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Speaker cautious, but optimistic, about oil tax changes

JUNEAU — House Speaker Mike Chenault is hopeful, but still cautious, on prospects for a major reform of state oil and gas taxes passing the Legislature in the final weeks of the 2012 session. With 28 days left in the session before the required April 15 adjournment hearings are still underway on the Senate’s version of the bill, Senate Bill 192, in the Senate Finance Committee. In a Monday briefing by House leaders Chenault said he thinks it may take one to two weeks for the Senate to finish its work and pass the bill to the House. The Senate version is much different than an oil tax bill passed by the House last year, House Bill 110. “When we get the Senate’s bill we will assign it to committees in the House for review, to see what’s in it, and see if we can get enough consensus for action,” Chenault said. House members are watching the Senate committee’s deliberations but with other bills pending in the House it is difficult to set aside enough time to gain a full understanding of detailed presentations being made by consultants to the Senate, the Speaker said. It would be possible for the House to pass the bill with just two weeks left, but it will depend on what House members think of the Senate proposal, the Speaker said. “Remember that we passed ACES (the current state oil tax) in just three and a half weeks,” he said. ACES, or “Alaska’s Clear and Equitable Share,” the state’s net profits production tax, was adopted in 2007. House Bill 110, which is now in the Senate Labor and Commerce Committee, was introduced last year by Gov. Sean Parnell to make changes in the ACES tax to encourage more industry production. The bill was modified in House committees and passed to the Senate. On other matters Chenault said the House version of the operating budget passed that body last Friday and has now gone to the Senate. “We expect to get it back in about two weeks, and then go to conference to work out differences,” between the House and Senate versions of the operating budget, Chenault said. Meanwhile, the House Finance Committee will start work on its version of a capital budget bill this week, he said. The Senate has been working on its capital budget for several weeks.

Alaska labor commissioner retiring

JUNEAU (AP) — Alaska's labor commissioner is retiring. Click Bishop, in a letter to Gov. Sean Parnell, says his family looks forward to having him home full-time. He requests his retirement be effective March 23. The letter is dated March 9. Bishop cites several of the department's accomplishments over the last several years, including reducing workplace injuries and deaths and making permanent the State Training and Employment program. Goals of the program include promoting local hire and improving the quality of in-state job training and employment assistance. Bishop was appointed to the post in 2007 by then-Gov. Sarah Palin.  

Exxon sets spending at $185B over next 5 years

NEW YORK (AP) — Exxon said Thursday that it will spend about $150 billion over the next five years to find more oil and natural gas to satisfy for the world's growing energy appetite. Exxon, the world's largest publicly traded energy company, expects global energy demand to increase 30 percent by 2040, compared with 2010 levels. As demand grows, Tillerson said Exxon will plow more money into a global search for new resources. Including investments in its refining and chemicals business, Exxon's capital budget for 2012 through 2016 will total $185 billion, up 29 percent from the prior five-year period. "Unprecedented levels of investment are needed to meet the scale of the energy challenge," CEO Rex Tillerson told analysts at the New York Stock Exchange. Major oil companies are struggling to tap new sources of oil fast enough in an environment where big finds are rarer and costlier to exploit. Potential fields lie deep under the seabed, or in shale rock formations that require expensive technology to crack open. When companies can't find oil fast enough, they're stuck with aging fields where production is on the decline. International production agreements also reduce how much they can sell as prices rise. Exxon Mobil Corp., Chevron Corp., BP and Royal Dutch Shell all produced less crude last year than in the prior year. Tillerson said Exxon's production could fall by another 3 percent this year, when compared with 2011. He also reduced the company's long-term expectation for average annual production growth to 2-3 percent, from a previous forecast of 4-5 percent. Exxon has steadily increased its access to oil and gas fields during the past several years through exploration and acquisition. But its focus recently has been on developing more natural gas, which the company believes will replace coal as the second-most popular fuel in 2025. Natural gas has made up more than half of Exxon's proven reserves since 2009, and in 2010 it spent $30 billion to acquire XTO Energy and become the largest natural gas producer in the U.S. Its natural gas bet so far hasn't paid off. Prices have plummeted this year following a production boom in North America and weak winter heating demand. Natural gas futures hit a 10-year low of $2.302 per 1,000 cubic feet on Wednesday. Competitors such as Chesapeake Energy Corp. and ConocoPhillips have cut back on natural gas production this year in an effort to reduce a national surplus. Exxon says it won't reduce gas production, though it will focus its future projects toward bringing more oil to market. The company said that production of crude and other liquid hydrocarbons will increase by 2 to 3 percent per year through 2016, outpacing increases in natural gas production. Altogether, Exxon said 21 oil and gas productions will begin production by 2014, and it expects to add more than 1 million barrels per day of oil and gas by 2016. High oil prices have supported Exxon's financial performance. Exxon's net income rose almost 35 percent in 2011. Exxon shares fell 90 cents in morning trading Thursday, to $84.93.

