and gas drillers. On Feb. 24, groups opposed to drilling in the refuge celebrated news reports about JPMorgan’s plans. The bank has been the top funder of Arctic oil and gas projects in recent years, according to a report by the Rainforest Action Network, the Sierra Club and other advocacy groups. “We’re glad to see America’s largest bank recognize that the Arctic Refuge is no place for drilling, and we hope that soon other banks and the oil companies they fund will follow along,” said Bernadette Demientieff with the Gwich’in Steering Committee. The committee, which advocates for 15 Gwich’in communities in Alaska and Canada, has argued that drilling will hurt caribou and other subsistence foods. The Gwich’in Steering Committee and Sierra Club members have met with large U.S. banks in recent months, said Ben Cushing, a campaign representative with the Sierra Club in Washington, D.C. The groups argue the banks’ reputations could be damaged if they provide financial support for drilling in the Arctic. Several banks outside the U.S., including Barclays in London and Crédit Agricole in France, also have said they won’t support new oil and gas projects in the Arctic, Cushing said. “It’s been mostly firms outside the U.S. until recently,” he said. JPMorgan’s new climate change initiative will not allow “financing for new oil and gas development in the Arctic,” among other steps, according to a statement from the bank that was emailed to reporters Feb. 24. The bank’s plans will be announced at an annual investor day meeting on Feb. 25. Dunleavy in December said that he has “serious questions” about doing business with any company that isn’t willing to work with Alaska. Dunleavy told Fox Business in a December interview that drilling in the refuge is important to the state and national economy. The governor’s office did not immediately provide comment on JPMorgan’s decision on Feb. 24. The $67 billion Alaska Permanent Fund had about $950 million invested in JPMorgan funds in December, according to the Permanent Fund’s latest monthly report published online. Craig Richards, chair of the fund’s board, said the board will not get involved in political decisions to determine its investments. Richards is also a former Alaska attorney general who is now representing a group opposing the recall effort against the governor. Richards said as an Alaskan, it is personally “disappointing to me to see banks that are bowing down to political pressure by certain activists and that are making political decisions, not business decisions.”

PFD, spending stalemate remains a month into the session

The 2020 legislative session is still young but little visible progress has been made to settle one of the biggest debates in the state’s history. The future of the Permanent Fund Dividend is still up in the air and until it is resolved it will continue to weigh heavily on nearly every other fiscal decision lawmakers can make, according to Anchorage Republican Sen. Natasha von Imhof. Von Imhof, a co-chair of the Senate Finance Committee called the PFD “the tail wagging the dog,” during a Feb. 24 speech to the Anchorage Chamber of Commerce. She has advocated for reducing the PFD in order to preserve the viability of core state services and noted paying a full, statutorily-calculated PFD of approximately $3,100 per Alaskan this year would consume more than $2 billion, which is about 40 percent of the state’s projected General Fund revenue in the 2021 fiscal year that starts July 1. Von Imhof recalled a Senate vote last year to pay full PFDs that was split 10-10. “The state is divided,” on the issue she said, adding that Gov. Mike Dunleavy’s proposed budget of roughly $4.5 billion in unrestricted General Fund spending would leave the state with a projected surplus of about $470 million if the state did not pay PFDs. With the full dispersal to residents, the governor’s budget leaves a roughly $1.5 billion deficit that Dunleavy is proposing be filled via the dwindling Constitutional Budget Reserve, the state’s last remaining savings account. The CBR currently holds about $2.1 billion and many lawmakers have resisted drawing on it much further, as it is the state’s financial buffer to fluctuations in oil revenue, emergencies and day-to-day cash management. The CBR will also fund the large fiscal year 2020 supplemental budget that is currently pegged at roughly $300 million, and more will be drawn to cover the annual deficit as the current fiscal year plays out. That means with or without full PFDs the state’s options for dealing with its structural fiscal imbalance under the status quo are increasingly limited, according to von Imhof. “Either way the day of reckoning is here,” she said to the Anchorage Chamber members. The Legislature’s continued split over the PFD is exemplified in the various bills submitted to change the dividend formula. While Dunleavy continues to push for full, statutory payments until or unless the law is changed — the administration on Feb. 19 also submitted legislation to pay a supplemental PFD of $1,034 per Alaskan for last year — the proposals from the Legislature vary widely. Fairbanks Democrat Rep. Adam Wool, a member of the Legislature’s bicameral Permanent Fund Working Group, submitted House Bill 300 on Feb. 24, which would allocate 15 percent of the state’s annual percent of market value, or POMV, draw on the Permanent Fund to dividends. With a 2021 POMV payout of nearly $3.1 billion, Wool’s proposal would pay PFDs of roughly $700 per Alaskan in October. HB 300 would allocate the rest of the POMV appropriation to K-12 education, the University of Alaska, community assistance and capital projects and would result in a nearly balanced budget in 2021 based on current revenue projections. He noted in a formal statement, as von Imhof and others have, that the size of the PFD has consumed the Legislature in recent years and prevented lawmakers from budgeting on time and addressing other pressing issues facing the state. “This plan allows a dividend that is sustainable, while also addressing the needs of our communities. Businesses, public servants, municipal governments and Alaskans all deserve stability. By protecting the Permanent Fund, committing funding to essential services, and directing funds to capital projects and communities, we can now focus on building Alaska’s future,” Wool said. Sen. Lyman Hoffman, D-Bethel, quietly submitted legislation to change the PFD on Feb. 24, which was the deadline for individual lawmakers to propose new bills this session. Hoffman’s Senate Bill 227 would split the annual POMV draw 50-50 between dividends and the General Fund, which would equate to PFDs of approximately $2,300 in October. The 50-50 split has been seen as an equitable calculation by many legislators, but von Imhof noted it would still leave the state with a deficit of about $1 billion in the coming fiscal year. She said a lot of legislators are supportive of dividends in the $900 to $1,100 range in private discussions. Legislative leaders are in regular talks with the governor on the issue, according to von Imhof, but there has been little movement publicly on the since the session started in late January. A state spending cap, another von Imhof priority, is currently languishing in the Finance Committee where she said it currently lacks the votes among the seven members to advance to a floor debate. In a radio interview Feb. 25, von Imhof also said there is also some desire within the Legislature to have a capital budget in the $300 million range as opposed to the bare minimum of a bit more than $100 million from recent years needed to generate federal matching funds. The Permanent Fund Working Group, which was supposed to come up with recommendations for the PFD at the start of the session, was unable to reach a consensus on a new formula. Von Imhof urged Anchorage Chamber members to contact their legislators with specific proposals for changing the PFD or otherwise resolving the state’s continual budget deficits. She noted there is still nearly two months to go in the regular session and she believes the “log jam will break at some point,” but having lawmakers continue to set the PFD on an ad hoc basis isn’t workable either, according to von Imhof. “I certainly didn’t run for office so I could argue about how big the PFD is each year,” she said. Elwood Brehmer can be reached at [email protected]

