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Army to slash Fort Richardson Airborne Brigade by 2,600

Editor's note: This story has been updated from the original verison published July 8. U.S. Army officials said Wednesday they will downsize operations in Alaska at Joint Base Elmendorf-Richardson in Anchorage by cutting 2,600 soldiers. An additional 75 soldiers are being cut at Fort Wainwright in Fairbanks. Anchorage officials said the reductions will hurt but the regional economic effects are expected to be minimal over time. “This could have been a lot worse. They could have taken out the entire brigade of about 4,000 troops,” said Bill Popp, president of the Anchorage Economic Development Corp. The JBER reductions, part of an Army-wide cut of 40,000 troops, will be from the 4th Airborne Brigade Combat Team of the 25th Infantry Division. The brigade is being “downsized” to a battalion, but no official announcement on that has been made. The total is a little less than half of the 5,483 active duty Army personnel at JBER. Alaska U.S. Sens. Lisa Murkowski and Dan Sullivan, as well as Rep. Don Young, received calls from Army officials Wednesday informing them ahead of the official announcement, but Anchorage Mayor Ethan Berkowitz went ahead with a press release early Wednesday afternoon, prior to any official announcement from the Army or others. Berkowitz said the municipality is ready to provide any assistance needed to military families and personnel that will be dislocated by the decision. Popp said AEDC’s preliminary analysis is that the reduction will leave about 1,900 soldiers at JBER in a new rapid-deployment battalion task force as well as about 200 Army personnel attached to the Army’s Alaska headquarters unit, which AEDC has been told will remain at JBER. “About 4,000 dependents will be affected, so the total number of people involved is about 6,500 including troops and dependents. That’s about 2 percent of our population. While that’s not good, it isn’t devastating either,” Popp said. The effects will also be mitigated because the reductions will take place over time, he said. They will be mostly achieved through attrition, or soldiers ending their enlistments and not being retained. Popp said the regional effects on housing are expected to be minor. “There is a waiting list for on-base housing so we would not expect any vacancies there,” he said. The off-base housing impact is more difficult to judge. “We believe there are about 1,700 soldiers living off-base and we do not know where they live other than spread across the Anchorage bowl, Eagle River and the Matanuska-Susitna Borough. We believe that about 1,000 apartment units in the Anchorage area could be affected,” but the rental market is tight and as this will take place over time the effects will be mitigated by non-military growth in housing demand, he said. Public officials quickly criticized the Army’s decision. In a statement, Sen. Lisa Murkowski said, “Along with thousands of Alaskans, I find this decision devastating, far beyond what it means to our state economy, but what it means to America’s defense. It is staggering that the Obama administration is making such short-sighted decisions and ignoring the emerging threat before our noses presented by Russia, China and North Korea.” Sullivan said he was putting a hold on a senior Defense Department official who was scheduled to be confirmed Wednesday. “I am extremely frustrated with today’s decision,” Sullivan said. “But I take some solace that the U.S. Army left the door open to reversing this decision by not eliminating a full brigade from Alaska. While I understand these troop reductions reflect the Administration’s worldview of what the Army should be, I do not believe that the Department of Defense’s decision adhered to the Senate’s defense guidance in the NDAA (National Defense Authorization Act). “This decision was obviously made without a full understanding of the geostrategic importance of Alaska’s troops to our national security. Since day one, I have worked on the Senate Armed Services Committee to call attention to Russia’s increasingly aggressive military buildup in the Arctic. “And as I’m sure President Obama would even admit, Russia is not a JV team and neither is North Korea. Like this year’s National Defense Authorization Act says, we need more forces in the Asia-Pacific — like Alaska — not less. These decisions need to be made based on strategy, not on bean-counting. “Therefore, I have placed a hold on a senior DOD official who was set to be confirmed by the Senate today. I will continue the hold until I get answers to questions about how this affects our national security, and continue to work with our Congressional delegation and Gov. Walker to reverse this strategically misguided decision.”  Gov. Bill Walker had his own comments: “The decision to eliminate thousands of soldiers from JBER and Fort Wainwright will have harmful impacts on Alaska and the entire United States.” In his statement, Walker said he is concerned that this decision does not recognize the military’s national security requirements in the Pacific, or the acknowledgement by senior Army officials that it would take “months” to train and prepare a force to operate in the Arctic if starting from scratch. “By limiting the number of soldiers stationed in Alaska, we are reducing our nation’s capabilities when responding to matters in Asia and the Arctic,” Walker said. “We should be bolstering our military presence in Alaska right now, not making significant cuts to it.”    

Hull damage forces Shell Arctic support ship back to dock

An icebreaker carrying a key piece of equipment for Arctic drilling planned by Royal Dutch Shell off the northern coast of Alaska was forced to return to dock after a hole more than three feet long was discovered in its hull, the company said Tuesday. It was unclear if the mishap would delay Shell's plan for drilling this summer. The crew of the Fennica discovered the leak in a ballast tank on Friday as the ship was leaving the channel in Dutch Harbor, Alaska, on its way to the Arctic, Shell spokesman Curtis Smith said. The company had not determined if repairs can be made to the breach measuring about 39 inches long and a half-inch wide while the ship remains in Dutch Harbor or if it will have to go to drydock for the work. Smith said bad weather had kept Shell from getting an inspector to Dutch Harbor for almost two days. Shell had hoped to begin drilling the third week of July and is still awaiting a final drilling permit from the government. The Fennica, one of many support ships for two drilling rigs, was transporting a capping stack that would be used to seal a well in case of a blowout. Smith said other options were being considered if the Fennica cannot continue the trip, including transferring the equipment to another ship in the fleet. It wasn't immediately clear if that would require new permits from the government, another possible setback. Jessica Kershaw, a spokeswoman for the U.S. Department of the Interior, said Shell's proposal for drilling activity in the Chukchi Sea this summer remained under review. "As we've said from day one, Shell will be held to highest safety and environmental standards," Kershaw said in a statement. "This includes having on hand the required emergency response systems necessary for each phase of its drilling program." Shell did not immediately know how the Fennica was damaged. Smith said the inspectors planned to re-enact the ship's movements through the channel to see if there is a shallow hazard that wasn't previously charted.  

Repsol submits plans to Corps, capacity for 60K bbls/day

Repsol has laid out its plans for development of new oil discoveries in the Colville River delta about 52 miles west of Prudhoe Bay. The Madrid-based company has a 70 percent stake in the project with Armstrong Oil and Gas, an independent based in Denver, holding a 22.5 percent interest and another independent, GMT Exploration, holding 7.5 share. No cost or reserve estimates have been released by Repsol. In an application filed with the U.S. Army Corps of Engineers June 15, the company has proposed construction of three drill sites, a field operations center pad and pipelines sufficient to support 60,000 barrels per day of oil production. Pipeline construction would begin in the second year. Sealift modules, landed at Oliktok Point to the east, would be delivered in the open-water, summer season of the third year and hooked up that winter.  One production site would be on a pad where the operations center will also be located, according to the application to the Corps, while two other production sites will be on pads in other parts of the field. The project would include 76 production and injection wells, a 150-bed operations camp as well as warehouses and maintenance buildings. Also included are 11.1 miles of gravel in-field roads and a 13.8-mile, 38-foot-wide road from the field to a junction with existing Kuparuk field roads. The pad supporting facilities will be built to a minimum of six feet above the tundra surface, and road will be built to a minimum of five feet. Pipelines will be built parallel to roads to facilitate visual inspections, although they will be built 500 feet to 1,000 feet from the road where feasible, the application said. Field pipelines and the pipelines to Kuparuk would be seven feet off the tundra surface. A 21.5-mile, 10-inch pipeline would carry oil from the Nanushuk pad to a tie-in with the Kuparuk pipeline at the Central Processing Facility 2 in the Kuparuk River field. Once construction is approved, developing the field will take about 3½ years. The main Nanushuk Pad, the operations center pad and the access road would be built in the first winter season; the two other drill sites and the infield access roads would be built in the second and third years. Repsol’s project is taking shape after several years of drilling and testing of discoveries, totaling 16 wells include sidetracks, which are new wells drilled underground off a well drilled earlier. On June 2, the company released some results of its most recent tests including one well, Qugruk 8, flowing at rates of 2,160 barrels per day with 30 degree API gravity oil, and a second test, of Qugruk 301, flowing at rates up to 4,600 barrels per day from a horizontal well section. The company did not release the API gravity of the oil from Qugruk 301. API gravity, measured in degrees, is a rough measure of oil quality that is widely used in the industry. “The better-than-expected yields of good quality crude (from the most recent wells), added to the positive results from previous campaigns (drilling), confirms the significant development potential of the area,” Repsol said June 2 in a statement. In its statement, also released June 2, Armstrong provided more information. Armstong said three wells in the Alpine sand formation, which Armstrong called “East Alpine,” penetrated a layer of oil-saturated sandstone more than 95 feet in thickness at a depth of 6,500 feet. Testing has indicated that the reservoir covers an area in excess of 15,000 acres, Armstrong said. Armstong also said the horizontal well mentioned by Repsol, Qugruk 301, tested the Nanushuk formation at up to 4,600 barrels per day, but the production test also indicated no “pressure drawdown” in the producing reservoir at the end of the test. The length of the test was not indicated but the fact that there was no change in reservoir pressure is an indication that a substantial amount of oil is present, according to a source familiar with the geology of the region. Armstrong also said that the Nanushuk formation appears to cover an area of 25,000 acres at the depth of 4,100 feet, with an “oil column” of up to 650 feet thick and “net pay” (the most productive zone) of 150 feet. The shallowness of the reservoir, along with the failure to mention the API gravity, could indicate that the Nanushuk formation could be cooler in temperature and, possibly, a lower-quality oil formation similar to the Torok formation encountered a few miles east by Caelus Energy at the Nuna project, or the West Sak viscous oil being developed by ConocoPhillips in the Kuparuk River field. However, the good daily flow rate of the Qugruk 301 well during its production test would seem to argue against that, because it seems to indicate a conventional crude oil.

