DJ Summers

North Pacific council gets review of Bering Sea pollock program

SEATTLE — After two years of almost ceaseless contention, the North Pacific regulatory waters have cooled down for now. The North Pacific Fishery Management Council oversees all federal fisheries between three and 200 miles off the Alaska coast. One of eight regions, the North Pacific fishery is by far the country’s most profitable, having produced two-thirds of the country’s total seafood value in 2015. Over the last two years, the council has been in battle mode over chinook salmon and halibut bycatch, and Gulf of Alaska groundfish catch shares. There have been parades of protest and industry stand-downs and rural Alaska villages emptied to give impassioned pleas alongside Seattle fishing crews and captains. At the council’s Seattle meeting Feb. 1-6, the council rested for the most part, taking scant public comment and few final actions. Rather, it focused on some of the structures behind the chaos, reviewing catch share programs and looking for areas to tune up following two years of pushing the gas. After indefinitely tabling a Gulf of Alaska catch share system four years in the works at its meeting this past December, the council reviewed the schematics behind the Bering Sea pollock fishery, Alaska’s largest fishery by volume. The council asked that some information be refined and sent back to it, including effects on the outmigration of rural employment, the amount of Community Development Quota ownership, and the individual ownership for catcher vessels. The American Fisheries Act was signed into law in 1998, designed to end foreign control of the Bering Sea pollock fishery. Under the new rules, vessels must be a minimum 75 percent U.S.-owned. As with most of the continually evolving North Pacific fisheries, the biggest points included how the program has encouraged U.S. and Alaskan ownership and employment. Indeed, the program did produce some consolidation. At start of 2000, 18 companies owned the 19 catcher-processors in the Bering Sea fishery. By 2015, seven companies owned them. Impacts to fishing communities have been “largely beneficial,” according to the review’s authors, Marcus Hartley and Gary Eaton of research firm Northern Economics. Frank Kelty, the city manager of Unalaska, talked of stability as the program’s best feature. Unalaska is the town home of Dutch Harbor, perennially the nation’s largest seafood port and where Kelty said AFA has led to steadier employment and steadier school enrollment. Stakeholders and council both acknowledge that the AFA program was a big step in fisheries management, bringing a host of management tools into practice. “We never talked about co-ops before AFA,” said Stephanie Madsen, executive director of the At-Sea Processors Association. “We never talked about sideboards.” Because issuing quota in the pollock fishery may free up opportunity to move into other fisheries, the sideboards set limits on the extent of those harvests so as not to crowd out other individuals not involved in harvesting pollock. Both co-ops and sideboards continue to feature heavily in management talks, including a recently discarded program for groundfish in the Gulf of Alaska. The review was not without problems, however. The council’s Scientific and Statistical Committee hadn’t reviewed the study, leaving several questions. Among other areas, council members wanted more information that the study had related to Community Development Quota, or CDQ, ownership and individual vessel ownerships. The CDQ program that gives 10 percent of the overall groundfish harvest quota to 65 western Alaska villages within 50 miles of the coast. The program was designed to promote economic health in those regions, and some of the review’s statistics point to success. Over the length of the pollock-based program, royalties going to CDQ groups from the AFA fishery have increased. From 2001 through 2005, CDQ royalties ranged between $42.6 million and $60.5 million per year, with increases every year. Pollock accounted for 79 percent to 86 percent of total all-species royalties in any given year during this period. From 2007 to 2013, estimates ranged between $59.9 million and $79.5 million per year, with a general upward trend. Alaska Department of Fish and Game Commissioner and council member Sam Cotton wanted a more detailed breakdown of CDQ ownership in the fishery. “The question here is how much of that fishery is staying in Alaska,” said Cotten. “How big a share of the fishery is owned by CDQ groups? In terms of percentage of the vessels, or harvesting capacity, revenue?” Hartley said that he has made those calculations before, but not for the current study. The study had similar gaps where the AFA’s 100 individual catcher vessels were concerned. By AFA design, none of these vessels can have anything less than 75 percent U.S. ownership. Council member Buck Laukitis wanted to make sure that these vessels weren’t skirting the rules. Inshore catcher vessel ownership info, Hartley explained “was insufficient to determine changes in ownerships pattern.” Those records are held by the U.S. Maritime Administration, or MARAD, which is tasked under the AFA with ensuring compliance for the U.S. ownership rules. Hartley said Northern Economics could not get access to much of the proprietary information.

North Pacific council talks halibut leasing

A halibut crisis in 2014 and 2015 is over, but the blowback still drives a broad and slowly developing North Pacific Fishery Management Council conversation, none of which fully satisfies everyone touching the iconic Alaska fish. At the council’s Seattle meeting beginning Feb. 1, members and stakeholders spent the day carving out regulatory pressure valves for Bering Sea halibut fishermen and picking away at a massive overhaul to how halibut in general is managed. Months after allowing sportfishing groups to buy commercial halibut quota, the council released for public review a measure that will allow Bering Sea fishermen in CDQ groups to lease halibut quota from commercial halibut fishermen. Community Development Quota entities, or CDQs, award 10 percent of the North Pacific groundfish harvest quota to 65 communities within 50 miles of the western Alaska coast. Individual Fishing Quota is commercial quota that was individually assigned to halibut fishermen. Essentially, the proposed measure will allow CDQ fishermen to lease IFQ when the halibut stocks are below a certain level. Though it gives Bering Sea fishermen a safety net, the CDQ representatives said they don’t relish taking quota from commercial fishermen. “This is a great thing for the council to provide, but we hope we don’t have to use it,” said Heather McCarty, who represents the Central Bering Sea Fishermen’s Association, the CDQ group in the Central Bering Sea. The measure aims to fix the problem that happened in 2015, when low halibut stocks disproportionately harmed Central Bering Sea fishermen’s quota holdings. “The recent years of low halibut abundance and the resulting low catch limits in regulatory Area 4, have hindered most CDQ groups’ ability to create a viable halibut fishing opportunity for their residents,” reads the council’s objective statement on the measure. “Given the social and cultural dependence on this species, as well as the economic importance it renders for small vessel fishing operations, the purpose of this action would be to alleviate the adverse impacts of decreasing available halibut resource on Western Alaskan communities.” Linda Behnken, who is both a commissioner on the International Pacific Halibut Commission and the executive director of the Alaska Longline Fishermen’s Association, said the measure feels more or less like open season on the longtime halibut fishermen. Only months earlier, the council gave sportfishermen a crack at IFQ quota too, and Behnken said she wonders when the council will make the big picture fix to the problem. Finding the threshold level for when CDQ groups will be eligible to lease IFQ, she said, “depends on what you as a council will do with bycatch. That’s as much your decision as the commission’s.” Bycatch workshop Behnken refers to the International Pacific Halibut Commission, which controls the harvests for the directed halibut fishermen but not the bycatch, which the council itself controls. With the large levels of bycatch given to the groundfish fishery — which don’t decrease with halibut stock downswings — she said the council might as well manage the whole thing. “It’s the council who controls halibut, not the commission,” Behnken said. The problem is by no means unknown or unaddressed. The North Pacific council spent the second part of the day trying to figure out how to link halibut abundance to halibut bycatch. It’s been a year since the council first flirted with the concept. The idea is too complex to tackle quickly, involving diverse stakeholders with differing needs, along with a communication and science gap between the North Pacific council and the international commission. In Seattle, the council invited Alan Hicks, a quantitative scientist from the international commission, to get stakeholder input about how to even start the process. “What we’re looking for is a broad range of straw man alternatives,” that they can whittle down into an action plan, said Diana Stram, the council’s scientific mirror of Hicks. The workshop laid out the problem, and how to “get from a goal to a measurable objective,” according Stram. In theory, the council will use these input to get a hold of which criteria it will use to make a new management framework: which stakeholders are the focus, which biological measurements and which communities, or as council director Chris Oliver put it, “the information we’re trying to develop intends to inform the development of those alternatives.” In practice, this meant a room full of the North Pacific’s most powerful fishing voices telling Stram, Hicks, and council director Chris Oliver what were there biggest concerns. Some wanted cultural and social factor taken into the scientific analysis, others for the council to consider halibut spawning and migration variations. Few wanted the same thing as another. Not everybody had high hopes for a timely solution. “I’m guessing there are about 5 or 6 PhD dissertations in what we’ve talked about today,” said Steven MacLean, the council’s protected species coordinator. “So I’m questioning what the timeline is here. If this were my job, it would be the remainder of my career to answer the questions you guys have put on the board.” The analysts were more hopeful. In the end, Hicks said he felt the discussion was a meaningful step in moving the plan forward. “You get a sense of what’s important,” he said. “And that’s what’s important. Now we know where we really need to focus.” DJ Summers can be reached at [email protected]

Wells Fargo looks for positives, and a budget plan from Juneau

Talk to three Alaska business leaders and you’ll probably get three different takes on the state’s recession. Still, Wells Fargo leadership echoed other economists and industry spokespersons in a Jan. 30 meeting with the Journal: an uncertain fiscal future is in ways worse than a decisive hit. Yet even without any pending solutions from legislators in Juneau, the current Alaska recession doesn’t deserve the “Great” description applied to the national housing crisis in 2008 or the oil-related state contraction in the mid-1980s. It’s bad, they say, but not bad enough yet to blot out glimmers of hope in healthcare growth, military spending, President Donald Trump’s resource policies, oil discoveries and the resilience of Alaskans. Overall, Wells Fargo’s new business loans have shrunk from $500 million in the last few years to $400 million in 2016. Consumer deposits have meanwhile only grown by 0.5 percent to 1 percent, a relative slowdown. Wells Fargo is the largest bank in the state, with 50 percent of deposits totaling just more than $6 billion. “By and large (business loans) are performing very well,” said Darren Franz, Wells Fargo Alaska regional business banking manager. “We’ve certainly not seen any increase in delinquencies, knock on wood. We definitely have seen a little bit of an uptick on watch listed, accounts we pay a little more attention to, primarily in the smaller contractor area, but we certainly expected to see that.” Alaskans have as much entrepreneurial drive as normal, but not the same amount of capital, Franz said. “In terms of the number of loans, they continue to go up, they’re just smaller,” said Franz. “That continues to be a strong point for us. The number of loans we’ve done has increased, but the dollar amount has decreased.” Franz said he believes there are indeed more people in Alaska opening businesses, despite the state’s economic climate. This runs into a larger theme of an older population than what was Alaska in 1986, when the oil boom brought the young, adventurous and flighty to the state. In 2017, the population is older and more rooted, with families and schools and more investment in the state’s infrastructure, he said, along with bigger stores of personal wealth. Though loans are continuing, some of the concrete and job-creating effects of private business openings aren’t crystallizing. Residential building in the Municipality of Anchorage the lowest since 2000, according to city records. Wells Fargo Alaska Commercial Real Estate Manager Patti Bozzo said the same trend exists in the commercial side as private projects have all but stopped. “Most of the activity on the commercial side has been government work,” she said. “It’s been that way for the last year or two and it’s kind of going to go that way looking forward as well. There is some expansion going on in military, there are still some bonds going on … commercial permitting in terms of non-governmental work is definitely going down.” Some small businesses are suffering more than others. With the Alaska commercial fishing fleet at the oldest it’s ever been and a clutch of bad salmons years and poor international pricing, Franz said Wells Fargo’s commercial fishing loan portfolio has been dropping. However, agreeing with other state industry and policy leaders, he points to healthcare, military and tourism businesses as bright spots in an otherwise dimming economic outlook. Providence Medical Center expansions and the Yukon-Kuskokwim Health Corp.’s new $287 million clinic and hospital in Bethel are some of the largest projects, but Wells Fargo Alaska President Greg Deal also said the Mat-Su Valley has a large amount of private satellite hospital facilities being built. Like many of the state’s policymakers and industry leaders, Wells Fargo looks to the oil discoveries on the North Slope as Alaska’s distant hope on the horizon. Discoveries by ConocoPhillips announced in early 2017 and Caelus Energy in late 2016 have offered some hope for the Trans-Alaska Pipeline System operating at three-quarters capacity. Wells Fargo points to both discoveries and to the pro-resource policies of President Trump as cause for a breather in industry conversation, if not yet champagne. Trump’s Republican-dominated Washington could open up the coastal plain of the Arctic National Wildlife Refuge to drilling, set sights to reverse President Barack Obama’s signature Environmental Protection Agency regulations, the Clean Power Plan and Waters of the U.S., or WOTUS, rule. “I’m feeling a sense of optimism based on (Trump’s policies),” said Deal. “There’s more planning. ConocoPhillips is starting to think about and plan for future development. A lot of it will depend on how the state handles itself. Uncuffing the oil industry is surely playing in people’s minds.” Nothing is certain, however. Businesses and banks are still waiting on the Legislature to plug the state budget gap, undoable without both a range of revenue such as taxes or Permanent Fund earnings and deep spending cuts. Not knowing the future, they said, is worse for Alaska’s business environment. “Uncertainty in our business is certainly death row,” said Darren Franz, Wells Fargo Alaska’s business manager. “We’d like them to balance the damn budget and move on and quit the bickering and the in fighting and everything like that and actually come up with something. “At this point I don’t care what kind of plan they come up with. Our future would be a lot more secure with just some kind of plan.” Franz and Deal see a silver lining to the economic mess of Alaska — people know more about their governmental spending process than ever before. Hard hits teach hard lessons, and whether or not the state emerges from the recession smaller and poorer as predicted by Northern Economics, it will be a “stronger and smarter Alaska.” “We’re opening for business, we’re taking loans, we’re not tuck-tailing and running,” said Darren Franz, president of Wells Fargo Alaska Region. “We’ll get through this and the state will be stronger as a result of the darker, trying times.” DJ Summers can be reached at [email protected]