Corps finds less risk of Pebble dam failure

A leaked summary of the Pebble mine project’s preliminary final environmental impact statement says U.S. Army Corps’ of Engineers officials declined to model a tailings dam failure at the mine because of the designs chosen by the company but mine opponents contend that’s simply unacceptable. The executive summary of Pebble’s preliminary final EIS — which was sent to some Bristol Bay-area Tribes as well as state and federal government organizations acting as “cooperating agencies” to provide input on the final document prior to its release — states that the modeling of an “extremely unlikely” tailings release was deemed inappropriate by the Corps due to Pebble’s use of a flow-through tailings dam design, which is fundamentally different than major tailings dams that have failed around the world in recent years. Pebble CEO Tom Collier said in a formal statement issued shortly after the typically confidential summary was released that criticism of the Corps’ review is rhetoric that ignores what happened during review of the draft EIS, which was published about a year ago. Pebble has interpreted the leaked summary as indicative of a favorable permitting conclusion for the project. “Just because some of the groups opposed to Pebble do not like the conclusions reached by the USACE (Corps) does not that the USACE’s work is not valid,” Collier said. “Rather, the USACE’s work on this issue is sound. It is defensible and it should be commended for its completeness.” Commercial fishing and conservation groups have criticized the entirety of the summary, and argue that the tailings dam issue is just another symptom of a rushed and incomplete EIS process. According to the summary, a not-yet-published appendix to the full, final EIS details the rationale behind the probability of a large-scale tailings dam release from the bulk tailings storage facility, or TSF. That appendix addresses several recent dam failures, such as those in Brazil and the 2014 Mount Polley dam failure in British Columbia, and discusses “the higher probability of failure of water-inundated tailings slurries behind upstream dams compared to drained, thickened tailings behind downstream/centerline dams.” Corps Alaska officials have said in prior interviews that a detailed analysis of the tailings facilities is outside the scope of their review, noting the State of Alaska is responsible for reviewing permitting for the specific tailings dams designs and construction through its Dam Safety Program administered by the Department of Natural Resources. Pebble has yet to apply for its state dam permits. The company plans to build a centerline-style dam for its bulk TSF that will allow water to pass through the dam and subsequently be collected below the embankment for storage and treatment before it is released back into the environment. Pebble Permitting Vice President James Fueg said the company specifically examined what has happened during TSF failures around the world while designing its facilities. “Everything we’ve done in our approach — not just to designing the tailings dams but into laying out the entire site and combining the tailings management systems and the water management system — was all done specifically to address things that led to the failures at Mount Polley and the failures in Brazil,” Fueg said. “It’s more than just saying, ‘This is how we’re going to design the tailings embankment;’ you’ve got to look at the whole project.” The January 2019 collapse of an iron ore mine tailings dam near the Brazil city of Brumadinho released a mass of tailings sludge and killed 270 people. It was preceded by another large-scale tailings dam failure in the country in 2015. Pebble leaders first point to the fact that they plan to build two, separate tailings facilities: one to store the benign waste rock that makes up the lion’s share of the finely ground mine waste, or tailings, and another that will hold the pyritic tailings, or those that can generate acid when exposed to air and water. The main bulk TSF dam will be 600 feet high and the pyritic tailings embankment will be approximately 250 feet high, according to Pebble’s permit application materials. Combined, the facilities will cover more than 3,800 acres. Fueg said the large, bulk TSF will hold 85 percent to 90 percent of the waste that is left over from the mining process and the focus there is simply building the most stable facility possible. Part of that is allowing water to flow through the dam itself, rather than allowing the water to build up behind the dam and become a static force that is constantly pushing on the upstream face of the dam, according to Fueg. Part of the problem at Mount Polley was that water breached the dam prior to its collapse; removing water helps stabilize the associated tailings. Separating the water and tailings reduces the already slim risk of a dam failure and also limits the impact if a failure does occur, he said. “If you take a glass that’s a mix of sand and water and pour it out over the table, what’s going to happen? That sand and water is going to run all over the table and drip over the edges. But if you take a glass of — whether it’s dry sand or damp sand — and you dump it on the table you’re going to end up with a pile of sand in the middle of the table and that’s what we’re trying to do with this concept,” Fueg described. Pebble’s pyritic, or potentially acid-generating waste rock will be stored in water behind a separate, downstream-style tailings dam in a lined-facility while the mine is active. The pyritic tailings will be moved from the storage facility and into the bottom of the roughly 1,500 feet deep mine pit at the end of the mine’s 20-year life. The pyritic tailings will again be covered with water as the pit naturally fills and will safely remain there after closure and reclamation, according to the company. Fueg said Pebble will be mining rock specifically for the tailings dams rather than utilizing tailings and waste rock to build the dams, as is often done at other mines. He added that the downstream slope of the bulk TSF will be very gradual, with a 2.6-to-1 slope. “Ours is a much flatter slope, which again increases stability and the factor of safety in the design,” Fueg said. Finally, Pebble will dig down to bedrock before building the dam to prevent a potential weak layer of soil from compromising the dam from below, as also happened at Mount Polley, Fueg said. The whole system hinges on the ability to treat lots of water in an already wet place, which Fueg acknowledged, but he said Pebble has designed its two large water treatment plants to handle the combination of a large storm during the peak of snow runoff in the midst of the wettest 20-year period in the 76 years of weather records available for the nearby Iliamna Airport. “Half of the overall (water management) capacity is simply there as a precaution to deal with flood events or a series of wet years. It’s a massive pond,” he said. Alaska Dam Safety Program Engineer Charlie Cobb declined to discuss the specifics of Pebble’s TSF designs because he could eventually be tasked with adjudicating them in the state’s permitting process. Cobb did note that Pebble’s tailings dams would be among the largest in the state. He said generally, though, that evaluating the failure risk of a given tailings dam against those that have failed is problematic because the design of each structure is extremely site and material specific. “The rates of failure in the tailings dam industry are based on a whole fruit basket of dams. When one goes bad now and then it’s like, ‘OK, what kind of fruit was that?’” Cobb said. More often, he said the failure risk is vetted through a Failure Modes and Effects Analysis by a group of engineers that search for weak spots in a design in a back-and-forth exercise until the design is sufficiently reinforced. However, Dave Chambers, an engineer and geophysicist who founded the Montana-based nonprofit Center for Science in Public Participation said Pebble’s tailings management plans were developed to save money and do not jive with the reality of the mine or the available mineral resource. Chambers counters the claim that the flow-through bulk TSF will reduce the risk of failure with the contention that allowing the dam to fill with water from the inside could actually add to the risk. “You don’t want the dam to ever become saturated. When you allow a dam to get saturated you can have static failures,” he said. According to Chambers, many modern tailings dams are built with a thick internal layer of clay or other impermeable material that prevents water flow. Instead, the water is directed to a drain at the toe of the dam and is subsequently routed to the water treatment pond. He said the flow-through design inherently allows some saturation of the dam material and while water is not supposed to build up behind the dam, it could and is a scenario that needs to be modeled. “To my mind, flow-through dams aren’t as safe as a more conventional flow-through dam with a barrier in it because that (barrier) gives you another check on controlling the saturation of the dam,” Chambers said. The company went with the flow-through design to avoid the added cost of designing and building the dam with the internal barrier, he argues. “A permeable dam is just adding basically a second drainage system that shouldn’t be required,” he said. Chambers is more concerned with the pyritic tailings plan, he said, despite the fact that the pyritic tailings dam will be built with a conventional downstream method that includes the impermeable internal layer he’s calling for in the bulk TSF. That’s because he doesn’t believe Pebble will ever end up dumping the pyritic tailings in the bottom of the pit. Doing so would preclude expansion of the mine beyond the current plan, which many observers believe is necessary to make the overall project economic. He called the proposal a “lawyer’s mine plan.” “The reason that won’t happen is that there’s 88 percent of that main resource sitting in the ground at the end of their 20-year mining life and if they backfill that (pyritic) material into the pit they sterilize that resource — that is, they can’t mine it until they take all that stuff out again, which is hugely expensive,” Chambers said. “I know that they’re not going to do it. They know they’re not going to do it. The investors know that they’re not going to do it, which is why they’re not complaining about the plan.” He expects Pebble to build a second, larger pyritic TSF once they move ahead with expanding the project. In response to the assertion that Pebble will expand the project, Pebble spokesman Mike Heatwole wrote that the current plan calls for putting the pyritic tailings back into the pit and the company believes that the proposal is a significant improvement to its closure plan. He noted that any further development plans would require a wholly new permitting process. Elwood Brehmer can be reached at [email protected]

Oregon LNG export permit stymied again

For the second time in four years, the liquefied natural gas export terminal proposed for Coos Bay, Ore., failed to win approval from the Federal Energy Regulatory Commission. The $10 billion project may get another chance with the commission at its next meeting, but it’s only one of several hurdles for the developer, Calgary-based Pembina Pipeline. The state has rejected three of the project’s biggest permits; environmental opposition has grown over the years; and the Asian market for LNG is at record low prices. Maybe shareholders in Pembina knew something in 2017 when the company took over the Oregon project with its purchase of Canadian pipeline rival Veresen. Pembina’s stock price fell that day. The plan was that Pembina, an oil pipeline operator, would diversify into the gas pipeline and LNG business by buying Veresen. “This is the magic: we’ve become basin diversified, commodity diversified,” Pembina CEO Mick Dilger said in announcing the deal in May 2017. The magic didn’t work. The Jordan Cove Energy Project started more than 15 years ago as a proposed LNG import terminal, looking to feed growing North American demand for the fuel amid stagnant U.S. production. In 2009, Veresen, back then known as Fort Chicago, and its partners pipeline operator Williams Cos. and California gas and power utility PG&E Corp., received FERC approval to build and operate an LNG import facility. It was supposed to be operational in 2014. Before construction ever started, however, the U.S. shale drilling boom ignited, putting an end to the gas import project. Like so many other unneeded LNG import terminals on the U.S. East and Gulf coasts, Veresen turned its attention to making Jordan Cove an export project. The company applied to FERC in 2013. The liquefaction plant would have capacity to produce 7.5 million tonnes per year of LNG. Up to 1.2 billion cubic feet per day of feed gas would be delivered by a 229-mile-long, 36-inch-diameter connector line from the California border across Oregon to the coastal terminal in Coos Bay. At full operation, the terminal would send out 10 LNG carriers per month. But in March 2016, avoiding a decision on environmental issues, FERC denied the application; specifically, the pipeline. Lacking any firm customers for the LNG, Veresen had failed to convince regulators that the pipeline was needed. The public benefits of a commercially unproven project were insufficient to overcome the actual harm to property owners along the pipeline route. Unlike LNG export terminals, which undergo no such public-interest test at FERC, regulated pipelines that are part of the nationwide grid are required to show a need for the line. Looking for a favorable decision under the new administration of President Donald Trump, the project reapplied to FERC in September 2017. In hopes of passing the public-interest test this time, the developer announced it had secured agreements to sell LNG in Asia, although they were non-binding deals. FERC’s final environmental impact statement for the project, issued in November 2019, said, “constructing and operating the project would result in temporary, long-term and permanent impacts on the environment. … (and) some of these impacts would be adverse and significant.” However, the final EIS said, “Many of these impacts … would be reduced to less than significant levels with the implementation of proposed and/or recommended impact avoidance, minimization and mitigation measures.” Good enough for FERC but not for Oregon state regulators. The state Department of Land Conservation and Development this month rejected a key permit, deciding that the LNG terminal would have significant adverse effects on the state’s coastal scenic and aesthetic resources, endangered species, critical habitat, fisheries and commercial shipping. Only a member of the president’s Cabinet could overrule the permit denial, the state said. State land agency director Jim Rue said neither FERC nor the Army Corps of Engineers “can grant a license or permit for this project unless the U.S. Secretary of Commerce overrides this objection on appeal.” It was the third state denial for Jordan Cove, adding to rejections of a water quality permit by the Department of Environmental Quality and a dredging permit by the Department of State Lands. “Three strikes and you’re out!” Ashley Audycki, a Coos Bay organizer for the environmental group Rogue Climate, said in a news release the day of the land agency’s denial. “Jordan Cove LNG has failed to obtain three critical permits from the state of Oregon. Jordan Cove LNG has no viable path forward.” Oregon Gov. Kate Brown in January said she “would consider all available options to safeguard the health and environment of Oregon” if the federal government ignores state permitting processes. Pembina in January pulled its application for a state permit for dredging, removal and fill work for the pipeline and LNG terminal, saying it would wait on FERC action. That decision came Feb. 20, when FERC commissioners voted 1-2, declining to approve the Jordan Cove application. Trump has failed to fill two vacant seats on the five-member commission. “I’m disappointed that we were not able to vote out Jordan Cove today, but I respect my colleagues’ need for more time,” said FERC Chairman Neil Chatterjee. “I want to reassure people that today’s vote is not a denial of Jordan Cove’s application. The application remains pending before the commission and we will vote on this matter when we are ready,” Chatterjee said. FERC Commissioner Bernard McNamee, who joined with Commissioner Richard Glick in voting no, said his vote was “not a hard ‘nay,’” and was based in part on the state’s determination that the project is not consistent with Oregon’s Coastal Management Program. “I want to see what the state of Oregon said, and I need that information to inform my decision about whether I’m ultimately going to vote for or against Jordan Cove,” said McNamee, who was quoted by the Natural Gas Intelligence newsletter on Feb. 20. 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.