Pipeline buildout buoys Interior opinion of gas project

NORTH POLE — There are construction projects all over the Fairbanks North Star Borough this summer: buildings are going up; roads are being repaved; and natural gas pipe is being buried in many parts of the area for the first time. Upwards of 4,000 feet is being added to the Interior Gas Utility’s infant distribution system each day, IGU engineer and project manager David Prusak said during a tour of the work June 25. The 15 crews working for IGU have buried more than 1.5 miles of pipe about 42 inches deep during their best days, according to Prusak. He said the goal is to complete Phase 1 of the distribution buildout in the center of North Pole by the end of September. To do that the crews have to trench about 315,000 feet of two-inch diameter polyethylene pipe, and roughly equal amounts of four-inch and eight-inch mainline pipe. Total installation needs to be about 400,000 feet — more than 75 miles — in about 100 days to stay on track this year, Prusak said. About 120,000 feet was finished in North Pole when work wrapped up June 27. At the end of IGU’s six-phase buildout, about 17,000 North Pole and Fairbanks homes and businesses currently reliant on fuel oil should have access to a cleaner and hopefully cheaper energy source, when combined with the Fairbanks Natural Gas Co. network expansion. Early spring right-of-way clearing was met with skepticism from North Pole residents. “They’ve been promised natural gas for a long time and they didn’t believe it,” Prusak said. IGU received 10 to 15 complaints per day at first, he said, but now as word and information campaigns have spread, the mood of the community has turned positive. Recent callers just have questions about work. Bob Shefchik, a former University of Alaska Fairbanks administrator, Interior Gas Utility chairman and the current Interior Energy Project manager, said in an interview that finally getting natural gas to the broader area would be a “dynamic change” to the future of the region. “Fairbanks is kind of on the cusp of…are they going to shrink or succeed?” he said. North Pole Mayor Bryce Ward also said in an interview that the construction happening this summer is helping to improve residents’ opinion of the project. “The proof is in the pudding, if you will. I think when gas is running down the lines is going to be really the true test, but I think people definitely want it and they’re excited about it,” Ward said. “ Just when and what price it’s going to be is still up in the air so there’s some uncertainty there.” “First gas” will likely arrive in the summer of 2017 at the earliest, a departure from estimates of the fall of 2016, Shefchik said. That is primarily due to the reboot of the Interior Energy Project in January, when the Alaska Industrial Development and Export Authority, or AIDEA, parted ways with the engineering and consulting firm MWH, its former partner in a North Slope gas-trucking plan. With the focus of the new iteration of the project shifted south to Cook Inlet, developing a gas supply chain and the necessary infrastructure will take time, he said. “Folks in the construction industry would think the summer of 2017 is aggressive,” he said. The late 2016 goal for gas was the end of an ambitious timeline under the old Interior Energy Project. Shefchik emphasized the role Southcentral natural gas utility Enstar Natural Gas Co. has played in developing the IGU distribution system. He said the company has been “incredibly cooperative” in offering technical expertise — some paid and some pro-bono work — to the startup utility. Enstar Vice President of Business Development John Sims said the emphasis from Enstar’s point of view is safely developing a gas distribution system. Marketing, business, and gas conversion strategy input has followed. “They have a couple of our individuals’ phones on speed dial and they’re welcome to call us anytime and we’re happy to provide any assistance we can,” Sims said. When IGU’s buildout is complete, utility leaders have said they would like to hire a private firm to handle operations. With AIDEA’s purchase of Fairbanks Natural Gas approved June 18, its operations could be expanded when AIDEA turns the utility over to a local entity, or another party could take over that role for IGU. The price of the natural gas or propane is more important than when it arrives, particularly in terms of cleaning up the region’s winter air, according to Ward. “People are driven to (burning wood) because of the economic freedom,” he said. “Paying the high cost for fuel oil is very prohibitive, and people enjoy living here and they want to continue to live here so they’re going to do the most economical thing, which at this point is burning wood.” Shefchik and AIDEA Infrastructure Development Officer Nick Szymoniak laid out the next six months for the project at the authority’s June 25 board of directors meeting in Fairbanks. First and foremost, Shefchik said this go-round of the Interior Energy Project would include the end users more. “In addition to evaluating other options was making sure both utilities and the communities were more involved in both the process and the decisions as we move forward,” Shefchik said. Currently the IEP team is waiting for a 60-day request for proposal, or RFP, solicitation window to close Aug. 3. In the interim, work is being done on liquefied natural gas storage and transportation options, work that would have been done earlier had House Bill 105, the authorizing legislation to allow AIDEA to use Interior Energy Project funds on a Cook Inlet-centric project, passed quicker, Shefchik said. “(Getting HB 105 passed) took longer than expected and consumed more resources than expected,” he said to the board. “Ultimately, it passed.” Developing LNG storage is starting from on-hold plans Fairbanks Natural Gas has to build a 5.25 million-gallon LNG tank in south Fairbanks. The utility suspended work when oil prices fell and the economics of expanding gas storage fell through, at least temporarily. AIDEA took inquiries from about 30 groups interested in the project prior to letting the RFP, according to Shefchik. The baseline for the RFP is a plan for a 6 billion cubic feet, or bcf, per year LNG plant located somewhere in Southcentral, without a gas supply, Szymoniak said. However, AIDEA is entertaining all offers, including “all-in-one” plans that include a gas supply, liquefaction and transportation to the Interior utilities, he said. Small diameter pipeline and propane proposals will also be investigated. If a serious North Slope plan reemerges, Szymoniak said AIDEA is prepared to donate the gravel pad it constructed on the Slope for an LNG plant as well as Interior electric utility Golden Valley Electric Association’s long-term wholesale natural gas contract with BP. “AIDEA is simply, from this RFP process, facilitating a commercial deal between the private developers and the utilities. AIDEA will probably enter into a potential agreement to provide financing, but it’s not actually going to be signing up to buy capacity at the plant,” Szymoniak said. “This is going to be a deal between the private developers and the utilities.” If a deal is struck the authority would then likely provide low-interest financing for capital development through the Sustainable Energy Transmission Supply, or SETS, fund loan and bond authority it has for the project. Expanding the small, 1 bcf per year LNG plant used by Fairbanks Natural Gas to more than 6 bcf could cost as little as $60 million, according to company leadership. That would be less than a third of the estimated cost of building a similar plant on the North Slope. The AIDEA board approved additional project expenditures from the SETS account and its economic development funds during the meeting. Another $500,000 in SETS funds and $200,000 in economic development fund money was given to the IEP team, doubling the SETS total to $1 million and the economic development expenditure to $400,000. Shefchik said the $148,000 spent from the original $200,000 development fund appropriation within AIDEA was used primarily for staff resources in Juneau dedicated to getting HB 105 passed.The SETS money will be used to hire expert help during proposal evaluations. “As we winnow down the proposals form the universe to four, and four to one, we expect to hire contractors to do technical evaluations,” Shefchik said.

AJOC EDITORIAL: Walker pulls rug from under explorers

Oh, the vagaries of print journalism. Our original cover story for this Oil & Gas Reporter was a profile of Corri Feige, the new director of the state Oil and Gas Division, and her effort to put the welcome mat out for new explorers coming to Alaska. After Gov. Bill Walker’s announcement June 30 that he was vetoing $200 million in tax credits for explorers with no tax liability, that headline quickly became obsolete. The subject of another article in this issue — an Australian-Houston venture to drill an exploration in a North Slope shale play — could also become moot based on Walker’s announcement to “start a discussion” about exploration credits by using his veto to delay payment of $200 million for which companies may be eligible. The venture by 88 Energy had just secured $50 million from Bank of America on June 24 to finance the project, and our reporter Tim Bradner wrote the effort could be eligible for up to 85 percent of its costs covered through the state exploration credit program. It’s unknown at this point what the impact of Walker’s decision will be on that project, but it’s not likely to be positive. Consider what Revenue Commissioner Randy Hoffbeck told the Senate Finance Committee Back on Jan. 28 after Walker first flagged the issue of the tax credits as “unsustainable” in a Jan. 8 opinion article. “Investments in the future, when you don’t have much revenue, are painful. But they’re still investments in the future,” Hoffbeck said. According to the Associated Press report on the hearing, “Hoffbeck said there is no systemic problem with the credits themselves. He said this is a cash-flow issue, driven by low prices.” It wouldn’t be the first time that Walker and his staff haven’t been on the same page. Later in the session, members of his team who’d been briefed on the Alaska LNG Project told legislators they were pleased with what they’d learned. That night, Walker dropped another op-ed expressing his goal to pursue a parallel, expanded state-owned gas pipeline project in case the Alaska LNG Project did not proceed. Thankfully, the Legislature killed Walker’s pipe dream by reappropriating money from the Alaska Gasline Development Corp. to prevent any funds from being spent on a competing project to AK LNG. Once again, Walker has done what he seems to do best: throw uncertainty at the state’s most important industry in the name of populist pandering. Although he claimed the opposite at his July 1 press conference, Walker had plenty of time and opportunity to weigh in on whether to shore up the budget deficit by capping or delaying credit payments to explorers — an idea Democrats were pushing nonstop — but he waited until now to do it. It is true that everyone in the state will feel the squeeze of budget cuts, but it is also true that agencies have also had plenty of time and opportunity to prepare for how to absorb them. What Walker’s action does is give pause to any company operating now or considering investing in the state because they’ll have no idea what the rules of the game will be or when the next time they will change without warning. And some folks — like the governor — wonder why the major Slope producers are making fiscal certainty on oil and gas taxes the keystone of any decision to proceed with the Alaska LNG Project.

