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Assembly eases Anchorage marijuana setbacks

The Anchorage Assembly freed up more marijuana space for Anchorage on Feb. 23, but further limited the already scarce zones in Chugiak and Eagle River. The new rules seem a win-win for the two Assembly members it concerned, Amy Demboski and Patrick Flynn.  The reconsideration holds the intent of the final Assembly land use package passed on Feb. 9 — which was packed with amendments adding additional restrictions to Chugiak and Eagle River — while partially responding to industry panic of overregulation in Anchorage. The reconsideration concerns setback distances between marijuana businesses and sensitive areas like schools, churches, and child-centered facilities like daycares. These distances will be measured by shortest pedestrian route through the municipality. The new amended land use package requires that Chugiak and Eagle River marijuana businesses maintain a distance of 1,000 feet from such areas, which now includes residential districts, dedicated parks, and the McDonald Memorial Center. In Anchorage, rules were somewhat loosened, though the breadth of sensitive areas could prove limiting. Marijuana businesses must maintain the state-mandated 500-foot separation from school, churches, correctional institutions, community centers, recreation centers, playgrounds, public housing, day care centers, and homeless shelters. Both area’s setback requirements will be measured by the shortest pedestrian route between the front entrance of a marijuana establishment and that of the special use property. This eliminates the “as the crow flies” measurement passed earlier — from property line to property line — which could conceivably have zoned marijuana business out despite being separated from sensitive areas by multi-lane highways or other obstacles. Atypical for public meetings involving marijuana, the meeting was quick and quiet, with little discussion among Assembly members and no public comment from the industry throng in the audience. Assembly member Flynn had called for reconsideration on marijuana zoning after noticing inconsistencies between an amendment he passed and those introduced by Assembly member Demboski in an earlier meeting finalizing land use requirements. One of Flynn’s amendments defined the pedestrian route measurement, while Demboski’s — one of 18 she introduced — specified “as the crow flies.” Industry in Anchorage and community councils in Chugiak and Eagle River had each expressed dissatisfaction with the original ordinance. Flynn, who plans to have direct stakeholder involvement in the marijuana industry, said he’d received outraged messages from cannabis entrepreneurs saying the original Anchorage rules zoned their planned buildings out overnight. Cannabis business attorney Jana Weltzin said the Assembly opened itself to legal challenge by making the industry “impracticable.” Marijuana land use is already restricted enough, industry believes, with a limited number of available retail and industrial buildings even by the least restrictive rules. Sara Williams, chief executive officer of Midnight Greenery, said she’d visited 47 retail properties in Anchorage without finding one both properly zoned and with a willing landlord. One business planner’s building would be just less than 500 feet from the nearest school by shortest pedestrian route, but just more than 500 feet if measured by lot line. In Chugiak and Eagle River, however, community councils said the rules didn’t go far enough. Largely conservative and with a sizeable bedroom contingent of military workers from Joint Base Elmendorf-Richardson, the area lobbied Assembly members Bill Starr and Demboski for more restrictive measures. DJ Summers can be reached at [email protected]

Army chief says Alaska 4-25 troop reduction should wait

U.S. Army Chief of Staff General Mark Milley said he wants to delay proposed force reductions at Joint Base Elmendorf-Richardson at least a year in testimony to a Senate committee Feb. 24. The revelation came as Sen. Lisa Murkowski questioned Milley during a Senate Appropriations Defense Subcommittee hearing. Army officials first announced plans to cut 2,600 soldiers from the 4th Airborne Brigade Combat Team of the 25th Infantry Division, also known as the 4-25, stationed at JBER last July as part of an Army-wide cut of 40,000 troops. The full division stationed in Alaska is about 4,000 troops. Milley, who visited Alaska military installations earlier this month, said increasing aggression and force buildup by Russia, particularly in the North Pacific, along with an “increasingly assertive” China and “very provocative North Korea” create heightened conditions for potential conflict in the region. “I think it would be contrary to U.S. national security interests to go ahead and pull out the 4-25 at this time,” Milley said to Murkowski. “My thought is that we should extend them at least a year to see how the strategic situation develops and then move from there.” He added that those beliefs were confirmed in conversations with on-site commanders and the troops themselves. “There’s a great joint strategic deployment capability with the Air Force up there. (The 4-25) can move by air; they can move by sea. We’ve got a national capability up there (in Alaska) that I think is worth keeping,” Milley said. Murkowski responded that Milley provided “very welcome news,” as the 4-25 Airborne Brigade Combat Team is the only such Army force stationed in the Pacific. Further, Milley noted, as members of Alaska’s congressional delegation have in their fight to keep the 4-25 intact, the brigade’s strategic ability to reach East Asia and other parts of the world in less than eight hours from its position in Alaska. Acting Army Secretary Patrick Murphy said to Murkowski that the Army has invested “a lot of money up there” in training facilities that are “second to none” and that he looks forward to working with the senator to fully resolve the issue. Sen. Dan Sullivan said in a statement reacting to Milley’s comments that he appreciates the general’s willingness to evaluate how important the 4-25 is in protecting the country’s global interests. “The 4-25 is the only extreme cold weather and mountain-trained airborne brigade combat team in the entire U.S. Army, and the only one strategically located to respond to threats in the Asia-Pacific and the Arctic,” Sullivan said. “This kick-in-the-door capability is vital to our national security and provides deterrence against increasingly aggressive actions from Russia, China and North Korea.” Sullivan requested Milley reconsider the troop drawdown last year when the general was going through the confirmation process. Sullivan also succeeded in adding an amendment to the defense spending bill requiring the Defense Department to draft an Arctic Operations Plan. He received verbal assurances from Army brass that the 4-25 would not be moved until the plan was complete, Sullivan told the Journal in December. During an Armed Services Committee hearing a day earlier U.S. Pacific Commander Admiral Harry Harris said to Sullivan that without the 4-25 in Alaska that “I don’t know where we’d be if we had a major fight on the Korean Peninsula.” The 4-25 also just completed a training exercise at Fort Polk in Louisiana with a full Airborne Task Force of nearly 1,600 troops to show the value of the full force, according to a U.S. Army Alaska press release. U.S. Army Alaska officials asked branch leaders to consider training with the full force last year after the Army directed the 4-25 to downsize to an Airborne Task Force of 1,046 soldiers as part of the effort to restructure to a smaller, more agile force, the release states. The release stated that the exercise at Fort Polk validated the 4-25 as “the only U.S. airborne unit in the Pacific region capable of performing forcible entry operations.” Elwood Brehmer can be reached at [email protected]

Greens Creek mine reports record silver production in 2015

Hecla Mining Co. announced annual results that included record silver production at its Greens Creek mine near Juneau. Greens Creek had production of 2.6 million and 8.5 million ounces of silver in the fourth quarter and full year of 2015, respectively, an increase of 4 percent and 8 percent over the same periods of 2014. It was the highest annual silver production since Hecla acquired 100 percent of the mine in 2008. According to the company, silver production increased over 2014 levels due to higher silver ore grades, particularly during the fourth quarter of 2015, as well as higher metallurgical recoveries. Overall, Hecla announced 2015 sales of $443.6 million and gross profit of $38.5 million, with net loss applicable to common stockholders of $87.5 million, and an adjusted net loss applicable to common stockholders of $34 million. Hecla President and CEO Phillips S. Baker Jr. said he was pleased with the results. “We believe we are one of few precious metals companies growing right now, not just in reserves but in production as well,” Baker said in a release. “Because our balance sheet allowed us to continue investing during the price decline of the last few years, we expect more than a 15 percent increase in silver production and about a 10 percent increase in gold production this year, positioning us to take advantage of the rally in prices we have seen in 2016.” At Greens Creek, capital spending was $46 million, including $20.7 million for a tailings pond expansion. Capital spending for Greens Creek in 2016 is estimated to be $48 million, of which approximately $14 million is for the tailings expansion project. Cash cost, after by-product credits, per silver ounce at Greens Creek was $4.18 and $3.91 for the fourth quarter and full year, respectively, compared to $2.74 and $2.89 for the same periods in 2014. The increase in cash costs, after by-product credits, per silver ounce for 2015 compared to 2014 is the result of lower by-product credits due to decreasing metal prices, partially offset by increased silver production.