Natural gas prices drop sharply on bulging supply

Natural gas prices fell sharply Thursday after spring-like weather blanketed much of the country, raising expectations that demand will remain weak. At the same time, supplies have stayed well above year-ago levels. The amount of natural gas in storage in the U.S. fell 80 billion cubic feet to 2.433 trillion cubic feet last week. That figure is 48.3 percent more than the five-year average, the Energy Department said. Analysts had expected a decline between 82 billion cubic feet and 86 billion cubic feet, according to a survey by Platts, the energy information arm of McGraw-Hill. Natural gas fell 5.5 cents, or 2.4 percent, to $2.247 per 1,000 cubic feet in New York. The price has fallen about 27 percent this year and is at the lowest level in a decade. Oil, meanwhile, rose near $107 per barrel as traders continue to be concerned about tensions between Israel, the U.S. and Iran. Natural gas stockpiles have expanded steadily this year as consumers and business owners have kept thermostats at lower temperatures during a mild winter. About a quarter of the nation's electricity is generated using natural gas. At the same time, production is booming because energy companies are accessing underground reserves using newer drilling techniques. Chesapeake Energy Corp. and other producers already have said that they will reduce production because of the low price. Some analysts speculate that the price could fall to $2 per 1,000 cubic feet or even lower if demand doesn't pick up significantly when air conditioners are turned on for the summer. "The bottom line is that there is too much natural gas in storage and temperatures are unlikely to help in the near term," Cameron Hanover analysts stated in a research report. Energy consultant Jim Ritterbusch thinks more producers will announce voluntary production cutbacks before the price falls too much lower. He's forecasting a range of $2.15 per 1,000 cubic feet to $2.20 per 1,000 cubic feet. In other trading, oil prices rose because of developments in the Middle East and Europe. Tension over Iran's nuclear program is a big reason that oil prices have risen about 14 percent in a little more than four months. On Thursday, an Israeli official claimed satellite images back Israel's contention that Iran is developing a nuclear weapon. Oil prices also got support from signs that a $140 billion bond swap deal to restructure Greece's debt will succeed. That would keep the country from defaulting on a massive amount of debt and benefit the European economy. The results of the exchange are expected to be announced early Friday. That development overshadowed a report from the U.S. Labor Department showing that the number of people seeking unemployment benefits rose slightly more than expected last week. Benchmark crude rose 55 cents to $106.71 per barrel. Heating oil rose 4.34 cents to $3.2628 per gallon and gasoline futures increased 2.15 cents to $3.3089 per gallon. At the pump, the national average for retail gas fell 0.3 cent overnight to $3.758 a gallon, according to AAA, Wright Express and the Oil Price Information Service. The price is about 28 cents more than a month ago and about 23 cents more than a year ago.  

Alaska Air Group pays $54M in employee bonuses

SEATTLE (AP) — Alaska Air Group paid almost $54 million in annual bonuses Wednesday to nearly all of its 12,800 employees for exceeding the company's 2011 operational and financial goals. The bonus amounts to nearly 7 percent of annual pay or more than three weeks' salary for most workers. Nearly $33 million or 61 percent of the total goes to some 6,300 Alaska Airlines and Horizon Air employees in the Puget Sound area. Nearly $8 million goes to 2,100 employees in Portland, more than $5 million to 1,600 workers in Alaska, and nearly $5 million to 1,300 workers in California. Spokeswoman Bobbie Egan says Alaska is among the top airlines in profit-sharing bonuses per employee. Alaska and Horizon airlines serve 90 cities in the United States, Canada and Mexico.

New poll shows Parnell and his policies get good ratings

A new poll shows almost 75 percent of Alaska voters believe Gov. Sean Parnell is doing a good job, with negative ratings from about 22 percent of responses in the survey. Alaska’s two U.S. senators, Lisa Murkowski and Mark Begich, also received highly favorable ratings. Hellenthal & Associates, a survey research firm, did the poll of 272 Alaska voters in the last week of January. Responses were from around the state but with most from Anchorage. The governor’s proposed oil tax changes were supported by 59.4 percent of those in the survey, with 33.3 percent opposed and 7.3 percent unsure. One other Parnell initiative, construction of a large hydro dam on the Susitna River, was favored by 60 percent of respondents, with 19.8 percent opposed and 20.2 percent unsure. For Murkowski, 71.1 percent were either “very positive” (28.1 percent) or  “somewhat good” (43.6 percent) on her job performance. Of the 24.8 percent disapproving, 19.3 percent were “somewhat negative” and 5.3 percent were “very negative;” 3.7 percent of respondents said they were neutral. For Begich, 58.1 percent were either “very positive” (17.2 percent) or “somewhat positive” (40.9 percent). Of the 36.6 percent disapproving, 22.4 percent said they were “somewhat negative” on Begich, and 14.2 percent said they were “very negative;” 6.7 percent of the respondents said they were neutral. Alaska’s Congressman Don Young was not included in the survey.