Movers and Shakers for March 1

Commonwealth North Inc. recently elected seven new members to its board of directors. New board members include: Nils Andreassen, executive director of the Alaska Municipal League; Tom Barrett, U.S. Coast Guard (ret.) and president and CEO of Alyeska Pipeline System (ret.); Moire Bockenstedt, vice president of administration and government affairs at Olgoonick; Kris Knauss, managing principal at Confluence Strategies; Gail Schubert, president and CEO of Bering Straits Native Corp.; Preston Simmons, chief operating and administrative officer at Providence Health and Services; and Father Leo Walsh, pastor at St. Patrick’s parish and adjutant judicial vicar at the Archdiocese of Anchorage. Incoming board members were elected to three-year terms. Terry Smith was elected to serve as board president. This is Smith’s second term leading the Commonwealth North board of directors. He is president of Unified Operations LLC. Jason Evans of Financial Alaska was elected treasurer and Launch Alaska managing director Isaac Vanderburg will serve as secretary. Northrim Bank announced several promotions within its Retail Banking and Credit Administration departments. Chris Chambos is now associate vice president, Retail Investment Services manager and will be based out of the East Anchorage Community Branch. Maureen Swartwood has been promoted to AVP, Branch Manager II at the Southside Financial Center. Christina Clayton has been promoted to Assistant Branch Manager II at Eastside Community Branch, and James Larson has been promoted to AVP, Special Credits Officer II. Chambos has been with Northrim for nearly nine years and has 16 years of experience in the financial industry. He in a licensed Investment Advisor Representative and Insurance Agent with the bank. Chambos will be based out of Northrim’s Eastside Community Branch in Anchorage. Swartwood joined Northrim in 2018 with 15 years of experience in the financial industry. She started as a teller and worked in various positions to become a branch manager at Alaska USA Federal Credit Union. Clayton has been with Northrim Bank since 2016 and has nearly five years of experience in the financial industry. Before joining Northrim Bank, she had more than 30 years of experience in retail sales management and has an occupational associate’s degree in retail management. Larson joined Northrim in 2019 with six years of experience in the financial industry. He has worked at institutions in Alaska and Nevada. Larson attended the University of Alaska Anchorage. David Carlson, PE, and Peter Yoo, PE, of R&M Consultants Inc. recently passed the Principles &Practice of Engineering Exam to gain their professional civil engineer licenses. Carlson has been with R&M since 2014 and is a Project Engineer in R&M’s Surface Transportation Group. He has a bachelor’s degree in civil engineering from the University of Alaska Anchorage. Yoo is a project engineer in R&M’s Construction Administration Group where he provides construction document review, quality control oversight and a variety of inspections during construction. Yoo has a bachelor’s degree in civil engineering from UAA. The Goldbelt Inc. board of directors selected McHugh Pierre as president and CEO. He has filled this role in an interim capacity since April 2019. Pierre joined Goldbelt in March 2015 as the vice president of Alaska Operations. Prior to joining Goldbelt, Pierre owned and operated Quantum Communications, a public relations and government affairs firm. In addition, he has served as deputy commissioner and director of Public and Government Affairs at the State of Alaska’s Department of Military and Veterans Affairs, as well as director of Public Relations in the for former Gov. Frank Murkowski. Jake Slingsby has been named vice president and commercial banking manager with KeyBank in Fairbanks team. With more than 14 years of commercial and business banking experience, Slingsby has held several positions of increasing responsibility within KeyBank, as well as Wells Fargo. Slingsby earned his bachelor’s degree in business administration, finance, economics and management from Carroll College in Helena, Mont., and his MBA from the University of Montana in Missoula. In addition, he is in his second year of Pacific Coast Banking School at the University of Washington, a three-year graduate-level program for the financial services community.

Wall Street winners amid virus: Disinfecting wipes, conference calls

NEW YORK (AP) — Stay indoors and stay clean. That’s what Wall Street is betting people around the world will do given all the fears about a rapidly spreading virus. As stock markets tumble on worries about how much COVID-19 will harm people and slow the global economy, more than a handful of companies have nevertheless been rising to new highs. They cross a range of industries, but in each of them investors see a chance to make money off fears about the virus. Clorox was close to an all-time high after jumping Feb. 24 amid expectations that homes and hospitals will use more of its disinfecting wipes, for example. Zoom Video Communications, which lets people conduct meetings online instead of in person, has surged nearly 40 percent in five weeks on the belief that people want to avoid getting within coughing range. A host of vaccine makers have shot higher on hopes that they may come up with something to corral the new virus. In some cases, analysts say the moves are overdone. Medical experts still can’t say how far and how quickly the virus will spread. The rapidly rising numbers of cases outside the viral outbreak’s center in China sent the S&P 500 on to its worst day in more than two years on Feb. 24. The index is down about 3.1 percent since Jan. 17, when the market set a new high before worries about the virus began to crescendo. The vaccine makers are particularly speculative bets because there’s no guarantee they’ll come up with anything. But that’s not keeping Wall Street from looking for potential winners. Here’s a look at a few: • (Some) health companies As a group, health care stocks in the S&P 500 are down more than the index since Jan. 17, 4.4 percent versus 3.1 percent. But Gilead Sciences is an outlier, up 15.8 percent over the same time. The company is working on a treatment for the new virus, named Remdesivir, though it has not been approved anywhere globally for use. Several other, smaller vaccine makers have shot even higher over the same period on similar hopes. Novavax, whose $258 million market value is about a quarter of 1 percent of Gilead’s size, is up 42 percent since Jan. 17. • Companies that help people work or stay at home Zoom Video Communications stock touched $110 during Feb. 24 trading, a level it’s reached just once since its shares began trading last spring. The company has said it’s seeing more business from customers wanting to meet online. Zoom CEO Eric Yuan went on CNBC earlier this month to say that “everyone is calling us” and usage has been at record levels. Stephens analyst Ryan MacWilliams says the boost in Zoom shares is indeed likely due to being “a play on” the virus outbreak. Summit Insights Group analyst Jonathan Kees, though, cautions that any benefit the company sees from the virus will be “incremental.” Streaming video services could also be a beneficiary as people look to stay away from crowds. Netflix, which is up 8.5 percent since Jan. 17, and other streaming video companies could benefit “from even the thought of COVID-19, much less its actual arrival and any restrictions that it will usher in,” said Forrester analyst James McQuivey. He called the virus “a mild accelerant” for such digital entertainment services. • Gold miners When fear is gripping markets, investors often run toward gold in a self-fulfilling prophecy. The metal has a reputation for holding up during tumultuous times, which increases demand for it just when such conditions occur. Gold on Monday jumped again to reach a seven-year high. That in turn has helped vault shares of gold miners higher, and Newmont Mining has added nearly 16 percent since Jan. 17. • Companies that pay dividends Only two of the 11 sectors that make up the S&P 500 index are higher since Jan. 17: utilities and real-estate investment trusts, both of which have climbed more than 4 percent. It’s not because the virus will make anyone buy more electricity or office buildings but because these kinds of companies pay healthy dividends at a time when bond yields are plunging. Investors have been rushing to buy U.S. government bonds along with gold in their search for safety. When a bond’s price rises, its yield falls, and the 10-year Treasury’s yield has sunk to 1.36 percent from roughly 1.90 percent at the start of the year. Such meager yields make the 3 percent dividend yields paid by the average utility or real-estate stock more attractive to investors looking for income. AP Business Writer Tali Arbel contributed.