EDITORIAL: To fight rising prison costs, Alaska must reform system

It’s time for Alaskans to take a hard look at the state’s prison system and who inhabits it. Next fiscal year, the state of Alaska will spend $326 million on the Alaska Department of Corrections. According to figures from the department, there were 5,267 Alaskans in prison on July 1, 2014, the first day of the current fiscal year. The exact number of Alaskans in prison will fluctuate from day to day as prisoners are released and admitted, but do the math, and it works out to nearly $62,000 per inmate bed per year. Though the Alaska Legislature has solved the state’s budget puzzle for the 2016 fiscal year, in less than seven months it will be back at work in the Capitol to address an even worse fiscal problem. As lawmakers face the issue, even the Department of Corrections will be cut. Prison reform must be part of the state’s budget solution. Done correctly, it will save money and lead to better results for Alaskans unfortunate enough to end up in jail. Last week, the Alaska Criminal Justice Commission met to hear a presentation from the Pew Charitable Trusts. The presentation mirrored one given to the Alaska Bar Association last month and included some alarming statistics. Alaska’s prison population grew by 27 percent between 2005 and 2014, the third-fastest rate in the United States. Almost half the inmates currently in jail are behind bars for nonviolent offenses or because they violated parole. An alarming proportion — 28 percent at any given time — are awaiting trial. Think about it: Men and women are in jail for offenses they may not have committed. If found not guilty at trial, they will be released from jail with nothing more than a pat on the back for the days, weeks or months they’ve spent behind bars. Even as their lives are disrupted, the state is absorbing the cost. Senate Bill 91, a bipartisan piece of legislation, would address this issue by offering more alternatives, including home arrest and electronic monitoring. It’s languishing until lawmakers return to the Capitol, and we hope the Legislature will keep it moving. What about if a person is found guilty? Our initial reaction is harsh punishment. How many times have you heard (or said) “If you can do the crime, you can do the time?” The problem then occurs when a person finishes their time. A majority of Alaska’s inmates, once released from jail, do something that sends them back to jail. It might be as simple as a probation violation or as dangerous as another crime. The Criminal Justice Commission and the Pew Trusts have teamed up to put together a reform package tailored to the state’s problems, including recidivism, the process by which freed inmates commit new crimes and return to jail. We hope the Legislature and members of the public will be open to the idea that prison is not always the best solution. To solve the problem of chronic inebriates in downtown Juneau, we’ve already turned to a housing-first approach as a new way to approach the issue. A similar approach may be needed for crime. If Alaska’s prison population continues to rise, all Alaskans will be squeezed to pay the cost. We simply can’t afford it.

EDITORIAL: Atrophy of armed forces should be issue in next election

During the third presidential debate in 2012, Mitt Romney attacked the Obama administration for advocating cuts to the military when some aspects of the U.S. armed forces are out of date or undermanned. “Our Navy is smaller now than at any time since 1917,” said Romney. “The Navy said they needed 313 ships to carry out their mission. We’re now at 285.” Obama shot back something like this: “I think Gov. Romney maybe has not spent enough time looking at how our military works. We also have fewer horses and bayonets because the nature of our military has changed. There are these things called aircraft carriers where planes land on them. We have these ships that go underwater, nuclear submarines. ... The question is not a game of Battleship, where we’re counting ships, it’s what are our capabilities.” Who won the debate can be argued, but Obama won the election. In light of the news three years later, though, it appears Romney was correct, if not as glib as the president. The U.S. may have enough big aircraft carriers and submarines (although that too may be debatable), but there obviously is a shortage of the amphibious vessels the Navy uses to deploy Marines to respond to global crises around the world, including incidents such as attacks on U.S. embassies. USA Today reports that the Marine Corps, faced with a shortage of the type of assault ships they use to get troops, helicopters and other equipment to hot spots, is exploring a plan to use foreign ships. The newspaper quotes Brig. Gen. Norman Cooling, deputy commander, U.S. Marine Corps Forces Europe Africa, as saying the measure is a stopgap way to deploy Marines aboard ships overseas until more American vessels are available. The Marines have been working with Spain, Italy, the United Kingdom and other close allies to determine the suitability of foreign ships for U.S. personnel, the report said. The units would be for limited operations and not major amphibious assaults. The Navy has 30 amphibious ships but says it needs 38, and because of budget constraints it won’t reach that level until 2028. That’s unacceptable. Depending on foreign ships to carry our troops doesn’t seem like a good option. We agree with Rep. Randy Forbes, R-Va., a member of the House Armed Services Committee, who says: “Allowing the continued atrophy of the Navy-Marine Corps team’s amphibious capacity is simply not an option given national security challenges facing the United States and its allies.” Foreign policy and military preparedness should be a major issue in next year’s presidential election. Let’s hope glib doesn’t carry the day over accuracy.

BP advisor: Alaska LNG Project can overcome challenges

Things may look a little gloomy right now for a possible $60 billion Alaska LNG Project that is trying to break into a world liquefied natural gas market that enjoys plenty of supply. That’s for now, at least. But Alaska has strengths, and the state’s competitors have some problems. “We have the (gas) resources, we’re close to the market and we have a good relationship with the state, said BP’s Chief Commercial Advisor Doug Rotenberg June 23 at an Alaska World Trade Center conference on gas. “There’s no reason why we can’t grow this into a compelling project.” BP, ConocoPhillips and ExxonMobil are working together, along with pipeline company TransCanada Corp. and the State of Alaska, to develop the Alaska LNG Project, which could be exporting up to 20 million tons of LNG per year after 2025 if the project is built. The cost of the Alaska LNG Project is its biggest challenge, but competitors promoting new LNG projects, of which there are plenty, have their share of problems, too. “Western Canada’s projects face tremendous challenges; East Africa has no experience in developing projects of large scale; then there’s Russia and Australia — and people have had enough of Australia,” because of large cost increases on LNG projects there, Rotenberg said. The challenges can’t be discounted, however. LNG trading has become a highly flexible and sophisticated world industry and a new phenomenon is that between 2005 and 2015 the share of LNG traded worldwide in short and medium-term contracts has grown to 30 percent to 35 percent of the market, Rotenberg said. That’s significant because very large projects like Alaska’s will require large long-term LNG sales contracts, and there could be a lot of competition for those. There is currently about 100 million tons of new LNG capacity in construction but most of this has already found buyers. Many new projects are in development, including Alaska’s, that could add 200 million tons of annual LNG production, however. “These people are competing with us now, for talent and particularly for capital. It’s clearly a buyers’ market. There’s certainly no lack of potential new resources,” Rotenberg said. There’s also price uncertainty. “Current sentiment also influences decisions even on supply that will come 20 to 30 years in the future. It’s easy today for buyers to get LNG for $7 (per million Btus, or British Thermal Units) but we need $10 to $11 FOB Alaska (loaded in Alaska) to make our project work,” he said. In the longer term, however, Alaska could present itself as a very competitive project. Assuming a $50 billion or $60 billion capital cost and 20 million tons of annual LNG exports, Alaska appears to be among the emerging projects that will be competitive, Rotenberg said. “Still, we have to find ways to make our project distinctive,” he said. “Our cost of supply can be competitive but we can distinguish ourselves by showing we have the resources, the involvement of major companies, and how we behave and show alignment,” among the participants. Alaska’s strength — what may differentiate it from the competition — is that purchasing LNG from the project will give buyers political and geographic diversity in sources of supply. That Alaska is politically stable and has a strong historical trade relationships with Asia are big pluses, along with the state’s closer location to markets compared to its competitors, Rotenberg said. Also, Alaska’s population-to-resource equation is such that it will be a reliable exporter, unlike places like Indonesia and Egypt where growing populations led to domestic gas demand limiting exports. Finally, the project sponsors, the three major North Slope producers and TransCanada, “are very strong and credible, and there is clear and consistent support from the state of Alaska,” he said.

Movers & Shakers 7/05/15

AECOM announced several personnel moves at its Anchorage office. Tux Seims has joined the office as an engineer in training; Suz Kyzer has joined the office after transferring from the firm’s Seattle operation; Bryan Strong has joined the office as a wetlands biologist; and Dr. Elizabeth Bella has joined the office as a senior ecologist. Seims was an intern at URS Corp. in the summer of 2014, shortly before URS combined with AECOM. He returns to AECOM after receiving a bachelor’s degree in civil engineering from the University of Alaska Fairbanks. His experience includes ocean mariculture, assisting with building/designing structures based on coastal needs, and water sampling. Kyzer has 24 years of experience performing contract administration on a variety of contracts for many federal and state agencies, including the Washington State Department of Transportation, U.S. Navy, U.S. Environmental Protection Agency, and the U.S. Army Corps of Engineers as well as various municipalities. Her responsibilities include contract implementation and compliance ensuring all administrative conditions of a contract are performed. She also performs project financial-tracking assistance by providing weekly reports to project managers, updates project specific tracking reports, provides clients with projections of financial expenditures, and earned-value data. Strong will support the AECOM Alaska office in various wetland project efforts. He has 10 years of field experience in Alaska as a wetland ecologist, hydrologist and soil scientist. Among his areas of expertise are wetland determinations, soil genesis, plant identification and ecology, and wetland restoration and monitoring. Strong graduated with a bachelor’s degree in natural resource science from the University of Maryland. Bella has 15 years of applied ecology and regulatory experience with public lands agencies and private industry. Prior to her position at AECOM, Bella was most recently an ecologist with the Kenai National Wildlife Refuge in Alaska. Previously she studied invasions patterns as a postdoctoral scholar with the Bio-Protection Research Centre at Lincoln University, New Zealand. She has a Ph.D. in ecology from UC-Davis focusing on invasive species biology, an master’s degree in forestry from the University of Montana, and a dual bachelor’s degree in forestry and biology from SUNY-ESF. Matt Waldron has been named executive vice president, general counsel, for Arctic Slope Regional Corp., effective immediately. Waldron has served as senior corporate counsel for ASRC since June 2013 and has provided insightful, practical legal support, analysis and advice across the ASRC family of companies. He has also taken a leadership role in a variety of projects important to the corporation to include legal oversight and support for the successful acquisition of Little Red Services. Before joining ASRC, Waldron worked as a corporate associate in law firms in Texas and Washington, D.C., providing legal guidance on mergers and acquisitions, debt and equity offerings and other financial matters. He also served as a captain in the U.S. Army and was awarded a Bronze Star Medal for his service during a year-long deployment to Iraq in support of Operation Iraqi Freedom. Waldron received his law degree from Georgetown University Law Center. ASRC Energy Services LLC made several personnel announcements. Treg Taylor has joined the AES Legal Department as a corporate staff attorney. Taylor will focus his efforts on contracting and proposal development and will work closely with the supply chain/contracting team. Prior to AES, Taylor worked for McKinley Capital Management where he was an in-house attorney for seven years. Prior to that Treg worked as an associate attorney for Delisio Moran Geraghty & Zobel. Ann Lindsey, CSP, CET, has joined AES’ QHSET Department as HSE director. Lindsey has more than 26 years of experience with various organizations in the field of Health, Safety, and Environmental services. SHe started her career in 1989 and earned her degree in Hazardous Materials Management. Lindsey is past president of the Alaska Chapter of the ASSE and was appointed by the Governor to the Alaska Safety Advisory Council representing industry. Martin Molyneux has joined AES as general manager of the Anchorage Fabrication Facility and Construction. Molyneux has more than 27 years experience in engineering, procurement, construction and operations management in Alaska’s Arctic oilfield development including executing capital projects with values of over $5 billion as well as operational work involving major facilities, pipelines, sealifts and fabrication. He comes to AES from ConocoPhillips Alaska where he was the Greater Prudhoe Bay BP, Point Thomson Exxon & Alyeska Pipeline Assets (GPA) Project Manager. Doreen Jack has joined AES as director, Shareholder Programs, and Human Resources Department. Jack has more than 15 years experience in human resources management and will be responsible for planning, implementing and managing the shareholder engagement strategy and career development programs, including the Paannaq Program. She previously served as director, Human Resources and Shareholder Programs, and returns to AES from Fluor where she was the Alaska content manager/HR representative for the Point Thomson project. Assistant Vice President and Loan Officer Daryl Lowe, a Mat-Su Valley banker and resident for more than 13 years, has joined First National Bank Alaska’s Wasilla Branch. Lowe started his banking career in 1995 and previously worked in Dillingham and Glennallen before moving to the Mat-Su. Steve Wadleigh has become a shareholder in the firm Altman, Rogers & Co. Wadleigh recently became a CPA in Alaska. Wadleigh joined the firm in 1998 and his experience includes working with non-profit and governmental organizations throughout the state. Wadleigh is a member of the American Institute of Certified Public Accountants, the Alaska Society of Certified Public Accountants and the Governmental Finance Officers Association. He has a bachelor’s degree in accounting from Vanguard University in California, where he graduated with honors.