GAO: better monitoring of subcontracting needed in 8(a)

Supporters of a federal program that gives Alaska Native corporations a special edge worth billions of dollars in federal contracts said Wednesday that a U.S. government report found what they have long been in favor of: improved oversight of the program. "It is disappointing that critics are using this innocuous report to attack a program that creates economic opportunity for Native people across the country," said Will Anderson, president of Koniag Inc., a regional Native corporation and member of a coalition representing Native corporations. The report by the Government Accountability Office says agencies need to do a better job monitoring the Small Business Administration 8(a) program that's designed to help small disadvantaged firms. The report says Native corporations, also known as ANCs, represented $4.7 billion of the $5.5 billion in 2010 program obligations. Sole-source contracts are a primary source of a growth in the tribal 8(a) program. The GAO report says an audit found minimal oversight by contracting officers working with Native firms enrolled in the program. A particular area of concern, the report said, was a lack of monitoring on subcontracting. "Not monitoring the limitations on subcontracting can pose a major risk that an improper amount of work is being done by large business subcontractors under large-dollar value, sole-source contracts to tribal 8(a) firms," says the report released Tuesday. U.S. Rep. Ed Markey, D-Mass., is calling for a congressional hearing on the report. Markey and other members of Congress have also requested another GAO report to look at ANC financial disclosures and corporate governance. "We need ANCs to promote economic development and opportunity for Alaska Natives," Markey said. "We should make sure they are serving this purpose above all else." The SBA implemented new rules last year after the audit began. Companies owned by tribes, Native corporations and Native Hawaiian organizations are now required to report the benefits returning to their communities. Critics of Alaska Native contracts include U.S. Sen. Claire McCaskill, D-Mo., who has introduced legislation to strip ANCs of their advantage. McCaskill has said only a small percentage of the companies' profits are reaching Native shareholders. "This report is further proof that there are serious, ongoing problems with Alaska Native contracting and that those problems are wasting taxpayers' money," she said in a statement. "The baby-steps taken so far to crack down on these problems haven't solved the issue, and serious reforms are necessary to protect the American people and their tax dollars." Supporters include all three members of Alaska's congressional delegation. Republican Sen. Lisa Murkowski said the new SBA rules should be given a chance to take hold, adding that more oversight is desirable. She said it was important to note that the GAO recommendations didn't include making any statutory changes to the program. "From the perspective of those ANC 8(a)s, they've said 'We don't have any problem with the transparency, the monitoring, the oversight," she said. Democratic Sen. Mark Begich said there are no negative findings of ANCs themselves in the report, which focuses mostly on how the program can be better managed. "I've long said the SBA's 8(a) program needs better training and better oversight, and this report confirms that," he said. The third member of the state's delegation, Republican Rep. Don Young, said he was pleased with to see the SBA revamp its regulations to reduce potential abuse. "Unfortunately, Alaska Native Corporations have become an unjustified target for criticism from those who fear Native economic development," he said.  

Natural gas price up on production cuts

NEW YORK (AP) — The price of natural gas jumped Thursday after a major producer said it is aggressively cutting production. Chesapeake Energy Corp. told investors its production cuts are "actually higher" than the minimum of 500 million cubic feet per day it announced in January. Investor relations chief Jeffrey Mobley said at an energy conference in Colorado that the company will push many of its natural gas operations to the sidelines until "what is hopefully a higher gas price environment" in the future. If prices remain weak, Chesapeake may limit natural gas production by up to a billion cubic feet per day. Natural gas futures climbed by 4 cents, or 1.4 percent, to $2.48 per 1,000 cubic feet in New York. Prices surged by more than 5 percent earlier in the day after Mobley suggested that Chesapeake was increasing the production cuts beyond what was previously announced in January. The company clarified the statement later in the day. Analysts said Thursday's announcement by Chesapeake shows that energy companies are watching the market closely and will aggressively manage supplies to push prices higher. "Perhaps this won't be the end," PFGBest analyst Phil Flynn said. "If prices stay low, maybe they'll drop production even more." The government reported earlier in the day that natural gas supplies fell last week by 78 billion cubic feet. That was less than analysts expected, and supply levels remain nearly 33 percent higher than the five-year average. Meanwhile, benchmark crude prices rose by $1.13 to $99.84 per barrel in New York. Brent crude rose by $1.11 to $118.31 per barrel in London. Prices increased after Greece agreed on new spending cuts and other austerity measures that were necessary to receive an international bailout. The deal eased concerns of bank failures that could impact Europe's economy and reduce petroleum demand. The U.S. also reported that the number of people seeking unemployment benefits fell to near a four-year low last week, suggesting that the job market is gaining strength. Energy demand tends to rise as the economy creates jobs and more people enter the daily commute. Retail gasoline prices rose by less than a penny to a national average of $3.49 per 1,000 cubic feet, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular is about 12 cents higher than it was a month ago and 37 cents higher than a year ago. In other energy trading, heating oil rose 2 cents to $3.21 per gallon and gasoline futures rose by 3 cents to $3 per gallon.