Fisheries funding in focus in Juneau

Discussions continue on how to patch up the state’s $3 billion budget hole, and again fishermen will feel the cuts from one realm or another. Meanwhile, legislators are hinting at an overarching message: find money anywhere but here and prove that your job matters. Budget-wise, the Alaska Department of Fish and Game has been hurting over the last few years, with a budget slashed 30 percent since 2014. Gov. Bill Walker’s budget for fiscal year 2018, which begins July 1, has a nominal department increase of 0.3 percent, but fishermen are still concerned about the effects of the last two years’ cuts. As with last year, a serious tax discussion is likely on the way after a cluster of industry tax increases including on fisheries failed to materialize in 2016. Until then, the concerns over management continue, largely over how ADFG can absorb the cuts and continue operations without harming fishermen’s economic prospects, which also hurt the state through lost tax revenue. In a Jan. 31 House Fish and Game Finance subcommittee meeting, Rep. Louise Stutes, R-Kodiak, launched a heated tirade against Commercial Fisheries Division Director Scott Kelley. Stutes accused Kelley and ADFG of strong-arming the Legislature by cutting funding for salmon weirs — a crucial part of commercial fisheries management. “Weir counters are directly related to salmon sustainability,” Stutes said. “These salmon fishermen can’t survive without the information of these weir counters that the department has seen to eliminate. I almost have to question if this is an attention-getting measure….a message to the Legislature that you can’t cut our budget because we’re going to cut weirs.” Further, the committee questioned Kelley over ADFG’s plan to increase test fisheries by 27 percent as a cost recovery effort, which will by definition take away opportunities from the commercial fishermen themselves. Without a state solution to increase management, Kelley referred to a growing trend of private entities and fisheries groups dipping into their own pockets for support as the Bristol Bay Regional Seafood Development Association did in funding studies for its fishery. “I want to make sure everyone knows…what we’re talking about here is everyone opening up their pocketbook and helping us,” said Kelley. Alaska Seafood Marketing Institute Executive Director Alexa Tonkovich fielded a round of tough questions about cuts from a Senate Finance Committee meeting on Jan. 25, each aimed at weaning the institute completely off state funding as soon as possible. The institute, or ASMI, is a joint state-private venture that aims to increase the demand and price of Alaska seafood in the U.S. and abroad. Last year, the Legislature passed intent language that aimed broadly to cut ASMI from unrestricted general funds by 2019. The committee asked Tonkovich pointedly, however, how ASMI’s board could reach that mark by as early as 2018. Chair Sen. Anna McKinnon, R-Eagle River, asked Tonkovich for answers to questions by Feb. 15. State general funds to ASMI were $4.5 million as recently as fiscal year 2016, a match to the federal market access grants that make 20 percent to 25 percent of ASMI’s overall budget. ASMI’s budget has fallen to $2 million from the state’s general funds in fiscal year 2017 to $1 million in Walker’s proposed fiscal year 2018 budget. By 2019, no state funds will go into the program. To make up costs, ASMI has planned to raise its voluntary tax on fisheries from 0.4 percent to 0.5 percent. By statute, the rate can only rise to 0.6 percent. Lawmakers questioned Tonkovich on whether ASMI could possibly fold some of duties into the Alaska Tourism Industry Association or develop deeper relationships with Community Development Quota groups. The CDQ program gives 10 percent of the overall federal Bering Sea groundfish harvest to 65 villages within 50 miles of the coast. The committee hinted at deeper issues in talking to Tonkovich, asking how much money the state brings in from fisheries and the how much Alaskan employment the industry generates. Sen. Lyman Hoffman pinned Tonkovich down about six Seattle-based ASMI positions totaling more than $900,000 in pay and benefits, asking why ASMI’s board had not cut these jobs and given them to Alaskans. “Does the board feel that Alaskan individuals do not have the understanding of the management of salmon resources?” he asked. “Paychecks are paychecks and Alaskans are struggling at this point. For the board not to realize that gives me great concern.” ASMI’s six Seattle employees, though a $1 million expense, pale in comparison to the larger employment picture of Alaska’s fishing industry — a fact not lost on the senators when they began prodding Tonkovich for bigger picture information. As with ADFG, legislators also want ASMI to prove it works for its designated purpose. Among other questions, the finance committee wants ASMI to come back with a kind of success list of numbers proving not only that it increases visibility of Alaska seafood but increases demand and sales as well. Sen. Click Bishop, R-Fairbanks, asked Tonkovich to compare ASMI’s success compared to a similar Norwegian entity in terms of seafood sold versus program cost. The Norwegian program has a $55 million budget. By the numbers By sheer numbers, the commercial fishing industry directly employs more people than any other private industry in the state, more than 60,000 in 2014. More than half of those jobs, however, aren’t held by Alaskans. According to the McDowell Group economic impact analysis of the seafood industry used by ASMI for its presentation, 27,600 of a total 60,000 seafood workers in 2014 were Alaska residents. This total is less than the average 2014 employment in retail trade (36,800), professional and business services (30,000), health care (33,800) and leisure and hospitality (34,200), according to Department of Labor and Workforce Development statistics. In processing facilities, 72 percent of the workforce was non-resident. Fifty-five percent of fishermen including captain and crew, or 17,600, were Alaska residents in 2014, almost exactly as many as worked in mining (17,100) or in construction (17,800). Alaska’s fisheries not only employ more non-residents, but also make more gross earnings for non-Alaskan commercial permit holders than for Alaskans. According to the data compiled by UFA, Alaska resident fishing permit holders made gross ex-vessel earnings of $602.5 million in 2015. Washingtonian-held permits made $904.2 million, or 50 percent more than Alaskans. Oregonian permit holders made $126.1 million and Californians made $27.8 million. The state collected $88 million in fisheries taxes in 2014, along with $23.9 million from permits and license fees and $26.5 million from industry self assessments for a total $138.4 million. This does not take into account a slew of other commingled taxes and funding sources from federal programs, which UFA said total $250 million. The state shares half of some of these taxes with the localities in which they are landed. According to McDowell Group, 38 percent of all fisheries taxes go to local governments, 55 percent to the state and 7 percent to the federal government.

New indictment for Maw on PFD fraud charges

Two weeks after a Superior Court judge dismissed charges against former United Cook Inlet Drift Association Executive Director Roland Maw on procedural grounds, the State of Alaska secured a new indictment. The state, spearheaded by special prosecutor Lisa Kelley, charged Maw with six felony counts of theft, six felony counts of unsworn falsification, and five misdemeanor charges. The felony charges each correspond to years between 2009 and 2014 when Maw received an Alaska Permanent Fund Dividend. The Montana Department of Fish and Wildlife opened an investigation into Maw’s residency in February 2015 after he was found to be holding resident licenses in Montana while also drawing the benefits of Alaska residency. Maw pled no contest to the Montana charges in May 2015. The 12 counts now brought against Maw are new, technically, but the five misdemeanor charges are the same as in the previous set of indictments. A three-day trial is tentatively scheduled for April 24, but Kelley admits that date will likely change. Alaska Superior Court First District Judge Louis Menendez had dismissed the felony charges against Maw in Juneau on Jan. 3 after agreeing with the defense that the state prosecution had not properly presented hearsay evidence to the grand jury, which would incurably sour the jury against him. Kelley explained that Maw avoids double jeopardy — being tried twice for the same offense — because the charges themselves had no final resolution. Rather, it was only the indictments that Menendez threw out. The state presented evidence to another grand jury and will proceed to the trial process, which may or may not happen. “The next step is defense reviewing the new indictment,” she said. “It’s entirely possible they’ll have the option to challenge the new indictment. If they either don’t challenge it, or the judge dismisses, the next step would be going to trial.” Maw’s trial process is a vestige of a fisheries politics fiasco stretching back to Gov. Bill Walker’s first days in office in early 2015. That included the ousting of former Board of Fisheries chairman Karl Johnstone by Walker, a chaotic confirmation cycle to replace him including the nomination and subsequent withdrawal of Maw after the charges became known in Montana, a one-vote defeat in the Legislature for Walker’s next pick, and eventually the resignation of Walker’s Boards and Commissions Director Karen Gillis. Although Walker had already nominated Sam Cotten for the position, Maw also applied for the job of Alaska Department of Fish and Game commissioner in December 2014. Under state law, the Board of Fisheries must interview and forward a list of qualified commissioner candidates from which the governor may choose. The board, then chaired by Karl Johnstone, unanimously deemed Maw unqualified to be interviewed for the job. In response to criticism of the board action by UCIDA and then-House Speaker Mike Chenault, R-Nikiski, Walker chastised the Board of Fisheries and told Johnstone he wouldn’t be reappointed with his term about to expire June 30, 2015. Johnstone resigned on Jan. 14, and Walker appointed Maw to replace him on the board on Jan. 20, 2015. Maw dropped out of consideration soon after on Feb. 20, 2015, shortly before the investigation in Montana became public knowledge. Walker’s next choice, Kenai-area habitat advocate Robert Ruffner, was torpedoed in the Legislature by a 29-30 vote after sportfishing groups organized against him. Walker then appointed Bob Mumford, who later resigned after only a year on the board rather than seek confirmation for the seat. In 2016, Walker then chose not to reappoint Fritz Johnson of Dillingham, and chairman Tom Kluberton announced he was not interested in another three-year term on the board, citing the political burnout from the contentious job. With three openings, Walker had less trouble with his appointments and all three were confirmed unanimously by the Legislature last session, including Ruffner in his second try. DJ Summers can be reached at [email protected]