Proposed mining tax increase gets poor reception at Feb. 19 hearing

JUNEAU — Miners opposed to a proposal by Gov. Bill Walker to raise taxes on the state’s top-producing mines got help from an unexpected source Feb. 19. Alongside the miners testifying against the tax increase was Graham Neale, director of the center for mine training at the University of Alaska Southeast. “Now is the time to evaluate how the state can attract investment,” Neale said, explaining that a tax increase might do the opposite. If mine developers are frightened away from Alaska by higher taxes, that would leave students of his program without jobs. “We could be putting Alaskans on pathways to careers that don’t exist,” he said. Higher taxes, if they reduce business, could end up reducing state revenue, not increasing it, Neale and others said. Several members of the Alaska House Resources committee, which was hearing public testimony on House Bill 253, appeared surprised by Neale’s testimony. “Your testimony is interesting,” said Rep. Andy Josephson, D-Anchorage, and a member of the committee. “You could take just that testimony and describe the entire session that way.” He went on to ask how to balance the fact that an employee of the University of Alaska Southeast, a state-funded institution, was arguing for a decrease in a tax that (as drafted) would earn about $6 million more per year for the state budget. Neale replied that the mine-training program is primarily funded by donations and gifts from industry, plus federal grants. It receives little state funding, he said. Neale declined to offer an alternative to the mining tax when prodded by Josephson and Rep. Geran Tarr, D-Anchorage, and he said he wasn’t comfortable talking about whether the higher tax is competitive or not. After the hearing, Neale said, “basically, my job is to put other people to work. If mining activity or new mines are discouraged, it’s pretty hard to find work.” For the past several years, Neale has worked as project manager of Niblack, a gold-silver-zinc-copper mine prospect on Prince of Wales Island. With declining mineral prices worldwide, that project has been put on the back burner. Neale also serves as chairman of the Ketchikan/Prince of Wales chapter of the Alaska Miners Association. He said he doesn’t think his testimony will hurt the mine-training center’s relationship with other UAS departments, which are supported by state funding. In addition to Neale, 13 others testified for and against the governor’s proposal during the two-hour hearing. HB 253 would raise the tax rate for the largest mines (those with a net income of $100,000 or greater) from 7 percent to 9 percent. Only 14 mines were in that tax bracket in 2014, according to state records. The 3½-year tax exemption for new mines would be eliminated, and there would be a fee for tax licenses, something that would affect mines of all sizes. According to state documents, the existing mining tax collected $38.6 million in 2015. The increase would collect another $6 million per year. Miners and industry advocates said that sum isn’t worth the harm that would be done to the state by the tax increase. “This could not have been proposed at a worse time in the past 45 years,” said professional geologist Donald Stevens of Anchorage. The slowing Chinese economy has meant less demand for minerals, which has deflated global prices and led producers to scale back mining efforts. A tax increase, testifiers said, would exacerbate problems and lead companies to invest in places other than Alaska. “Alaska competes worldwide for capital, and I saw this firsthand in Anglo-American’s boardroom in London,” said Jason Brune, who was laid off from his job as a spokesman for Pebble Mine after Anglo-American withdrew from the project. He now works for Southcentral Alaska Native Regional corporation Cook Inlet Region Inc. “I was a casualty of higher costs,” Brune said. Josephson pointed out during the hearing that the mining tax hasn’t changed since 1955, before the Alaska Constitution was written, let alone before Alaska became a state. “We haven’t changed the tax since right after the Korean War,” he said. Randy Powelson, a mining engineer now working at a family-owned placer mine, said that doesn’t tell the whole story. The federal and state regulatory burden has risen, even if taxes haven’t. “Maybe it hasn’t changed since 1955, but I’ll guarantee you that everything else in the world has, and it’s making you uneconomical,” he said. In response to questioning from Rep. Paul Seaton, R-Homer, Nome placer miner Doug Tweit said a $200,000 lower limit for the top tax bracket might make more sense. Though most of the comments Feb. 19 were against the proposed tax hike, two commenters supported the governor’s proposal. George Pearce of Kasilof urged committee members to “get the best deal for the Alaskans, not the destroyers of the renewable resources like fish, water, habitat,” while Julia Mickley of the Northern Alaska Environmental Center said “development doesn’t come without a cost, and the public should be compensated for minerals removed from the land.” The bill was held in committee after the hearing, and committee co-chairman Rep. David Talerico, R-Healy, said people who didn’t testify Feb. 19 will get another chance. “We certainly don’t expect this to be the only public testimony on this bill,” he said.

EDITORIAL: Liberal lockstep on Court will sink Obama’s nominee

The Wall Street Journal   With the death of Antonin Scalia, Democrats and the media are graciously offering Republicans an ultimatum: Give them control of the Supreme Court now, or they’ll use the vacancy as a political club to hold the White House and retake the Senate. False choices don’t get more false than that. The reality is that no one President Obama is likely to nominate for the Court this year has a chance to be confirmed in a GOP Senate. Republicans could vote for José Cabranes of the Second Circuit Court of Appeals, but he’s 75 years old and too independent-minded for Democrats. Conservatives would revolt if Republican Senators voted to confirm any other Obama appointee. And well they should. The stakes are simply too great with the high court now split 4-4 on so many legal issues. The most important aren’t even the social issues like abortion and gay marriage that preoccupy the media. Roe v. Wade isn’t going to be overturned by replacing Justice Scalia, so the disputes would be over laws that regulate abortion in late term or to protect the health of the mother. Same-sex marriage won’t be overturned either. The more consequential cases are over the Bill of Rights and the separation of powers that President Obama has so abused to serve his political goals. Take the First and Second Amendments. The Friedrichs case on coerced union dues that the Court is scheduled to rule on this year is probably now a 4-4 tie. That would let stand the mistaken Ninth Circuit ruling that denies workers their right not to support political causes they oppose. The Little Sisters of the Poor are also now likely to lose their religious-liberty challenge to ObamaCare’s coerced subsidies for abortion. A new 5-4 liberal majority would also take aim at the conservative precedents of recent years. These include the 5-4 rulings upholding individual gun rights in D.C. v. Heller and McDonald v. Chicago. Justice Ruth Bader Ginsburg, who read her Heller dissent from the bench, gave a speech saying she expected that a future Court would overturn Heller. Also in peril would be Citizens United and other rulings that struck down limits on financing political campaigns. The lawyer for the Obama Administration said during oral argument for Citizens United that even books could be banned as an independent campaign expenditure. Mr. Obama and Hillary Clinton say they want to rewrite the First Amendment to limit campaign donations, and it would take a brave liberal to buck that pressure. Justice Scalia’s death also means the Court lacks the votes to correct Mr. Obama’s illegal expansions of executive power. These include the House challenge to his rewriting of ObamaCare and the Texas case against his unilateral legalization of four million illegal immigrants. If the Court ties 4-4 on immigration, as it probably will, the Fifth Circuit’s stay on Mr. Obama’s order will continue until the courts rule on the merits. But a 5-4 liberal majority is all but certain to uphold anything a Democratic President does on so political a subject. We know this because this is how all Democratic Justices have voted for more than a generation. Not since Byron White retired has any Democratic appointee broken with the liberal lockstep on issues that truly matter to the left. Justice Stephen Breyer provided a rare sixth vote after the Sixth Circuit said the people of Michigan couldn’t ban racial preferences (Schuette, 2014), but the liberals had already lost that case. Otherwise the four current liberals are a solid bloc that never breaks. Among Mr. Obama’s appointees, Elena Kagan is a more nuanced thinker than Sonia Sotomayor, but on big cases they vote the same. By contrast, Republican appointees Harry Blackmun, John Paul Stevens, David Souter, Sandra Day O’Connor, Anthony Kennedy and John Roberts all broke with conservative political preferences on major legal issues. For that matter so did Justice Scalia, albeit for more principled legal reasons. The larger point is that progressives have made the Court so political that it’s understandable that Republicans want to let the next President fill Justice Scalia’s vacancy. A GOP Senator who voted to confirm an Obama nominee would demoralize his own supporters. Meanwhile, the outrage among Democrats over being denied a vote is entirely synthetic as they use the issue to mobilize their own partisans. (See Chuck Schumer nearby.) Majority Leader Mitch McConnell and Judiciary Chairman Chuck Grassley are right to say that the Senate should refuse to consider any nominee this year. An election-year hearing and vote would only politicize the Court more and be unfair to the nominee. So ignore any complaints you read about “unprecedented” GOP “obstruction.” As Justice Scalia warned (our Sunday editorial on his legacy can be found on wsj.com), legal progressives made the Court a partisan cause by making value judgments that are best left for voters to decide. One result is that Democrats will have to fight and win an election in 2016 to replace the greatest contemporary Justice.

FISH FACTOR: World market continues to squeeze Alaska sockeye

Early signs point to continuing headwinds in world markets for Alaska salmon. Global currencies remain in disarray, the ongoing Russian seafood embargo is diverting more farmed salmon to the U.S., and tons of product remains in freezers from back-to-back bumper sockeye runs. (The majority of Alaska’s salmon goes to market in frozen, headed and gutted, or H&G, form.) One plus: aggressive market promotions have kept reds moving briskly at retail outlets at home and abroad and removed some of the back log.  “What the Alaska industry really needs is to move that product through the supply chain — clear the decks — so we are not continuing to deal with that overhang in the following year. Whether we are there yet or not, is hard to say,” said Andy Wink, a fisheries economist with the Juneau-based McDowell Group.  “When the supply increases as much as it has over the last few years, especially from Bristol Bay, it has a big impact on what the distributors, secondary wholesalers and retailers are willing to pay to processors who are buying from the fishermen,” he said. And in the case of salmon, size does matter. In the past two years at Bristol Bay, most of the fish have been on the smaller, two- to four-pound size, meaning they are worth dramatically less than larger fish. Luckily, sales of smaller sockeyes to Japan have moved well, primarily because of the lower prices, and their use of cut-up fish in various dishes makes it less of an issue. “We have seen good sales volume through the supply chain in the past year,” Wink said, adding that Alaska sellers were surprised at the amounts that went to Japan and Europe, due to the global currency situation. The continued strong value of the dollar means it is more expensive for overseas customers to buy U.S. seafood. “We’ve seen things move a lot faster, and while the currency situation is still terrible, at least it’s been terrible now for a while,” he added. “People are more adjusted and markets have a better grip on where it’s at. Hopefully, they can figure out what everyone needs to operate at these currency levels.” Alaska salmon also will face even more competition from farmed fish. Russia’s ongoing seafood embargo against several countries has displaced record amounts of Norwegian salmon and imports to the U.S. have doubled. “It’s been a big shift and the whole supply chain is adjusting to that. But there is reason to think that we are getting to a more stable environment where there is not so much uncertainty,” Wink said. Alaska processors will get a good sense of demand when they meet with their customers next month at Seafood Expo North America in Boston and Seafood Expo Global in Brussels in April. “They’ll get a very good sense of how hungry those customers are for product. If they haven’t done very well moving these large sockeye volumes, they won’t be as aggressive. If they have been having good luck with their sales promotions they’ll likely come back eager for more,” Wink said. All combined, early signs don’t point to any big price boosts this year for Alaska salmon. “There’s still a lot of headwinds, a lot of unknowns. It’s just kind of hard to see how the price takes any significant jump,” Wink said. “We’ve got a lower forecast so we’ll see how the market responds to that. But so much depends on how much product has moved through the system, and how well inventories have been absorbed.” Marine debris redux Money from the Japanese government is continuing to fund marine debris removal from Alaska coastlines. An influx of debris, especially polystyrene foam, continues to wash ashore from the tsunami that devastated parts of Japan in 2011. The Alaska Department of Environmental Conservation, or DEC, recently received $950,000 from Japan for tsunami marine debris collection, removal, and disposal projects for the 2016 field season. Specifically, this funding is intended to support a single large-scale project covering Kayak and Montague Islands, which have some of the highest debris densities Since 2012, Alaska has received the majority of a $5 million dollar gift from the Japan to the United States for aerial surveys and coastal cleanups in the Gulf of Alaska, Southeast Alaska, and the Kodiak Island area. Last July, a large scale, three-week project used 1,176 helicopter airlifts to sling 3,397 “super sacks” and 717 bundles of marine debris on to a 300-foot barge from 11 locations. The debris was transported to the Lower 48 for disposal and recycling. To date, over one million pounds of marine debris have been collected and removed from Alaska using the funds provided by the Japan and administered through DEC. The agency plans this month to issue a Request for Proposal (RFP) for the 2016 field work. Qualified contractors should monitor the Alaska Online Public Notice website for updates. Find more information on marine debris cleanup efforts in Alaska at dec.alaska.gov/eh/marine-debris/ Climate comments National Oceanic and Atmospheric Administration Fisheries has just released a draft climate science action plan for the southeastern Bering Sea that will assess the vulnerability of 18 commercially important fish species. The plan identifies key information needs and actions that the agency will take over the next three to five years to implement the NOAA Fisheries Climate Science Strategy, released in August of 2015. The plan will look first at the southeastern Bering Sea because it supports large marine mammal and bird populations and some of the most profitable and sustainable commercial fisheries in the nation. The plan builds on work the Center has been doing for more than 20 years as part of a Bering Sea Fisheries Ecosystem Plan, said AFSC program leader Mike Sigler. The center has completed a number of studies on the potential effects of climate change on three fish species — pollock, red king crab and northern rock sole. “We expect climate change to lead to smaller populations of walleye pollock and red king crab, but have little effect on northern rock sole,” Sigler said. NOAA is asking the public to provide feedback on the draft plan, to be finalized this fall. See more www.st.nmfs.noaa.gov/ecosystems/climate/national-climate-strategy Laine Welch lives in Kodiak. Visit www.alaskafishradio.com or contact [email protected] for information.