Russian tanker, U.S. icebreaker free of Bering Sea ice, headed home

The Coast Guard Cutter Healy, an icebreaker, and the Russian tanker T/V Renda have broken out of the Bering Sea ice and are in open water sailing for home, Stacey Smith, a spokeswoman for Vitus Marine LLC, said Monday. Vitus Marine had contracted with Nome-based Sitnasuak Corp. to make arrangements for the Renda to deliver 1.4 million gallons of fuel to Nome, and for the Healy to break a path through ice for the tanker. The two vessels left Nome Jan. 19 after delivering the fuel and spent the following 9 days breaking through about 300 miles of ice in conditions that were often difficult. At various points the Renda was stopped by the ice. The Renda is now en route to its base in Vladivostok, in the Russian Far East, Smith said.

Plea deal for one in massive contracting fraud case

WASHINGTON (AP) — A former Army Corps of Engineers employee has agreed to plead guilty for his role in what prosecutors say may be one of the largest and most brazen frauds involving U.S. government contracts, court papers show. Michael A. Alexander plans to plead guilty to charges of bribery and conspiracy to launder money, his attorney wrote in court papers, requesting a hearing as early as Monday. Alexander, another Army Corps of Engineers employee and two other men were indicted in October on charges of participating in a $20 million bribery and kickback scheme involving the awarding of government contracts. Alexander, a program director, and Kerry F. Khan, an Army Corps program manager, received kickbacks in exchange for directing government contracts to a subcontractor specializing in software encryption devices and other information assurance technology, prosecutors said. The kickbacks paid for luxuries including properties, Rolex and Cartier watches, sports cars and hotel accommodations, prosecutors said. The scheme, which authorities said spanned roughly four years, involved phony and inflated invoices for government contracts and millions of dollars in kickbacks that were funneled through a network of shell companies in the United States and around the world. Also indicted were Kerry Khan's son, Lee, and Harold F. Babb, the director of contracts for Eyak Technology LLC. Eyak Technology is a subsidiary of an Alaska native corporation with Virginia operations. It was the prime contractor for a five-year, $1 billion contract administered by the Army Corps of Engineers. The two Khans and Babb have pleaded not guilty, though two officials with an EyakTek subcontractor — Nova Datacom — have already pleaded guilty. It was not immediately clear whether Alexander planned to cooperate against his co-defendants, though his lawyer wrote that his client has agreed to plead guilty, "among other things," as part of a deal with the government. Alexander's lawyer, Christopher Davis, did not immediately return a call seeking comment Wednesday. A spokesman for the U.S. attorney's office in the District of Columbia, which is prosecuting the case, declined to comment.