Route change, bigger pipeline on table

Gov. Bill Walker is working to put his imprint on the Alaska LNG Project, the $50 billion-plus North Slope natural gas pipeline and liquefied gas export project. The state is a 25 percent partner in the project with North Slope producers BP, ConocoPhillips and ExxonMobil Corp. and, so far, with pipeline company TransCanada Corp. Walker is considering changes in an agreement with TransCanada to be the state’s partner on its 25 percent of the “midstream” pipeline and North Slope gas treatment plant. The state-owned Alaska Gas Development Corp., the state is fully managing, however, its 25 percent share of the LNG plant planned at Nikiski. The governor is now asking for additional changes in the project. In a June 8 letter to the three North Slope producers, Walker asked for an enlargement of the pipe size from a 42-inch diameter size to 48 inches so as to be able accommodate more gas in the future. Walker indicated that the state would be willing to pay for the additional capacity, subject to legislative approval, but would also own the added space. Additionally, the governor asked for a change in the pipeline routing to cross Cook Inlet using a route from near Port MacKenzie in the Matanuska-Susitna Borough rather than a more western route to Tyonek now planned by the Alaska LNG Project team. The eastern route would put the pipe closer to major population areas, the governor wrote. Finally, Walker asked for a major decision on the way the partners, including the state, would market their respective shares of LNG from the project and address upstream issues. The governor is proposing a joint-venture marketing organization formed by the partners in lieu of a plan for “equity” marketing, or each partner selling its own share of LNG on its own. Either alternative could work under Senate Bill 138, the state enabling legislation passed in 2014. The state has the option of contracting with one or more of the producing companies to market its 25 percent LNG share or forming a state gas marketing group. However, the joint-marketing approach is also on the table. Since the letter was sent, the governor has met with each of the three producing companies on the proposed changes, said Walker’s press secretary, Katie Marquette. “The Governor’s letter provides a broad framework for moving the project forward,” said ConocoPhillips spokesperson Natalie Lowman told the Journal June 23. “It provides fair and reasonable solutions to what we believe are key commercial issues: the gas supply agreement and LNG marketing arrangements. The letter also provides a basis for discussion of several other major issues that we believe can be resolved.” Building a bigger pipe In support of the pipe expansion Walker wrote in his letter, “Constructing a 48-inch line will alleviate the issues of access and expansion. “The producers have said they do not need or want a 48-inch line. The state is willing to pay for this expansion, subject to legislative approval, but it would own all of the benefits of the increased size. “The state would also pay for installing the valves and pads to accommodate four more compressor stations that will be added when demand exists from new developments or fields. The state intends to use this expansion capacity to encourage access.” Under Federal Energy Regulatory Commission rules, non-discriminatory access to the pipeline would be guaranteed but Walker is concerned that the physical constraints of the current design will place limits on how much new gas can be shipped. There is currently no estimate for the cost for enlarging the pipe, but Audie Setters, the state’s new gas project coordinator, said building in extra capacity for at least the pipe might be cost-effective if done at the outset, because incremental additions can be done when the additional gas is found for the gas treatment plant on the slope and the LNG plant at Nikiski. “You can only size the pipe once,” he said in an interview. However, there is already pushback from legislators on this. Questions are being asked how the state can afford to pay for the expanded pipe size given the huge current budget deficit and the draining of state cash reserves. “I don’t see how we can pay for this,” Sen. Cathy Giessel, R-Anchorage, said in an interview. “The state is already dealing with multi-billion dollar budget deficits due to low oil prices. Even paying for its current 25 percent share of costs of a possible $50 billion-plus project, may be difficult. Giessel said there may be less expensive ways to get additional capacity, such as by adding more compression. “I’ve been told we could get another 1 billion cubic feet a day with more compression,” she said. The project is now designed to deliver about 3.3 billion cubic feet of gas daily at a peak winter rate. Setters also said the cost of the expansion could be mitigated to some degree if fewer compressor stations have to be built. Setters, a 34-year retired Chevron LNG manager, signed on last year to advise the state on its LNG marketing and was recently named to manage the state’s overall interest in the project by Walker. State geologists are bullish about prospects for more gas because most the North Slope is gas-prone, and exploration for gas will begin if a gas pipeline is built. However, there is no guarantee that more gas will be found, and if the state pays for the extra capacity it bears this risk. Setters said that preliminary discussions with the producers are that they would like a share of the added capacity if the state insists on this. Thus, the state would bear only 25 percent of the cost, he said. There may also be issues, however, about obtaining high-pressure 48-inch diameter steel pipe. One of the reasons why the 42-inch diameter was selected is that more sources for pipe of that size, using high-strength steel, would be available. East vs. West On another of Walker’s requests, a change in the pipeline routing across Cook Inlet, there is pushback from the LNG project team. In his letter Walker wrote, “It is my understanding that the studies for the two routes (an eastern and western route) are underway but that the tentative conclusion at this point ing time is that the western route is the preferred alternative. “The Mat-Su Valley constitutes the second largest population base in the state of Alaska and has some of the highest industrial potential in the state. Consequently, the state strongly prefers the eastern route since the studies to date do not indicate any insurmountable difficulties. “Also, the eastern route will better enable this route to fulfill the statutory domestic gas mandate,” because the pipeline would be closer to population areas in the Mat-Su, requiring a shorter transit line for gas off-take. However, Steve Butt, an ExxonMobil official who is managing the LNG project, told state legislators at a legislative hearing June 16 in Nikiski that there are obstacles with the eastern route. The meeting was a joint session of the House and Senate Resources Committee, which convened for a scheduled update on the gas project by the Alaska LNG Project. Butt said the problems include an old gunnery range on the eastern route that might contain unexploded munitions; complex subsea soil issues in lower Knik Arm due to heavy sedimentation, and the presence of several subsea electrical transmission cables connecting the Beluga power station with the Anchorage bowl. There could also be complications in anchoring large pipe-laying barges in the upper Inlet near Knik Arm. These problems are not present on the proposed western route, which would be near the Tyonek community. In addition, it is shorter, Butt told the lawmakers. Joint marketing Legislators appear to be more open the idea of the joint-marketing approach for LNG, although the concept is not yet well understood. Under the equity marketing alternative, each producer would sell its share of LNG itself, as would the state for its share of gas, which would be for state royalty and the production tax taken “in-kind,” or in the form of gas. However, the state now believes a stand-alone Joint Venture Marketing approach, where all producers and the state form a separate marketing entity instead of the alternative of separate marketing efforts, by each producer and the state, is superior, according to Setters. In his June 8 letter sent to the producers, Walker wrote, “The state believes it will be very difficult, if not impossible, for this project to proceed with the Prudhoe Bay and Point Thomson fields with all the current participants outside a Joint Venture Marketing context.” Walker is referring to a key difficulty that has emerged is getting consensus for a gas production “balancing agreement” among the producers that would guarantee production sufficient for the pipeline and LNG purchasers. The joint-venture LNG marketing unit, if it is formed, is an alternative, and possibly simpler way, of accomplishing these ends, Setters explained. A production balancing agreement is still needed but it achieving it could be easier. Setters said the joint-venture approach is actually the norm in large LNG project marketing although the “equity” marketing approach, where each producers markets its own share on LNG by itself, is gaining popularity. A key advantage of equity marketing, at least for large companies who are in the LNG business worldwide — like two of the Slope producers — is that companies retain the flexibility to offer customers LNG combined from several sources. “It can help them de-risk the contract,” Setters explained. If there is a shortfall of gas from Alaska, due to a production upset for example, a company with many sources of LNG can very easily supplement the contract supply with LNG from other places. “However, the state wouldn’t have the ability to do this, so our risk profile is different,” he said. That’s because Alaska doesn’t have access to LNG from elsewhere, he said. Supply guarantees can be done under joint-venture marketing too but it gets more complex because there are distinct contacts. The customer is buying from the joint-venture, not a specific producer. Setters explained that joint-marketing arrangements also typically require combining of upstream interests into a single unit, which simplifies the coordination for production, and the balancing of commercial interests, among producing companies who are contributing gas. The North Slope gas supply situation is complicated, however, because gas for the Alaska LNG Project will come at least initially from two fields, the Prudhoe Bay and Point Thomson fields, which the same companies own but in different percentages. The volume of gas coming from each field, and when it would come, are issues currently being negotiated. What complicates this further is that Prudhoe Bay is also an oilfield and gas production must be weighed against probable loss of crude oil recovery as the underground pressure is drawn down by gas being produced from the same reservoir. The oil loss can be reduced by taking gas early from Point Thomson, which allows the gas to be retained for a period in Prudhoe Bay to produce more oil. However, the timing of this, and how it affects   field owners who have differing shares of ownership in the two fields is a complex issue. Yet another complication is that the reservoir risk profile of the two fields are different, which can be a big issue. Prudhoe Bay has been producing since 1977 and the reservoir is well understood. Point Thomson, however, is a new field with no production history, and there are still uncertainties as to how well the reservoir will perform, although an “Initial Production Project” planned to produce liquid condensates from the field is due to begin early next year, and that will answer some questions. Meanwhile, the need for a producers’ “balancing agreement” on all these issues is proving more difficult than expected and Walker is worried that a delay getting a consensus, which is crucial, could bog down a schedule that is already extremely tight. Setters said that if the joint-venture marketing approach is adopted the organization formed can provide an alternative, or at least supplementary, mechanism for balancing the gas supply issues and making contractual guarantees to customers. There are, reportedly, mixed views among the producers on this matter, sources close to the companies said. ConocoPhillips is said to favor the idea, while BP is reported to be neutral and ExxonMobil is said to have reservations, the source said. On the timing, the marketing organization could be set up fairly quickly, and certainty in time for the critical decision on FEED, which will trigger serious marketing efforts by the project partners, the source said. At least one legislator is cautious about the joint-marketing approach, however. “This is a serious shift. It is one that could complicate things if the state wants to return to an equity arrangement in the future,” said Rep. Mike Hawker, R-Anchorage, who chairs the Legislature’s Budget and Audit Committee, in a statement. “I haven’t seen the analysis of how significantly this locks us into a certain arrangement, and what the benefits and consequences are for Alaskans. Until I see the analysis supporting this major decision, including the implications to the state’s overall interests, I have to be concerned.” In his letter Walker also offered the state as a facilitator to mediate differences among the companies. Giessel, who chairs the Senate Resources Committee, said she is concerned about the governor’s intention to push the negotiations. “The governor wants to speed this up but everything we’ve been told about the planning of megaprojects is that we should avoid allowing them to become schedule-driven because that’s when costly mistakes are made,” Giessel said. “These are difficult issues and I want to give the companies the space to work things out themselves without the state interfering.” State officials had something to say about this, however: “We are not interfering. We are a 25 percent owner at the table and should not sit at the back of the room,” Setters said in a statement issue from the governor’s office. “That is why this project has not moved for 30 years. If aggressively pursuing a gasline project by mediating with and among the producers is interfering, then it’s about time. It should have been done a long time ago.” Currently the project partners and the state are aimed at getting key agreements by late summer, in time for a special legislative session in the fall for ratification of certain of the gas-related contracts.