Dubler resigns as interim president at state gasline agency

The temporary head of the state’s gasline agency publicly announced his resignation Thursday morning. Interim Alaska Gasline Development Corp. President Joe Dubler made his plans to retire public at the corporation’s board meeting in Anchorage. He will remain at AGDC through May 2, he said. Dubler stepped into the lead role at the state-owned corporation in January 2019 after Gov. Mike Dunleavy made sweeping changes to the AGDC board of directors, which quickly acted to fire then-President Keith Meyer, who championed former Gov. Bill Walker’s vision for the state-led Alaska LNG Project. Over the past year AGDC ended its active marketing to potential Alaska LNG customers and cut 60 percent of its staff to instead focus on securing the key construction license for the project from the Federal Energy Regulatory Commission, which would then be sold to a private developer who would build the project. 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. Dubler, who worked as an executive at AGDC from 2010 to 2016, stressed throughout his most recent tenure that he always intended to lead the corporation on an interim basis. Dave Cruz, AGDC’s longest-serving board member reiterated that message in a brief interview. Cruz said the board had been aware of Dubler’s plans for some time. “From day one it was going to be a six-month deal and it dragged on from there,” he said of Dubler’s employment, adding that, “He did everything we asked him to do.” Dubler said he and his wife Patti will be staying in Alaska and spending more time with their grandchildren. He does not expect to work full-time elsewhere. Cruz said the board is starting the search process for Dubler’s replacement who will be expected to lead the Alaska LNG Project through the final permitting steps, sell the license and reams of associated data to a firm ready to develop the project and represent the state throughout that process. “We’re going to have someone come in and finish the job,” Cruz said. Elwood Brehmer can be reached at [email protected]

GUEST COMMENTARY: Proposals at state, federal level would end energy independence

Thanks to President Trump, America has finally achieved energy independence and is pushing for worldwide energy dominance. Unfortunately, at the same time, the Democratic Party is pushing its radical agenda that would make America the worldwide punchline of a sad joke. Despite these efforts to destroy a critical industry, Americans are benefitting greatly from the Trump Administration’s support of natural gas and oil. President Trump has diligently removed unnecessary, archaic restrictions that once shackled the United States’ ability to responsibly, safely and efficiently develop its abundance of natural resources. These actions have brought overseas manufacturing jobs back to America, given the U.S. more leverage in international negotiations, and revitalized an economy that was decimated during the Obama Administration. Looking at the policies and politics of the current Democratic presidential front-runners, it’s clear that all of this progress is at risk. Particularly for Alaska – a state coming out of a recession that still has the highest unemployment rate in the nation – the Democratic candidates’ platforms and priorities would be crushing. A few of the candidates’ far-left pledges are worth noting: o The Green New Deal is a radical proposal that would ban fracking, severely restrict the entire oil and natural gas industry, and cost Alaskan households over $100,000 in just its first year of implementation. o Ending fossil fuel leasing projects on federal lands, which would take away Alaska’s ability to use its natural resources from land like the Arctic National Wildlife Refuge. o Sens. Bernie Sanders and Elizaebth Warren both pledged to ban fracking on day one of their Presidency, whereas Joe Biden, Mayor Pete Buttigieg and Sen. Amy Klobuchar would still regulate it significantly. o Sanders and Warren also propose banning exports of our nation’s fossil fuels. These types of proposals might be good for California, but they certainly aren’t in the best interest of Alaskans. Any of those candidates, should they ascend to the White House, would inflict tremendous damage to Alaska’s economy. They would rather see oil, gas, minerals and rare earth materials stay in the ground in the name of unproven talking points. With the Democratic presidential primaries intensifying and candidates competing for the national spotlight, it’s easy to lose sight of what’s happening right here at home, where there is another more immediate threat to the Alaskan way of life. The Fair Share Act is a measure slowly making its way toward appearing on an election ballot sometime later this year. In a short-sighted effort to close the state’s deficit, this initiative would increase taxes on the oil industry by over 300 percent. This would imperil Alaska’s entire oil and gas sector and the employment of nearly one-third of all private-sector jobs in our state. Robin Brena, a longtime attorney who has made millions of dollars suing the major producers in Alaska, is the primary sponsor of the Fair Share Act. He’s spent his career punishing the industry that has long provided Alaskans with so much, and this is just his latest attempt to restrict it, just as the potential for increased production across the North Slope is exploding. Brena is trying to do to Alaska what the leading Democratic presidential candidates are trying to do to America: thwart investment, kill jobs, and perpetuate a development strategy that will lead to decreased investment in our leading employment. Come election time — for both the Fair Share Act and the presidency — this agenda does not deserve to be rewarded with votes from Alaskans who actually care about our great state. Rick Whitbeck is the Alaska State Director for Power The Future, a national non-profit advocating for energy workers, while fighting back against environmental extremism and the ideologues who fund radicalized efforts to thwart American energy dominance.

GUEST COMMENTARY: U.S. shows how to fight climate change without regulation

Speaking at the United Nations in December, House Speaker Nancy Pelosi drew cheers by saying the United States was “still in” the Paris Climate Agreement. Green activists applauded Pelosi’s defense of the international climate accord, which President Trump has vowed to exit. They claim remaining in the Paris Agreement will help reduce global emissions. But they’re wrong. European leaders have spent years trying — and failing — to solve the climate crisis with regulation. Whether intentionally or not, U.S. policymakers have mostly avoided top-down solutions, and counterintuitively, the United States now leads the developed world in reducing carbon emissions. Policymakers can learn an important lesson from this comparison. The key to fighting climate change is to unleash the power of the free market, not to embrace every green idea. European countries have not had much success using regulation to fight climate change. Germany recently spent 150 billion euros on an aggressive campaign to lower emissions by mandating across-the-board fossil fuel reductions. In its quest for renewable energy, Germany refused to embrace cleaner-burning fossil fuels like natural gas. Because solar and wind don’t generate enough power, Germany must rely on coal — the dirtiest fossil fuel — to generate 40 percent of its electricity. As a result, Germany is projected to fall short of nearly every national and EU clean energy standard by 2020. Germany’s experience is par for the course with bureaucratic climate policies. The United States was criticized for not joining our European allies in signing the 1997 Kyoto Protocol, another international plan to reduce emissions. But today the United States is curbing emissions much faster than any country that signed the agreement. That’s because instead of banning fossil fuels outright, America embraced its natural gas boom. Thanks to a process called hydraulic fracturing, or “fracking,” we’ve managed to tap new reserves of natural gas and oil in recent years. In 2015, the United States surpassed Saudi Arabia and Russia to become the world’s top producer of natural gas. By 2018, energy companies produced more than 60 percent more natural gas than they did two decades earlier. This newfound abundance of natural gas has helped our nation transition away from coal, which emits twice as much carbon dioxide. Thanks to this shift, U.S. carbon dioxide emissions have hit 30-year lows — even as global emissions have spiked 50 percent. And since 2005, natural gas has done more to reduce power sector dioxide emissions than all renewable energy sources combined, according to the Energy Information Administration. While the rest of the world fumbles with green energy policies, the United States continues to reduce emissions. We don’t need regulation to guarantee future success. American firms will continue to combat climate change — as long as we let them. Drew Johnson is a Senior Fellow at the National Center for Public Policy Research.

Glass half-full for American whiskey distillers

FRANKFORT, Ky. (AP) — President Donald Trump’s trade war dampened the overseas market for American-made whiskey last year, diminishing exports even as the domestic market continues to thrive. Overall exports of bourbon, Tennessee whiskey and rye whiskey tumbled amid a trade war-induced decline in exports to key European markets. At home, U.S. sales posted solid gains, especially for pricier premium brands, the Distilled Spirits Council reported Feb. 12. For distillers, it was the proverbial glass-half-full, glass-half-empty, scenario. “While it was another strong year for U.S. spirits sales, the tariffs imposed by the European Union are causing a significant slump in American whiskey exports,” said Chris Swonger, the council’s president and CEO. American whiskey makers have been caught in the middle of a trans-Atlantic trade dispute since mid-2018, when the EU imposed tariffs on American whiskey and other U.S. products in response to Trump’s decision to slap tariffs on European steel and aluminum. Those duties amount to a tax, which whiskey producers can either absorb in reduced profits or pass along to customers through higher prices — and risk losing market share in highly competitive markets. The tariff headaches continued in 2019, when whiskey makers in the U.S saw their exports decline by 16 percent to $996 million compared to the prior year, the council said in its report. American whiskey exports to the EU were down 27 percent in the last year, it said. American whiskey accounts for 65 percent of all U.S. spirits exports, and the EU is the top export market for whiskey makers. Exports plunged by nearly 44 percent in Spain, nearly 33 percent in the United Kingdom and almost 20 percent in France, the council said. At Catoctin Creek Distillery in Virginia, prospects remain bleak for now to rebuild the business it had cultivated in Europe before the tariff fight. “Tariffs remain in place and our business has been at a standstill with virtually no revenue coming in from Europe,” said Scott Harris, co-founder and general manager of Catoctin Creek. “We do have whiskey and warehouses in Amsterdam, but with the increased pricing due to tariffs, it doesn’t move very fast.” Whiskey producers got a shot of relief last year with an agreement to end retaliatory tariffs that Canada and Mexico had slapped on whiskey and other U.S. products. The new North American trade agreement preserves tariff-free trade for spirits with America’s two neighbors, the council said. Catoctin Creek has managed to gain a foothold in Mexico, where it sold a “small amount” of spirits last year as it tries to find new markets to make up for losses in Europe, Harris said. Meanwhile, the whiskey industry is hoping for a trade breakthrough with the EU. “We are hopeful that the recent trade agreements will create new momentum for negotiations with the EU,” said Christine LoCascio, the council’s public policy chief. While the spirits industry faced stiff headwinds in Europe, it built up more momentum in the U.S. Overall domestic supplier sales rose 5.3 percent to a record $29 billion in 2019, the council said. Total volumes were up 3.3 percent to a record 239 million cases, it said. Spirits continued to gain market share versus beer and wine in 2019, the council said. Combined U.S. revenues for bourbon, Tennessee whiskey and rye whiskey rose 10.8 percent, or $387 million, to $4 billion in 2019, the council said. Domestic volumes were up 8.4 percent to 26.6 million cases. Rye whiskey continued its upward trajectory with sales growth of 14.7 percent to reach $235 million. The strongest revenue growth in the U.S. spirits market continued to come from high-end premium and super-premium products that fetch the highest prices. In the bourbon, Tennessee whiskey and rye segment, super-premium volumes surged by 22 percent while high-end premium volumes rose 8.2 percent. Irish whiskey had another strong year with U.S. revenues up 5.6 percent to $1.1 billion, the council said. Vodka remains the spirits sector’s largest category, representing 31 percent of all U.S. volume, it said. In 2019, vodka revenues were up 2.9 percent to $6.6 billion, also driven by strong growth in high-end premium products, it said.