Virgin Galactic rolls out new space tourism plane

MOJAVE, Calif. (AP) — Virgin Galactic rolled out a new version of its SpaceShipTwo space tourism rocket Feb. 19 as it prepares to return to flight testing for the first time since a 2014 accident destroyed the original craft, killing a pilot and setting back the nascent industry. A Land Rover with Virgin Galactic founder Sir Richard Branson standing through the sunroof pulled the ship in front of an audience inside a hangar at Southern California’s Mojave Air & Space Port, where it was assembled. Branson’s 1-year-old granddaughter, Eva-Deia, helped by her mother, christened the craft by breaking a little bottle of milk over its nose. The baby is the daughter of Branson’s son, Sam, and his wife, Bellie. “All of us in this room need to pinch ourselves ... isn’t she quite beautiful,” Branson told the audience. The ship is the size of a small corporate jet. It was named Virgin Spaceship Unity at the suggestion of theoretical physicist Stephen Hawking, whom Branson promised a free ride into space. SpaceShipTwo is designed to be flown by a crew of two and carry up to six passengers on a high-speed suborbital flight to the fringes of space. At an altitude above 62 miles, passengers will experience a few minutes of weightlessness and see the Earth below. After years of development, Virgin Galactic appeared to be nearing the goal of turning ordinary civilians into astronauts when the first SpaceShipTwo broke apart on Oct. 31, 2014, during its fourth rocket-powered flight. Wreckage fell to the Mojave Desert floor. “When we had the accident, for about 24 hours we were wondering whether it was worth continuing, whether we should call it a day,” Branson told The Associated Press. He said engineers, astronauts and members of the public helped convince him that space travel is too important to give up on. The crash investigation found that co-pilot Michael Alsbury prematurely unlocked the so-called feathering system that is intended to slow and stabilize the craft as it re-enters the atmosphere. Alsbury was killed, but pilot Peter Siebold, although seriously injured, parachuted to safety. The “feathers” — a term derived from the design of a badminton shuttlecock — are tail structures that extend rearward from each wingtip. They are designed to swivel upward at an angle to create drag, preventing a buildup of speed and heat, and then rotate back down to normal flying position as the craft descends into the thickening atmosphere. A National Transportation Safety Board investigation found that Scaled Composites, a company that was developing SpaceShipTwo with Virgin Galactic and was responsible for its test program, should have had systems to compensate for human error. The NTSB chairman, Christopher Hart, said it wasn’t a matter of shortcuts but of not considering a crew member would make the mistake that occurred. Virgin Galactic subsequently assumed full responsibility to complete the test program. Company officials said that the new spaceship will have a device to prevent a similar pilot error. The company stressed in a statement Thursday its commitment to testing from the level of individual parts on up to the complete craft. “Our team’s job is to plan out not just the obvious tests but also the strange and inventive ones, to conduct those tests, and to use the data from those tests to re-examine everything about our vehicle to ensure we can take the next step forward,” it said. The company, which has invested more than $500 million in the program, did not project a timeline for actually carrying space tourists, noting that “our new vehicle will remain on the ground for a while after her unveiling, as we run her through full-vehicle tests of her electrical systems and all of her moving parts.” SpaceShipTwo is the successor to SpaceShipOne, the winged rocket plane that won the $10 million Ansari X Prize in 2004 by demonstrating a reusable spacecraft capable of carrying three people could make two flights within two weeks to at an altitude of least 62 miles. The prize announced in 1996 was intended to spur the development of private manned spaceflight in the same way the Orteig Prize offered in 1919 fostered trans-Atlantic aviation. Charles Lindbergh won that prize with his nonstop flight from New York to Paris in 1927. Like SpaceShipOne, SpaceShipTwo is carried aloft beneath the wing of a mother ship — a special jet aircraft that releases it at an altitude of about 45,000 feet. After gliding for a few moments, SpaceShipTwo’s pilots ignite the rocket engine to send the craft hurtling toward space. After reaching the top of its suborbital trajectory, the spacecraft begins falling back toward Earth and glides to a landing on a runway.

Movers and Shakers 2/28/16

Denali Federal Credit Union has promoted Lily Li to executive vice president and chief operating officer, and Dale Fosselman to chief corporate development officer. Li most recently served as the Credit Union’s chief operating officer, and previously worked as senior VP of central operations, and as vice president, internal audit and compliance. Prior to joining Denali, Li was involved in accounting and auditing with the Municipality of Anchorage, KPMG and several Alaska banks. She is a CPA and a NAFCU Certified Compliance Officer. She received a degree in management science from Alaska Pacific University and an accounting degree from the University of Alaska Anchorage. She earned a master’s degree in global finance from Alaska Pacific University. Fosselman, who was promoted from the senior VP corporate development position, supervises Denali’s Credit Union Service Organizations. These entities are for-profit subsidiaries of the Credit Union, and include Denali Alaskan Insurance, and two analytics subsidiaries: Denali Analytics and Deep Future Analytics. Fosselman received a bachelor’s degree in organizational administration and a master’s of business administration degree from Alaska Pacific University. He has held the Chartered Property Casualty Underwriter qualification and Certified Credit Union Executive credential. Associate Financial Planner Kailie Abascal has joined Alaska Permanent Capital Management. Abascal attended the University of Washington, where she earned bachelor’s degrees in international studies and in Spanish language and literature. During her time at UW, she studied abroad in Cienfuegos, Cuba, and Quito, Ecuador, and fell in love with the cultures and history of Latin America. Upon graduating, Abascal moved to Oaxaca, Mexico, where she earned the Teacher of English to Speaker of Other Languages certification, and worked as an Instructional Supervisor at Berlitz Language Center. She lived and worked in Mexico for nearly three years, before moving back to the United States to pursue her master’s degree in Latin American and Caribbean Studies at New York University on a full scholarship. Andrew Niemiec, PE, has joined Stantec as transportation manager in its Anchorage office. He has more than 28 years of in-state project development experience, spending most of his professional career working for the State of Alaska in a variety of capacities. He is an associate of the firm. At Stantec, Niemiec will provide senior design leadership and management for a variety of transportation projects. He will manage Stantec staff working on transportation projects based out of Anchorage, Fairbanks, Wasilla and Juneau. Niemiec was the executive director of the Knik Arm Bridge and Toll Authority for more than six years. Additionally, he worked with the Alaska Department of Transportation and Public Facilities in its Nome, Anchorage and Fairbanks offices. Niemiec is a graduate of the University of Alaska Fairbanks and a charter member of Alpha Kappa Chi, the civil engineering honor society. Nolan Klouda, executive director of the University of Alaska Center for Economic Development, recently earned the designation of Certified Economic Developer, a national recognition that denotes a mastery of principal skills in economic development, professional attainment and a commitment to personal and professional growth. With more than five years of economic development experience, Klouda has led a variety of initiatives to help create jobs in Alaska, including a current effort to develop a five-year strategic plan for economic development on the Kenai Peninsula. After more than 38 years working in almost all areas of the organization, Cindi Buzitis was promoted to senior vice president at First National Bank Alaska. In addition to serving as one of First National’s 11 senior vice presidents on the executive management team, she’s also its Bank Secrecy Act and Bank Operations support manager. In Buzitis’ current position, she manages the bank’s Corporate Compliance, Customer Support, Deposit Services, Manual and Review units. Buzitis joined First National as a mini proof clerk in January 1977. She spent subsequent years on multiple tasks like installing the bank’s first ATMs and played an instrumental role in the 1997 conversion to a new software and hardware mainframe. Colleen Harrington Baer of Alaska USA Mortgage Company has been promoted to regional vice president for Alaska, California, and Washington. She began her career with Alaska USA in 2000 as a manager of special credits and transitioned to mortgage lending in 2003. In 2012, Baer was promoted to assistant vice president of the West Abbott office. Baer has been in finance for more than 20 years and involved with Rotary since 1998. The Arc of Anchorage board of directors announced the appointment of Barbara Rodriguez-Rath to serve as CEO of The Arc of Anchorage. With several decades of experience in social services and most recently, her previous service as The Arc’s chief operating officer, Rodriguez-Rath begins her role as CEO for the organization that serves Alaskans who experience intellectual and developmental disabilities. Rodriguez-Rath has worked in the field of health and human services for over 20 years and is a graduate of the University of Alaska Fairbanks with a bachelor’s degree in social work and holds a master’s degree in social work from the University of Alaska Anchorage. In 1995 she began her career in Fairbanks working with youth in residential facilities designed to provide support for individuals experiencing severe emotional disturbances.