Shell flotilla begins assembling in Dutch Harbor

Dutch Harbor will be busy in the next couple of weeks as Shell’s Arctic drill fleet converges on the Aleutians port, prior to heading north for the Chukchi Sea. Shell’s spill containment barge Arctic Challenger is already in Dutch Harbor, having arrived June 14, and the semi-submersible mobile drill rig Polar Pioneer is now en route from Seattle, Shell spokeswoman Meg Baldino said June 23. A second drilling vessel, Noble Discoverer, is meanwhile still in port at Everett, Wash., making preparations to sail to Dutch Harbor. “The Discoverer has received its certificate of compliance from the Coast Guard, which involves a series of inspections of safety systems like fire protection and lifeboats,” Baldino said. “It’s a routine step before a vessel sails from one port to another.” Other support vessels in Shell’s fleet, which will total about 25 in addition to the two drill vessels and the spill containment barge, are also heading west or preparing to sail, Baldino said. Meanwhile, environmental groups are continuing to press federal officials in Washington in attempts to stop Shell, and may file another lawsuit in a last-ditch effort. The latest development is a letter sent by nine environmental organizations to Interior Secretary Sally Jewell on June 23 complaining that Shell’s drilling plan would place its two drill ships nine miles apart in the Chukchi Sea, which is contrary to U.S. Fish and Wildlife Service regulations stipulating that drill ships be 15 miles apart. “Once again, Shell is up to their old tricks, deliberately ignoring federal regulations. We urge President Obama to cancel Shell’s lease and prevent them from drilling in the Chukchi Sea,” said Athan Manuel, director of land protection for the Sierra Club, in a statement. In an article in the Houston Chronicle, Interior spokeswoman Jessica Kershaw said her agency was reviewing Shell’s plans to ensure compliance. Baldino would only say, “We continue to consult with regulators on the terms of a Letter of Authorization.” The company is planning to have both the Polar Pioneer semi-submersible and the drillship Noble Discoverer drilling this summer at the Burger prospect, about 70 miles offshore. Interior’s rules also require Shell to have two rigs in the area so that one can assist the other in the event of a drilling emergency. Shell has received almost all of its permits for the summer Chukchi Sea exploration program except the Letter of Authorization from the U.S. Fish and Wildlife Service, which has to do with possible impacts on walruses and polar bears, and the final authorizations to drill from the U.S. Bureau of Ocean Energy Management. The drilling authorizations typically come later, when an applicant is close to the start of operations. A letter from the National Marine Fisheries Service, which has jurisdiction over marine mammals, has been received by Shell. The Burger prospect was actually a discovery made by Shell in the early 1990s when it previously drilled in the Chukchi Sea, but the find, which appeared then to be mostly natural gas, was not considered economic to develop at the time. Since then, Shell has done more analysis with modern exploration technology and now believed Burger to be much more prospective, including for oil, than was previously believed. The company had relinquished its leases in the 1990s but re-leased them from the federal government in an Outer Continental Shelf lease sale in 2008. Preparations are meanwhile underway for this summer on an extensive logistics network to support Shell’s drilling. The company has leased the former Kulis Air National Guard facility at Ted Stevens International Airport, as it did to support drilling in 2012, and has temporarily renamed the facility, “Shell Anchorage Airpark.” Barrow, the nearest large community near the exploration area, will be the main aviation support center, Baldino said, while oil spill response equipment is being staged at Wainwright, a community southwest of Barrow on the Chukchi Sea coast. The Arctic Challenger will meanwhile be kept on standby near Kotzebue. “We also have a logistics terminal at Wainwright. We also have dedicated space for storage and laydown,” of equipment, Baldino said. Barrow will be a busy place this summer. “In Barrow we have an aviation terminal. We upgraded the old Era Aviation terminal at the airport and that is where all of Shell’s chartered passengers will go. Our crew change helicopters and a SAR (search and rescue) helicopter will operate out of Barrow,” Baldino said. “We are leasing both hangers from Frontier Flying Service,” which are known also as the old Cape Smythe Aviation hangers, she said. Shell will also have three personnel camps in Barrow managed or owned by local Alaska Native corporations. In terms of personnel, Shell’s 2015 program will be similar to that of 2012 when about 2,000 people overall were involved with about 800 of them Alaska residents recruited in the state.

EDITORIAL: Now is time to start on next year's budget

It took 140 days, but Alaska will have a budget for the year ahead. In a long-delayed compromise that provided the votes for a draw on the state’s Constitutional Budget Reserve, the Legislature passed an operating budget totaling roughly $5.4 billion, a cut of $800 million from last year. While there’s still a long way to go, the Legislature made progress in slimming the state’s budget this year, and it’s good that the majority and minority caucuses were able to compromise and avoid a government shutdown. Passing a state budget seem a low bar to clear, but it’s the fundamental task assigned to the legislative branch, and the effects if the Legislature had not done so would have been far-reaching and disastrous for Alaskans. The speed with which the budget compromise came together was surprising given the abject failure of earlier efforts. Gov. Bill Walker sent the Legislature to special session when several major items — including the operating budget — were left unfinished in April. The House majority and minority caucuses spent weeks during the two special sessions that followed assembling a fragile compromise, only to have it rejected outright by Senate Finance Committee chairman Sen. Pete Kelly, R-Fairbanks, who stripped out many of the compromise items from the budget the Senate later passed. A conference committee was assigned to iron out the differences between the House and Senate budgets, and it appears the bulk of movement on the budget after that committee formed took place behind the scenes. With only 20 days before the state was due to lay off about 10,000 employees, a move that would have caused economic chaos, the sides reached agreement and passed a budget that looked largely like the compromise the House caucuses had come up with in the first place. While there are various items throughout the budget with which one might find fault depending on individual priorities and political philosophy, there are two big positives in the Legislature’s passage of the budget. The first is that the huge negative impact that would have resulted if no budget were in place by the start of the next fiscal year will be avoided. The second is that the method the Legislature chose to fund that budget — drawing on the state’s Constitutional Budget Reserve rather than making an arcane shuffle involving the Alaska Permanent Fund earnings reserve — is by far the most sensible option that was available. The scorched-earth approach of transferring nearly all of the money out of the permanent fund earnings reserve would have left the state with far less flexibility regarding future deficits and could have endangered residents’ annual dividends. So the Legislature has done its primary job for the year, and while the $800 million in cuts made from last year’s state operating budget will fall heavily on the state and its residents, for the most part the body did what it could to spare residents from outsize impacts. That task will be nowhere near as easy in future years as more avenues to reduce state spending are sought. The state still has a $3 billion budget gap, which can only be closed a small fraction by additional cuts without great harm to state services and the Alaskans who depend on them. In recognition of this reality, it’s time to begin discussion of revenue options to make Alaska’s budget sustainable again. This won’t be an easy discussion — few people want to have more money withheld from their paycheck, face higher prices on groceries and household items or acknowledge that the permanent fund dividend may not last forever. And care must be taken to ensure the revenue solutions enacted don’t disproportionately discourage residents and businesses from investing in Alaska and its future. But it’s a discussion that must start now and must involve all Alaskans, so that when the Legislature returns to session next year, they won’t be starting from square one.