IPHC sets 2017 halibut harvest, adopts charter rules and allocations

Halibut catch limits rose for the third year in a row on Jan. 27, this time by 5 percent, marking another year that the commission has gone millions of pounds north of the recommendations of its staff scientists. The International Pacific Halibut Commission, a joint U.S.-Canada body, sets the catch limits for halibut from the West Coast to Alaska every year. At their 93rd meeting in Victoria, British Columbia, the six IPHC commissioners voted to increase the total Pacific halibut quota from 29.9 million pounds in 2016 to 31.4 million pounds in the coming 2017 season that begins in March. For the third year, the commission has set the harvest limits above the recommended levels, known as the “blue line” — which a commissioner called “useless” during the meeting. The blue line number presented by staff biologists was for 26.1 million pounds at the commission’s interim meeting in December 2016. In 2016, the commission also set the harvest levels above the blue line by 3 million pounds. This is a notable difference from the U.S. federal policy. At the eight regional fishery management councils, harvest limits may not exceed the overfishing limits set by the Scientific and Statistical Committee. The blue line estimated by IPHC staff is based on incomplete information, according to analysis, particularly on the concept of “exploitable biomass,” or how many halibut can be sustainably removed. “The concept of exploitable biomass is no longer a relevant factor,” said Canadian commissioner Paul Ryall, who works for the Canada Department of Fisheries and Oceans. “If the scientists are telling me they’re estimating something based on a flawed understanding of the resource…how can the output be any longer relevant?” Indeed, IPHC scientists have been warning the commission of its model’s shortcomings in the last year. “The scaling of the current harvest policy revolves around the concept of exploitable biomass (EBio), which is based on externally derived selectivity curves that are not representative of the current stock assessment results,” wrote Dr. Ian Stewart in a missive to the IPHC. Among other problems, IPHC scientists can’t effectively split the overall biomass into each of the regulatory areas. Instead, Stewart advocates a different, more complete model that will allow the commission to clearly break out area-specific information. Other than the Aleutians chain and the Eastern Bering Sea, which have static allocations, every regulatory area under commission purview will have an increased harvest limit in 2017. • Area 2A (West Coast): 1.33 million pounds, up from 1.14 million pounds last year • Area 2B (British Columbia): 7.45 million pounds, up from 7.3 million pounds last year • Area 2C (Southeast Alaska): 5.25 million pounds, up from 4.95 million pounds last year. Guided charter anglers will have 915,000 pounds of this total. • Area 3A (Central Gulf of Alaska): 10 million pounds, up from 9.6 million pounds last year. Guided charter anglers will have 1.9 million pounds of this total. • Area 3B (Western Gulf): 3.14 million pounds, up from 2.71 million pounds last year • Area 4A (Aleutians): 1.39 million pounds, the same as last year • Area 4B (Eastern Bering Sea): 1.14 million pounds, the same as last year • Area 4CDE (Central Bering Sea): 1.7 million pounds, up from 1.66 million pounds. Charter rules, allocations The commission also adopted guided angler rules recommended by the North Pacific Fishery Management Council in December. Area 2C will have a reverse slot limit of one fish of 44 inches or less or one longer than 80 inches with no annual limit and a one-fish daily bag limit. In 3A, or Southcentral Alaska, anglers have a two-fish bag limit, with a size limit for one of those fish of 28 inches, one inch less than last year. Guides are limited to one trip per calendar day. Anglers have an annual limit of four fish, the same as last year. Wednesdays will be closed all year. The council also added three Tuesday closures between July 18 and Aug. 1. The rise in harvest limits is the latest in a pattern over the last two years, following intense discussions, arguments and regulatory tightening over declining halibut stocks and the impacts on Pribilof Island communities dependent on them. Before the last three years of increases, the halibut harvest took a dive over the previous decade by more than 70 percent as the biomass grew but the number of commercially harvestable fish 32 inches or longer declined. In the last two years, however, IPHC scientists have said the stocks are leveling out. Further, one of the larger sources of halibut mortality has declined. In the Bering Sea and Gulf of Alaska, groundfish trawlers incidentally catch halibut, known as bycatch. Since 2014, bycatch has dropped nearly two million pounds for the groundfish trawlers in the Bering Sea. The recent drop in bycatch is part of a larger trend. Bycatch in non-halibut fisheries has fallen steadily from a height of 20 million pounds in 1990 to the present level of 7 million pounds — the lowest bycatch level since 1960. DJ Summers can be reached at [email protected]

Construction forecast down 10 percent

Those who attended the 2017 Associated General Contractors of Alaska forecast on Thursday heard many of last year’s talking points: Construction forecasts are down, again, the Legislature is at fault, again, but things aren’t as bad as they seem. Again. Every year the University of Alaska Anchorage Institute for Social and Economic Research, or ISER, compiles data for AGC to project how much job-creating construction will happen in recession-struck Alaska. In 2017, ISER professor emeritus Scott Goldsmith said construction spending will fall another 10 percent from 2016, from $7.1 billion to $6.5 billion. This will in turn drop the overall number of construction jobs to roughly 15,000, the lowest level in a decade. Last year, ISER projected an 18 percent decline in spending from 2015, bringing the year back to 2013 spending levels. As with last year, AGC-Alaska Executive Director John MacKinnon described the short-term outlook for state construction spending with the word “challenging.” Also like last year, MacKinnon said the recession won’t be as bad as the oil price-driven recession in the late 1980s. “We’ve got a lot of good here,” he said. “We’re a lot more resilient. In ‘86 we were a lot younger demographic. The impact of the economy in 1986 was a lot more severe that it is today.” Spending cuts ISER lumps construction spending into public, which includes federal, state and local spending, and private, more than 60 percent of which is the oil and gas industry. As with last year, the oil and gas sector will see a 15 percent dip in spending, rounding this year’s spend out to $2.4 billion. Utilities, the largest chunk of non-oil and gas private construction spending, will go down 1 percent in 2017, driven mainly by fewer projects by telecommunications companies. The second-largest non-oil and gas private sector, healthcare spending, stands out with a huge projected growth of 55 percent, which is itself carried in large part by record-breaking amounts of federal money. This growth is largely attributed to the Yukon-Kuskokwim Health Corp.’s new $287 million clinic and hospital in Bethel. YKHC received a $165 million U.S. Department of Agriculture loan for the project, the largest single loan the USDA has ever approved, according to corporation leaders. Residential construction spending will drop 21 percent to $277 million, driven in large part by statewide declines in residential homebuilding demand. According to statistics, Anchorage, in which 40 percent of Alaska’s population lives, had fewer residential construction permits in 2016 seen since 2000. Statewide, every other area is seeing the same pattern with the exception of the Mat-Su Valley, according to Goldsmith and municipal records. Public construction will go down 12 percent from last year, with every category except national defense taking a hit. National defense is the largest bracket in public spending, as Alaska’s federal defense budget is larger than that of any other state, according to Goldsmith. More than $561 million was appropriated by Congress for the 2017 fiscal year for military projects at Eielson Air Force Base in Fairbanks includes a new flight simulator in preparation for new squadrons of F-35 fighters and upgrades to the base’s heat and power plant. Upwards of $1 billion will be invested in missile defense systems over the coming years at Clear Air Force Station near Nenana and Delta Junction’s Fort Greely. Highways and roads, the next largest public building sector, will go down 4 percent. Especially hard hit in the public domain is education, which ISER forecasts a whopping 48 percent decrease in construction spending. Looking for the upside Capping both sides of the spending projections were appeals to positive thinking and state solutions. Goldsmith agreed with MacKinnon, saying Alaska’s situation isn’t as bad as people may think, or that it can’t get any worse. Anyone who says different doesn’t know what he’s talking about, Goldsmith said, contending economists who predict a gloomy outcome. “I am not sure I would buy this,” Goldsmith said of an Alaska-Dispatch News article written by columnist Charles Wohlforth, citing Northern Economics vice president Jonathan King and warning of another three years of recession with a “smaller, poorer Alaska” on the other side. “I think any economist who tells you he knows what’s going on is not being entirely honest with you,” Goldsmith said. “We’re not sure what’s going on. What it does tell us is that the economy is at this moment fragile, and we don’t want to do something to cause it to go off a cliff if we can avoid it…that headline might be a little bit of an overstatement.” Goldsmith went on to claim that oil and gas spending cuts are “hitting a floor,” and that state and local construction spending “can’t go down any lower, right?” Goldsmith’s analysis teetered slightly, acknowledging that oil and gas spending “will probably not turn around anytime soon, and neither will state spending.” However, Goldsmith said, “it looks like we may be starting to bottom out in terms of oil and gas capital expenditures.” Goldsmith bases this perception on oil prices, which have risen to more than $50 per barrel and he said may move higher, and outlook for certain Alaska producers. “There’s been some drive to reduce costs, not only in Alaska but nationwide,” he said. “That makes things look a little more attractive. ConocoPhillips announced they would be spending the same this year as last. Several of the companies like Caelus and Armstrong pulled back last year because the price was low, and they may be taking a second look at this and starting to bring those projects back.” As with last year, MacKinnon and Goldsmith used the opportunity to appeal to the Legislature to find a solution to the $3 billion budget gap being discussed in Juneau. Legislative gridlock and the State of Alaska’s spending habits, he said, fed both a negative reality and a pessimistic outlook. After Goldsmith warned the Legislature not to “kick the can” on a budget fix and cause economic uncertainty, MacKinnon pointed to an oil price analysis that shows a fairly steady $50-per-barrel trend. “We used to be able to get along great at $50 a barrel, but that was before we had bad spending habits in the state of Alaska, and we’re going to have to change those habits very soon,” he said. “Last year we predicted an 18 percent drop (in construction spending). Lack of action on the part of the Legislature helped us meet that goal.” DJ Summers can be reached at [email protected]

Beyond the budget: Bills filed addressing healthcare, fisheries issues

Alaska’s $3 billion budget hole still needs patching, but in the meantime efforts don’t stop for new legislation in other areas. Several legislators, who began their 2017 session on Jan. 17, have filed bills addressing healthcare. Some aim to set in motion what one lawmaker calls a long overdue “overhaul” to the way Alaska manages state run child care efforts. House Bills 10 and 12 — both of which come from Rep. Tammie Wilson, R-North Pole, encompass a wide array of adjustments to the Department of Health and Human Services. These would include allowances for parents looking to reclaim their children and a variety of adjustments about the determination process the state uses to remove children from parent’s care in the first place. HB 43, coming from freshman Rep. Jason Grenn, I-Anchorage, would allow physicians to prescribe investigational drugs. SB 19, coming from Anchorage Sen. Bill Wielechowski, mirrors Grenn’s bill. The bill would allow Alaska physicians to prescribe investigational drugs to patients with terminal illnesses. Investigational drugs are drugs the U.S. Food and Drug Administration has not approved but have passed Phase 1 of the FDA’s approval process and are undergoing further clinical trials. Physicians may currently prescribe these methods or medications after filing extensive paperwork to detail the patient’s consent and the lack of effectiveness of other options. “For me this comes from a policy perspective to eliminate red tape and give terminally ill Alaskans more choice,” explained Grenn. The bills fall into a broader national effort of so-called Right to Try laws, which aim to get more terminally ill patients access to otherwise unavailable investigational drugs. Currently, 33 states have such laws on the books and another 15 have had Right to Try legislation introduced. If legislators are successful, another bill would add the right to die along with the right to try. HB 54, from Sen. Harriet Drummond, R-Anchorage, would allow the voluntary termination of life for terminally ill patients. Currently, only six U.S. states allow this measure. Still other bills are only peripherally related to healthcare in that they involve the Department of Health and Social Services. A Mat-Su Valley legislator has a pair of bills apparently designed to curb food stamp program expense by cutting off those who are able to work and those who are not fulfilling financial obligations. HB 67, from freshman Rep. David Eastman, R-Wasilla, would “prohibit the Department of Health and Social Services from requesting, accepting, or attempting to renew or extend a waiver of work requirements or time limits for an able-bodied adult, without dependents, in the food stamp program.” HB 68, also from Eastman, would establish “An Act relating to disqualification from the food stamp program for refusal to cooperate with the child support services agency or for past due child support payments; relating to the duties of the Department of Health and Social Services; and relating to the duties of the child support services agency.” Another Wasilla legislator is looking to expand government program services, adding adult foster care homes to a Medicaid waiver system. In the Senate, SB 10 from Wasilla Republican Mike Dunleavy would offer Medicaid community-based waivers for adult foster care homes, establish an adult foster care home license and procedures in the Department of Health and Social Services, and provide for the transition of severely disabled individuals from foster care to adult foster care homes. Other bills look to get ahead of drug problems.  SB 20, coming from Anchorage Republican Sen. Kevin Meyer, would place the synthetic opioid U-47700 onto the state’s highest controlled substances list alongside other opioids. U-47700 is a foreign-made synthetic opioid and the topic of heated media coverage in the Lower 48, as it contributed to the overdose of pop music star Prince in combination of with another synthetic opioid, Fentanyl. Dozens of deaths in 2016 were attributed to the drug — including in Alaska — which itself comes during a nationwide opiate abuse crisis that has hit Alaska especially hard. The U.S. Drug Enforcement Agency declared its intent to move the U-47700 onto the Schedule I Controlled Substances Act listing, the most restricted category for substances in the U.S. The DEA said the scheduling “is necessary to avoid an imminent hazard to the public safety.” Fisheries bills Fish formed one of the slippery elements of Gov. Bill Walker’s suite of industry tax bills during the marathon 2016 legislative session. In trying to scrape together as many funds as possible, Walker’s general fish tax increase enraged virtually every commercial fishing sector in the state. Representatives from each sector acknowledged that they will likely need to kick more money into state coffers, but said the governor’s tax plan didn’t account for regional and operational variations across the board. Further, fishermen felt that if no other industry taxes moved forward, they should not be singled out. No word yet has surfaced on what kind of fishing industry taxes will come in 2017, but legislators nonetheless will continue pushing fish-related bills. HB 29, coming from Reps. Geran Tarr and Les Gara, would ban the sale of genetically modified fish in the Last Frontier. Genetically engineered salmon dominated headlines in 2016 after the U.S. Food and Drug Administration and its Canada equivalent approved the sale of AquaBounty salmon, which splices several kinds of wild salmon with ocean pout to create a fish that grows twice as fast as wild salmon. Tarr’s and Gara’s bill could be seen as an act of solidarity with Alaska’s Congressional delegation, which has fought tooth and nail over the FDA’s decision.  Other bills will seek to make funding more available for commercial fishermen in coastal communities. HB 56, from Ketchikan independent Rep. Dan Ortiz, would add $100,000 to the amount of commercial fishing loans made by the Department of Community, Commerce, and Economic Development. Currently, fishermen may not have an outstanding balance of $300,000 on their loans. Ortiz’s bill would raise that amount to $400,000. These loans are intended for items like fishing vessel purchases and safety upgrades. According to Ortiz’s office, the $300,000 outstanding balance limit was last updated in 1982. If adjusted for inflation, that cap would be worth $746,000 this year. DJ Summers can be reached at [email protected]  