Beware of these overhyped financial strategies

A good rule of thumb when you’re trying to eat healthy is to beware of any food you see advertised. The most beneficial fare — whole grains, fruits, vegetables — tends not to have a marketing budget. Similarly, investments that are enthusiastically pushed by commission-earning salespeople may not be the best for your financial health. Before you buy any of the following, you’d be smart to investigate lower-cost alternatives and to consult an objective, knowledgeable third party, such as a fee-only financial planner. Equity-indexed annuities Equity-indexed annuities are insurance products that base their returns on stock market benchmarks. They’re often promoted as a way to benefit from stock market gains while being protected from losses. But the contracts typically limit how much investors get when the stock market rises, says certified financial planner Anthony Jones of Groveport, Ohio. Two clients, who had purchased equity-indexed annuities before joining his firm, received only a fraction of last year’s 30 percent increase (as measured by the Standard &Poor’s 500 benchmark). “They expected bigger returns in 2019 and were very disappointed,” Jones says. “They each had less than a 3 percent return.” Equity-indexed annuities typically come with high commissions and surrender charges that can make it expensive to get your money out, says CFP Scott A. Bishop of Houston. The contracts can be extremely complex, and many buyers don’t understand what they’re getting, he says. “They are not necessarily bad products, but they are really more like bond alternatives than stock alternatives,” Bishop says. Reverse mortgages Reverse mortgages allow homeowners 62 and older to convert some of their home equity into a lump sum, a series of monthly checks or a line of credit. Borrowers don’t have to make payments on the loan, which doesn’t have to be paid back until they die, sell or move. But borrowers don’t always realize that their debt is accruing monthly interest. The amount they owe may grow so high they no longer have any equity in their homes, says Barbara Jones, an attorney with the AARP Foundation. Reverse mortgages typically aren’t a good fit for people who may need to rely on their equity for future expenses, such as medical bills or nursing home care. Reverse mortgages could be a way to avoid foreclosure if a homeowner can’t afford to make payments on a regular mortgage, Jones says. There may be no equity left for their heirs, “but at least the person gets to age in place,” Jones says. Non-traded real estate investment trusts Real estate investment trusts allow people to invest in commercial real estate without having to buy and manage the properties themselves. Most REITs are publicly traded so it’s easy to buy and sell them. Non-traded REITs also invest in real estate but are designed to reduce or eliminate taxes. The trade-off is that your money could be locked up for years. Also, non-traded REITS tend to have high upfront fees that reduce the return on your investment. “Non-traded REITs make my heart sink when I see them in a new client’s portfolio,” says CFP Jonathan P. Bednar of Knoxville, Tennessee. “These are very complex products, with high fees, and oftentimes not the greatest-quality underlying holding.” Bednar prefers that clients own investments they can easily sell if needed, such as an exchange-traded fund that invests in real estate. Cash-value life insurance Cash-value life insurance combines a death benefit with an investment component. (Whole life, universal life and variable life policies are all types of cash-value life insurance.) Sometimes the policies are promoted as a tax-efficient way to invest for high earners who have maxed out their other retirement savings options, says CFP Alex Caswell of San Francisco. But the premiums aren’t deductible, and the policies tend to have high costs, Caswell says. Many investors have better alternatives, such as using a tax-efficient investment strategy in a regular brokerage account, he says. Also, premiums for cash-value policies tend to be much higher than premiums for the same amount of term insurance, which has a death benefit but no investment component. The higher premiums can lead buyers to skimp on coverage or to drop the policy because it’s too expensive. And sometimes policies are sold to people who don’t need life insurance at all, such as single people with no financial dependents, says CFP Tess Zigo of Lisle, Illinois. Zigo says the higher commissions paid by cash-value policies can lead insurance agents to recommend them even when there are better alternatives. “If all you have is a hammer, everything looks like a nail,” Zigo says. This column was provided to The Associated Press by the personal finance website NerdWallet. Liz Weston is a columnist at NerdWallet, a certified financial planner and author of “Your Credit Score.”

State dusts off look at Susitna-Watana hydro project

Proponents of the massive Susitna-Watana hydro project contend it is the linchpin to making a large-scale shift to renewable energy in Alaska, but it’s unclear exactly what it would take for the state to dust off the shelved dam proposal. Former Gov. Bill Walker suspended the mega project through an administrative order in 2015 when the state was mired in a string of multibillion-dollar annual budget deficits. While the state’s fiscal situation has improved somewhat but is far from cured — the fiscal year 2021 deficit is pegged at roughly $1.5 billion — Gov. Mike Dunleavy lifted Walker’s freeze in 2019 as part of his overarching goal for the state to explore the gamut of economic development prospects available to Alaska. To that end, lawmakers heard from Alaska Energy Authority officials what it would take to restart Susitna-Watana during a Feb. 11 Senate Community and Regional Affairs Committee hearing. Alaska Energy Authority officials who would lead the restarted project told legislators that they are about two-thirds done with the pre-licensing study work required by the Federal Energy Regulatory Commission before the state-owned authority could apply for the FERC license that would trigger a wholesale environmental and socioeconomic review of the plan. AEA estimated the 705-foot dam in the upper reaches of the Susitna River valley would cost roughly $5.6 billion in 2014 dollars. The hydro project would generate up to 619 megawatts of electricity — meeting about 60 percent of the Railbelt’s electricity demand — and would form a reservoir about 42 miles long and 1.25 miles wide, according to the authority. AEA Executive Director Curtis Thayer said AEA couldn’t resume work on Susitna-Watana without explicit direction from the Legislature and the governor, which would also have to include significant state funding to finish the environmental studies for the project. The hefty construction cost would be paid up front through bonds that would be repaid once the dam started producing power. Thayer told legislators he didn’t know specifically how much it would cost to get through FERC licensing, but AEA officials said when the project was suspended they needed about $100 million over four years to obtain the key federal construction license. “If it is greenlighted, obviously determining the licensing status would be the next step and then updating the cost estimate to obtain the license; updating the cost-benefit and economic analyses and then reviewing the data to make sure it remains reflective of the current conditions,” Thayer said. He added that AEA estimates power from the dam would cost about 6.5 cents per kilowatt before transmission costs are factored in, which is about 20 percent less than current costs for natural gas-fired electricity in the Railbelt and about 40 percent more than existing hydropower in the region. According to AEA Hydro Group Manager Bryan Carey, power would likely start flowing from the project after eight years of construction, though it wouldn’t be completely done for a couple years afterwards. Carey said AEA completed 19 studies and made “significant progress” on another 39 of the 58 total studies FERC approved for the project starting in 2012. However, dam opponents, led by the Susitna River Coalition point to a lengthy June 2017 determination report from FERC officials on study requirements for the project as indication that advancing Susitna-Watana would require much more work than advocates claim. That report states that the agency partially approved changes recommended by third parties to 17 AEA studies covering baseline water quality data, the dam’s impact to ice formation, in-river sediment, fish passage and other issues. It notes that AEA has conducted a significant amount of water quality data, but it’s difficult to tell if that data represents current conditions because it has not been fully vetted. “Consequently, we find that in its current state, the (water quality) data are largely unusable, and we are also unable to determine the adequacy of the data to characterize baseline water chemistry, water quality, water temperature and groundwater of the Susitna River,” the 2017 FERC determination report states. The project was essentially frozen at that point. The report authors additionally state that it would be “premature to require AEA to essentially redo the study as requested by the commenters” until the authority has the chance to support its conclusions. AEA officials emphasize that while the dam would restrict water flow in one of the state’s largest salmon-bearing drainages, it would be upriver of nearly all salmon habitat. That’s because Devil’s Canyon — about 20 miles downstream of the proposed dam site — acts as a natural fish barrier for all but a few chinook salmon. However, members of the Talkeetna-based Susitna River Coalition counter that operating the dam to meet energy demand would mean more stable year-round flows in the river that are counter to what juvenile salmon rearing in the river and its back channels have adapted to. The coalition further disputes claims that the dam would provide decades of clean power by displacing natural gas-generated electricity because the reservoir would inundate many thousands of acres predominantly spruce forests that would release carbon gasses as they decay. ^ Elwood Brehmer can be reached at [email protected]