Caelus nears deal for stake in NordAq Beaufort Sea leases

Caelus Energy LLC is negotiating for the acquisition of a 75 percent working interest ownership in state-owned offshore Alaskan Beaufort Sea leases held by NordAq Energy, an Alaska independent based in Anchorage. The closing is still pending because final terms are still being settled. “We are making progress on this, however,” Caelus spokesman Casey Sullivan said June 24. Caelus owns and operates the small offshore Oooguruk field on the North Slope, and is also currently engaged in developing a new onshore production pad near that field, Nuna. Caelus acquired the Oooguruk and Nuna assets from Pioneer Natural Resources for $300 million in 2014. The pending acquisition involves an interest in 26 offshore state of Alaska leases covering 117,000 acres in Smith Bay, about 150 miles west of the Prudhoe Bay field on the Slope and offshore from the federal National Petroleum Reserve–Alaska. NordAq acquired the leases, on what it calls the Tulimaniq prospect, in previous state lease sales. Under the agreement Caelus will become operator, with plans to drill one to two exploration wells this winter, according to the Caelus announcement. Caelus is very bullish on the prospect. “We’re extremely excited. The NordAq Energy team has done a great job of defining the geologic potential in Smith Bay,” said Caelus President and CEO James Mussleman in a June 17 press release. “Our team is ready to take the helm and get to work on exploring and appraising the Tulimaniq play.” NordAq had planned to drill a well on the prospect last winter but had to delay the project. The company is active in exploring onshore leases in the NPR–A, which are not involved in the Cealus transaction, as well as exploration in the Cook Inlet basin in southern Alaska. One gas discovery made by NordAq in Southcentral Alaska is on the Shadura prospect within the Kenai National Wildlife Refuge, on subsurface lands owned by Cook Inlet Region Inc. The company has not yet developed the discovery, however. NordAq is also exploring on the west side of Cook Inlet.

Dena'ina roots still run deep in Southcentral Alaska

Editor’s note: This is the conclusion in a series of articles by the Journal of Commerce recognizing the Anchorage Centennial and examining the events and the industries that have shaped Alaska’s largest city. The series is now available as a single special edition of the Journal at centennial events throughout the summer. Until recently, few people knew much about Anchorage’s original residents, the Dena’ina. Settlement of Southcentral Alaska by waves of gold miners, homesteaders, railroad construction workers and, finally, the development of a city at Anchorage, had a steamroller effect in pushing the Dena’ina not only off their lands but out of the consciousness of Alaskans, too. It was as if they never existed. Through history the Dena’ina used much of what is now the “Anchorage bowl” area for subsistence hunting and fishing and had a large and well-established village at Eklutna as well as smaller communities at Knik and other locations. Across Cook Inlet, Tyonek was a long-established Dena’ina community, as well as Kenai and Seldovia on the Kenai Peninsula. Most Alaskans, however, hardly knew the Dena’ina existed, had lived in and used the Anchorage area, and were numerous and, at times, quite prosperous. The Dena’ina Civic and Convention Center in Anchorage, the city’s premier meeting and convention center, at least reestablished the name, but it took the Anchorage Museum’s major exhibition, “Dena’inaq’ Huch’ulyeshi, The Dena’ina Way of Living,” in 2014 to finally underscore the importance of the people in the history of Southcentral Alaska. The museum brought together the first exhibition of Dena’ina historical artifacts and exhibits. Many artifacts were collected from around the world, loaned by museums and individuals for the exhibition. Dena’ina elders and community leaders provided important advice and assistance. Origins The Dena’ina were in Southcentral Alaska about 1,000 to 1,500 years ago. They are Athabascan, like Alaska Native people of the Tanana and Yukon River regions of Interior Alaska and the Ahtna people of the Copper River basin. Aaron Leggett, the Anchorage Museum’s special exhibits curator who is Dena’ina himself, said the Dena’ina appear to have migrated in two waves, one through Rainy Pass and the Copper River area to Talkeetna and upper Cook Inlet, and a second through the upper Kuskokwim River valley to Stony River, Lake Clark and Illiamna, and then to the Kenai Peninsula. When people migrate there are usually reasons for it, but Leggett said there is no evidence that people were being pushed out of territory in the Interior. “It’s more likely they were attracted by the favorable climate and abundant resources in Southcentral. It’s not as cold as in the Interior, and the big salmon runs of the Kenai and Russian Rivers, and at that time the Susitna, were big attractions just like they are today for us,” Leggett said. There were a caribou in the area at that time too, and the ocean offered a lot of beluga, clams and some seals. The Dena’ina were the only Athabascans who were able to exploit marine resources. In the Interior, in contrast, there were only land animals. Those resources supported a larger population in the region; the Dena’ina were then estimated at about 5,000, but diseases, brought by Europeans, would later reduce the number sharply. Eklutna, one of the longest-established villages, had a population of about 800. Diseases were to have major impacts over time but the village was repopulated several times. Early life appeared to be quite good for the Dena’ina. There were larger settlements than in the Interior although people typically moved out to summer fish camps, including across what is now Anchorage. There were summer camps at Ship Creek and Campbell Creek, and fall hunting on the upper drainages of those creeks and the mountains, what is now Chugach State Park. The area populated by Dena’ina extended west to the Kuskokwim and to Chickaloon in the northwest, Matanuska-Susitna Borough, the border with the Ahtna region (there was a lot of movement back and forth, and intermarriages with Athna people). The northern boundary was approximately the upper Susitna River area, about where the Watana hydro dam is now planned, although this area seemed to have been lightly used, Leggett said. To the south, the Dena’ina had a strong presence on the Kenai Peninsula, and what is now the Girdwood area was a kind of buffer area, lightly populated and used (game was actually scarce) between the Denai’na and the Prince William Sound peoples, who were Eskimo and traditional enemies of the Denai’na. Cook’s arrival The arrival of the first European, Captain James Cook, in 1778, had little actual effect on the Dena’ina although the forces that Cook’s voyage set in motion were to have immense impacts later. Cook made an impression on the Denai’na, and they on him, and the arrival of the ships and subsequent meetings, offering opportunities for trading, are noted in Dena’ina oral histories. In fact, there are incidents that are noted both in the oral history and Cook’s journal, “so we know it was Cook that the Dena’ina met,” Leggett said. Cook was in the area only briefly, however, about six days in total. Cook named Cook Inlet (for himself), Turnagain Arm and a Kenai Peninsula land feature, Point Possession, “but he really didn’t like the area.” “The weather was lousy, there were strong tidal currents and waves, and his boats kept getting stuck,” Leggett said. Soon it was obvious that Cook Inlet did not lead to a hoped-for Northwest Passage, and Cook pointed his ships south, to the relief of the crews. Before he left, however, Cook sent a crew of men who landed and named Point Possession after planting the British flag and claiming the region for the King of England, although that made no impression on the Dena’ina, who met Cook and his crew there to trade, or to the exploitive Russians who showed up later, and who really took possession. One story in the Dena’ina oral history, which matches an account in Cook’s journal, is that the Dena’ina made a trade of a dog to Cook and his men, or maybe a gift, Leggett said. For some reason, the British shot the dog. “It may have been because it bit someone, or some other reason, but it really upset the Denai’na,” he said. “They asked, if the dog wasn’t wanted why didn’t Cook’s men just give it back?” Dogs were valuable to the Denai’na as pack animals and for hunting. Cook’s impact If Cook’s visit had only minor significance for the Dena’ina, other visits by Europeans in the following years. George Vancouver, who was in Cook’s crew, came back several years later to do surveys for the British Admiralty and charted Cook Inlet as well as Prince William Sound and the coast of Alaska and British Columbia down to Puget Sound. Leggett said the first big impact by Europeans on the Dena’ina came when the Russians showed up in 1787 and 1791, three years after Cook’s voyage. This wasn’t the relatively benign Russian government of the Russian-America Company, but companies of traders and hunters who were violent, exploiting the Dena’ina. Three Russian trading companies moved into the area competing with each other for furs and exploiting the Denai’na. There were murders and kidnappings, and by 1798 the Denai’na had enough. An uprising at Tyonek drove out the Russians. The Russians maintained a presence in the area after the Russian America Co. under its governor, Alexander Baranof, took control and ended most abuses. Meanwhile, the Russian Orthodox Church had gained influence and its priests worked to modify the behavior of Russian traders. By the 1820s things had settled down, Leggett said, and the Dena’ina were prospering with the fur trade, mostly acting as middle-men between the Russian buyers and inland Native people who were doing most of the hunting. “This was a good time, and people were acquiring a lot of wealth,” he said. But disease brought by the Europeans hit people hard. A smallpox epidemic that raged between 1836 and 1839 wiped out about half the Dena’ina, but those who survived still prospered on the fur trade. Alaska purchase The purchase of Alaska in 1867 by the United States was to bring about a huge shift in the Dena’ina world. Gold prospectors, and American traders, started showing up in the 1880s. There was no law enforcement, and in fact no laws, and some of the traders resented the influence the Russian Orthodox Church had, and some priests were harassed by the new arrivals. “The priests were trying to provide a moral compasses, scolding the newcomers about drink and abuse of women,” Leggett said. But by the turn of the 20th century conditions were improving in the territory of Alaska. Wealthy American sports hunters, mountain climbers and explorers started showing up, creating business opportunities for the Dena’ina in guiding and providing support to the visitors. “People had heard about world-record moose on the Kenai,” and it was a big draw in the sports hunting world, Leggett said. Hope and Sunrise, on Turnagain Arm, had also become small but thriving gold mining communities, and those were soon joined by Girdwood. Most of upper Turnagain Arm was not used heavily by the Dena’ina because hunting was generally poor, so there were few, if any, conflicts with the miners. Prospecting had also spread out across Interior and western Alaska and people traveling to mining areas used trails originally established by the Dena’ina from what is now Knik and Tyonek. Relations were generally good with the Dena’ina, who benefitted from providing services to the travelers. However, there were negative effects from other activity. Salmon canneries were being established on lower Cook Inlet and streams traditionally used for fishing by the Denai’na were blocked by fish traps. In 1917, construction crews showed up in Anchorage to build the Alaska Railroad, and the Dena’ina started to lose access to fish camps in the Anchorage bowl. “They were just told to move by the government,” Leggett said. At that time the Dena’ina also had the use of what is now Joint Base Elemendorf and Richardson for hunting and fishing, and in fact a 328,000-acre “Eklutna Education Reserve” had been established by the government for their use. The reserve began to shrink as military facilities were installed, and by the 1960s only 1,800 acres were left near Eklutna village. Meanwhile, the Chugach National Forest had been established, which brought another level of government over many areas used by the Dena’ina. However, traditional uses of some areas hung on for years. Fire Island, in Cook Inlet just offshore Ted Stevens International Airport, was a Dena’ina fish camp until the 1980s, Leggett said. The Anchorage’s Museum’s “Dena’ina Way of Living” was not a one-time event. With funds from the Rasmuson Foundation, smaller units of the exhibition have been travelling in Alaska, to Fairbanks and Homer, Leggett said. Portions will also permanently reside at the Kenaitze tribe’s wellness center in Kenai. An illustrated book of the exhibition is still available, however. It can be purchased for $34.95 at the Anchorage Museum’s gift shop.