ADFG closes early Kenai kings

The Alaska Department of Fish and Game issued an emergency order on Feb. 18 closing the Kenai River early king salmon run to sport fisheries. The closure will be in effect May 1 – June 30.  The closure responds to a low forecast. Biologists forecast a return of 5,206 fish for the early king run. The optimal escapement goal for early-run Kenai River king salmon is 5,300 to 9,000. If the run does come in as forecasted, it will rank one of the lowest on record, 29th of the 31 years ADFG has been counting. ADFG said that the closure matches the standard for the previous year, and will be maintained unless the department makes more optimistic measurements during the season. “Since the 2016 total run forecast is similar to the 2015 run forecast when the fishery remained closed, and the forecast is less than the lower end of the optimal escapement goal, closing the fishery preseason is warranted until data from inseason assessment projects indicate that fishing opportunity can be afforded without jeopardizing achievement of the optimal escapement goal,” ADFG’s report reads. Low king runs have kept the early-run fishery closed since 2013 when it was open briefly to catch and release angling. The Kenai is part of a statewide decline in chinook salmon stocks. Low king runs will also affect the Kasilof River early king sport fishery. ADFG “prohibits the retention of naturally-produced king salmon except Tuesdays and Saturdays, and limits sport fishing gear to one unbaited, single-hook, artificial lure while sport fishing in the Kasilof River beginning 12:01 a.m. Sunday, May 1 through 11:59 p.m. Thursday, June 30, 2016.”   DJ Summers can be reached at [email protected]

Wells Fargo report bleak for Alaska on strong dollar, weak oil

Wells Fargo economists released an investment update for 2016, and little of the news looks pleasant for Alaska. The report, entitled “Navigating Risk in a Year of Change,” advises investors to shrug off the appearance of market volatility in 2016. “We started the year very differently than we started the year ever before,” said JoEllen Weatherholt, an Alaska investment strategist with Wells Fargo. Weatherholt said the market’s recovery from economic doldrums beginning in March 2009 has been abnormally smooth. Market volatility now, she said, only feels intense by comparison. “We’re back to more normal volatility,” she said. “It feels like super volatility when you haven’t had any in awhile. We are going to continue to have volatility, we’re not going to be in that smooth sailing environment.” Investors, she said, should calculate their appetite for risk and try not to get sucked into pessimism. “Quit watching TV and just hang tough,” Weatherholt said. The volatility, the report says, traces back to several themes. Most crucial for Alaska, commodity prices including oil remain low with little sign of an upswing, and the U.S. dollar’s strength causes problems in export markets. In terms of Wells Fargo’s report, Alaska more closely resembles the bank’s definition of an “emerging economy”: one dependent on low-value bulk resources without a substantial proportion of 21st century business drivers like technology and internet development. With political unrest and low commodity prices, these emerging economies have a negative outlook. The dollar’s strength hurts for Alaska as a foreign export producer, notably for the state’s largest foreign export, seafood, and for it’s largest revenue source, oil. Alaska also exports other commodities such as gold, lead and zinc. In 2015, the dollar’s strength factored into Bristol Bay fishermen — the world’s largest sockeye run — receiving half the average price for their fish. Wells Fargo doesn’t predict the dollar will weaken anytime soon, though early 2016 saw it beef up less than the previous year as foreign economies strengthen. “The dollar’s two main supports are stronger economic growth and widening interest-rate differentials across countries,” reads the report. “The U.S. economy has outperformed the Eurozone and Japanese economies since 2014 as the dollar has surged in value against the euro and the yen. The economic-growth gap across these regions should narrow somewhat in 2016.” Europe is a key export market for Alaska seafood along with Japan and China, but outlooks for their currencies look dim. Political unrest driven by the European refugee crisis contributes to the euro’s weakness, said Mike Serio, Regional Chief Investment Officer for Wells Fargo Private Bank. The dollar’s strength has been a factor in the price of oil’s decline, colliding with a glut in supply. Global production increased in 2015 from 94.5 million barrels to 95.5 million, with no equivalent increase in demand to raise prices back up. “The problem is our storage facilities all over the U.S. are just bloated with oil,” said Serio. Rather than depress supply willingly, oil-producing regions continue to yield. “We’ve got Russia continuing to pump, Saudi Arabia continuing to pump, and Iran continuing to pump,” he said. Oil prices are good for the U.S. consumer, but there’s been no equivalent buildup in other areas to benefit. Wells Fargo estimates an annual household savings of $92 billion per year. Typically, economists theorize that gas pump savings fuel growth in other sectors, but the U.S. consumer appears to have learned a savings lesson from the Great Recession. “People are saving 5.5 percent of their income,” said Jon Snare, a regional investment manager. “It’s one of the mysteries in the U.S. that consumers since the crisis have been less willing to go out and spend the money they save.” For Alaska, this could dampen tourism expectations. Tourism, nearly a third of the state’s private economy, comes from discretionary spending, especially lengthier and more expensive trips to remote locales like Alaska. With that extra money socked away in savings, it may be less likely to be spent on glacier cruises and halibut charters, although the state is forecast to have another strong year of visitors in 2016. DJ Summers can be reached at [email protected]

AK LNG talks ‘unlikely’ to meet deadlines

A lack of progress in negotiations between the state’s producer partners on major Alaska LNG Project agreements is likely to throw the project off schedule, according to a key member of the Walker administration. Deputy Department of Natural Resources Commissioner Marty Rutherford said in an interview that BP, ConocoPhillips and ExxonMobil are still working on the structure of the Alaska LNG Project’s critical Gas Balancing Agreement after more than a year of negotiations. Rutherford is the state’s lead negotiator for commercial terms on the project, Gov. Bill Walker has said. The Gas Balancing, or gas supply, Agreement is the underpinning contract for at least seven more issues that must be resolved within several months to keep the project on track, according to the administration. It provides a framework for the companies — each with a different share of North Slope natural gas dedicated to the project — to pull their gas from the fields at certain times without upsetting the overall operations of the project. Even if the Gas Balancing terms were reached immediately, she said, it would still be “highly, highly unlikely” that all the agreements could come together in time because it still takes months to finalize agreements met in principle. Rutherford noted she always thought the Alaska LNG Project commercial terms would be wrapped up in time for a spring 2016 special session, but she also characterized the general challenge of several-party negotiations, regardless of the topic. “Two-party negotiations are tough; three are very difficult and four are — it’s hell,” she said. Company representatives acknowledged the slow pace of the negotiations in recent testimony before state legislative committees. Gas supply agreements are common in joint-venture LNG projects, but disparate ownership in the Alaska LNG Project’s two major gas fields, Point Thomson and Prudhoe Bay, makes this negotiation particularly challenging, ConocoPhillips Vice President of Commercial Assets Leo Ehrhard told the Senate Resources Committee Jan. 27. The agreement dictates how gas is “lifted” from the field under normal operations, but also during downtimes for maintenance on one field or the other. Gas draws must also jive with when customers want LNG from the $45 billion-plus export project, further complicating matters. On top of all that, each party comes to the table with differing risk perspectives and policy goals in a time of particular financial stress, given the state of world oil markets, Rutherford noted. “There have been some pieces we haven’t even begun (negotiating) yet because the foundational, what I call the threshold agreement, hasn’t been landed, even structurally,” she said. Walker sent a letter to the company leaders in Alaska on Jan. 18 expressing his concern over the lack of progress. He said the state would seek other alternatives to commercialize its gas if the parties don’t reach an agreement by the end of the regular legislative session, which is in late April. The governor has said for several months he hoped to have a comprehensive set of project agreements in place for the Legislature to review late in the regular session so a special session to vote on the agreements could be held shortly thereafter. A special session would also include a vote on a constitutional amendment needed for the state to enter into long-term contracts — tax policy — for the initial 25-year life of the project. The Alaska Constitution prohibits one Legislature from taking the authority to tax away from future bodies, which locking the state into a 25 percent share of the project’s gas would seemingly do. “There is an absolute certainty that a constitutional amendment is needed if the fiscal agreements that the producers want contain the Legislature suspending their power to tax,” Attorney General Craig Richards said to the Senate Resources Committee Jan. 29. Richards noted many, if not most, states have similar clauses in their constitutions. He also said the Stranded Gas Development Act, an earlier attempt to monetize North Slope natural gas, included fiscal terms that would have required an amendment as well. Because the public must vote on the amendment in a general election, the Legislature’s vote needs to happen in time to get it to the Division of Elections before June 23, the deadline for getting it on the November ballot. If any of that falls apart, the project is all but delayed for at least two years until the 2018 general election. The timeline was imposed by the producers’ prerequisite to have fixed project tax terms, Rutherford said, which added deadlines for the fiscal term sheets and the subsequent constitutional amendment. Ehrhard also said the agreements are necessary for the project to enter the full-fledged front-end engineering and design, or FEED, stage. The decision whether to enter FEED has been expected sometime next year. Despite the challenges, the parties are continuously negotiating. “We’re working hard to try to get breakthroughs on all fronts with the hope that the unlikely could happen,” Rutherford said. “We’re totally focused on trying to make these dates.” Gas supply from each field is also an issue for the state, she said, but not on the level it is for the producers because the state holds an equal 25 percent share of gas in each field through royalties and the proposed tax share to be taken in-kind. The negotiations started even before the Walker administration took office in December 2014, but began in earnest about a year ago. Last June the producers asked the state to step aside so they could work on the issue themselves and the State of Alaska was invited back to the Gas Balancing table about a month ago, according to Rutherford. Elwood Brehmer can be reached at [email protected]