Board of Fisheries seeking updated habitat protections

The Alaska Board of Fisheries finalized a letter to the Legislature asking to give the Department of Fish and Game more authority over fish habitat permitting. Under Title 16 of the Alaska statute, the section outlaying fisheries habitats, the commissioner of Fish and Game must weigh in on development projects taking place in fisheries habitats by issuing them a “fisheries habitat permit.” The letter requests that “proper protections” for fisheries habitats be defined more extensively in statute. Under the current law, “proper protection” is a matter of discretion, as it has no statutory definition. The Board of Fisheries agreed with the proposal’s idea that the Alaska Department of Fish and Game should be involved from the start with a more robust idea of what is acceptable. “Additional guidance is warranted for the protection of fish, to set clear expectations for permit applicants and to reduce uncertainty in predevelopment planning costs,” wrote the Board of Fisheries. “To strengthen ADFG’s implementation and enforcement of the permitting program, the legislature may want to consider creating enforceable standards in statute to protect fish habitat, and to guide and create a more certain permitting system.” Title 16 gives the commissioner of Fish and Game authority to approve a fisheries habitat permit but doesn’t go any further. The board wants the “proper protections” to be in line with the standards of the Sustainable Salmon Policy, which “protects wild salmon and habitat to ensure sustained yields,” “manages for escapement ranges,” and “encourages public support and involvement,” among other goals. However, the Sustainable Salmon Policy only allows the Board of Fisheries to make recommendations to the Legislature, rather than give ADFG more criteria for its own decisions. Fishermen from around the state submitted the proposal to the Board of Fisheries, but the locales are telling. Many came from Cook Inlet and Bristol Bay — homes of the proposed Susitna-Watana dam, Chuitna coal mine and Pebble copper-gold mine. Lindsey Bloom, a Bristol Bay fisherman and a fisheries consultant for industry group United Fishermen of Alaska, explained that those items were the exact reason for the proposal. “Problem No. 1 is sort of these mega projects and our concern that Fish and Game does not have clear authority to say no,” said Bloom. “Those are the three standouts that do not seem to fit in any criteria for proper protection of fish and game. We wanted to make sure that Fish and Game is part of the process early on.” Each of these projects is currently in a hiatus over legal or budgetary issues. Pebble Limited Partnership is in the middle of a lawsuit against the Environmental Protection Agency and hopes to settle out of court, but even a victory there is unlikely to bring back the major companies like Anglo American, which invested more than $500 million in exploration and development before pulling out under the threat of a preemptive veto by the EPA. As PacRim Coal’s proposed Chuitna Mine is still early in the permitting process, the company, the state and stakeholders are haggling over who’s allowed to be involved. In October 2015, the Alaska Mental Health Trust Authority appealed a Department of Natural Resources decision to grant certain water reservation rights to a non-state entity for the first time ever. Chuitna Citizens Coalition received an instream flow reservation, or IFR, for the lower portion of Middle Creek, a salmon spawning stream in the proposed mine’s area. Gov. Bill Walker shut down agency efforts for the Susitna-Watana dam in June 2016 along with several other “mega projects” based on the state’s multibillion budget deficit. The Legislature hasn’t yet received the letter. The Legislature convened on Jan. 17, still hoping to solve a state budget gap that has played a part in launching the state into a recession since oil prices fell in 2014. Bloom said she doesn’t know what chance the change has given the Legislature’s focus on fixing the budget, but welcomes the discussion. “To be a realist, I think it could be a very tough, uphill battle,” she said. “I do think, though, that should the Legislature decide to take it up, we will all benefit greatly from learning more.” DJ Summers can be reached at [email protected].  

State forecasts second straight poor run for Copper River kings

Two days after a federal disaster was declared for Gulf of Alaska pink salmon including Prince William Sound, the Alaska Department of Fish and Game released a Copper River forecast on Friday for 2017 that anticipates a king salmon run that would tie 2016 as the smallest since 1980. According to ADFG, the 2017 chinook, or king, salmon total run forecast of 29,000 is about 34,000 less than the 18-year average total run size of 63,000, and if realized, the 2017 forecast total run would tie with 2016 as the smallest runs since 1980. The forecast for 29,000 king salmon returning to the Copper River is barely more than the minimum escapement goal of 24,000. After accounting for sport and subsistence harvest, that would allow for a commercial harvest of just 3,500 of the species that kicks off the salmon season amid pomp and circumstance with “first fish” celebrations from Cordova to Seattle. “It’s looking like it’s time to batten down the hatches and get ready for a tough year,” said Jeremy Botz, the commercial fisheries manager for the Copper River district. “That’s the disadvantage of managing a natural stock. We’ve definitely got a challenge in front of us.” As grim as the forecast sounds, the fishery will have to continue as planned until nets are in the water and ADFG can see what reality looks like. Botz said the department isn’t considering management actions just yet. Botz acknowledges that trimming the traditional season start date, May 15, is an option, but that the season is too far away to make any predictions. “I think what’s more likely is to get out there, put some nets in the water,” said Botz. Still, which such a low forecast, Botz said conservative management techniques are likely, including time and area closures. “We’re gonna do our best to minimize the harvest. That’s a pretty difficult target, if the run truly comes that small,” he said. “We’ll need to take a really conservative approach. I would imagine there’s going to be a strong consideration for keeping the inside waters closed.” Supply and demand will create a silver lining in prices, however, as Botz expects the consistently high demand for Copper River salmon to keep up. With a small supply, prices are likely to rise for the Copper River signature product. The ex-vessel price for Copper River king salmon was $9.50 per pound last year — which was itself a three-dollar per pound jump from the year before. Forecasts for Copper River have been off before, however.  ADFG undershot the Copper River king salmon forecast by a fair margin last year, predicting a run of 64,000 with a harvest of 27,000. By the end of the season, fishermen had harvested 13,100 Chinook salmon, well below the previous 10-year (2006–2015) average harvest of 18,000 and far short of meeting the escapement minimum of 24,000. “The 2016 Chinook salmon inriver abundance point estimate from the mark–recapture program run by the Native Village of Eyak was 16,009 fish,” according to the ADFG season summary. “After upriver fisheries harvests are subtracted, the total spawning escapement estimate will likely be close to half of the lower bound SEG of 24,000 fish.” Forecasting has never been an exact science, and Botz said forecasts tend to skew. “Last year’s forecast was significantly higher projecting the run, coming off a run (in 2015) that beat the forecast,” Botz said. “It’s kind of a little bit of a whipsaw…Over the last five year the Copper River chinook stock has been lower than average.” Sockeye salmon, the region’s main commercial output, doesn’t escape the downturn either. ADFG forecasts 1.5 million sockeye to return to Copper River, the third lowest number in the last 20 years. While not necessarily a silver lining, considering the region’s dependence on fisheries revenues, the dueling weak forecasts will at least synchronize management. “This’ll be the first year in a long time we’ve had a projection for both weak sockeye and chinook,” Botz said. “Management will tend to coincide a little better.” As with many rivers with both commercial chinook and commercial sockeye fisheries, the Copper River basin enacts restrictions on sockeye fishermen to protect the king salmon that have been in a statewide downturn for the last five years. This year, at least king-related restrictions may not cause fishermen to forgo an otherwise bountiful sockeye harvest. DJ Summers can be reached at [email protected] This story has been updated from the original with more information from the regional ADFG manager.  

Commerce secretary declares pink salmon disaster

Help could be on the way for the pink salmon fishermen whose catch sank to dismal lows last year. U.S. Secretary of Commerce Penny Pritzker granted Gov. Bill Walker’s request for a declaration of a disaster for Alaska’s pink salmon fishery on Jan. 18 along with eight other salmon and crab fisheries along the West Coast. In 2016, the pink salmon harvests in Kodiak, Prince William Sounds, Chignik and lower Cook Inlet came in woefully under forecast and stumped biologists as to why. The estimated value of Kodiak’s 2016 haul was $2.21 million, compared to a five-year average of $14.64 million, and in Prince William Sound the ex-vessel value was $6.6 million, far less that the $44 million five-year average. The total state harvest was the smallest since the late 1970s. Although state biologists weren’t ready to declare a cause for the poor pink salmon performance, the Commerce Department press release attributed the disasters to “unusual ocean and climate conditions.” “In recent years, each of these (nine) fisheries experienced sudden and unexpected large decreases in fish stock biomass due to unusual ocean and climate conditions,” the statement reads. Emily Menashes, deputy director of NOAA Fisheries Office of Sustainability, said drawing conclusions about the cause of the disasters was not intended. “I think it was difficult to pinpoint one specific thing,” she said. “We did not intend to make some kind of causal link to climate change.” Scientists interviewed during the 2016 season had no solid evidence of any causes for the small returns. “We recognized in the reviews that there were conditions during the time period that the disasters were requested (e.g., warm water “blob”), which met the criteria for an allowable cause under the Magnuson-Stevens Act,” wrote John Ewald of NOAA Fisheries public affairs office. “We did not make any determinations about the underlying reasons for the conditions.” Unusual ocean and climate conditions did occur in the Gulf of Alaska in the last few years, notably the so-called “Blob” of warm surface water in 2015 and 2016, which led to other factors including a large red algae growth stretching from the West Coast to the Gulf of Alaska. State and federal scientists interviewed directly following the poor pink salmon season each emphasized that they were mystified as to the run’s causes, though they acknowledged the “Blob” was a potential factor. Further, these conditions also coincided with positive results in at least one case. Though the 2016 season was a bust that earned a federal disaster declaration, in 2015 the pink salmon harvest doubled the forecast in Prince William Sound and broke the previous 20-year record. Menashes said in a telephone interview that the press release’s statement was a “high level” communication that did not capture the more detailed analysis in the Secretary of Commerce’s individual determination letters for each of the nine fisheries. That letter does draw similar conclusions to the press release’s statement. “The impacts resulted from poor pink salmon returns due to a variety of factors outside the control of fishery managers to mitigate, including unfavorable ocean conditions, freshwater environmental factors, and disease,” reads the secretary’s letter specific to the Gulf of Alaska fishery. Now that the disaster has been declared, it will be up to Congress to find the necessary funds and secure them for fishermen.  “I am relieved to see that the Department of Commerce has listened to Alaskan fishermen, the Governor, and the delegation by acknowledging the dire situation this past summer in the Gulf of Alaska pink salmon fishery by issuing a disaster declaration,” said Sen. Lisa Murkowski in a statement. “However, this is not automatic relief for our fishermen or the industry. As we have learned before in previous fishery disaster declarations in Alaska, it is a long process. Now comes the hard work of fighting to secure funds through the appropriations process.” Fortunately for fishermen, Alaska’s Congressional delegation is seated well to handle the appropriations process. Murkowski sits on the Appropriations Committee, while junior Sen. Dan Sullivan was named chair of the Senate Commerce Subcommittee on Oceans, Atmosphere, Fisheries, and Coast Guard for the newest Congress. In the House of Representatives, Rep. Don Young sits on the Subcommittee on Water, Power and Oceans, which also oversees fisheries. Staff from these offices has said the quest for relief dollars has not yet begun. This will be one of growing number of disaster declarations for Alaska fisheries in the 2010s. Alaska received $20.8 million in federal money for fishery failures declared in 2012 over low king salmon returns on the Yukon River from 2010-12, the Kuskokwim River from 2011-12 and in the Cook Inlet region in 2012. The Magnuson-Stevens Act outlines how the U.S. Department of Commerce concludes that a fishery is a disaster. The MSA only says natural, manmade or undetermined causes: “At the discretion of the Secretary or at the request of the Governor of an affected State or a fishing community, the Secretary shall determine whether there is a commercial fishery failure due to a fishery resource disaster as a result of: natural causes; man-made causes beyond the control of fishery managers to mitigate through conservation and management measures, including regulatory restrictions (including those imposed as a result of judicial action) imposed to protect human health or the marine environment; or undetermined causes.” DJ Summers can be reached at [email protected] This story has been updated from the original with comments from NOAA officials regarding the reasons for the disaster declaration.