$700M salmon habitat plan faces new challenge

PORTLAND, Ore. (AP) — A massive federal habitat restoration effort in the Columbia River Basin has spent more than $700 million on breaching levies, restoring tidal channels, reconnecting floodplains and other actions meant to boost salmon and steelhead populations imperiled by hydroelectric dams. Experts say it’s likely the largest, most intensive, and most expensive habitat restoration program in the nation. Hundreds of restoration projects in Oregon, Idaho, Washington, and Montana have reopened more than 2,800 miles of habitat. The monumental scope and price tag stem from habitat restoration’s role as the centerpiece in a federal management plan to relieve the damage that dams cause to fish. Critics of the plan say relying heavily on habitat improvements is not enough to restore wild fish runs and take them off the endangered species list. The plan has changed over the past two decades after several legal challenges; the latest version has also been challenged in court and was scheduled to be debated in front of a judge June 23. In defending the plan, federal officials say record numbers of chinook, coho and sockeye salmon returned in 2014 to the Columbia and its tributaries — thanks in large part, they say, to the improved habitat. But many of the basin’s 13 protected runs of salmon and steelhead are still barely hanging on and most of the returning fish were born in hatcheries, not in the wild — a reality that’s leading critics to call for the breaching of four dams. Prior to European settlement, millions of salmon and steelhead returned every year to the Columbia and its tributaries. But due to overfishing, agricultural water diversions, mining, logging and pollution, salmon populations plummeted. Biologists estimate that most of the fish habitat was lost or damaged. Construction of energy-producing dams dealt the biggest blow to fish mortality. The management plans — called biological opinions — must mitigate the dams’ damage to the threatened or endangered populations and set goals for their survival. These plans include improving fish passage and making operational changes at the dams, keeping predators such as Caspian terns or sea lions at bay and reducing the impacts of artificially-bred fish on wild ones. But since 2000, habitat restoration has become the plan’s most important strategy. Officials say scientific evidence shows fish survival is directly linked to the quality of their habitat. The Bonneville Power Administration, the federal agency that markets power from the dams and funds the majority of habitat projects in the basin, is effusive about the program. BPA says changes in habitat are impressive and the fish are using it — in some cases, salmon arrive within a few weeks after habitat is restored. “We have been highly successful,” BPA’s Rosy Mazaika said. But federal scientists overseeing the restoration work are a lot more reserved. “We’re working on it. I’m not going to say it’s a qualified success, because not every project has a qualified benefit,” said Chris Jordan, a NOAA research scientist who oversees the largest research and monitoring project under the plan. The biggest challenge, Jordan said, is isolating the factors that limit fish survival and recovery and deciding whether a habitat improvement will make a difference. “There are so many different ways in which humans have destructed fish habitat for hundreds of years, it becomes hard to know what the limiting factor is,” Jordan said. “So even if you put a lot of money into restoring an aspect of habitat, you sometimes don’t see any fish response.” Some techniques, such as riparian planting, take time to show impacts, Jordan said. And it takes years for fish to mature, reach the ocean and return to their native streams to spawn — which is the real measure of success. Another challenge, said NOAA research scientist Phil Roni, is that the government doesn’t always choose projects that will have the greatest benefits. When a community, landowner or farmer refuses to cooperate, he said, the money is invested in another less-needed project. And instead of focusing on key watersheds, restoration is spread thin across the entire landscape. “It’s opportunistic, meaning people are doing the projects that they can get done,” Roni said. “In most places, the actions aren’t big enough, and their choice and scope is limited by money, local cooperation and reasonable time frames.” BPA says its strategy has evolved; the projects it now funds are larger and more data driven. Where an action proves infeasible or ineffective, the agency said it adds other projects. To plaintiffs who oppose the federal plan in court, that strategy makes little sense. “We’re not saying there is no value in restoring habitat,” said Todd True, an attorney with Earthjustice who represents environmental groups in the case. “Good habitat is beneficial, but the elephant in the room is the impact of the dams. Let’s address it and not get distracted by the idea that we’re spending millions of dollars on habitat so we must be doing something right.” True said the method used by the government to calculate how improvements in habitat translate into higher fish survival is uncertain. The best way to help fish, True said, is to breach the four lower Snake River dams. Oregon, which also opposes the plan in court, has a different idea. Oregon officials say habitat alone can’t save fish. For example: While there are nearly pristine wilderness areas in Oregon and Idaho, the fish populations in those watersheds are still imperiled. “To think you can compensate for the effects of dams by habitat restoration is a flawed premise,” said Ed Bowles, with the Oregon Department of Fish and Wildlife. Instead of breaching dams, Oregon wants federal managers to spill more water over dams to get fish past the concrete and quicken their migration to the ocean. Federal agencies oppose this because spilled water doesn’t go through the turbines and doesn’t produce energy.

Cutter Healy heads out on Arctic expedition

BAINBRIDGE ISLAND, Wash. (AP) — U.S. Coast Guard Capt. Jason Hamilton, of Bainbridge Island, will lead a crew of 150 on an unprecedented expedition to study the Arctic Ocean. About 50 of those aboard will be scientists who will be collecting data on the Arctic Ocean, said Hamilton, who has been with the Coast Guard for 26 years and captain of the Healy for two weeks. What makes Hamilton’s first expedition with the Healy unlike any other Arctic study is the international partnership to create a baseline for the area’s biogeochemical cycles — the cycles of chemical elements and compounds in the ecosystem. The study is part of the U.S. Geotraces project, an international study of the marine biogeochemical cycles. The National Science Foundation is the Coast Guard’s primary partner, providing grants to organizations and scientists, while the Coast Guard gives scientists access to the Arctic and Antarctic with icebreakers. Three countries — the United States, Canada and Germany — have agreed on what sections of the Arctic scientists will study and made arrangements to test one another’s results. “The amount of international collaboration is very impressive,” said Dr. David Kadko with Florida International University. “It’s probably unprecedented.” Kadko is an oceanographer who specializes in geochemistry with 40 years of experience and will be aboard the Healy. Data that Kadko and other scientists collect during the four-month expedition will be used to compare future collections or changes in the Arctic Ocean’s ecosystem. The Healy is the Coast Guard’s largest icebreaker at 16,000 tons and 420-feet long. It is designed to break 4.5 feet of ice continuously at 3 knots, according to the U.S. Coast Guard website. The Coast Guard’s other icebreaker, Polar Star, is smaller, although more powerful, Hamilton said. The Healy’s primary mission is assisting scientific studies with more than 4,200-square-feet of scientific laboratory space and equipment. Besides a massive data collection on biogeochemical cycles, scientists from the National Oceanic and Atmospheric Administration will be testing equipment in cold conditions, Hamilton said. NOAA will test a 6-foot, unmanned aircraft called Puma that can provide ice conditions, observe marine mammals or check on potential oil spills. They also will test a NOAA Wave Glider to study water below the ocean’s surface. It is the third year the Coast Guard has assisted with equipment testing through its research and development center, Hamilton said. Hamilton has multiple roles with the Coast Guard beyond being a commander on the Healy. He serves as captain on the water and an attorney on land, helping shape law and policy. Hamilton earned his law degree from the University of Washington in 2000, and has served as a prosecutor and judge as well as being on defense counsels. He has helped negotiate maritime treaties, including preparing for oil spills. Hamilton entered the Coast Guard Academy directly after high school, graduating in 1993 from the academy. His first polar expedition was in 2004 to the Antarctic. It was during his time at the academy he realized his passion for maritime life and environmental response, Hamilton said. “Going forward, I’ve always looked for opportunities to be on the water,” he said. “And if not on the water, working policy and legal aspects of it to protect the oceans and make them safe.”

The Bookworm Sez: Making sense of making cents

Find a penny, pick it up. Words of advice from your grandfather, for whom a penny was worth bending over. For you, one cent doesn’t buy much, so do you grab errant coins or step past them?  What’s the deal with a lousy penny, anyhow? Harley J. Spiller makes it his hobby to know, and in “Keep the Change,” he’ll tell you. We humans are a curious bunch. There’s a good chance, for instance, that you have fabric in your wallet, cloth you could exchange for dinner. The fabric itself isn’t worth much — surely not as much as printed numbers inked by 60 tons of force might indicate. No, it’s the value we assign to it that really matters. Dollar bills are made with “world-class” precision and safeguards, each made of 75 percent cotton, 25 percent special linen, measuring 2.61 inches by 6.14 inches by 0.0043 inches thick. “In 2012,” says Spiller, “more than eight billion rectangles… soaked up close to three thousand tons of ink to create just under three hundred and fifty-nine billion dollars.”  That ain’t chump change, and the government constantly looks for ways to keep counterfeiters from reproducing the fine details, glow strips, and muted colors of foldable money. Even just scanning a dollar bill into your computer, Spiller notes, can result in a bit of unpleasantness… And then there are the bits of metal you have in your pocket or purse. Copper has been prized for eons: some Native Americans considered it sacred. The U.S. Mint begged to differ, though, and didn’t declare copper to be legal tender until 1862 — which meant that the first copper pennies, produced in 1792, couldn’t be deposited in a bank. Still, making cents made sense: pennies were traded for and used by slaves, and when Abraham Lincoln died, mourners turned “Indianhead” coins into souvenirs. Abe’s portrait on the penny proved to be even more popular: between 1909 and 2012, nearly 500 billion pennies were minted, although many people now jeer at the mere presence of a one-cent coin. Did you know that banks sometimes literally throw money away? Yep, and you’ll learn why (and more!) in “Keep the Change.” Since he was a young boy, museum professional and author Harley J. Spiller has been a numismatist (coin collector) with a focus on mangled and altered cash. In this entertaining book, he nicely melds his passion and quirky collection with photos and facts about money as a whole: its history, the reasons why it looks as it does, and a large list of alternates for the word “money.” Spiller’s shared knowledge also fills in many cultural gaps to help readers understand money’s role in society, and embracing his glossary of terms will make you sound like the Big Wig of Big Bucks. While you’ll surely learn a thing or two here, the real reason to read this book is to enjoy a lighthearted look at currency, recovered and made. If that seems like great fun to you, then find “Keep the Change”… and pick it up. Terri Schlichenmeyer is the author of The Bookworm Sez, which is published in more than 200 newspapers and 50 magazines throughout the U.S. and Canada. Schlichenmeyer may be reached at [email protected]