Cotten, council get earful from trawlers

PORTLAND, Ore. — An administrative push to keep fishing jobs in coastal communities is butting heads with the trawl industry claiming they provide the jobs in the first place. The North Pacific Fishery Management Council will continue studying a bycatch reduction plan unpopular with Gulf of Alaska trawlers. The option, known as Alternative 3, would allocate individual bycatch caps to groundfish vessels in the Gulf of Alaska rather than the target species. The council is making changes at the fleet’s insistence. The council passed a series of chinook salmon bycatch limits and halibut bycatch reductions in 2011 and 2012, leading to bycatch-related shutdowns of the trawl fleet. Following a two-day public comment marathon that spilled into an impromptu town hall-style meeting, the council approved an amended version of the original alternative. The amended Alternative 3 narrowly passed the council 6-5 along the state lines. All six Alaska members voted in favor of including the alternative, while members from Washington, Oregon, and the National Marine Fisheries Service Alaska Region voted against it. Even with changes, trawl industry representatives say Alternative 3 is the short route to crippling the Gulf of Alaska groundfish fleet. “If the goal of the council is to hamstring the trawl industry, then Alternative 3 it is,” said Bob Krueger, executive director of Alaska Whitefish Trawlers. Trawlers say the council process is skewed towards small boat Alaska interests, a disservice in their eyes, as the fishery is federal. Council members said that may be true, but Alaska plays the biggest role in the North Pacific. “The majority of the people that have LLPs (limited license permits) now don’t even live in Alaska,” said Alaska Department of Fish and Game Commissioner and council member Sam Cotten. “But the fishery is prosecuted from Alaska ports. The fish are brought to Alaska harbors. The fish are processed in Alaska communities. There are people who live in these towns who are affected by fishery management plans. We’re gonna listen to them, too.” After the vote, trawl industry stakeholders clustered together to vent against what they said was harmful anti-trawl rhetoric that will shoot Alaska in the foot. “All my boats that are ported in Kodiak deliver to Kodiak for decades,” said Heather Mann, executive director of the Midwater Trawlers Cooperative. “They spend money in Kodiak. The fish is being processed in Kodiak. They’re buying groceries and fuel in Kodiak, and getting services in Kodiak. We’re as much a part of that economy as someone who was born and lives in Kodiak. To discriminate against us…harms Alaskans.” Cotten said the trawlers are right; Alaska interests, in his mind, are the council’s top priority. “If not us, then who will protect the economic interests of Alaska?” he said. Alternative 3 Roughly 85 percent of North Pacific groundfish fisheries are rationalized. A big chunk of the remainder is in the Gulf of Alaska. Rationalization assigns blocks of fish quota to individual vessels or to fishing cooperatives. Managers often pinpoint rationalization as the best way to ensure safety and to minimize bycatch; vessels with their own quota can harvest at their leisure instead of the derby style fisheries of the past, thus allowing more time to avoid prohibited species like chinook salmon and halibut. Coastal communities, however, have a bad aftertaste of some rationalization programs. When the council rationalized Bering Sea crab, the number of boats in the crab fleet shrank by two-thirds in one season and eliminated 1,000 crew jobs. Though not to the dramatic level as crab, halibut rationalization also produced some consolidation of vessels and harvest quota. Quota is also extremely expensive, which has limited the ability of new entrants to join the fisheries. In state fisheries, the Alaska limited entry permit system saw many rural permits migrate to urban areas.  “Those that live in the community are very concerned about duplicating and magnifying the negative experiences we’ve had in the past,” said council member Duncan Fields. “Our experiences create a very clear philosophical demarcation on the council.” Alternative 3 creates an individual quota system for bycatch, rather than for the target species. Trawlers say this does nothing to end the race for fish, as vessels will simply fish up to their individual bycatch limit instead of the fleetwide limit. Trawlers understand the fears of consolidation, but say their fishery isn’t analogous to crab or halibut. Groundfish are low-price, high-volume product not subject to the same harvesting or market structure as the higher-end seafood products. As evidence, they point to the Gulf rockfish fishery, which produced little consolidation when it was rationalized in 2007. Fewer than 40 trawlers currently operate in the Gulf of Alaska groundfish fishery, but potentially as few as 10 could harvest the whole quota. Fields said this is exactly the kind of consolidation Alternative 3 wants to avoid. Trawlers say an existing option, Alternative 2, already incorporates certain guarantees for preventing consolidation, including vessel usage caps. To prevent the kind of consolidation of the crab or halibut, each vessel would be restricted to hold no more than 1 or 3 percent of the total target quota – allowing for increased efficiency but preventing the fleet from shrinking below about 25 vessels. Among other concerns, trawlers also say Alternative 3 doesn’t recognize individual vessels’ or cooperatives’ historical take of prohibited species catch, or PSC, or of target species; they worry a PSC-only allocation will be a kind of redistribution of wealth to those entrants without their lengthy investment of time and finances. To fix this, Cotten amended the final Alternative 3 to recognize dependency, but not history, which trawlers said “molests” their concerns. Only recognizing dependency without history, they say, goes against the tenets of the Magnuson-Stevens Act, which states the council must make allocations with history as a consideration. Cotten put in a concession to history: any allocation of history would use only the historical share from the year before. Trawlers say one year of bad fishing shouldn’t guarantee another. Both trawlers and the National Marine Fisheries Service, or NMFS, oppose Alternative 3, believing it doesn’t address the stated goal to make fisheries safer and lower bycatch. Merely adding it to the discussion, they said, will cost crucial time for the trawl fleet, which has had two bycatch-related shutdowns already and anticipates more. NMFS Alaska Region Assistant Administrator Glenn Merrill, who sits in place of Alaska Region Administrator Jim Balsiger on Gulf-related matters because Balsigers’s wife Heather McCarty works for the City and Borough of Kodiak on fisheries matters, voted against Alternative 3 and said analyzing the option will add up to a year’s more time to a final plan’s passage. Stakeholder input Trawlers heatedly testified against moving Alternative 3 forward, both in the Advisory Panel and in front of council. The AP, a group of 21 stakeholders who provide input to the council, almost passed a recommendation to the council to drop Alternative 3, but the motion failed on a 9-12 vote.  Virtually everyone affiliated with a trawl operation spoke against the option, most with the same criticism: only allocating bycatch caps will not encourage trawlers to slow their operations and avoid prohibited species. “I feel that time is the most effective and powerful tool to reduce bycatch,” said trawl captain Jason Chandler. “If only PSC is reduced, the fleet will continue to race upwards to the limit. I can’t honestly believe we’re even talking about a program that doesn’t take out the race for fish.” Most public comment was against the alternate with a few notable exceptions. Those who supported it spoke to the alternative’s ultimate goal: boosting coastal community stake in the fishery. “Everyone has figured out that owning a public resource is a really groovy tool,” said Alexus Kwachka, a Kodiak fisherman and AP member. “I don’t know if Alternative 3 would work, but I think it has merits to consider. I think there has to be some kind of happy medium. If we do it wrong in the Gulf, we wipe out other businesses.” Trawlers organized a voluntary stand down from Feb. 3-6 in order to testify and show solidarity. The masses hinted that the stand down was taken seriously, but Alaska council members probed to find out if the stand down’s timing was too convenient. Prior to the council meeting, pollock prices pushed trawlers to target non-pollock fish in the Gulf instead, leading to a halibut bycatch spike of 100 metric tons, or about 242,000 pounds, over the same period last year and spurring trawlers to stop targeting non-pollock species such as Pacific cod. Accounts for when the trawlers decided to stand down to participate in the council meeting differed; some said last year, others said earlier in January. “Are their any other reasons you would stand down,” asked Cotten, “perhaps because of bycatch?” Trawlers acknowledged the halibut bycatch spike, but said the two stand downs were purely coincidental. “I just want to point at that that agreement was entered prior to the beginning of our fishing season,” said Jason Chandler, a trawl captain. Alaska council members seemed to think the much-publicized stand downs skewed reality. There’s a critical distinction, they said, between the largely Seattle-based trawl industry and the actual residents of Gulf of Alaska towns like Kodiak, Sand Point, and King Cove. Few such residents testified before council or wrote letters of support. Trawlers, meanwhile, resented the implication that they aren’t community members, too. The council’s Advisory Panel wrote in its recommendation that “no industry” voiced any support for the alternative, earning a scolding tone from council member Duncan Fields. “Is the AP of the opinion that (supporting) written comments do not count as stakeholder input?” Fields asked AP co-chair Art Nelson. The letter Fields referred to came from the Sitka-based Boat Company, which describes itself as a “non-profit educational organization offering luxury eco-cruises through Southeast Alaska.” Of the 20-odd letters submitted to council, the Boat Company alone supported Alternative 3. The remaining letters came from processors, trawl captains and crew, or from industry groups. Some Kodiak residents within the council process had argued a similar point in the AP discussion preceding the council’s. Certain “community protections,” they said, are merely protections for trawlers and processors. “I consider myself a stakeholder as a resident of the community of Kodiak,” said Theresa Peterson. “I don’t see stakeholders as being limited to the stakeholders in the trawl industry. Granted, people not directly represented in the trawl industry have not shown up en masse, but I feel like the state was responsive to a lot of community concerns.” The council’s public comment period — spanning two days with more than 50 speaking — was highly charged, and the Benson Hotel’s conference room temperature rose. The sheer volume of public comment spilled into an impromptu town hall-style meeting with Cotten. Trawlers crowded the commissioner and some had trouble keeping voices below an on-deck volume. Paddy O’Donnell, a Kodiak resident and trawl owner who introduced the motion to scrub Alternative 3 out of the package as an Advisory Panel member, told Cotten he hates being treated as a second class citizen. Fixed gear fishermen, he raged in a brogue-soaked shout, are just as important to the Alaska economy — and the Alaska identity — as the more romanticized hook and line fisheries. “I’m branded because I’m a trawler. I’ve lived in Alaska for 26 years, longer than I ever lived in Ireland,” said O’Donnell. “I’ve got two kids going to school there. You are throwing out the future of my livelihood, the future of my kids, the future of the community of Kodiak.” Fishy politics Trawlers accuse the North Pacific council of letting itself be dominated by Gov. Bill Walker’s interests through Cotten, and weren’t shy about telling Cotten they felt betrayed by Alternative 3. “You, as commissioner to the State of Alaska, you’ve got a job to do, but you’re throwing me under the bus,” said O’Donnell. “You’re the guy we look up to, to protect us. You’re our man in Juneau, and you need to look after us.” Council members don’t necessarily disagree that the process is weighted for Alaskans; that’s the way it’s supposed to be, they said. Alaska was given the majority of the voting seats on the North Pacific council when the eight regional councils were created by the Magnuson-Stevens Act. Cotten introduced Alternative 3 in October 2015. Former commissioner Cora Campbell, who Cotten replaced following Walker’s election, had forwarded Alternative 2 to the council the year before. Trawlers support Alternative 2, which they said is still flawed but had the benefit of two years of substantial public comment. Trawlers said the council discriminates against them. The decision to move Alternative 3, opponents said, demonstrates an Alaska-stacked, philosophically anti-trawl council process. Cotten, they said, controls the majority of Alaska votes and has rearranged the council’s Advisory Panel to reflect anti-trawl interests. At its December meeting, the council removed Mitch Kilborn of Kodiak’s International Seafoods of Alaska and Anne Vanderhoeven, fisheries quota manager for Bristol Bay Economic Development Corp., a Community Development Quota, or CDQ, group. In place, the council appointed Ben Stevens of the Tanana Chiefs Conference and Angel Drobnica of the Aleutians Pribilof Islands Community Development Association, another CDQ group. Before the Portland meeting, the AP changed leadership roles, voting to replace Ruth Christiansen with Ernie Weiss of Aleutians East Borough as chair, with co-chairs Matt Upton from U.S. Seafoods and Art Nelson from Bering Sea Fishermen’s Association.  Only eight of the 21 AP seats come from outside Alaska. “This meeting just underlined how dysfunctional the council is becoming,” said Krueger. “People are not voting the way they really feel. We have council members up for reappointment. Voting contrary to the wishes of the commissioner would end any hope of being reappointed.” Council members disagree that the council bears hatred for trawl interests. Fields said the trawlers, more than any other group, began working the council process in 1976. The appearance of anti-trawler bias through increased regulation is more an example of long-absent equity between North Pacific user groups and stakeholders than some kind of targeted attack. “They structured fisheries that generally advantaged the trawl fleet and perhaps disadvantaged others,” said Fields. “There is a perspective on the council that the trawl fleet needs to be regulated in ways that minimize impact to other stakeholders.” Clem Tillion, a lobbyist for the city of Adak and Alaska political fixture, said the trawlers simply don’t like the taste of sour grapes. “They had everything going their way under (former Gov. Sean) Parnell,” he said. “Well, Walker won, and they’re having trouble facing up to that.” Walker’s limited involvement with fisheries has typically been in favor of Upper Cook inlet commercial fishing interests. He has repeatedly emphasized the importance of coastal and rural economies dependent on fishing. Julie Bonney, executive director of Alaska Groundfish Data Bank, submitted a letter to Walker on Feb. 5 and passed copies around to council members during public comment. “Your Administration’s proposal jeopardizes these benefits and yet does nothing to better manage bycatch and improve conservation,” the letter reads. “There is absolutely no support for this approach by the current participants in the fishery.” Cotten said Walker is aware of the council’s actions and supports them. Alternative 3 hits the main points of Walker’s objectives for Alaska fisheries, he said: the health of coastal communities and fish-first management. Other items The Gulf of Alaska bycatch issue took the majority of council’s time, but it also revisited several ongoing issues peripheral to halibut fisheries. Like the Gulf, the Limited Access Trawl Sector yellowfin sole fishery in the Bering Sea is not rationalized. New entrants have been coming into the fishery, leading to both economic concerns for the historical participants and to halibut bycatch concerns – yellowfin sole is one of the “dirtiest” fisheries for halibut bycatch, and the Bering Sea and Aleutian Islands yellowfin grounds are nurseries for halibut.  The council’s discussion paper examined possibly closing off the fishery to new entrants. For trawl vessels in the Bering Sea and Aleutian Islands, the council passed a motion that allows vessel in the partial observer category to voluntarily opt into full coverage. Also in the coverage category, a discussion paper examined the possibility of putting observers on tender vessels, which deliver fish from offshore vessels to onshore processors. The council will continue to review observer data and move forward a rule for tenders to file landings reports. The council’s next meeting will be held in Anchorage from April 4-12, where it is tentatively slated to hold an initial review of halibut Recreational Quota Entities, a discussion paper of salmon genetics, and another review of the ongoing halibut management framework. DJ Summers can be reached at [email protected]