Cannabis industry latest to be tangled in Anchorage permitting code

Brian Coyle thought his marijuana lab, AK Green Labs, would open last September. Nobody told him he needed a “change of use,” or a “nonconforming determination,” or that he would have to solve a spatial Rubik’s cube of parking space on his property — parking spaces over which he said the Municipality of Anchorage is “holding (his building permit) hostage.” Nobody told him he’d need five more months, private legal counsel and a former city manager turned hired gun to help him open a business the city insists it treats just like any other, or that it would take a meeting with city managers to even start clearing it up. After weeks of sitting in city rooms, Coyle’s attorney Jana Weltzin hired consultant Ron Thompson when she and several of her other Anchorage cannabis clients had trouble fixing permitting holdups associated with Title 21. Title 21, the Anchorage planning code, requires change of use permits for marijuana businesses. Change of use — when a building changes its function — triggers an avalanche of regulatory compliance. Weltzin argues the city didn’t need to create a new change of use category, as marijuana could’ve been folded into a different subsection of the use code. Now she said her clients are singled out. “This, what they’re applying, has never been applied to other businesses,” she said. Further, many Anchorage pot businesses leased buildings before the city adopted the change of use plan in February 2016. “When I applied for standard land use permit, they had not decided that all marijuana businesses need to go through change of use,” Coyle said. “They changed their mind, but they didn’t tell me about ‘til a day before my final inspection.” Further, Coyle said he’s been made to address parking space issues his absentee landlord is responsible for. Weltzin hired Thompson, who worked as the city’s building official, director of development services and public works director at various points since 1997. Mayor Ethan Berkowitz fired Thompson in 2015. Since then he hires himself out as a consultant and fixer for anyone bogged down in the city process. The city held a meeting with Coyle, Weltzin and Thompson to talk about a temporary fix, in light of his situation being a city mistake. Erika McConnell, the planning and zoning lead who handles most marijuana issues for the city, is apologetic about Coyle’s situation and a handful of others in particular she said came from misunderstandings and bad communications the city takes responsibility for. Still, the process raises hackles. “It’s silly,” said Weltzin. “Instead of thanking us for getting into buildings and making improvements and increasing their property taxes, they’re choosing to hold it all up for parking spaces, for no parking signs even.” City workers, marijuana businesses, consultants, homebuilders and Anchorage Assembly members each have a different take on what’s making Alaska’s largest city the slowest to get the marijuana industry running. Some marijuana business representatives believe they’re being singled out unfairly, while others say they only deal with standard practices. Since being legalized in 2014, Alaska cannabis producers have entered the world of industry regulation, trading potential prison time for potential dollars only on the other side of the federal, state and local micromanagement. In Anchorage, business owners have stumbled into a problem Anchorage businesses already know and fear: the planning and inspection process through which builders get building.  ‘The city is just really messed up.’ Something in the city process is indisputably holding back Anchorage’s marijuana businesses, and it may or may not be the standard treatment for all city businesses. Statistically, Anchorage lags behind other population centers in terms of getting active licenses on track growing, selling, testing, manufacturing and paying taxes. The Last Frontier’s largest city, home to 40 percent of the population, represents a third of the state’s 450 marijuana business license applications. The Alcohol and Marijuana Control office declares a license active when it has satisfied every requirement and can begin selling, growing, testing or manufacturing whenever ready. Anchorage has 28 percent of the state’s 74 active licenses. Despite having more active licenses than any other city in Alaska, however, Anchorage has a smaller percentage of active licenses up and running than any other major population center. The state has declared 21 licenses active in Anchorage as of Jan. 10. Only four are either producing or selling cannabis, or 19 percent of the total active licenses in the city and 4 percent of over 100 pending Anchorage licenses at the state level. This is well below the average rate for Alaska’s major population clusters, according to AMCO data. The Central Kenai Peninsula, which includes Kasilof, Kenai, Soldotna, Sterling and Nikiski, has 69 percent of its 13 active licenses either selling or growing. Roughly 50 percent of Fairbanks’ 14 active licenses are either selling or growing. In Juneau, half of the six active licenses are selling or growing.  At an Anchorage Cannabis Business Association meeting on Jan. 11, anything that touched the Municipality of Anchorage boiled into tirades. Would-be entrepreneurs in the state’s newest industry, some nearing bankruptcy, swapped Kafkaesque tales about the building and permitting process. Some had been told a permit requirement by one city worker only to have another tell them something different. Others spoke about lost applications eventually found wedged under municipal desks. Nearly all had a horror story about endless arguments in municipal halls over parking spots. None knew to whom to appeal. Nick Miller, ACBA’s president and a member of the state Marijuana Control Board, lamented that none of his organization’s members had received clear instructions from the city. “There’s no consistency,” he said. “The planning and permitting are entirely disconnected.” Chris Constant, a Fairview Community Council leader and hopeful Anchorage Assembly member, dropped in to commiserate with what he said is another problem he hoped to fix someday. “A lot of you learned that the city is just really messed up,” he said. “It’s exhausting to watch the process unfold with such disrespect to time.” Business as usual Thompson said businesses would jump the same hoops anyhow. The change of use permit requires the same as a special land use permit. The marijuana industry simply suffers from shock at the process, plus a handful of problems unique to them, he said. Problems seem systemic, not personal — at least, not any single person anyone can name. Most marijuana industry members spoke highly of Erika McConnell and of other city workers they said have been as helpful as they know how to be, but the overall structure is daunting. No one person knows everything or controls everything, and many people have a crucial part in the process. Building permit plans pinball between a multitude of city departments and sub-departments, each of which have a single separate chunk of a building approval process. “I’m beat up as this point,” said Cade Inscho, who is currently waiting for footing and foundation permits on a $260,000 hole he plans to turn into a marijuana dispensary. “Nobody has the full story in that building. It’s completely wrong.” Switching the terms and communicating the requirements poorly, Thompson said, is a particular problem with marijuana. “I believe most of the requirements they put in place mimic what’s going on in other businesses, except this change of use permit,” he said. “That is just terminology that doesn’t work with the building system that’s in place. They created a bunch of sections for marijuana, which was a good idea … but nowhere do you tell them that they need a change of use permit. “So there’s people that don’t understand that permitting process that created new language that doesn’t need to be there.” The permitting laws themselves are only part of a network of colliding problems for Anchorage cannabis businesses. Money compounds issues, McConnell said. Since the Marijuana Control Board banned all Outside investment in marijuana licenses and Alaska’s banks insist they want no part of it, shop and grow owners must bootstrap businesses, find private investors in state, or find Outside investors to buy building space the businesses can lease. Cheap buildings have regulatory compliance issues from the get-go. “What I have seen happen is that because marijuana business in Alaska don’t have access to normal capital,” said McConnell. “They’re working on a shoestring and they’re finding locations that are the cheapest they can find. These locations have problems. “I can think of several examples where this has been a problem. The marijuana businesses end up having to address these issues. And it’s tough. But it’s not because they’re marijuana businesses.” A going concern Unfair or not, Anchorage developers and residential homebuilders know the cannabis industry’s story well. Andre Spinelli, president of Anchorage’s Spinell Homes and the Builder’s Council co-chair on the Anchorage Home Builders Association, had only an unhappy message for marijuana businesses: welcome to the club. “This is something homebuilders have complained about and talked about and had meetings and reports and studies about for years,” he said. Spinelli voiced the same litany of bureaucratic miscommunications as those voiced at the ACBA meeting nights before. He said inspectors and permit reviewers spend little time helping businesses meet code, but rather simply say “no,” part of what Thompson called a citywide culture of “say ‘no’ now and let the industry prove you wrong later.” “It just turns into wasted time and money,” Spinelli said. “It’s constantly like this game of whack-a-mole. You get 10 departments to say ‘yes’ and then a ‘no’ comes up. It’s not just me, or the homebuilders. You talk to Verizon or Walgreens about doing building in Anchorage and they’ll all tell you, there’s no department that’s quite as messed up.” City leaders know the issue well. Anchorage Assembly member Bill Starr, who represents Chugiak and Eagle River, sympathizes with marijuana’s entry into a building permit process he called “over the top.” “I don’t get that sense that the (marijuana) industry has had a harder time of it that anyone else,” Starr said. “I don’t think our departments are built for efficiency. They’re seeing the standard for our city.” Starr, Thompson, and Spinelli have each suggested several fixes at various points to mayoral administrations and the Assembly — streamline codes or the departments, hire a new building manager who will consolidate department functions and provide central leadership, allow third party permit reviews, whatever it takes to get the city moving faster. “There is a major issue to address here,” said Thompson. “It really seems like nobody wants to address it and get better, and that’s a sad thing.” Mayor Ethan Berkowitz did call attention to the building process in 2015 during a mayoral debate opposite Assembly Member Amy Demboski. “You want to have clarity, because people who are trying to build things should know what the rules are,” he told the crowd. “You want to have speed, because when it takes a long time to process a permit or inspect a site, then it adds cost to projects. And you want to have flexibility because one-size-fits-all rules don’t really work when you’re building things.” A 2012 housing market analysis from Juneau-based economics firm McDowell Group underscored Anchorage’s lack of housing and available land. In the recommendations, it said the city would benefit from a more streamlined process. Also in 2012, an Assembly taskforce of officials, businesspeople and academics recommended similar measures as Anchorage’s housing expense forced more and more people to live in the cheaper Mat-Su Valley. These recommendations included streamlining the rezoning process, expediting the permitting process for developers and trusted planners, and assigning a “single project advocate to have responsibility and accountability for development through the entire permitting process.” Changes never came, however.  “I feel defeated in the topic, that I was never able to make a change,” Starr said. “I was never able to figure out the key.” Fear and loathing in Anchorage No grieving party really knows who to talk to for a fix — though several are talking about petitions and lawsuits. Most keep quiet. The city bureaucracy has bred a culture of fear. Several cannabis industry members refused to comment on the record about their troubles with the city, each of them saying they don’t want to invite revenge from the inspectors, permit reviewers or any other city employee with control over a piece of the process. Spinelli said the fear isn’t anything new for homebuilders and contractors. “People are very wary of complaining,” Spinelli said. “They don’t want to speak out about problems with the building department because they know the building department is going to read it. They fear retribution.” Further, he said, the complexity and disconnection make it so few people know where to isolate communication breakdowns or identify mistake origins. “It’s just impossible to prove,” Spinelli said. Thompson echoed Spinelli almost verbatim. “People are so afraid of retribution by inspectors,” he said. “They have so much power, an enormous amount of acting power. They have the right to say yes or no on everything. Most people just do what they say and not argue a thing. They feel if they were to argue and question and push back, they’re gonna get a nasty inspection next time.” Little is really known, or solved. Whatever the problems, Anchorage marijuana businesses are clearly lagging behind, and some are afraid to come forward to their own city leaders. Thompson success in this role itself, he said, is a downbeat comment on a city that should be expanding opportunities during a statewide recession. “I am literally making a living combating incorrect decision-making at the muni,” he said. “It’s sad that that’s how it is.” DJ Summers can be reached at [email protected]