US to unveil new forest rules

WASHINGTON (AP) — The Obama administration says new rules to manage nearly 200 million acres of national forests will protect watersheds and wildlife while promoting uses ranging from recreation to logging. The new rules, to replace guidelines thrown out by a federal court in 2009, are set to be released Thursday by Agriculture Secretary Tom Vilsack. A summary was obtained by The Associated Press. Vilsack said in an interview that the rules reflect more than 300,000 comments received since a draft plan was released last year. The new rules strengthen a requirement that decisions be based on the best available science and recognize that forests are used for a variety of purposes, Vilsack said. "I think it's a solid rule and done in a collaborative, open and transparent way," he said. The guidelines, known as a forest planning rule, will encourage forest restoration and watershed protection while creating opportunities for the timber industry and those who use the forest for recreation, he said. Vilsack, who has pledged to break through the logjam of political conflict over forest management, said the new regulation's emphasis on science and multiple uses should allow it to stand up to likely court challenges from environmental groups or the timber industry. "I am hopeful and confident that it will stand scrutiny," he said. Forest Service Chief Tom Tidwell said the guidelines would allow land management plans for individual forests to be completed more quickly and at a lower cost than under current rules, which date to the Reagan administration. Several attempts to revise the 1982 planning rule have been thrown out by federal courts in the past decade. Most recently a Bush administration plan was struck down in 2009. Environmentalists had fought the rule, saying it rolled back key forest protections. The Obama administration did not appeal the ruling, electing to develop a new forest planning rule to protect water, climate and wildlife. Under the new rule, forest plans could be developed within three to four years instead of taking up to seven years, as under current guidelines, Tidwell said. "We really can protect the forest at lower cost with less time," he said. The new regulation also should give forest managers more flexibility to address conditions on the ground, such as projects to thin the forest to reduce the risk of wildfire, Tidwell said. "We'll be able to get more work done — get more out of the forest and create more jobs," while at the same allowing greater recreational use, Tidwell said. Recreational use of the forest has grown exponentially in recent years. Like Vilsack, Tidwell said he is optimistic the new plan will stand up to scrutiny from environmental groups and the timber industry, both of which have challenged previous planning rules in court. "I'm optimistic that folks will want to give it a shot," Tidwell said. The 155 national forests and grasslands managed by the Forest Service cover 193 million acres in 42 states and Puerto Rico. Balance between industry and conservation in those areas has been tough to find since the existing rules went into effect three decades ago. At least three revisions of the rules have been struck down since 2000. The planning rule designates certain animal species that must be protected to ensure ecosystems are healthy. However, the rule became the basis of numerous lawsuits that sharply cut back logging to protect habitat for fish and wildlife. Meanwhile, the timber industry has continued to clamor for more logs, and conservation groups keep challenging timber sales, drilling and mining projects. Tom Partin, president of the American Forest Resource Council, a timber industry group, said his members will review the final rule to see if it follows a federal rule to manage forests for a diversity of plants and animals — not in a manner that places a single use or species above all else.

Top 40 Press Release

Jan. 20, 2012 The Alaska Journal of Commerce is pleased to announce the 2012 Top Forty Under 40® recipients. Each year, the Journal honors Alaska’s best 40 up-and-coming leaders who are under 40 years old. Recipients demonstrate professional excellence and a commitment to community. A selection committee chose these outstanding individuals from nearly 200 nominations. A luncheon honoring the 2012 Top Forty Under 40® recipients is scheduled for March 8 at Anchorage’s Dena’ina Civic and Convention Center. Below is a list of the recipients, separated by community: First Name Last Name Job Title Company City Nils Andreassen Managing Director Institute of the North Anchorage Dana Applebee Marketing Mngr Kendall Auto Group Anchorage CB Brady Owner Benchmark Construction Anchorage Jeffery Davis Associate Attorney Hughes Gorski Seedorf Odsen and Teervoren Anchorage Crissy Ditmore Project Manager VPSI Commuter Vanpools Anchorage Jara Haas Sales and Marketing Mngr Anchorage Museum at Rasmuson Center Anchorage Brandi Kirk HR Director Anchorage Museum at Rasmuson Center Anchorage Kristel Komakhuk Development Director First Alaskans Institute Anchorage Sunny Mall Asst Prof., Secondary Math Education University of Alaska Anchorage Anchorage Sarah Erkmann Communications Director Municipality of Anchorage Anchorage Stephanie Mormilo Municipal Traffic Engineer Municipality of Anchorage Anchorage Robert Morris Dir of Human Resources Alaska Children’s Services Anchorage Laura Nelson Project Mngr/Shareholder Watterson Construction Co. Anchorage Kameron Perez-Verdia CEO Avant-Garde Learning Alliance Anchorage Suzanne Rudolph President Providence Alaska Foundation Anchorage Aaron Steelman Project Manager Kiewit Building Group Inc. Anchorage Elizabeth Stuart Partner KPMG LLP Anchorage Geran Tarr Exec Director Alliance for Reproductive Justice Anchorage Aleesha Towns-Bain Sr. Program Associate Rasmuson Foundation Anchorage Louis Ulmer Sr Bus Development Officer First National Bank Alaska Anchorage Sarah Whicker COO Millrock Resource Inc./Millrock Exploration Corp Anchorage JR Wilcox President Cook Inlet Energy Anchorage Carol Wren Director or Employment & Training Cook Inlet Tribal Council Inc. Anchorage Tiffany Jane Zulkosky West Area Director USDA Rural Development Bethel Shawna Larson Council Member Chickaloon Village Traditional Council Chickaloon Seth Kelley Exec Director FOCUS Eagle River Meadow Bailey PIO, Northern Region Ak Department of Transportation Fairbanks Patrick Cotter Planner, GIS Specialist PDC Inc. Engineers Fairbanks Dallas Ferguson Men’s Hockey Coach University of Alaska Fairbanks Fairbanks Renee Staley Project Site Mngr Birchwood Homes Fairbanks Ryan Thomas Tilbury K-12 Counselor, Air Force Reserve Yukon-Koyukuk School District/US Pacific Command Fairbanks Karonhiakta’tie Bryan Maracle Natural Resources Director Council of Athabascan Tribal Governments Fort Yukon Karl Heinz Vice President, Haines Branch Manager First National Bank Alaska Haines Teri Simmons Healy Branch Manager First National Bank Alaska Healy J. Kate Burkhart Exec Director Advisory Board on Alcoholism and Drug Abuse Juneau Russell Dick President/CEO Haa Aani (subsidiary of Sealaska Corp.) Juneau Gretchen Klein   Big Brothers Big Sisters/AEYC Liaison Ketchikan Ketchikan Erin Elizabeth Uloth Partnerships/Public Affairs Officer US Forest Service Ketchikan Mark Lackey Exec Director CCS Early Learning Palmer Christy Terry Seward Dock Ops Mngr Alaska Railroad Corp Seward           The Journal will begin accepting nominations for the 2013 class of Top Forty recipients in the summer. Watch for more information at www.AlaskaJournal.com. For sponsorship information, contact Cheryl Metiva at (907) 275-2109. Top Forty tickets available starting Monday, January 23, 2012. To reserve a ticket for the luncheon on March 8, contact Katie Johnston at (907) 275-2108 or by email at [email protected]