Utilities purchase share of Beluga gas field

Anchorage’s electric utilities have partnered to purchase part of a Cook Inlet natural gas field, a move that secures a long-term fuel supply and could save ratepayers up to $9 million per year, utility leaders said Monday. City-owned Anchorage Municipal Light and Power and Chugach Electric Association agreed to purchase ConocoPhillips one-third interest in the Beluga River Unit gas field for a total of $152 million. Under the agreement ML&P will own 70 percent of the unit share and Chugach will take the remaining 30 percent. ML&P purchased a one-third share of the Beluga field in 1996, which has already saved its ratepayers more than $239 million when the utility’s cost to produce the gas is stacked against historical market prices, according to ML&P General Manager Mark Johnston. Hilcorp Energy owns the remaining third of the West Cook Inlet field and is the expected operator on behalf of the utilities, Johnston said in a press briefing. “Because we have the city’s business core and commercial and industrial core (in ML&P’s service area) we think it’s very important that we have a stable fuel supply that helps us to have stable fuel prices for the business community that they can rely on,” Johnston said. The latest deal should supply ML&P with all of its natural gas needs and Chugach with about 10 percent to 15 percent of its gas demand for about the next seven years before production begins to significantly taper. Beluga is expected to produce for the utilities through 2033. Johnston said two reservoir analyses concluded there is between 70 billion and 80 billion cubic feet of gas remaining in the Beluga River Unit. Chugach CEO Brad Evans said his ratepayers would likely see overall savings up to 15 percent on the fuel portion of their electric bills, equating to an overall yearly savings of between $2 million and $3 million per year. Johnston said ML&P’s larger share in the field should translate into savings in the $4 million to $6 million per year. “My wife and I did a back of the envelope calculation and we figure it could be worth a couple hundred bucks a year,” in savings to ML&P ratepayers, Anchorage Mayor Ethan Berkowitz said. ML&P’s gas production cost this year is $4.35 per thousand cubic feet, or mcf, from its original share in Beluga, according to the utility; compared to the regulated wholesale market price of $7.42 per mcf for Cook Inlet natural gas. While still a savings, the production cost has nearly doubled since 2013, a consequence of drilling new wells and doing well workovers to maximize production, Johnston said. The cost of production has fluctuated over the 20 years ML&P has held an interest in Beluga, he said in an interview, and the utility could invest about $30 million to $40 million more in the field over the next five years. ML&P expects to be able to pay for its portion of the acquisition with about $80 million from its Deferred Regulatory Liability from Gas Sales Fund along with a $13.5 million underlift and nearly $25 million in available cash. If the Regulatory Commission of Alaska limits the fund draw Johnston said the utility would turn to revenue bonds tied to production from the field. Evans said Chugach will likely use its low-interest commercial paper program for short-term financing with longer-term debt covering any remaining balance. The utilities first partnered to build the $369 million Southcentral Power Project, a 183-megawatt natural gas-fired plant completed in early 2013. Ownership shares in the power plant are reversed from Beluga deal, with Chugach owning 70 percent and ML&P holding 30 percent. ML&P is also finishing work on the new wholly owned 120-megawatt George M. Sullivan Power Plant 2 natural gas-fired plant in Northeast Anchorage. Combining the new, more efficient generation with owned gas reserves enables the utility to provide power at the lowest possible cost, Johnston and Berkowitz said. Elwood Brehmer can be reached at [email protected]

Juneau hydro developer has plan for clean, stable heat

Duff Mitchell is doing his damndest to get Alaska’s capital off of fuel oil. The director of Juneau Hydropower Inc. announced plans for a seawater-sourced district heat system for Downtown Juneau Feb. 9 at the Juneau Economic Development Council’s annual Innovation Summit. The science behind the renewable energy is nothing new; it’s already being used on a smaller, and cooler, scale to heat the Alaska Sealife Center in Seward and the Ted Stevens Marine Research Institute in Juneau. Juneau District Heating’s system would take electricity from Juneau Hydropower’s Sweetheart Lake facility about 40 miles south of the city to power heat pumps in Gastineau Channel that “scavenge” the thermal energy in the seawater and transfer the heat to water in network of pipes used to deliver the heat to homes and businesses, Mitchell said in an interview. It is essentially the same process used in large-scale refrigeration, except the heat is trapped as a valuable resource rather than being collected and dispersed as waste. The City of Seward is also investigating the potential of sourcing its heat from Resurrection Bay. At more than 180 degrees Fahrenheit, the district heat loop would run hotter than the systems used at the Sealife Center and Marine Research Institute, according to Mitchell. With two water lines, that hot water can simply be put hooked up to and replace a fuel oil-fired boiler system, which 78 percent of Juneau’s buildings, including Downtown state facilities, use for space heat, he said. Mitchell estimated the cost to switch from fuel oil heat to the district heat system to be in the hundreds or low thousands of dollars — less than switching to natural gas. “The conversion cost is low because you’re not ripping out your old system; you’re just supplementing it,” he said. Adding a new space heat source adds redundancy, meaning a fuel oil boiler could be called back into use if need be just by turning a water bypass valve, Mitchell noted. Water used in the loop would head back to be reheated at a temperature between about 120 and 140 degrees Fahrenheit. The system does not sell an energy source; the end product is energy itself. “We’re selling and monitoring (British thermal units),” he said. Recent advancements in the compressors have improved the efficiency of the technology to upwards of 300 percent, making the system more feasible on a larger scale, according to Mitchell. “There’s nothing more efficient than a heat pump,” he said. “In fact, we’ve gone to saying heat pumps are to heating what LED lights are to lighting.” Juneau’s would be the first ocean-sourced district heat system in the country, but Mitchell said the coastal city of Drammen, Norway, supplies heat to its 65,000 residents through the same system. Alan Simchick, a regional manager for the heat pump manufacturer Emerson Climate Technologies, said the large-scale pump technology has been on the market for about eight years, a relatively short period in engineering time. “We really see a bright future for (heat pumps) in a lot of different areas, not just district heating, but also in food processing plants and any areas where heating is needed on an industrial scale,” Simchick said. He called it “one play” in reducing a community’s overall carbon footprint. The end cost of heat to consumers will largely depend on how many homes and businesses sign up, he said, but district heat can compete at today’s oil prices and it offers another major benefit — price stability. The seawater must be at least 37 degrees to maximize efficiency, according to Mitchell, and temperature records show Gastineau Channel has historically met the criteria. Installing the pipe network can be done through directional drilling, eliminating the need to rip up Juneau’s already cramped streets. Initial plans are to cover the city’s Downtown, Willoughby District and extend north to include Juneau-Douglas High School, Mitchell said. Expansion to include Douglas and the hospital areas is being analyzed. The key to Juneau’s system will be the stable cost of electricity born from Sweetheart Lake hydro. About half of the 20 megawatts available will go to power the district heat pumps and the other half will go to the Kensington underground gold mine north of Juneau, he said. Mitchell is developing both projects in concert with hopes have everything complete in 2018, he said. Permitting for the projects should be wrapped up by the end of this year. Combined, the work could inject upwards of $200 million into the region’s economy. Because inexpensive electricity is paramount for an ocean-sourced district heat system, the technology could be extended to communities in Southeast with excess hydro capacity; however, the economics would likely be challenged in communities with fuel oil, or diesel-fired, electric generation, according to Mitchell. Elwood Brehmer can be reached at [email protected]