Victorious Inlet drifters file to vacate salmon rule

A Cook Inlet salmon plan will take a lot more work from federal managers in the next few years. The United Cook Inlet Drift Association, an industry group of salmon drift netters, has requested the U.S. District Court of Alaska to vacate a piece of fisheries policy they successfully sued to overturn after an appeal court ruling this past September. In the meantime, the old plan replacing the vacated plan will require some work. “Given the dire situation faced by UCIDA as a result of the federal government’s utter abdication of its (Magnuson-Stevens Act) responsibilities in this important fishery, the Proposed Judgment sought by UCIDA is immediately necessary,” according to the motion filed by UCIDA on Jan. 7. “It would ensure that the checks and balances guaranteed by the Act — including the requirement to use the best available science, to manage the fishery in accordance with the 10 national standards, and to achieve optimum yield — are provided to UCIDA and the fishery in the short term while NMFS works with the council to produce a new FMP.” A fisheries management plan, or FMP, is plan required by the Magnuson-Stevens Act, the governing law of U.S. federal fisheries. All federal fisheries must have one. The North Pacific Fishery Management Council, one of eight regional fisheries management bodies, is responsible for creating a viable FMP. A three judge panel of the U.S. 9th Circuit Court of Appeals sided with commercial fishing groups against a 2011 decision by the North Pacific Fishery Management Council to remove several Alaska salmon fisheries from the FMP. The fisheries removed from federal oversight — those that at least partially take place within federal waters three or more miles offshore — and delegated officially to state management were Cook Inlet, Prince William Sound and the Alaska Peninsula. Southeast salmon fisheries remained under federal oversight because of treaty obligations with Canada. UCIDA filed the lawsuit in 2013 to repeal the council’s decision, which was officially Amendment 12 to the Alaska salmon FMP. The initial suit was rejected by U.S. Alaska District Court Judge Timothy Burgess. The 9th Circuit remanded the case back to Burgess with instructions to find for the plaintiffs. Roland Maw, former executive director of UCIDA, said in an interview that the group proposes a 24-month period for the North Pacific council to create a new FMP and that FMP is approved by the U.S. Secretary of Commerce. In the meantime, they will use the previous FMP. “The 9th circuit court struck down Amendment 12,” Maw said. “The 9th circuit court however did not strike down the regulations that were promulgated by virtue of Amendment 12. So if the foundation for the regulations was struck down, we still feel it’s appropriate the regs that follow Amendment 12 should be vacated. That’s the precedent at law.” In the absence of another plan and slow development of a new FMP, Maw said fishermen are getting “a little cranky” about how the fishery will proceed. “You can’t create chaos and create a void,” Maw said. “So we asked for the prior FMP, although we have issues with it. What else are we going to do?” The old plan, however, isn’t up to snuff. The North Pacific Fishery Management Council only removed these fisheries from the federal FMP after acknowledging it did not satisfy the 10 National Standards of the Magnuson-Stevens Act, or MSA. Specifically, the old FMP, which was last amended in 1990, did not and still does not follow National Standard 1, which requires annual catch limits. Under the reauthorization of the MSA passed in 2006, all federal FMPs were required to be updated to reflect the 10 national standards. The updated law, however, specifically cited Pacific salmon fisheries as some that may not be appropriate for annual catch limits because of the unique lifecycle of the species. To get the FMP up to compliance, the North Pacific council had a range of options, but agreed with the Alaska Department of Fish and Game that its management was sufficient to meet the national standards. The salmon FMP was the first one passed by the council after the regional bodies were created in 1976, and the federal government had essentially deferred to state management ever since until making the delegation of authority official in 2011.  “The State concludes that its program of inseason abundance estimates using contemporaneous data, with appropriate monitoring for achievement of escapement goals, is the most effective way to lessen the risk of overfishing while achieving OY (optimum yield) on a continuing basis,” according to a discussion paper from the council’s December 2010 meeting. Rather than update the old FMP to conform to National Standards, the council deemed state management compliant and unanimously decided to remove the three fisheries from the FMP. The council and the National Marine Fisheries Service that is charged with implementing management plans has given little indication yet as to how it will respond to the court ruling, though both bodies have been adamant about their opposition to UCIDA’s proposal. UCIDA has stressed that it doesn’t want day-to-day federal management of the fisheries, but it does want state management to be held accountable for meeting federal standards. Maw said the he doesn’t understand why managers are taking so long to respond to the lawsuit and make the necessary adjustments to management policies. “I don’t know why the fear, the reluctance, is occurring, he said. “If we knew what it was we’d address the issue.” DJ Summers can be reached at [email protected]

Judge tosses felony charges against former fish board nominee

Three months after a U.S. appeals court sided with a group of Cook Inlet drift fishermen contesting the delegation of most salmon management from federal officials to the State of Alaska, the former leader of that group had a dozen felony charges dismissed related to allegations of illegally receiving Permanent Fund Dividends. Alaska Superior Court First District Judge Louis Menendez dismissed most of the charges against former United Cook Inlet Drift Association Executive Director Roland Maw on Jan. 3, capping a fisheries politics fiasco stretching back to Gov. Bill Walker’s first days in office in early 2015 that included the ousting of former Board of Fisheries chairman Karl Johnstone, a chaotic confirmation cycle to replace him and the resignation of Walker's Boards and Commissions Director Karen Gillis. Maw said the ordeal has not only drained him financially but left a sour taste in his mouth about his treatment from the State of Alaska, which he said was unfair and has resulted in damage to his reputation. “I’m a little cranked,” he said. “You’re darned right I am.” On Jan. 13, 2016, the State of Alaska hit Maw with 12 felony charges and five misdemeanors for claiming Alaska residency to obtain Permanent Fund Dividends and resident rates for hunting and fishing permits while claiming residency for similar licenses in Montana. The State of Montana filed similar charges against Maw in March 2015, less than a month after he withdrew his name from confirmation for the Board of Fisheries, and he pled no contest to those charges in May of that year. Yet on Jan. 3, the Alaska Superior Court threw out Maw’s felony indictments by the State of Alaska. The prosecution by Lisa Kelley didn’t properly present the hearsay evidence to the grand jury, according to the ruling. “A plain and simple reading of the law is that the reasons for presenting hearsay evidence shall be stated on the record at the grand jury, and not at some later point in time,” the ruling reads. “That did not happen in this case and the near entirety of the evidence heard by the jury did not comply with Alaska law.” According to the ruling, the state did not authenticate the records until nine months after they were presented to the grand jury. The ruling goes further, saying Maw couldn’t have gotten a fair trial as a result. “The issue is whether or not the exhibits were properly presented to the grand jury,” it reads. “The court finds that they were not and indictment should be dismissed because of the prejudice suffered by Mr. Maw as a result.” However, the state has not dropped five misdemeanor charges of unsworn falsification in second degree. The prosecution for these charges will continue as planned. Maw said he hopes those charges may go away in light of the ruling, though, as the Superior Court ruling finds all the admissible evidence insufficient to support the felony indictments. “Even if the court were so to find the remaining evidence is sufficient to support the indictment, the probative force of the admissible evidence is so weak and the unfair prejudice to Mr. Maw is so strong that it appears very likely that the improper evidence was a factor in the grand jury’s decision to indict,” according to Menedez’s ruling. The state now has three options regarding Maw’s felony indictments. Prosecutors can choose not to file the charges again, try to get a new grand jury indictment or pursue a plea agreement with the ongoing misdemeanor charges.  Maw said he hasn’t heard anything from the state regarding its intent, and Kelley said the state has not plotted a course of action yet. The now-dismissed indictment is tangled in a political situation at the beginning of the 2015 Legislative session. Although Walker had already nominated Sam Cotten for the position, Maw also applied for the job of Alaska Department of Fish and Game commissioner. Under state law, the Board of Fisheries must interview and forward a list of qualified commissioner candidates from which the governor may choose. The board, then chaired by Karl Johnstone, unanimously deemed Maw unqualified to be interviewed for the job. In response to criticism of the board action by UCIDA and then-House Speaker Mike Chenault, R-Nikiski, Walker chastised the Board of Fisheries and told Johnstone he wouldn’t be reappointed with his term about to expire June 30, 2015. Johnstone resigned on Jan. 14, and Walker appointed Maw to replace him on the board on Jan. 20, 2015. Maw dropped out of consideration soon after on Feb. 20, 2015, shortly before the investigation in Montana became public knowledge. Walker’s next choice, Kenai-area habitat advocate Robert Ruffner, was torpedoed in the Legislature by a 29-30 vote after sportfishing groups organized against him. Walker then appointed Bob Mumford, who later resigned after only a year on the board rather than seek confirmation for the seat. In 2016, Walker then chose not to reappoint Fritz Johnson of Dillingham, and chairman Tom Kluberton announced he was not interested in another three-year term on the board, citing the political burnout from the contentious job. That created three openings for the board, and all three of Walker’s choices, including a second shot for Ruffner, were unanimously approved by the Legislature. Maw said he never wanted the situation to play out as it did, and has no further plans to seek any board position. “I’ve scratched that itch,” he said. DJ Summers can be reached at [email protected]