Small Business Survey results show uncertainty amid recovery

Economists generally agree that Alaska’s recession is over, but small businesses — often the first to feel a downturn — are still recovering. The Alaska Small Business Development Center Annual Small Business Survey, to be released this week, measures the overall health of small businesses in the state and offers a look at how they are fairing post recession. Alaska SBDC Executive Director Jon Bittner says that he’s particularly interested in how the survey results identify barriers to business. “Considering that 99 percent of business in Alaska is small business, things that slow or hinder their growth really impact our economy,” said Bittner. “During a recession or times of economic uncertainty, small businesses are hit first, and hardest.” The top three barriers to small businesses remain the same as previous years: 1. Operating costs 2. Finding capital 3. Finding employees Operating costs Dawn Walsh, who co-owns Anchorage retail shop ShuzyQ with her daughter, Shawna Rider, is well acquainted with the cost of doing business in Alaska. She’s been a boutique owner for the last 15 years, and says that operating expenses present the biggest challenge to their business, specifically shipping costs and logistics. For a company that orders inventory — shoes, handbags,and other accessories — from across North America and Europe, the balance between paying bills and receiving freight is a delicate one. “We have some vendors who require us to pay our bills within 30 days, but it can take up to three weeks for freight to arrive and process,” she says. “This week, deliveries are delayed — Span Alaska called to give us a heads up that storms were impacting shipping from Seattle. You can’t always plan for that kind of thing.” She also says that high costs of shipping make special orders for customers prohibitive, especially when many online retailers offer fast, free shipping. Bittner agrees, noting that shipping costs, which become increasingly expensive the farther you travel from Alaska’s urban centers, are consistently cited as a major challenge by businesses across the state. “This is the kind of issue that needs a solution on a larger level; solving the shipping challenge is a very difficult thing for the private sector to do on its own,” Bitter said. “If the state of Alaska wants to grow the economy, this is the kind of fundamental work that could really change the landscape for small businesses.” Finding capital Access to capital is a consistent barrier for small businesses. Twenty-five percent of Alaska SBDC survey respondents said they were seeking funding, with fixed capital for new equipment and building renovations being the greatest need followed by working capital for operations. Of those 25 percent, only half of them received funding, and more than half of survey-takers expect it to be difficult to obtain financing in 2020. Bittner says that he sees an interesting shift in the sources of funding. “This year, friends and family were the No. 1 source of funding for businesses; in prior years it was bank loans. We’re also seeing a surge in people seeking other non-traditional forms of finance like online lending, angel investing, and crowdfunding.” Although bank loans are generally considered some of the best funding for a small business because of their low interest rates and dependable process, they can be difficult to attain, especially for businesses just starting out or those with an uncertain financial future. Capital from friends and family, online lending, and crowdfunding aren’t as strict in their lending requirements, but can also carry more risk for the business. Bittner notes that angel funding is also difficult for businesses with uncertain prospects to obtain. ”This year we saw a huge jump, percentage-wise, in applications for angel funding but no increase in actual investments.” Finding employees Recent Department of Labor data shows that Alaska’s population is shrinking due to a combination of outmigration, decline in birth rates, and increase in death rates. Less people means less workers, making the competition for qualified employees fierce, and a strong economy in the Lower 48 makes it hard to attract new talent to the state to fill the gap. Fifty-six percent of survey respondents say it is very or somewhat difficult to hire employees, the biggest reason being a lack of qualified applicants. “During the last three years, lack of qualified applicants has been split evenly between applicants that lack technical skills and those that lack soft skills,” says Bittner. “Lack of technical skills is hard to address. There’s only 700,000 of us in Alaska, and we can’t have homegrown specialists in everything, but the strong economy in the Lower 48 is making it harder to attract what we don’t have to the state.” He sees the lack of soft skills as a fixable problem that can start to be addressed during K-12 education, and identifies it as one that the state could solve by partnering with the private sector to invest in helping students become career-ready. Hiring qualified staff hasn’t been an issue for Walsh. “We’ve been really fortunate that people want to work for us,” she said. “When I ask my employees what they like about working at ShuzyQ, it’s always the customers. Plus, people come in because they want something to make them happy, and helping them find it is very rewarding.” Additionally, Walsh says that ShuzyQ pays competitive retail rates and offers bonuses and flexible schedules to attract and keep employees. Confidence in Alaska’s economy The survey also measures business owners’ confidence in the economy. In general, business owners are more optimistic about their own businesses than they are about the economy as a whole. When it comes to the economy, respondents are split roughly into thirds: they are equally likely to think the economy will improve (31 percent), worsen (33 percent), or are just uncertain (36 percent). However, the number of businesses marking “yes” to whether or not they have confidence in the state economy dropped 16 percent from 2018. “It’s interesting that we’re seeing declining confidence in the economy while at the same time most economists are agreeing that we’re coming out of the recession,” says Bittner. “For this level of pessimism, there must be another factor contributing to business owners uncertainty.” Walsh thinks she might have the answer, for some retailers at least. “This year was really challenging for us,” Walsh said. “We had the heatwave, and we ran out of sandals but couldn’t sell other shoes. BP announced they were leaving Alaska, Nordstrom closed which wasn’t good for retail overall, and online shopping is always our biggest competitor. “But the biggest impact was when the budget came out at the end of June. People came back to the store to return their shoes, they were frightened and worried, some of them got pink slips. Politics definitely plays a role in stability, and we’ve been told that election years are harder on retail.” Economic uncertainty is a sizable barrier to small business. “You can plan for good times and you can plan for bad times, both are acceptable and viable parts of being a small business,” says Bittner. “But the hardest thing for a business to deal with is uncertainty.” He sees businesses not planning for growth and instead focusing on trying not to contract. “Instead of working to increase market share, people are using their capital to pay for operating costs to try to hold the line,” Bittner added. “The state needs to provide them with a clear vision on what’s to come, and offer stable taxes, a clear regulatory environment, and a strong economic plan for the future.” Walsh says her team had to work harder than ever before just to keep the numbers similar to years prior. Despite the challenges, ShuzyQ finished 2019 within $1,000 in gross sales of 2018. Profits are still down 10 percent from pre-recession, but now Walsh considers these numbers her “new normal.” Signs of economic opportunity “Last summer I was very distraught, very concerned about the future of small business in Alaska because of the economy. It’s scary being a business owner,” says Walsh. “But now I have a lot more confidence than I did six months ago.” Along with a strong quarter, she’s seeing more people get involved in their communities and local politics, and points to efforts in Anchorage to invest in downtown along with new housing developments — meaning more small stores and coffee shops springing up nearby — as signs that things are turning around. Bittner is also optimistic. “I still think that the Alaska economy has a lot going for it. There are strong growth opportunities in health care and tourism, and to a smaller extent in manufacturing. There are also interesting new prospects in the resource extraction industry as well as in renewables and energy efficiency. Military/federal spending is also going to be a boon, especially in the interior and rural Alaska,” he said. “All of this could lead to more economic opportunities for those who are willing to take advantage of them. If anyone has the wherewithal to overcome the barriers to doing business in Alaska, it’s Alaskan entrepreneurs.” Gretchen Fauske is a marketing-minded economic developer fueled by a passion for entrepreneurship, innovation, and small business. She is the associate director for the University of Alaska Center for Economic Development, board president for Launch Alaska, and a Gallup-certified CliftonStrengths coach.