Movers & Shakers 6/28/15

Jason Walsh has been appointed to lead the State Pipeline Coordinator’s Office, effective June 1. Walsh directs the office tasked with developing and maintaining large-diameter oil and gas pipeline right-of-way leases and lease compliance efforts for multiple pipelines, including the Trans-Alaska Pipeline System. Walsh, a lifelong Alaskan, has a wide breadth of experience in natural resource management. After attending graduate studies in natural resource planning at the University of Vermont, he has held a variety of positions during his decade-long tenure at DNR, including land planning and development for the Division of Mining, Land and Water and facilitating right-of-way lease coordination for the Point Thomson Export Pipeline and the Alaska Stand Alone Gas Pipeline. As a member of the state’s Point Thomson permit team, Walsh received a Governor’s Denali Peak Performance Award in 2013 and was soon after promoted to Operations Manager of the SPCO. Most recently, Walsh has served as Acting Deputy Pipeline Coordinator and has led the SPCO through several significant transitions, including relocating the office to the new Geologic Materials Center and the SPCO’s initial planning and permitting activities for the proposed AK LNG project. Ryan Makinster has been named executive director of the Brewers Guild of Alaska. Makinster brings more than 16 years of non-profit administration, public relations, communications, and government relations experience to BGA. Prior to joining BGA, Makinster served as chief of staff to Rep. Mia Costello. He has also worked as communications and events director for the Alaska Chamber and communications director for the Anchorage Economic Development Corp. Before that, he spent five years as a legislative aide in the Alaska House of Representatives and Senate. Makinster holds a bachelor’s degree in communications from the Edward R. Murrow School of Communications at Washington State University. United Fishermen of Alaska announced the election of Lindsey Bloom, Zachary Hill, Bruce Schactler and Paul A. Shadura II as at-large board members. The at-large directors will serve two-year terms beginning June 15, 2015 and ending April 14, 2017. Bloom, of Juneau, grew up fishing Bristol Bay and Southeast salmon gillnet and currently gillnets in Southeast. She also serves on the Juneau Fisheries Development Committee and participated in the Walker administration’s Transition Team and Sustainable Future dialogue that was held in Fairbanks earlier this month. Hill, of Anchorage, fishes the Kodiak area salmon purse seine fishery; and previously fished salmon in Upper and Lower Cook Inlet, and Prince William Sound; and has fished herring all around the state. In addition to fishing, Hill is a CPA and member of North Pacific Fisheries Association in Homer, on the Finance Committee of Seafood Harvesters of America, and is on the steering committee for the Alaska Young Fishermen’s Summit. Schactler, of Kodiak, has an extensive fisheries background in various parts of the state including Southeast and Kodiak salmon seine; tanner crab in Kodiak and Togiak, longlining for cod and halibut, and has fished herring throughout the state for food, bait, and roe. He also is the director of the Alaska Global Food Aid Program with the Alaska Seafood Marketing Institute and he is the National Director for the National Seafood Marketing Coalition. He received the 2013 UFA Fisherman of the Year award. Shadura, of Kenai, is a third generation Cook Inlet salmon, halibut, and herring fisherman; who has fished set gillnet, seine, and longline; as well as tendering and buying. He is a past UFA vice president and board member; past president, vice president, and executive director of Kenai Peninsula Fishermen’s Association; current commercial representative on the Cook Inlet Regional Citizen’s Advisory Committee; and Finance Chair on Cook Inlet Aquaculture Association board. He owns PAS Services, a resource consulting business. Lee Bolling of Coffman Engineers Inc. passed Professional Engineering exam. Bolling, an engineer in the Mechanical Department at the Anchorage office, has worked at Coffman for four years. During his time at Coffman, Bolling has performed energy audits and alternative energy feasibility studies, as well as completed designs for energy conservation measures and alternative energy systems in Alaska. He has performed investment grade energy audits of over 1.5 million square feet of large commercial and public buildings across the state of Alaska. Bolling graduated with a bachelor’s degree in applied mathematics from University of Nevada and a bachelor’s degree in civil engineering from University of Alaska Anchorage. Northrim Bank hired Barbara Gill as vice president, commercial loan officer, and promoted Jared Shary to marketing and sales officer. Gill has nearly 28 years of banking and lending experience. She began her banking career as a teller in Maryland, advancing to branch management and into commercial lending. She was a commercial loan officer for several years in South Dakota before moving to Alaska. Locally, Gill has worked for Alaska Growth Capital and Evergreen Business Capital before joining the Northrim team. She has a bachelor’s degree in business administration from the University of Maryland European Campus. Shary started at Northrim Bank in 2009 as a teller at West Anchorage Branch, before moving to the Marketing Department in 2011. He has held multiple positions in marketing, including Marketing and Web Specialist and Marketing Coordinator. Shary holds a bachelor’s of business administration in marketing and finance from the University of Alaska Anchorage and is currently pursuing his MBA in management at UAA. Kumin Associates has added Rich Monahan, Associate AIA, CDT, to their design team. Monahan brings more than 30 years of experience in design and construction documents. His extensive Department of Defense portfolio includes military housing; education and child development centers; medical, command, maintenance and aircraft facilities; vulnerability and condition assessments; and programming charrettes. A long-term Alaskan with a passion for efficient arctic and subarctic design, Rich has worked on many other private and public sector projects throughout Alaska. He is a Certified Document Technologist, with in-depth familiarity with REVIT, AutoCAD, SpecsIntact and Masterworks. Since joining Kumin, he has worked on a concept design for a hotel property, lighting upgrades at the Fairbanks Federal Building, and Career Technical Education facilities at West-Romig School in Anchorage and Metlakatla High School on Annette Island.

Three insurers plan to leave Alaska individual health market

JUNEAU — Thousands of Alaskans will have to find a new insurer after three companies announced plans to leave the state's individual health care market. Assurant Health, Aetna and State Farm have notified the Division of Insurance of their plans, leaving Premera Blue Cross Blue Shield and Moda Health as the major remaining insurers. Division of Insurance Director Lori Wing-Heier says fewer than 6,000 policyholders will be affected. Wing-Heier says the division is trying to contact another company licensed to write individual policies in Alaska to gauge their interest but that company hasn't written a policy of that kind in several years. Aetna said it looked at factors including whether it could provide affordable plans in making its decision. Assurant is looking for a buyer for its health insurance business nationwide.

Progress made on Card Street fire

KENAI — As the humidity rises and the temperature drops, the Card Street wildfire is smoldering in place, according to representatives of responding agencies who spoke at an information session at the Sterling Community Center on Sunday. “I really don’t think we had any fire growth yesterday, and I’m not sure we’re going to have any fire growth today,” said the response team’s incident commander Bob Allbee. The current size of the fire is 7,657 acres. Stewart Turner, the command team’s fire behavior analyst, provided further detail. Cooler, more humid weather is adding moisture to the duff layer of the soil — the moss and organic matter covering the first few inches of the ground — material that “moves the fire around the most and stimulates the most growth,” Turner said. However, the increased moisture of the duff layer is encouraging the fire to enter layers that remain dry from a lack of snowpack this winter and light rains in the spring. “(The deeper soil layers) are not getting moisture in from the higher humidity,” Turner said. “So when fires do burn, they burn deeper and they hold down there longer. That’s the situation we’re facing now.” Fire in deep soil layers could create a longer-term threat. “When we bring those hot temperatures back and lower that humidity, we’ll probably see that fire start to move around again,” Turner said. At present, Turner said people returning to burnt areas might observe some generally non-threatening “creep and smoulder.” “At dark — or dusk, or twilight, or whatever you call that here — as the sun goes down a little bit, you’ll see some glows out there, some smouldering,” Turner said. “That’s going to happen a long time, until some firefighters get out there to extinguish that, or until the fuel is completely consumed. Then they’ll go out.” Occasional flames might also be spotted. Turner said in most cases, smouldering and small flare-ups are not cause for alarm. As for long-term solutions, Turner said that the best might be provided by the weather. “What you’re all looking for is rain,” Turner said. “That’s what it’s going to take.” Some questions from those returning to burn areas focused on practical and immediate concerns. Approximately 190 Enstar customers in the burnt areas of Kenai Keys and Feuding Lane are without heat or hot water since Enstar shut off its natural gas lines. In response to their questions, Enstar Southern Division Operations Manager Charlie Pierce said the gas line is currently pressurized with air that will have to be purged before it can resume function, a job that Pierce said Enstar crews will begin Monday, with the goal of having the gas back on by that afternoon. Pierce said customers shouldn’t reactivate meters or reignite pilot lights themselves, but should instead wait until the line is reactivated, then call Enstar at 262-9334 to add their names to a service list. Alternatively, Enstar will have six trucks in the area with crews that will be able to reactivate meters. In response to a question about how to clean up the red fire-retardant material that airplanes dumped on the fire, Alaska Division of Forestry fire manager Howie Kent said the material can be washed off of vehicles and structures with soap and water. He added that the retardant can be corrosive and should be washed from vehicles or other metal surfaces as soon as possible. Kent said that the retardant — containing ammonia and clay — is not environmentally damaging, and that the ammonia can act as a fertilizer when it seeps into the ground. Kent said that a material safety data sheet on the retardant will be posted on the Kenai Peninsula Borough’s fire information blog at kpboem.blogspot.com. Because the retardant contains ammonia, Division of Forestry Public Information Officer Terry Anderson said it has the potential to create chlorine gas in reaction to bleach. People should not attempt to wash the retardant with bleach, especially in a confined area.

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