Judge upholds fishing closures while finding feds violated NEPA

Alaska U.S. District Court Judge Timothy Burgess has handed down his ruling in the case brought against National Marine Fisheries Service by the state and a coalition of fishing groups. Burgess found that NMFS violated the National Environmental Policy Act by not preparing an environmental impact statement, or EIS, and for not adequately informing the public or allowing for comment before implementing its wide-ranging fishing closures for Pacific cod and Atka mackerel in the western Aleutian Islands. Burgess denies all other claims brought by the state and fishing groups, which included allegations the Steller sea lion regulations violated Magnuson-Stevens Act, the Administrative Procedures Act and the Endangered Species Act, and wrote that he does not intend to vacate the biological opinion or the interim final rule that put the fishing closures in place. “It does appear to the court, however, that some degree of injunctive relief is appropriate to remedy the NEPA violations given that the restrictions at issue are expected to continue into the future indefinitely,” Burgess wrote. “Accordingly, the Court intends to remand the matter to NMFS to prepare an EIS in compliance with NEPA procedures. … The Court also intends to set a reasonable, but definite, deadline for NMFS to complete this process.” The state and fishing groups had hoped Burgess would agree with their contention that NMFS exceeded its mandate under the ESA by applying recovery standards to subunits of Steller sea lions smaller than the distinct population segment, or DPS. Burgess did not announce a remedy in his 56-page order, and will take briefings from both sides up until Feb. 8. The affected fishing seasons began this month. Earthjustice attorney Colin O'Brien, who intervened in the case, praised Burgess' decision. "We are pleased the court upheld measures required by the Endangered Species Act to protect Steller sea lions," O'Brien wrote in an emailed statement. "Still, there is significant concern about whether the protection measures are enough. We are hopeful that authorities will move quickly to adopt additional protections if the endangered Steller sea lion population continues to falter.” Michael LeVine of Oceana was similarly pleased. "Overall, today is a good day for the oceans," he said. Freezer Longline Coalition Executive Director Kenny Down said the plaintiffs are in discussions about next steps, including whether they will appeal the ruling. "We’re extremely happy the judge ruled in our favor on the NEPA grounds," Down said. "We’re happy he agreed with us that NMFS did not prepare an EIS as they should have. At the same time, we’re disappointed the judge did not vacate the rule. We want to make it clear that finding in our favor on NEPA grounds is no small victory. This is a favorable outcome. The judge did agree with us that NMFS did not follow the procedures laid out by law."   Andrew Jensen can be reached at [email protected]