Council cracks up over catch shares

Everyone in the Gulf of Alaska agrees on one thing: it was the other side’s fault. Depending on who you ask, catch shares are evil incarnate or an angel of good management. Depending on who you ask, they’ll either save Kodiak or kill it. Depending on who you ask, it’s either the State of Alaska’s fault or its credit for not allowing catch shares in the Gulf of Alaska’s groundfish fishery.  And depending on who you ask, they’ll either come up again or get sliced up into a handful of other little nibbles at the Gulf of Alaska bycatch problems. Either sighs of relief or defeat leaked from every mouth in the room on this past Dec. 12 when the North Pacific Fishery Management Council, which oversees all federal fisheries from three to 200 miles off the Alaska coast, indefinitely tabled a complex range of options for the Gulf of Alaska groundfish fisheries. The tabled program has a long history of stops, false starts, foibles and thrown stones. This time, Alaska Department of Fish and Game Commissioner Sam Cotten charged the processor and trawl industry with refusing to bend — the same charge leveled at the state by the trawlers and processors. “Had elements of the program not been so focused on privatizing and monetizing the fishery, there could have been the broad structure of a plan. But there was no acceptance for compromise,” said Jeff Stephan, a Kodiak fishermen and one of the council Advisory Panel’s most outspoken opponents of catch shares. It was the state’s fault, others said. “I seriously question how dedicated the state was to an outreach effort, as was pledged in Kodiak, when they never came prepared to talk about any changes they wanted to see to a proposed program,” said Heather Mann of the Midwater Trawlers Cooperative, a staunch catch share advocate. Gulf of Alaska groundfish fisheries — Pacific cod, pollock, and flatfish — are one of the only groundfish fisheries in the North Pacific without a catch share or rationalization program. Catch share programs involve issuing fishing quota, or shares, to eligible fishermen based on factors such as history in the fishery. The goal is to end so-called “derby style” fishing also known as the “race for fish” in an open access environment. Such conditions often led to risky behavior chasing the harvest, particularly so in the Bering Sea crab fisheries that inspired the name for the TV show “Deadliest Catch.” Halibut and sablefish were the first to be rationalized in Alaska in the early 1990s, with similar programs created for crab, pollock, and flatfish in the Bering Sea. Like the Bering Sea, the Gulf of Alaska also has pollock and flatfish fisheries that are known for heavy amounts of bycatch of crab, halibut and salmon, which are taken while in pursuit of the target species. While Gulf trawlers do not have the catch shares of their Bering Sea counterparts, they do have halibut and chinook salmon bycatch caps that if met lead to the closing of the fisheries. Chinook bycatch caps were adopted in 2011 and 2012, respectively, and the halibut bycatch cap was lowered by 15 percent in 2012. Trawlers and processors have said for years they need better bycatch management tools than what the council offers and that catch shares are the best way. They aren’t wrong, in that catch shares are linked to effective bycatch management and reductions in other fisheries, including the six programs in the North Pacific. But the possible negative impacts of these programs — fleet consolidation, loss of crew jobs, and the death of the coastal Alaskan tradition of owner-operators — are also linked to catch shares, and hang like a cloud over the heads of coastal residents like Stephan. To him, the culture is at stake. “If you can design fisheries in a manner that are efficient as can be without damaging the social and cultural and economic characteristics of these communities…I think that there’s something that can be done there,” he said. The meeting Trawlers say they made every attempt to address the state’s concerns about community impacts. Such attempts included vessel harvesting caps, ownership caps, active participation requirements, port landing requirements for Kodiak, and other assorted bells and whistles to prevent the kind of behavior that turned some crab and halibut fishermen into what are known derisively as “mailbox fishermen” who lease their quota for rates anywhere from 50 percent to 70 percent or more with their fees coming out of the pockets of working crew that neither own or have any stake in the resource. But in the end Cotten said their solutions weren’t good enough. “The advocates just weren’t going to offer any compromises or any concessions,” Cotten said afterward. “We are in a different place now. I’m hopeful people will reconsider their stances, and we will too.” Heather McCarty, who lobbies for the City and Borough of Kodiak, said several fisheries working group meetings yielded the same thing. “We’ve been also hearing meeting after meeting that if there’s going to be a catch share program, there needs to be mitigation of some of these impacts,” she told the council. “I think there’s general acknowledgment that there’s a problem in the trawl sector. I don’t think there’s a common understanding of how that should be addressed.” Cotten ended the showdowns, at least for now, by making a motion to table the options indefinitely on Dec. 12. Catch shares are simply too large an issue not to have more support. “It’s clear both the council and the public are deeply divided on this issue, and something more closely resembling consensus is needed,” said Cotten. “Moving to a catch share program like this would be a major policy shift, and one of this magnitude should enjoy broader public support. “When the crab rationalization program was approved in 2003, the council vote was 11-0. I think we should look for boarder support and more consensus.”  Though divided on the subject of catch shares, most council members agreed with Cotten, voting 8-3 in favor of the motion in spite of hesitations. “I’m of quite mixed mind on this,” said Bill Tweit of the Washington Department of Fish and Wildlife. Though he hated the idea of staying in “limbo,” Tweit said Cotten’s motion was pragmatic. “I think we have to be smart of how we use our resources,” Tweit said. “I think the commissioner’s motion responds to that.” Others echoed Tweit’s reluctant yes vote. “This is not our finest hour,” said Roy Hyder of the Oregon Department of Fish and Wildlife. “We’re going to have to find a way to go forward, nibble around the edges, but as far as putting together a comprehensive plan … we’re not gonna get there. I’m going to support the motion, because we’re stuck.” Others disagreed, saying the council’s inaction amounts to a failure after all the meetings and infighting and collaboration. “This is the fourth time I’ve dealt with GOA ratz,” said council member Craig Cross, using the acronym for Gulf of Alaska and shorthand for rationalization. “Every time we get to the end something happens — a new governor, a new administration, a new philosophy. It’s getting very difficult and frustrating that we can’t help these fishermen. “If we take this and postpone it indefinitely, we are at status quo. You can call it what you want, but we’re going to continue to have a race for fish.” 15 years chasing catch shares The latest try at a comprehensive program ended in 2016, but since 2001 the Gulf of Alaska rationalization talks have encapsulated gubernatorial cancellations, rebrandings, surprise alternatives, accusations of political intrigue in Washington, D.C., stand downs, emergency season openings and closures, protest parades and even a pie throwing contest. The quest for a Gulf of Alaska groundfish rationalization program started in 2001 when Congress directed the North Pacific council to “examine the fisheries under its jurisdiction, particularly the Gulf of Alaska groundfish and Bering Sea crab fisheries, to determine whether rationalization is needed. In particular, the North Pacific Council shall analyze individual fishing quotas, processor quotas, cooperatives, and quotas held by communities.” The plan developed over the next half decade until former Gov. Sarah Palin saw the crab fleet shrink by two-thirds in the first year of rationalization and lose 1,000 crew jobs in a devastating blow to Kodiak and other small communities such as Cold Bay. Palin instructed the council to drop efforts to create a Gulf program after she took office. Alaska holds six seats on the 11-member council, meaning the state can effectively control the outcome. After the council passed a series of chinook salmon bycatch limits and halibut bycatch reductions in 2011 and 2012, the council took up the matter again, this time focusing on bycatch management that would do more than simply cap the allowed amount. Through Gov. Sean Parnell’s term, former Alaska Department of Fish and Game Commissioner Cora Campbell worked closely with groundfish trawlers and processors to craft the industry’s preferred alternative. One of the first appointments made by Gov. Bill Walker after being elected in 2014 was to replace Campbell with Cotten, who advanced another alternative at the council’s October 2015 meeting that would give trawlers bycatch quota, but no quota for the directed species. The ADFG commissioner is mandated to have a seat on the council and typically sets the direction for the Alaska delegation. Trawl and processing industry representatives lambasted the option as another race for fish — this time a race for bycatch — and accused Cotten of introducing it without the same public input that had gone into their own preferred alternative. The arguments between trawlers supporting Campbell’s alternative and Cotten’s motion boiled over during the council’s February 2016 meeting in Portland, when Cotten stood in hotel room surrounded by shouting trawlers accusing him of abusing the process. Only days before, the same trawlers had a spike of halibut bycatch after targeting non-pollock species. Rather than fish for the low prices being offered for small-sized pollock, trawlers went after groundfish and ended up taking 110 metric tons more halibut than they had in the same period a year earlier. During this time, Julie Bonney of the processor and trawl representative group Alaska Groundfish Data Bank organized a stand down specifically for trawl operators to travel to Portland in protest of Cotten’s motion.  Rumors later surfaced that Bonney and others were pressing Washington Rep. Jaime Herrera Beutler to draft language to get their preference into a congressional appropriations bill, which Herrera Beutler denied. They later organized letter-writing campaigns to Gov. Bill Walker’s administration, and a parade and festival celebrating the trawl industry during the council’s June meeting in Kodiak. Processing workers and trawl crew marched through downtown Kodiak sporting signs reading, “Gov. Walker, don’t take our jobs” and “Don’t destroy what you don’t understand.” Red baseball caps with the words “Make Trawling Great Again” were de rigueur for attendees — even for Duncan Fields, one the council’s most outspoken critics of catch share programs, who later took a pie to the face for charity toward Kodiak’s Brother Francis shelter. Joe Bundrant, CEO of Trident Seafoods, which controls roughly 50 percent of the Gulf of Alaska groundfish harvest, and Heather Mann, executive director of the Midwater Trawlers Cooperate, paid $2,500 between the two to hit Fields with the pie. Between then and the December meeting, groundfish industry representatives like Bonney and Pacific Seafood Processors Association executive director Glenn Reed met with Cotten, Department of Commerce, Community & Economic Development Commissioner Chris Hladick, and Lt. Gov. Byron Mallott. Catch shares and Kodiak As policy, two of the most direct means of reducing bycatch are catch share programs and straightforward bycatch caps. Modern catch share programs took hold as a management tool starting in the 1970s, but the U.S. saw its first catch share program in 1990 with the Mid-Atlantic Surf Clam and Ocean Quahog Fishery. The National Oceanic and Atmospheric Administration has 16 catch share programs spread among six of the eight regional fishery management councils that govern U.S. federal fisheries, which take place between three and 200 miles off the coast. Over 40 countries now use the programs for a variety of goals, including lowering fishing mortalities, consolidating over-capitalized fleets, reducing bycatch, extending season lengths, reducing fishermen’s cost of operations, and steadying supply for wholesalers and retailers. Catch shares accomplish these goals in theory by ending the “race for fish” in fisheries that only established a fleet-wide harvest limit and a season length. Fishermen could catch however much they could handle within the season limits and stop when the fleet reached the overall cap. Under a rationalized program, individual fishermen start the season with a set quota and fish until they catch their share, theoretically allowing a slower, safer pace to avoid prohibited species. Managers and conservationists tout the positives of catch share programs. Fishermen can more effectively plan their trips, deliver fish according to market demands, fish more carefully, deploy their gear more selectively and take greater pains to avoid fishing in sensitive habitats. Coastal communities, however, fear the “economic efficiencies” catch shares establish. For Kodiak, a town a built on fish, catch shares are seen as either savior or slayer. Most of Kodiak’s seafood landings value — $41 million in 2014 — comes from groundfish, according to Juneau economics firm McDowell Group, which contracted with the City and Borough of Kodiak in 2015 for a study on the community’s fisheries dependence. The island has 10 active processors, five of which are among the city’s 10 largest employers with more than 1,300 Kodiak resident employees. Together the 10 make more than two-thirds of their revenue from federal fisheries. Of this, 58 percent of the total dockside value comes from federal groundfish. Once touting itself as the “Crab Capital of the World,” there is also no shortage of hard feelings toward trawlers as fishermen have seen crab fisheries closed and halibut harvests cut while trawl bycatch continues unabated and often unobserved because of limited coverage on their boats. Kodiak has already seen its fisheries participation shrink, and community advocates wish to see it shrink no further, especially if caused by enriching trawlers with harvest shares. In Kodiak, cost of entry into fisheries has risen, and local participation has fallen. Between 2000 and 2010, Kodiak’s locally held Commercial Fisheries Entry Commission permits dropped from 1,646 to 1,279; halibut quota holders from 304 to 224; active crew licenses from 1,263 to 884; and locally owned vessels from 719 to 452. Some fear the statistics from other catch share programs, given Kodiak’s delicate fishy tightrope walk. Crab rationalization took place in 2005, but the outcomes had, and still have, certain Alaska coastal communities and fishermen reeling. Consolidation, one of rationalization’s most feared impacts and the biggest warning repeatedly given to the council, shrunk the crab fleet by 200 vessels in one season and eliminated 1,000 crew jobs overnight. Halibut rationalization also produced consolidation of vessels and harvest quota, shrinking the fleet from more than 3,000 vessels in 1992 to just more than 1,000 in 2012. Although the shares are classified as fishing “privileges” under the law, the issuance of quota is essentially permanent — and extremely valuable. The philosophical argument against rationalization is that it privatizes a public resource by gifting the right to a fish to a select few while cutting out the Americans who own it. Catch shares have often been promoted as investment tools and foundations run by Intel founder Gordon Moore and retail giant Walmart only drive the suspicion that a well-funded fish grab is underway in the guise of conservation. The issuance of halibut, sablefish and crab quota made a select group of vessel owners incredibly wealthy which in turn reduced working crew compensation and created a class of stakeholders who no longer needed to fish to make money from the fisheries. Quota is extremely expensive — halibut shares cost more than $60 per pound in 2016, which limits the ability of new entrants to join the fishery. At least one catch share progam hasn’t caused as many problems. In the Gulf of Alaska rockfish program, started in 2007 and reauthorized in 2012, the fleet has only lost two vessels since the program started, and halibut bycatch dropped 80 percent in the first year. The council made several changes when it reauthorized the program after a five-year review designed to correct mistakes in prior attempts. Among them were severing the ties requiring delivery to certain processors, effectively cutting processors out of the program as non-fishermen, and instituting a 4 percent vessel use cap that ensures a minimum of 25 vessels will always be in the fleet. Similarly, a 30 percent cap was put on processors, ensuring at least four plants could take deliveries. Trident lost a lawsuit challenging the revised rockfish program for cutting out processors, which are included in the Bering Sea pollock and crab programs, arguing they were having to pay higher prices to fishermen because the company had to compete for deliveries rather than have vessels tied to them based on history. Cotten predicts the trawlers are simply waiting until a new governor comes along to usher the issue back onto the council’s agenda. Gulf rationalization may be tabled once again, but the urgency for a solution won’t be until one is finally found. DJ Summer scan be reached at [email protected]  

NOAA plan: set aside more salmon for belugas

Cook Inlet could have a new group of salmon users joining recreational, commercial, subsistence and personal use fishermen: endangered beluga whales. The National Marine Fisheries Service, or NMFS, wants the Alaska Department of Fish and Game to start considering the dietary needs of Cook Inlet beluga in management plans, part of a nationwide Species in the Spotlight project aimed to boost eight different species to the point of delisting them from the status as a threatened species. In a release, ADFG called the plan “unrealistic,” and the criteria for recovery “untenable.” The department stated the criteria would make the recovery plan, and the acceptance of the plan by stakeholders, impossible to achieve. “Under the NMFS recovery plan, Cook Inlet belugas would be down-listed to threatened status when the population reaches 40 percent of their historic environmental carrying capacity (estimated in the plan as 1,300 whales) and delisted when numbers reach 60 percent carrying capacity,” reads the release. “These demographic criteria are problematic because the number of animals in a population is not necessarily an indication of the risk of extinction. Further, the plan includes threats-based recovery criteria that are not measurable and impossible to meet.” Cook Inlet beluga whales — one of five distinct beluga stocks in Alaska waters — have been on the downswing for decades. Alaska Natives used to harvest an average 77 a year until a big drop in stocks from 1994 to 1998 spurred NOAA to strictly rein in subsistence harvest. When stocks didn’t rebound as expected, NOAA listed them as endangered in 2008 and designated a critical habitat for them in 2011. Currently, NOAA Fisheries estimates there are 340 Cook Inlet belugas, down from the 1,300 estimated in 1979. The recovery plan has a range of goals, including better surveying and science. Ensuring more access to what they eat could be critical. Pointedly, Cook Inlet belugas like salmon even more than Alaskans. According to data gathered by NOAA between 2002 and 2010, salmon had a 67 percent occurrence rate in the stomachs of 28 dead beluga stomachs, a greater percentage than any other species and more than pollock and cod, beluga’s next favorite fish with a 39 percent occurrence rate. According to a plan, fisheries managers might have to start factoring more escapement into management plans to account for the salmon beluga eat. The plan calls for managers to “ensure fisheries management (e.g., escapement goals for CI beluga prey species) adequately accommodates CI beluga prey requirements, and if necessary, expand the number of species with escapement goals.” Currently, salmon escapement goals in Cook Inlet don’t explicitly account for whale predation. They are included in the “natural mortality” metric used by the Alaska Department of Fish and Game to calculate salmon populations. “ADFG should ensure the management of anadromous species considers CI beluga dietary needs, particularly in a way that provides for a sustained abundance, density, and temporal availability of returning fish as prey in CI beluga feeding areas,” reads the report. “This may require review of the models being used to manage fisheries in Cook Inlet to gain insight about the potential effects of these fisheries on the Inlet’s ecosystem.” The endangered beluga rejuvenation plan also contains several mentions of the negative impacts of oil and gas development on habitat. Belugas live mostly in near shore waters, near human activity. “Concern is warranted about the continued development within and along upper Cook Inlet and the cumulative effects on important beluga whale habitat,” reads the plan. “Ongoing activities that may impact this habitat include: (1) continued oil and gas exploration, development, and production; and (2) industrial activities that discharge or accidentally spill pollutants.” Oil and gas drilling are also listed as a threat as a source of noise, which may interrupt the movements of prey. DJ Summers can be reached at [email protected]