Early release of Pebble report draws strong reactions

A new version of a federal environmental review for the proposed Pebble mine has angered the mine’s opponents and encouraged its developer. The Army Corps of Engineers will use the final review to decide whether to give the controversial mine a key permit it needs before it can be built. The Corps had provided the report to several cooperating agencies involved in the review process, such as state and federal agencies and tribal governments. The Anchorage Daily News obtained an executive summary of the Corps’ preliminary final environmental review that was leaked to reporters. The report could foreshadow what’s to come. Tom Collier, chief executive of developer Pebble Limited Partnership, is pleased. He said the report’s release, and its major conclusions, indicate the company will see a decision in its favor by mid-2020. Pebble opponents that have seen it are not happy. They say the proposed copper and gold mine in Southwest Alaska will threaten the Bristol Bay region’s valuable salmon fishery, and they will go court to stop it. On Feb. 11, groups from the Bristol Bay region issued statements saying the document does not address local concerns raised in Congress about shortcomings in the review process. U.S. Sen. Lisa Murkowski in particular criticized the process, previously saying the mine shouldn’t be permitted unless the Corps addresses data “gaps” raised by the Environmental Protection Agency and other entities. Very little has changed between the draft environmental review issued last year and the preliminary final review, said Alannah Hurley with the United Tribes of Bristol Bay, representing 15 tribes from the region. The Corps still has not analyzed a tailings dam failure, she said. “That’s outrageous,” she said. “That’s one of our biggest concerns, when you store toxic waste at the headwaters of the last great wild sockeye salmon fisheries on earth.” She said groups will sue to stop the mine. The United Tribes of Bristol Bay and other anti-Pebble groups have already sued the EPA to try to reestablish one roadblock against the mine. John Budnik, a Corps spokesman, said there have been several revisions to the draft report. He said it addresses three spill scenarios. But the report says the Corps did not model the effect of an “extremely unlikely” catastrophic failure of a tailings dam, like what occurred at the Mount Polley mine in Canada in 2014. Public commenters had requested such a review. Tailings are a mine’s finely ground waste material. The report says the Corps determined that modeling for such an event was “inappropriate.“ Pebble has proposed a design with “water-reduction measures” for the tailings, such as drainage and air flow. The facility would have less chance of failure compared to a breach of “water-inundated tailings,” such as at the Mount Polley mine, the report says. “The bulk (tailings storage facility) would remain in place in perpetuity in ‘dry’ closure, further reducing the long-term spill risk,” the report says. Commercial Fishermen for Bristol Bay also said the preliminary final report is insufficient. “The preliminary final EIS is more of the same; this administration’s priority is a purely political process that completely ignores well-documented science and the voices of Alaskans,” said Katherine Carscallen, director of the fishermen’s group, in a statement. She said the report severely underestimates the risks of the mine to salmon and other resources. Collier with Pebble said Tuesday it’s “absolutely false” to say there have been only small changes to the preliminary final document. The Corps has held numerous meetings and delayed a final decision to address concerns with the draft report, he said. Also, Pebble has changed the design of the proposed port facility and roads and bridges to reduce impacts to waters and wetlands, as spelled out a compensatory mitigation plan it has submitted to the Corps, he said. It has proposed plans to help protect waters in the region, including improving wastewater management in three communities and taking steps to improve salmon passage in 8.5 miles of streams. The Corps’ major conclusions remain the same, Collier said. The report shows the mine would not hurt the Bristol Bay salmon fishery, he said. He pointed to a section on commercial fishing. It says that under normal operations, development alternatives would “not be expected to have a measurable effect on fish numbers and result in long-term changes to the health of the commercial fisheries in Bristol Bay.” Collier pointed out a section on subsistence that says, “Overall, impacts to fish and wildlife would not be expected to impact harvest levels, because no population-level decrease in resources would be anticipated.” Carscallen, with the fishing group, said Collier is wrong to say there won’t be harm to the fishery, The report says the development’s footprint will harm 100 miles of salmon stream, she said. The report indicates the final decision will be in Pebble’s favor, Collier said. “That’s the only conclusion you can reach,” he said.

‘1 percent’ rule reverts to July 31 for Peninsula setnetters

They’re not always counted numerically, but coho salmon in Upper Cook Inlet are highly sought after by sport fishermen and commercial fishermen alike — and, naturally, lead to disagreements over who gets to harvest them and when. Though the most recent Board of Fisheries meeting was largely focused on the regulations on sockeye and king salmon fisheries in Upper Cook Inlet, concerns about coho fishing pulled the strings on some of the regulations, particularly for set gillnet fishermen on the east side of Cook Inlet. In particular, changes to the one percent rule — a rule established for the commercial fisheries in the area, largely designed to minimize commercial harvest of coho salmon — could cost commercial fishermen more time in the August each season. The board approved moving the 1 percent rule date back to July 31 on a 4-3 vote, with members John Jensen of Petersburg, Fritz Johnson of Dillingham and Gerad Godfrey of Eagle River voting against the change. Coho salmon, also known as silver salmon, aren’t as numerous in Cook Inlet as sockeye or pink salmon and aren’t as high-value as kings, but they’re still a highly prized species. In the commercial fishery, they were worth about $1.02 per pound last season, a little less than half as much as sockeye. In 2019, commercial fishermen across the area harvested about 164,859 coho salmon, with a little more than half landed via the drift gillnet fleet, according to the Alaska Department of Fish and Game’s annual management report. Silver salmon are worth big money in the sport fisheries around the Cook Inlet basin, too, with guides marketing trips from late July through September based on silvers. When the Kenai River king salmon run closes for sportfishing at the end of July, anglers turn most of their attention to silvers. The board rejected proposals to increase the Kenai daily sport bag limit of two coho in August to three fish. Anglers are allowed to harvest three Kenai coho per day starting Sept. 1. ADFG staff in past meetings have said they consider coho salmon in Upper Cook Inlet to be fully allocated, meaning that they in order to increase harvest for one group without damaging the population, the allocation for another group would have to be reduced. However, there are a number of data gaps that made the board’s decisions on how to move coho around difficult. For one, there is no regular enumeration project on the Kenai River counting silver salmon — the last comprehensive population estimate ADFG has is from 2004. As part of an overall attempt to move more silver salmon toward in-river users, the board members passed a proposal to move the effective date of the 1 percent rule for East Side setnets back from Aug. 7 to July 31. Next season, if the setnet fleet collectively catches less than 1 percent of its total season harvest of sockeye salmon in two consecutive periods after July 31, the fishery will automatically close prior to its normal closing date of Aug. 15. “Everyone is worried about overexploiting the coho because we don’t know (enough),” said board member Israel Payton during the deliberation process in Anchorage. “ I was comfortable leaving it as it was a few years ago … I thought it was appropriate. I think the in-river users think two fish is appropriate, and the in-river users think the one percent rule should be back to the July 31 date.” The 1 percent rule went into effect after the 2014 board meeting, and the effective date moved from July 31 to Aug. 7 after the 2017 meeting. Payton, who voted against moving the date at the 2017 meeting, said he thought the board made the wrong decision at that time to move the date back to Aug. 7, especially as the board also voted against increasing the bag limit for inriver users. Setnetters objected, saying it would unfairly truncate their opportunity to harvest sockeye salmon. Sockeye runs on the Kenai have been increasingly arriving in August—in 2018, for the first time on record, more than half the run arrived after Aug. 1. The fleet also shrinks in August, as more people begin pulling nets out of the water and fewer people are fishing. The rule is evaluated based on the entire fleet, and so the one percent rule makes it a challenge for the whole fleet to keep up with the catch. Gary Hollier, a longtime East Side setnetter, told the board the fleet’s harvest of Kenai-bound coho salmon is relatively minimal. Genetics data provided by the department estimated the East Side setnet harvest of Kenai-bound coho at about 5,400 fish last year, said Pat Shields, the commercial fisheries management coordinator for Upper and Lower Cook Inlet. The total yearly Cook Inlet-wide coho harvest has declined by about 56 percent, or roughly 150,000 fish per year since 1999 compared to historical averages, according to department figures. Comparatively, the Kenai River sport coho harvest has remained roughly flat over that time. Historical data indicate the Kenai coho run is about 150,000 fish. “(The commercial coho harvest) is already minimized,” Hollier said. “There’s no reason to change this. If anything, the minimize date… was Aug. 15. That’s the minimize date.” Shields said the 1 percent rule was not used since being moved back to Aug. 7 in 2017, but other restrictions were placed on the setnet fishery in recent years because of low king and sockeye returns. It was used periodically in years when it took effect July 31, according to Shields. Kevin Delaney, a former ADFG sportfisheries biologist and consultant with the Kenai River Sportfishing Association, pointed to another proposal for the board to increase the bag limit of coho to three from the current two. In 2017, the board declined to do so, citing concerns about harvest rates, but still moved back the effective date for the 1 percent rule. Coho are worth more to the sportfishery than the commercial fishery, he said, especially with the decline in king salmon availability across Alaska. “We stand ready to present reams of economic data that would reflect and inform the board and the public on the value of coho salmon for sportfishing in Upper Cook Inlet,” Delaney said. “That value has gone up exponentially because of the low abundance of king salmon we have. We’ve seen a real decline in the abundance of king salmon … what’s that done is it’s pushed a lot of the effort toward sockeye and coho salmon.” What the new rule is likely to cost setnetters, though, is sockeye. ADFG was neutral on the proposal but had concerns about the effect on management for escapement goals, said Alyssa Frothingham, the assistant area management biologist for commercial fisheries in Upper Cook Inlet. “The department has concerns, however, with restrictions that might impair our ability to meet sockeye salmon escapement objectives in the Kenai and Kasilof Rivers,” she told the board. Board member Fritz Johnson said that variability in salmon runs could end up unfairly restricting setnetters from harvesting sockeye. “In (Bristol Bay), fish don’t arrive where they’re headed in a steady stream,” he said. “The changes that can take place from a day or a tide can be significant, and under those circumstances, there can be a lot of lost opportunity if we enact this rule too early. I don’t think it’s right that the commercial fishery take a hit on this and lose opportunity.” The board ultimately voted to pass the proposal moving the date to July 31, taking no action on other 1 percent rule proposals based on it. Commercial fishermen had proposed eliminating it entirely, while other proposals sought to expand it to 2 or 3 percent, largely based on concerns for coho salmon harvest opportunities.