ConocoPhillips absorbs $4.4B loss; nets just $4M in Alaska

ConocoPhillips’ fiscal situation looks a lot like the State of Alaska’s after the company posted a 2015 net loss of $4.4 billion in its year-end financial results released Feb. 4. While Alaska leaders are contemplating cutting the Permanent Fund Dividend to help fund the budget, ConocoPhillips announced it was slashing its dividend from 74 cents to 25 cents per share. Combined with reductions in capital expenditures to $6.4 billion from the $7.7 billion plan announced in December, the two moves will save the company $4.4 billion in 2016. The company’s share price dropped 8.1 percent to $35.50 following the announcement. In Alaska, ConocoPhillips reported earnings of $4 million for the year, compared with more than $2.04 billion in earnings for 2014. Excluding negative special items totaling $478 million for the year that include a $412 million impairment related to its Chukchi Sea leases, adjusted earnings for Alaska were $482 million for the year compared to $2.07 billion in 2014. The company posted positive Alaska earnings in the first three quarters, but reported a $389 million loss in the fourth quarter as its average realized price per barrel was $40.29 compared to $71.34 in the fourth quarter of 2014. In January, Alaska North Slope crude prices dipped to less than $30 per barrel for the first time in more than a decade. Including special items, ConocoPhillips reported an overall pre-tax net loss of $650 million for Alaska in the fourth quarter. Company spokeswoman Natalie Lowman said ConocoPhillips is estimating its tax and royalty obligation for the year at $665 million, which, when combined with capital expenses, resulted in a negative cash flow exceeding $100 million in Alaska. A $467 million fourth quarter after tax item loss for Alaska is primarily attributable to the company’s federal Chukchi Sea lease holdings, according to Lowman. Following Shell’s lead, the company announced it would suspend development of the Chukchi leases it paid $500 million for in 2008. New oil from the CD-5 development in the National Petroleum Reserve-Alaska and Drill Site 2S online late in the year helped boost fourth quarter production, Lowman said. ConocoPhillips’ average daily Alaska production increased 5,000 barrels per day in the third and fourth quarters compared with 2014. Its average daily in-state production for the year was down 4,000 barrels to 158,000 per day, or about 2.4 percent. The harsh financials likely mean a slight decrease to the previously announced $1.3 billion Alaska capital budget in 2016, Lowman said, but she also noted the state continues to have one of the highest capital spend levels of any sector of the company’s worldwide portfolio. “For this year we expect our (Alaska) capital budget will be higher than in 2012,” Lowman said. In November, ConocoPhillips announced the sanctioning of its Greater Moose’s Tooth-1 exploration in the NPR-A, with a projected development cost of $900 million. LNG export permit renewed On Feb. 9, ConocoPhillips received a renewal of its LNG export permit for its Nikiski plant. After allowing its permit to lapse in 2012 as Cook Inlet supply shortages were a concern, the company renewed exports from the plant in 2014 after utilities’ gas needs were secured. “For nearly half a century, Alaska has exported liquefied natural gas to our friends and allies overseas,” said Alaska U.S. Sen. Lisa Murkowski. “As projects get underway in the rest of the nation, and planning continues for an even larger project here in the State, we should remember that Kenai set the precedent for the historic build-out of export capability now underway in North America. Alaska led the way, Alaskans can now continue to lead the way, and all Alaskans should be proud.” Elwood Brehmer can be reached at [email protected]

AG wants permission to investigate Bill Allen

Alaska Attorney General Craig Richards and Sen. Dan Sullivan joined forces in Anchorage Feb. 5 to announce the state’s intent to pursue longstanding allegations of sexual abuse and trafficking of a minor against former Alaska business leader Bill Allen. Richards sent a letter to U.S. Attorney General Loretta Lynch Friday requesting she cross-designate the State of Alaska with authority to investigate and potentially prosecute Allen in federal court for violating the Mann Act. A federal law passed in 1910, the Mann Act prohibits transport of individuals across state lines with the intent of engaging in sexual acts with them. The Anchorage Police Department and the Federal Bureau of Investigation first looked into the allegations in 2004 that Allen had paid for Paula Roberds, originally from the Western Alaska village of Goodnews Bay, to fly between Anchorage and Seattle multiple times for sex when Roberds was 16, according to news reports. The U.S. Department of Justice announced in 2010 that it would not prosecute Allen for those allegations. Prior requests for cross-designation by former attorneys general Michael Geraghty and Sullivan himself were denied by the Justice Department with little explanation. In rather unique coalescence, Sullivan, as senator, sponsored an amendment to the Mann Act requiring the U.S. attorney general to approve the cross-designation or provide the state attorney general with “a detailed reason for the denial no later than 60 days after the date on which a request is received,” the law states. President Barack Obama signed the anti-trafficking bill that included Sullivan’s Mann Act amendment into law last year. Alaska Criminal Division Director John Skidmore said documents subpoenaed to a federal grand jury cannot be revealed to parties not authorized to pursue charges on a federal level, thus requiring the cross-designation authority from Lynch. Speculation has persisted — and continued at the press conference in Anchorage —that Allen was not prosecuted due to a deal he may have reached with the feds in exchange for testifying against the late Sen. Ted Stevens in a 2008 political corruption case. Stevens was found guilty just days before the 2008 election and lost to Mark Begich by a narrow margin. The conviction against Stevens was eventually tossed and the Justice Department attorneys were sanctioned for misconduct for withholding exculpatory evidence from the defense. “The guardians of justice for the country may have said, ‘alright, to go after Ted Stevens we are going to throw (out), ignore and not go after the heinous crimes where victims are young girls.’ The Department of Justice should not be doing that if that did indeed happen,” Sullivan said. Richards and Sullivan both emphasized that their criticism of the Justice Department’s silence regarding its denials of previous cross-designation requests is not aimed at Lynch, given she was not the U.S. attorney general when those requests were made. “This is really, I think, the opportunity for the Justice Department to right a wrong and make clear and provide clarity around what really happened,” Richards said. “And if there was a deal cut and the deal was that (seeking) to prosecute Ted Sevens would result that Bill Allen not be prosecuted for sexual crimes against children, then we should know it and if that wasn’t the deal then Alaskans should know that too.” Allen, the former head of the oilfield services firm VECO Corp., pled guilty in 2007 to bribing a handful of Alaska legislators for support of an industry-friendly state tax policy. He was sentenced to three years in prison and fined $750,000. Skidmore said the state has not yet confirmed Allen’s whereabouts and would do so if it chooses — and is allowed — to pursue charges against him.

Juneau bars some materials for marijuana concentrates

JUNEAU — Anybody attempting to make marijuana concentrates using butane, propane or any other such chemical had better think twice. Not only could using these gases result in a potentially deadly explosion, they will now result in misdemeanor charges, too. Without objection, the City and Borough of Juneau Assembly passed an ordinance Feb. 8 making it illegal for anybody without a license or permit to make marijuana concentrate — waxes, oils, etc. — using extraction methods that are not alcohol-, food- or water-based. This ordinance applies to all city zones; no permit or license, no gas-based extraction. Until Feb. 8, the ordinance allowed only for food- and water-based extractions, but Assembly member Debbie White motioned to include alcohol-based extractions, which she pointed out are not as dangerous as using explosive gases. “Alcohol is flammable, but it’s definitely not explosive,” she said. With a 5-3 vote, the Assembly approved White’s motion but not before consulting with Capital City Fire/Rescue Chief Rich Etheridge, who confirmed White’s point. “I think the risk is less than those explosive, compressed gases, but there is a risk similar as when cooking with alcohol or using it in your garage,” he told the Assembly. “There is a risk, but it’s not the level of using butane or those other methods.” Assembly members Loren Jones, Maria Gladziszewski and Mayor Mary Becker voted against White’s amendment. Jones said that he wanted the Assembly to clarify what it meant by “food-based” extraction, explaining that people are already making concentrates illegally. The only way the Assembly can make sure people are making concentrates safely is by “better defining ‘food-based.’” Assembly member Jesse Kiehl, a proponent of the ordinance and of White’s motion said that what Jones was asking for was beyond the scope of this particular ordinance. “In terms of dealing with this ordinance, that is dealing with things that go boom, any of these food products are OK with me because none of them go boom,” he said responding to Jones. “It makes sense that we should allow people to do alcohol-based extractions because it’s not going to make the neighbor’s house blow up.” The members of the Assembly weren’t the only ones talking about marijuana in City Hall Monday. The Assembly discussion regarding the concentrate ordinance was preceded by a lengthier public-comment period than usual. Four North Douglas residents, including Planning Commission Chair Nicole Grewe, spoke out against the Assembly’s decision to allow commercial marijuana operations to operate in D1 and Rural Reserve zones outside the urban service boundary. Though the Assembly established the zoning rules for marijuana businesses in early November, Grewe said it’s not too late to ensure neighborhood harmony. “We answered the where, but we didn’t answer the how,” she told the Assembly. Grewe also took issue with the fact that the Assembly had made the “random” distinction between D1 and Rural Reserve neighborhoods inside the urban service boundary and those outside it, which is the case for her neighborhood. Not all neighborhoods outside the urban service boundary are low density, she said. “I could subdivide my lot, put in two grow facilities, and force my neighbors to look at two marijuana farms, 1,000 total square feet,” Grewe said. “That’s not low density, not even close.” The Assembly didn’t discuss the zoning matter further, as it was not an agenda item.