Parnell: Pipeline timeline borne of frustration

JUNEAU — Alaska Gov. Sean Parnell said Thursday that he didn't seek approval of the North Slope's three major players before setting a timeline for progress on a major natural gas pipeline project. Parnell, in his first news conference of the legislative session, told reporters the timeline he set out in Wednesday evening's State of the State address was borne of frustration. He said that he — and Alaskans — are tired of waiting for a gas project. In October, Parnell called on the big three — Exxon Mobil Corp., BP and ConocoPhillips — to unite behind a project that allows for liquefied natural gas exports to the Pacific Rim if the market has shifted from the Lower 48. TransCanada Corp., which holds an exclusive license with the state to advance the line and is working with Exxon Mobil, has been focusing mainly on a line that would serve North America markets. But TransCanada has yet to announce agreements with producers, and changes in the past several years, including the rise of shale gas, have led to concerns that there will be little demand for Alaska gas in the Lower 48 anyway. In his address to lawmakers Wednesday, Parnell set a March 30 deadline for alignment under the Alaska Gasline Inducement Act, or AGIA, the law passed under then-Gov. Sarah Palin in an effort to jumpstart a line. He said this alignment must include work on a line to tidewater that would allow for overseas exports. But he noted Thursday that the Lower 48 option could remain on the table, allowing the companies to compare the economics of it against those of a liquefied natural gas option. He said that if the companies don't meet his expectations, they should expect a "change in direction" and for the state to pursue other gas line options. "I think I have the people of Alaska with me," he said. That first deadline will come near the end of the 90-day session. Parnell said the companies have been working and that he's optimistic there will be alignment. Sen. Joe Thomas, D-Fairbanks, said late Wednesday in reaction to Parnell's speech that the timeline is aggressive and potentially realistic but nothing binds the companies to it. He said the real question surrounds the market potential for Alaska gas. A rival project to TransCanada's that would have served North America markets, a joint effort of BP and ConocoPhillips, folded last year. Leaders of BP and ConocoPhillips balked at provisions of AGIA, giving rise to the rival project. They have since expressed interest in exploring a liquefied natural gas option. Parnell's first deadline looms: he wants resolution of litigation over disputed leases in the Point Thomson gas fields by Feb. 8. If there is none, he said the state would fight for its interests at a court hearing that day. The leases are seen as key to a major gas line project.  

Alaska unemployment unchanged in December

JUNEAU — Alaska's December unemployment rate stood at 7.3 percent, unchanged from the month prior. That level matches the lowest rate seen in Alaska in 2011. The U.S. Department of Labor's Bureau of Labor Statistics shows Alaska also had 7.3 percent unemployment in April and May last year. Seven-point-three percent is the lowest level since February 2009, when seasonally adjusted unemployment stood at 7.2 percent in Alaska. Last month's rate compares to 7.9 percent in December 2010. Nationally, the seasonally adjusted unemployment rate for last month was 8.5 percent.  

Judge finds feds violated NEPA on Steller sea lion regs

• This story has been updated to reflect Burgess' comments on injunctive relief. • Second update adds quotes from Earthjustice and Oceana • Third update adds quotes from Freezer Longline Coalition Alaska U.S. District Court Judge Timothy Burgess has handed down his ruling in the case brought against National Marine Fisheries Service by the state and a coalition of fishing groups. Burgess found that NMFS violated the National Environmental Policy Act by not preparing an environmental impact statement, or EIS, and for not adequately informing the public or allowing for comment before implementing its wide-ranging fishing closures for Pacific cod and Atka mackerel in the western Aleutian Islands. Burgess denies all other claims brought by the state and fishing groups, which included allegations the Steller sea lion regulations violated Magnuson-Stevens Act, the Administrative Procedures Act and the Endangered Species Act, and wrote that he does not intend to vacate the biological opinion or the interim final rule that put the fishing closures in place. “It does appear to the court, however, that some degree of injunctive relief is appropriate to remedy the NEPA violations given that the restrictions at issue are expected to continue into the future indefinitely,” Burgess wrote. “Accordingly, the Court intends to remand the matter to NMFS to prepare an EIS in compliance with NEPA procedures. … The Court also intends to set a reasonable, but definite, deadline for NMFS to complete this process.” The state and fishing groups had hoped Burgess would agree with their contention that NMFS exceeded its mandate under the ESA by applying recovery standards to subunits of Steller sea lions smaller than the distinct population segment, or DPS. Burgess did not announce a remedy in his 56-page order, and will take briefings from both sides up until Feb. 8. The affected fishing seasons began this month. Earthjustice attorney Colin O'Brien, who intervened in the case, praised Burgess' decision. "We are pleased the court upheld measures required by the Endangered Species Act to protect Steller sea lions," O'Brien wrote in an emailed statement. "Still, there is significant concern about whether the protection measures are enough. We are hopeful that authorities will move quickly to adopt additional protections if the endangered Steller sea lion population continues to falter.” Michael Levine of Ocean was similarly pleased. "Overall, today is a good day for the oceans," he said. Freezer Longline Coalition Executive Director Kenny Down said the plaintiffs are in discussions about next steps, including whether they will appeal the ruling. "We’re extremely happy the judge ruled in our favor on the NEPA grounds," Down said. "We’re happy he agreed with us that NMFS did not prepare an EIS as they should have. At the same time, we’re disappointed the judge did not vacate the rule. We want to make it clear that finding in our favor on NEPA grounds is no small victory. This is a favorable outcome. The judge did agree with us that NMFS did not follow the procedures laid out by law."   Andrew Jensen can be reached at [email protected]