Movers and Shakers for Feb. 23

Kevin Henderson assumed the duties of the U.S. Army Corps of Engineers-Alaska District’s Equal Employment Opportunity manager in December 2019. Prior to retiring from active duty from the Army in June 2018 as a Sergeant First Class, Henderson served as the U.S. Army Alaska’s Sexual Harassment/Assault Response Prevention Operations Manager/Non-Commissioned officer-in-charge and Lead Sexual Assault Response Coordinator at Joint Base Elmendorf-Richardson. In that role, he trained and provided services to more than 10,000 soldiers, their families and Department of Defense civilians. During his 25 years in the Army, Henderson was stationed at Illeshiem, Germany; Schofield Barracks, Hawaii; Fort McCoy, Wisconsin; and Joint Base Elmendorf-Richardson, Alaska; serving as a Human Resources Specialist and maintaining the SHARP and SARC duties in several of those stations. He is a certified John Maxwell team coach, trainer, and speaker. Henderson is a DiSC behavioral consultant. He holds an associate’s degree in liberal arts from Chaminade University of Honolulu. Alaska Department of Transportation and Public Facilities Deputy Commissioner Mary Siroky is retiring again and Rob Carpenter will fill the deputy commissioner position effective Feb. 10. Carpenter has extensive legislative and budget experience. For the past 20 years, Carpenter has worked as a senior fiscal analyst with the Legislative Finance Division. In this role he focused on transportation operating and capital budgets. Carpenter has a degree in business administration, finance from the University of Oregon and an associate’s degree from the University of Alaska Southeast. Siroky will remain with DOT through May 1 and will work on special projects and to assure a smooth deputy commissioner transition. First National Bank Alaska announced several recent hires. Herbert Davis brings a master’s degree in capital markets and more than three decades of banking and management experience to his role as a commercial lending officer and assistant vice president at the Golden Valley Branch. With a bachelor’s degree in computer systems engineering and more than 23 years of information technology experience, Todd Naliboff was named Network Services manager and appointed vice president. Joe Donahue was named commercial loan officer and vice president. The Sitka Branch added Shauna Thornton as branch manager with nearly 10 years in banking and branch management. Thornton has a master’s in public administration and is currently working towards obtaining her Ph.D. The Alaska Railroad Corp. is promoting Sean Mesloh to become chief mechanical officer, effective March 1. The current CMO is 36-year railroad veteran Don Freestone, who retires Feb. 28. Mesloh began his railroad career nearly two decades ago in December 2000, when he was hired as a mechanical laborer in the Anchorage Car Shop. Within months, he began an apprenticeship, progressing through carmen apprentice levels, learning to maintain freight and passenger railcars. In January 2004, he earned full carman status. By 2006, Mesloh was promoted to mechanical supervisor, overseeing work on railcars, locomotives and heavy equipment. In this role, he gained three more years of hands-on shop experience. In 2008, Mesloh moved to Fairbanks as general mechanical supervisor. In late 2015, he was promoted to director of Fairbanks Operations, responsible for terminal and train functions on the railroad’s north end. Mesloh returned to Anchorage in November 2019 to accept ARRC’s manager of motive power and equipment position. Mesloh earned an associate’s degree in fire science and hazardous material control from the University of Alaska Fairbanks Chris Brown has been selected to fill the position of executive director for Consumer Lending at Alaska USA Federal Credit Union. Brown has more than 25 years of industry experience, including 12 years with Ford Motor Credit Co. He has been employed with Alaska USA since 2017, most recently as senior vice president, special credits.

FISH FACTOR: ASMI paper outlines Russia’s ambitious seafood plans

Lost in the headlines about the hits to seafood sales from the Trump Administration’s trade war with China is another international barrier with Russia that’s been going on far longer. In August 2014 Russia placed an embargo on all U.S. food products to retaliate for sanctions the U.S and other Western countries imposed over the invasion of Ukraine. The ban included Alaska seafood, which at the time accounted for more than $61 million in annual sales to Russia, primarily from pink salmon roe. But here’s the bigger hurt: For the nearly six years that the embargo has been in place, no corresponding limits have ever been imposed on Russian seafood coming into the US. At first, Alaska seafood companies and the Congressional delegation made some “tit for tat” noise about imposing a ban on Russian seafood. But in fact, the value of Russian imports has grown nearly 70 percent since 2014; and it all comes into the U.S. almost entirely duty free. A four-page white paper from the Alaska Seafood Marketing Institute outlines the trade imbalance further. For example, the U.S. imported $551 million of seafood from Russia in 2018, plus $50 million of pollock from China that was caught in Russia. U.S. crab comprised 84 percent of the value of Russian imports just in that one year. Through December 2019, the numbers increased again; federal trade data show that more than 80.2 million pounds of Russian seafood entered the U.S. valued at over $698 million. That included nearly 16 million pounds of red king crab valued at $293 million and 4.6 million pounds of frozen sockeye salmon worth more than $16.7 million. Alaska and Russia harvest many of the same fish and crab species, and many Russian seafood products compete in the U.S. at much lower prices. The trade report reveals how ASMI worked aggressively to build markets in Russia starting in 2006, and steady growth boosted Alaska pink salmon prices from 2010 through 2013, which benefitted fishermen and coastal communities. The trade imbalance will only get worse, the ASMI report said, as Russia aims to nearly double the value of its global seafood exports by 2024 to more than $8 billion. Huge investments are underway to increase and modernize capacity by building more than 20 new processing plants and 90 new fishing vessels by the year 2030. The plan also includes the launch of a new marketing and supply chain strategy called “The Russian Fish.” Total investments by Russia to its fishery sector between 2018 and 2025 are estimated at nearly $7 billion. Call for crew trainees The call is out for Alaskans interested in learning firsthand about commercial fishing. It’s the third year for the Crew Training Program hosted by the Alaska Longline Fishermen’s Association in Sitka. More than 213 have applied so far from all across the country and 25 deckhands and 20 skippers have participated. “It’s very exciting to see so many young people interested in entering the commercial fishing industry. You always hear about the graying of the fleet but it shows that the interest is out there. Young people just need these resources to explore and get involved,” said Tara Racine, ALFA communications and program development coordinator. ALFA received a $70,000 grant from the National Fish and Wildlife Foundation to launch the program and to support similar crew apprenticeships in Alaska. Additional grants came from the Edgerton Foundation, the City and Borough of Sitka, the Alaska Community Foundation. “We are hoping to share any information and lessons that we’ve compiled and learned and material we’ve created and give it to anyone else interested in doing a program like this,” Racine said. Most of the recruits have gone out on longliners and trollers and plans include expanding to seiners and gillnetters in a flexible fishing schedule. “We have short term and long term programs,” she explained. “It could be just a couple of days for people who just want an intro and that’s what the skippers have the availability and time for. We also have plenty who go out for the entire season or several weeks at a time.” The rookies are paid for their work and Racine said skippers are eager to show them the ropes. “The skippers are looking for reliable crew and are wanting to mentor the next generation of resource stewards and skilled fishermen. So not only are they training the pool of young people in our area to become deck hands, they also are ensuring the life of this industry that they love and is so important to our coastal communities,” she said. Troller Eric Jordan has mentored more than 40 young fishermen aboard the F/V I Gotta. He believes the future depends on them learning the right ways to care for the fish. “Finding crew with some experience is so critical to the future of our individual businesses in the industry as a whole,” Jordan said. “One of the things this program provides is the taste of it. So, deckhands know they like it, and skippers can recommend them for future employment. It is a win-win for the crewmembers and the skippers.” The program’s growth will depend on more skipper participation. Applicants must be 18 or older to apply at www.alfafish.org/crewtraining. The deadline is Feb. 28. Dungie danger Two hundred fishermen in Southeast Alaska will share a record $16.3 million payday for the Dungeness crab they hauled up from combined summer and winter fisheries, which just wrapped up last month. Crabbers fishing primarily around Petersburg and Wrangell landed 5.3 million pounds of dungies for the season, the third highest catch and at an average $3.07 per pound, the most valuable ever. Meanwhile, some grim news for dungies has surfaced that reveals impacts of increased ocean acidity on the crab. Results from NOAA’s Pacific Marine Environmental Laboratory in California showed for the first time that corrosive conditions of coastal waters affected portions of the fragile, still-developing shells and legs of tiny, post-larval Dungeness crabs, leaving tell-tale features such as abnormal ridging structures and scarred surfaces. In another surprising discovery, lab studies on crabs collected in 2016 showed increased acidity caused the loss of hair-like bristles called mechanoreceptors that stick out from the shell and transmit important chemical and mechanical sensations that help the crabs navigate their environment. The research team said “this is a new aspect of crustacean sensitivity to ocean acidification that has not been previously reported.” Previously, scientists thought Dungeness crab were not vulnerable to current levels of acidity. “This is the first study that demonstrates that larval crabs are already affected by ocean acidification in the natural environment and builds on previous understanding of ocean acidification impacts on pteropods,” lead author Nina Bednarsek said in a press release. (Pteropods are tiny floating snails that are a main diet for juvenile pink salmon) Dungeness crab is the West Coast’s most valuable fishery and all states are working to develop policies and management tools to deal with effects on marine life from the off kilter ocean chemistry. Some reports have shown that even if preventive measures are taken now, the situation will still worsen in coming years before it gets better. Laine Welch lives in Kodiak. Visit www.alaskafishradio.com or contact [email protected] for information.

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