Alaska Journal of Commerce

Trustees hear plans for Fund

The plans before the Legislature to use the Permanent Fund’s investment returns to pay for government have much in common, while their differences exemplify the priorities of their sponsors. The plan that is ultimately chosen will go a long way toward shaping the relationship Alaskans have with their state government.

Fuel tax bill moves with industry support

Gov. Bill Walker’s bill to increase state fuel taxes has support from some industry groups it would directly impact.

It is also the only tax bill amongst a suite of revenue proposals by the administration to help close the $3.5 billion-plus budget deficit to have moved out of a single committee so far.

The Senate Transportation Committee passed the bill onto the Finance Committee last week with lukewarm support on a 3-2 vote.

Committee chair refuses to advance gov’s fisheries tax hike

Commercial fisheries may see taxes increase, but only if other resource industries do, too.

Under a budgetary thundercloud, Gov. Bill Walker is trying to squeeze funding from any source. A commercial fisheries tax bump, part of nine such bills in the Legislature, has slowed to a crawl in committee as fishermen decry it.

Fishermen, and House Fisheries Committee chair Rep. Louise Stutes, R-Kodiak, fear Walker’s tax plan could disproportionately pinpoint the commercial fishing industry while other resource taxes die.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

Anchorage Assembly finalizes marijuana business regulations

Anchorage’s marijuana industry is set to begin, with a final package of municipal requirements coming weeks before the Marijuana Control Board starts accepting licenses on Feb. 24.

Anchorage tightened certain regulations while holding off on others. New regulations increase buffer zones in Chugiak and Eagle River, add new buffer zone triggers to Anchorage marijuana businesses, bar small-scale commercial home grows, prohibit onsite consumption, and redraft the measurement standard between marijuana businesses and sensitive areas.

Construction forecast down 18% to 2013 levels

Alaska’s contractors will begin to feel the effects of the new oil reality in 2016 as statewide capital spending declines about 18 percent from last year, according to a construction industry forecast.

The University of Alaska Anchorage Institute for Social and Economic Research projects just more than $7.3 billion will be spent on capital projects in 2016. About $8.9 billion was spent on construction projects in Alaska last year.

Negotiations among producers challenging AK LNG timeline

Progress has slowed in fiscal negotiations among the state’s partners in the Alaska LNG Project, raising concerns that agreements might not be in place to meet critical deadlines.

At the top of the list of eight agreements still needing to be resolved is the Gas Balancing Agreement, the foundation necessary for the other issues to fall into place, project leaders told the Senate Resources Committee Jan. 27.

Bycatch spike, meeting spur trawl stand down

Gulf of Alaska trawlers are flocking to a meeting in Portland, leaving behind a halibut bycatch situation the North Pacific Fishery Management Council is attempting to fix.

The trawlers have complaints with council process, but are also standing down from a halibut bycatch spike resulting from a pollock price dispute with area processors.

‘Permission slip’ offered to use Fund earnings

Politicians are often accused of being childish, and the leaders of some of Alaska’s largest companies and interest groups are asking Alaskans to sign a “permission slip” allowing legislators to use Permanent Fund earnings as the basis for a solution to the state’s nearly $4 billion budget deficit.

Led by GCI co-founder and CEO Ron Duncan, the newly formed Alaska’s Future coalition has the singular mission of pushing the Legislature to finally use the $50 billion Permanent Fund for its original purpose: to pay for state operations when resource revenues are depleted.

Walker gives Ruffner second shot at Board of Fisheries

Gov. Bill Walker announced three new nominees to the Board of Fisheries on Feb. 2, including one who lost a bruising confirmation fight to the same body in 2015.

Walker once again put forward Kenai area habitat advocate Robert Ruffner for a seat on the board, but this time his nomination has been promised to go smoother after a campaign waged against him last year by sportfishing advocates that resulted in a 30-29 defeat in the Legislature.

Anchorage LIO owners submit proposal to Legislative Council

A proposal to resolve the political hot potato that has become the Anchorage Legislative Information Office lease has been submitted to Legislative Council chair Sen. Gary Stevens.

The building’s owner group, 716 West Fourth Ave LLC, released a statement Feb. 2 saying it would not release the details of the proposal out of respect for the Legislative Council process, but noted that the group had met the timeline laid out by the council in mid-December and also likely resolved a lawsuit over the terms of the lease.

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