Fuel transfer done in Nome

A massive effort to pump fuel from a Russian tanker to the iced-in Alaska city of Nome is complete, moving an estimated 1.3 million gallons into the city that faced a shortage after missing its last delivery. Stacey Smith, manager of Vitus Marine LLC — the company that arranged for the tanker to deliver gas and diesel to the city — said the operation finished up Thursday morning. Smith said the pumping operation finished up with temperatures finally reaching above zero in Nome, which for weeks has been experiencing record cold temperatures, dipping to more than 30 below zero. The two lines that pumped both gasoline and diesel fuel from the ship will have to be cleared of any residual fuel, which could mean up to 7,000 more gallons of fuel. The city of 3,500 didn't get its last pre-winter barge fuel delivery because of a massive November storm. Without the Russian tanker's delivery, Nome would run out of fuel by March or April, long before the next barge delivery is possible. Alaska has had one of the most severe winters in decades. Snow has piled up 10 feet or higher against the wood-sided buildings in Nome, a former gold rush town that is the final stop on the 1,150-mile Iditarod Trail Sled Dog Race. This is the first time petroleum products have been delivered to a western Alaska community by sea in winter. The Russian tanker Renda began its journey from Russia in mid-December, picking up diesel fuel in South Korea before heading to Dutch Harbor, Alaska, where it took on unleaded gasoline. It arrived last week off Nome on Alaska's west coast, more than 500 miles from Anchorage. A Coast Guard icebreaker cleared a path for the 370-foot tanker through hundreds of miles of a slow journey stalled by thick ice and strong ocean currents. In total, the tanker traveled an estimated 5,000 miles. Two parallel hoses, 700 yards long each, stretched between the Renda and a pipeline that delivered the estimated 1.3 million gallons of fuel to storage tanks near the harbor of the iced-in city.

Shell gets final OK on air permit for Chukchi Sea drilling

The U.S. Environmental Protection Agency's Environmental Appeals Board has approved Shell Oil's air quality permit for the Noble Discoverer drillship, Shell announced Thursday. The drilling vessel will be used by Shell to drill up to three exploration wells in the Chukchi Sea this summer if Shell secures other permits and approvals that are still pending. The EAB, an internal appeals panel within the EPA, denied petitions for review of the permits filed by environmental groups. “Achieving usable air permits from the EPA is a very important step for Shell and one of the strongest indicators to date that we will be exploring our Chukchi and Beaufort Sea leases in July,” Shell spokesman Curtis Smith said in a statement. “That our air permits for the Noble Discoverer withstood appeal is a testament to the robust nature of the work we have done to have the smallest possible impact on the Arctic airshed,” Smith said. Shell equipped the drillship with advanced emissions control technology and will use ultra-low sulfur diesel fuel in operations of the vessel. Shell is planning to use another drill vessel, the Kulluk, in the Beaufort Sea in 2012. The company has not yet decided to mobilize for the summer drilling. “The validation of Shell’s first air quality permits is almost the end of what has been a long and exhaustive process,” said Sen. Lisa Murkowski. “I’m relieved that the EPA’s internal appeals board chose here not to drag out the process any further, and I hope that the permits for Shell’s second drillship, the Kulluk, are similarly confirmed in a timely manner.”  

Meet Alaska/Alliance Conference 2012

Tanker again making progress toward Nome

The 420-foot Coast Guard Cutter Healy breaks ice in the Bering Sea to assist the tanker Renda make way toward approximately 165 miles from Nome, Alaska, Sunday Jan. 8, 2012. The Coast Guard icebreaker is cutting a path through icy seas for a Russian tanker carrying much-needed fuel for the iced-in Alaska city of Nome. (AP Photo/U.S. Coast Guard/Petty Officer 3rd Class Jonathan Lally) A Russian tanker and a Coast Guard icebreaker are again making progress in the ice-choked and frozen waters of the Bering Sea. Coast Guard spokesman David Mosley says the tanker and the icebreaker are 78 miles from Nome. Mosley says conditions in the Bering Sea continue to be challenging, but the tanker and the icebreaker are again making headway. Thick ice, wind and unfavorable ocean currents had the vessels making little progress Tuesday, but conditions improved Wednesday. The tanker is loaded with 1.3 million gallons of fuel for Nome. The city missed its final pre-winter delivery of fuel by barge when a big storm swept the region last fall. Without the delivery, Nome could run short of fuel before a barge delivery becomes possible in late spring.

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