Obama vows to press on after Clean Power Plan setback

WASHINGTON (AP) — The administration of President Barack Obama is vowing to press ahead with efforts to curtail greenhouse gas emissions after a divided Supreme Court put his signature plan to address climate change on hold until after legal challenges are resolved. The Feb. 9 surprising move by the court is a blow to Obama and a victory for the coalition of 27 mostly Republican-led states and industry opponents, who call the regulations “an unprecedented power grab.” By issuing the temporary freeze, a 5-4 majority of the justices signaled that opponents made strong arguments against the rules. The high court’s four liberal justices said they would have denied the request for delay. The administration’s plan aims to stave off the worst predicted impacts of climate change by reducing carbon dioxide emissions at existing power plants by about one-third by 2030. White House spokesman Josh Earnest said the administration’s plan is based on a strong legal and technical foundation, and gives the states time to develop cost-effective plans to reduce emissions. He also said the administration will continue to “take aggressive steps to make forward progress to reduce carbon emissions.” A federal appeals court in Washington last month refused to put the plan on hold. That lower court is not likely to issue a ruling on the legality of the plan until months after it hears oral arguments begin on June 2. Any decision will likely be appealed to the Supreme Court, meaning resolution of the legal fight is not likely to happen until after Obama leaves office. Compliance with the new rules isn’t required until 2022, but states must submit their plans to the Environmental Protection Administration by September or seek an extension. Many states opposing the plan depend on economic activity tied to such fossil fuels as coal, oil and gas. They argued that the plan oversteps federal authority to restrict carbon emissions, and that electricity providers would have to spend billions of dollars to begin complying with a rule that might end up being overturned. Attorney General Patrick Morrisey of West Virginia, whose coal-dependent state is helping lead the legal fight, hailed the court’s decision. “We are thrilled that the Supreme Court realized the rule’s immediate impact and froze its implementation, protecting workers and saving countless dollars as our fight against its legality continues,” Morrisey said. Implementation of the rules is considered essential to the United States meeting emissions-reduction targets in a global climate agreement signed in Paris last month. The Obama administration and environmental groups also say the plan will spur new clean-energy jobs. In opposing the request for delay, the EPA argued that states had plenty of time to comply with the requirements as the rule is rolled out over the next 6 years. “A stay that delays all of the rule’s deadlines would postpone reductions in greenhouse gas emissions and thus contribute to the problem of global climate change even if the rule is ultimately sustained,” U.S. Solicitor General Donald Verrilli said in legal filings. Environmentalists were stunned by the court’s action, which they stressed did not reflect a decision on the relative strength of the administration’s case. “The Clean Power Plan has a firm anchor in our nation’s clean air laws and a strong scientific record, and we look forward to presenting our case on the merits in the courts,” said Vickie Patton, a lawyer for Environmental Defense Fund, which is a party to the case. To convince the high court to temporarily halt the plan, opponents had to convince the justices that there was a “fair prospect” the court might strike down the rule. The court also had to consider whether denying a stay would cause irreparable harm to the states and utility companies affected. The unsigned, one-page order blocks the rules from taking effect while the legal fight plays out in the appeals court and during any further appeal to the Supreme Court, a process that easily could extend into 2017. Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan would have denied the request for delay.

Obama vows to press on after Clean Power Plan setback

WASHINGTON (AP) — The administration of President Barack Obama is vowing to press ahead with efforts to curtail greenhouse gas emissions after a divided Supreme Court put his signature plan to address climate change on hold until after legal challenges are resolved. The Feb. 9 surprising move by the court is a blow to Obama and a victory for the coalition of 27 mostly Republican-led states and industry opponents, who call the regulations “an unprecedented power grab.” By issuing the temporary freeze, a 5-4 majority of the justices signaled that opponents made strong arguments against the rules. The high court’s four liberal justices said they would have denied the request for delay. The administration’s plan aims to stave off the worst predicted impacts of climate change by reducing carbon dioxide emissions at existing power plants by about one-third by 2030. White House spokesman Josh Earnest said the administration’s plan is based on a strong legal and technical foundation, and gives the states time to develop cost-effective plans to reduce emissions. He also said the administration will continue to “take aggressive steps to make forward progress to reduce carbon emissions.” A federal appeals court in Washington last month refused to put the plan on hold. That lower court is not likely to issue a ruling on the legality of the plan until months after it hears oral arguments begin on June 2. Any decision will likely be appealed to the Supreme Court, meaning resolution of the legal fight is not likely to happen until after Obama leaves office. Compliance with the new rules isn’t required until 2022, but states must submit their plans to the Environmental Protection Administration by September or seek an extension. Many states opposing the plan depend on economic activity tied to such fossil fuels as coal, oil and gas. They argued that the plan oversteps federal authority to restrict carbon emissions, and that electricity providers would have to spend billions of dollars to begin complying with a rule that might end up being overturned. Attorney General Patrick Morrisey of West Virginia, whose coal-dependent state is helping lead the legal fight, hailed the court’s decision. “We are thrilled that the Supreme Court realized the rule’s immediate impact and froze its implementation, protecting workers and saving countless dollars as our fight against its legality continues,” Morrisey said. Implementation of the rules is considered essential to the United States meeting emissions-reduction targets in a global climate agreement signed in Paris last month. The Obama administration and environmental groups also say the plan will spur new clean-energy jobs. In opposing the request for delay, the EPA argued that states had plenty of time to comply with the requirements as the rule is rolled out over the next 6 years. “A stay that delays all of the rule’s deadlines would postpone reductions in greenhouse gas emissions and thus contribute to the problem of global climate change even if the rule is ultimately sustained,” U.S. Solicitor General Donald Verrilli said in legal filings. Environmentalists were stunned by the court’s action, which they stressed did not reflect a decision on the relative strength of the administration’s case. “The Clean Power Plan has a firm anchor in our nation’s clean air laws and a strong scientific record, and we look forward to presenting our case on the merits in the courts,” said Vickie Patton, a lawyer for Environmental Defense Fund, which is a party to the case. To convince the high court to temporarily halt the plan, opponents had to convince the justices that there was a “fair prospect” the court might strike down the rule. The court also had to consider whether denying a stay would cause irreparable harm to the states and utility companies affected. The unsigned, one-page order blocks the rules from taking effect while the legal fight plays out in the appeals court and during any further appeal to the Supreme Court, a process that easily could extend into 2017. Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan would have denied the request for delay.

EDITORIAL: Omnibus energy bill a chance for bipartisan progress

Since becoming chairwoman of the Senate Committee on Energy and Natural Resources, Sen. Lisa Murkowski hasn’t been sitting on her hands. In addition to routine legislation and a host of bills on priorities of the day, she has spent much time crafting a gargantuan omnibus energy bill that, if passed, would be the first such successful legislation in almost a decade. As it stands now, the bill is in a holding pattern after Michigan senators blocked it due to a lack of action on resolving the Flint water crisis. Both the energy bill and the situation in Flint are worthy of the Senate’s attention, but using one to block the other will serve the country only if both are resolved. The omnibus energy bill, on which Sen. Murkowski has worked with the help of Sen. Maria Cantwell, D-Wash., is a landmark piece of legislation and the product of many months’ heavy lifting by both senators. Before even passing the bill from committee, Sens. Murkowski and Cantwell invited members to submit any and all amendments they wished to have become part of the bill so they could be heard and debated, even if many ultimately didn’t pass muster. In an attempt to ensure bipartisan support for the bill, the senators made sure to avoid loading it up with pork, controversial legislative agenda items or state-specific benefits. That means it doesn’t address hot-button issues such as the proposed Keystone XL pipeline or state priorities such as funding for Alaska’s LNG line from the North Slope. What it does include, however, is plenty important for the Last Frontier and the rest of the U.S. Energy efficiency and weatherization programs are a major focus of the bill, as well as funding for alternative energy options such as microgrid hybrid power systems of the type common in Alaska villages off the road system. There are funds for extending and expanding federal geothermal energy research, from which Alaska — located as it is along the geological “Ring of Fire” — could see great benefits. And though there isn’t money included for the LNG line, the bill would speed up LNG permitting. And when it comes to major infrastructure projects of the sort Alaska LNG would be, time can be a far more valuable resource than money. The bill passed out of the energy committee late last year and looked like it had momentum to succeed on the Senate floor, but its prospects got a bit cloudier when it ran afoul of the water crisis in Flint, Mich. The energy bill as passed from committee doesn’t relate directly to Flint’s situation, of course, but its progress is being blocked by Sens. Debbie Stabenow and Gary Peters of Michigan. The Michigan senators, both Democrats, want to see funds included to deal with the water crisis for their state’s city and others similarly effective. It’s a worthy priority, and Sens. Murkowski and Cantwell recognize that. When the Flint issue blew up a cloture vote on the omnibus bill last week, the two senators worked through the weekend to try to resolve the situation. As late as Feb. 8, there had been no resolution, leaving little time left on the Senate calendar to move the important legislation. Both the omnibus bill and Flint’s water plight deserve consideration, and it smacks of cutting off one’s nose to spite one’s face to potentially torpedo one over a debate with the other. The Senate energy omnibus bill should pass — after nine years without one, it’s time to show that Washington, D.C., doesn’t always have to be the broken morass residents have come to feel it is.  

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