Ringing in new round of ‘fish wars’ as ADFG manages budget

In the face of yet another round of budget cuts, Alaska’s largest private employer, the seafood industry, will have entirely new management schemes to sort out and live under in 2017 alongside status quo projections for harvest in key fisheries. The Alaska Department of Fish and Game will take another budget cutback responding to the state’s multi-billion dollar deficit that has yet to be patched. Gov. Bill Walker released a proposed fiscal year 2018 budget on Dec. 15. Among other cuts, Walker proposes a budget of $28.9 million for ADFG. This is a 36 percent reduction from the fiscal year 2015. ADFG will have to find ways to deal with budget cuts to monitor key fisheries stocks, including the iconic king salmon that has fallen in abundance beginning in the late 2000s. Further, commercial fisheries management programs will suffer, including the sonar and other survey methods used by the department to gauge incoming stock. Without robust programs and the information they yield, fisheries managers take conservative harvest approaches that could harm commercial fishermen’s bottom lines. That’s already happened in the Togiak herring fishery, as sampling surveys were not done in 2016 and leading the department to set a harvest at an average level reduced by a conservation buffer. Fish wars renewed As usual, much of Alaska’s year will center around salmon. Among the biggest items for Alaska’s state fisheries will be the two-week 2017 Upper Cook Inlet meeting of the Alaska Board of Fisheries. This meeting, held once every three years, pits the often-conflicting interests of sportfishermen, commercial fishermen, personal use and subsistence fishermen all vying for a limited supply of salmon. The proposal book, now under review, is stuffed with 499 pages that largely carry over the battles fought in the 2014 meeting, when the Board of Fisheries marathon gave way to new rules for the Kenai River management plans. The book is currently under review for the 166 proposals submitted. More than a dozen proposals look to modify or entirely repeal the Kenai River Late Run King Salmon Management Plan and the Kenai River Late Run Sockeye Salmon Management Plan. The current late run king salmon plan include restrictions on commercial sockeye fishing and sport fishery bait usage when the department projects an in-river run of less than 22,500 fish. The late run sockeye plan, which begins after the sport fishery closes on July 31, restricts the commercial setnet fleet to 36 hours through Aug. 15 if the Alaska Department of Fish and Game projects a king salmon escapement of less than 22,500 fish. Commercial fishermen largely resent the August sockeye rules and have been restricted by them to some degree in each of the last three years since they were adopted in 2014. Not helping matters for the meeting is that the Upper Cook Inlet forecasted commercial harvest of just 1.7 million sockeye is 1.2 million less than the recent 20-year average harvest. The matter will be further complicated by a court decision that will change the area’s salmon management entirely. The U.S. 9th Circuit Court overturned a decision made by the North Pacific Fishery Management Council in 2011 to remove Cook Inlet salmon from the federal fishery management plan, or FMP. Cook Inlet’s salmon fisheries will now require an FMP that conforms to the 10 National Standards laid out in the Magnuson-Stevens Act. The council has not yet started on an FMP, but the Board of Fisheries will need to take the court ruling into consideration. Halibut headaches Halibut will continue as one of the biggest discussion points in the North Pacific’s federal fisheries. The International Pacific Halibut Commission will adopt harvest limits for commercial and charter halibut fishermen in late January 2017. These allocations will carry a new undercurrent due to a recent North Pacific Fishery Management Council decision that will allow charter halibut guides to purchase commercial halibut quota through a recreational quota entity. Developing the structure of the recreational quota entity, and potentially seeing its first sale, will be on fisheries managers agenda for 2017. Bristol Bay can look forward to a regular season in 2017 after two years of hard work, if the forecast is to be believed. Alaska’s largest sockeye run has blown past projections the last two years, but next year the Alaska Department of Fish and Game predicts an average harvest. A total of 41.47 million sockeye salmon (a range of 31.2 million to 51.7 million) are expected to return to Bristol Bay in 2017, according to an ADFG report released Nov. 15. This is virtually identical to the most recent 10-year average of Bristol Bay total runs (41.4 million) and 27 percent greater than the long-term mean of 32.76 million. For commercial fishermen, this means next year’s harvest will also be average, with a commercial harvest of 29 million. It’s anyone’s guess whether or not Bristol Bay’s fishermen will receive more than the last two years relatively depressed ex-vessel prices, which were 50 cents and 76 cents per pound, respectively. Reports from research firm McDowell Group say the salmon market has eased some of the back stocked salmon from processor shelves, which should raises prices for fishermen. DJ Summers can be reached at [email protected]

Young cannabis industry will start to mature in 2017

Big changes and big money are on the way for Alaska cannabis in the upcoming year. Alaska joined the national green rush in 2014, and then spent 2015 hashing out regulations and 2016 scrambling to build out grow operations and retail stores to meet those rules. In 2017, Alaska’s cannabis entrepreneurs will ramp up into a full-fledged industry, with developed supply chains feeding a ballooning number of retail stores. The industry will finally make the kind of money necessary to bring in tax dollars, and political influence could grow as a result. Already, Alaska has a number of operational cultivators and retailers across major and minor population centers. Sales kicked off with Valdez’s Herbal Outfitters and Fairbank’s Pakalolo Supply Inc. in late October, followed by Rainforest Farms in Juneau. On Dec. 15, Anchorage saw its first retail opening at Arctic Herbery, beating the Dec. 17 opening of Alaska Fireweed as the first entrant to the state’s largest population center and cannabis market. A handful of additional Anchorage stores will pop up in the coming months, finally having navigated the intensive dual licensing process required by the Anchorage Assembly. Supply issues will begin to ease as more and more cultivators bring their products to market. Currently, the level of finished cannabis products in the state doesn’t allow for the kind of widespread consumer base necessary to bring the Alaska market to the same levels seen in Lower 48. In some cases retailers have either run out of product to sell or have limited the amount of product their customers can buy. The state’s take of the industry’s taxes will increase, though nobody knows by how much. The Alaska Department of Revenue took its first cannabis tax payment of $5,600 in November at a specially purposed Anchorage drop box. In 2017, estimates place Alaska’s cannabis tax revenue somewhere between $5 million and $12 million. Both industry and regulatory leadership will undergo changes. Marijuana regulations could look far different in 2017 than the helter-skelter period between 2015-16. Several of the most influential regulatory voices are gone or on their way out, leaving 2017 to an entirely different dynamic. Cynthia Franklin, executive director of the Alcohol and Marijuana Control Office, resigned from the position on Dec. 5. AMCO falls under the auspices of the Alaska’s Department of Commerce. Commissioner Chris Hladick will need to hire another, which could potentially change the atmosphere of meetings and the color of ever-changing regulations. Franklin had a conservative approach to regulations compared to other states, and a hands-on approach to managing the board, often arguing with former chairman Bruce Schulte over policy points. Throughout her two-year tenure as the Marijuana Control Board’s director, Franklin frequently butted heads with the industry members on the five-member board over items like servings limits, buffer zones between businesses and protected areas and advertising restrictions. The board itself may change as well, with one of its more conservative voices and its wild card having terms expire at the end of February 2017. Fellow board members are quick to praise Peter Mlynarik, Chief of the Soldotna Police Department, for his diligence as the board designated public safety member. He ran afoul of the industry eventually, however, when he collected signatures for a Kenai Peninsula Borough commercial cannabis ban following a record of conservative policy positions. Bethel’s Mark Springer, the board’s designated rural member will also have his term end in 2017. Springer’s record as the board’s informally designated tiebreaker has been well earned, swinging on both conservative and industry-friendly sides of innumerable issues that split board votes in half. Stakeholder leadership will continue to evolve as well as the industry makes more and more money. In 2015 and 2016, the Alaska marijuana industry lacked the kind of central political and industry leadership some Lower 48 states have in the form of lobbyists or well-funded trade associations. Several organizations will vie for the top spot. Among others, the Anchorage Cannabis Business Association, the Alaska Small Cultivators Association and the Alaska Marijuana Industry Association form a cluster of interests, which sometime collaborate and sometimes collide. Two of these industry associations have leadership crossovers with the Marijuana Control Board. AMIA’s president, Brandon Emmett, will sit on the MCB until 2019, a year longer than any other current member, and ACBA’s president Nick Miller will sit on the MCB until 2018.  Emmett’s position as AMIA president could potentially change next year, as AMIA will hold a public vote to elect new board members. Given his public and industry visibility and place on the Marijuana Control Board, electing a different president may not be likely. DJ Summers can be reached at [email protected]  

Year in Review: Telecoms

The state’s lack of budget solutions has dug into telecommunications growth. General Communications Inc. is cutting 20 percent to 25 percent of its planned capital project spending next year in light of the State of Alaska’s failure to implement a fiscal plan during its 2016 marathon legislative session. This implies 2017 capital expenditures of $158 to $168 million compared to previous plans for up to $210 million in spending. GCI President and CEO Ron Duncan has been an outspoken supporter of plans such as those put forward by Gov. Bill Walker and approved by the state Senate to restructure the Permanent Fund to use earnings to pay for state government. The House failed to have a floor vote on the Senate bill, leading Walker to veto $1.3 billion in state spending, including $666 million from Permanent Fund Dividends to reduce this year’s check from more than $2,000 to $1,022. Duncan is the founder and one of the co-chairs of Alaska’s Future coalition, which has organized a campaign to encourage legislators to approve a fiscal plan and for the public to support such a plan. GCI spokesman David Morris said the company doesn’t plan on shedding employees as a result of capital expense reductions, but acknowledged things can change. The capital expense cut at GCI will dig into statewide utilities construction. According to forecasts by the Institute of Social and Economic Research at the University of Alaska, private spending for utilities construction in 2016 will total $459 million. GCI accounts for nearly half that amount.  No. 2: Quintillion starts laying offshore Arctic fiber Wireline wholesaler Quintillion’s plans for an intercontinental subsea fiber system connecting Asia and Europe evolved in 2016. The company sets the project into three phases, each of which representatives said are independently viable financially. The first phase connects an undersea fiber system from Nome to Prudhoe Bay with an existing terrestrial fiber line running north from Fairbanks. The second will entrench a subsea line from Nome spur to Tokyo, while the third lays line from Prudhoe Bay to London. Ships from France began laying the subsea cable for phase one in mid-July and continued through October. Rather than sell directly to customers, Quintillion hopes to draw Alaska’s telecommunications providers to the fiber system. Companies like GCI or Alaska Communication, representatives said, should see the value of fiber over less robust platforms built and used internally. Along with Cooper Investment Partners, Alaska Native organizations Arctic Slope Regional Corp., and Calista Corp. bought into the Alaska portion of the project, previously led by Canada’s Arctic Fibre. Now the project is entirely Alaskan. Costs have shifted since the project started. Previously estimated at $250 million, Quintillion vice president of external relations Kristina Woolston can only say now the project is a “considerable investment.” No. 3: Rural broadband continues to expand Rural internet connectivity grew in 2016. Broadband networks and provider contracts for Alaska’s largest telecommunications companies are slowly expanding in rural markets, focusing on large contracts with federally funded Alaska Native organizations and municipal customers. GCI announced on June 21 the addition of 10 new Northwest Alaska villages into its now-completed TERRA network. Buckland, Kiana, Noorvik, Selawik, Koyuk, Elm, Golovin, White Mountain, Stebbins and St. Michael will now have access to internet connection speeds far faster than 6 megabits per second standard in many rural Alaska communities, which is well beneath the FCC benchmark of a minimum 25 megabits per second. TERRA is a hybrid of broadband cable and microwave transmitters in stretching from Southwest to Northwest Alaska. The expansion is the second this year to build on the existing system. The TERRA-Northwest project extends from Nome to Kotzebue. The Southwestern portion of TERRA began upgraded June 8 with new microwave radio networks from Levelock to Bethel — which allows 3G wireless data service in 28 communities in Southwestern rural Alaska villages, including Aniak, St. Mary’s, and Marshall. GCI already has operating contracts with the Northwest Arctic Borough School District, Norton Sound Health Corp., and Maniilaq Association, an Alaska Native health and social services organization. Outside the North Slope and away from the areas of coverage provided by the TERRA project, Alaska Communications is supplying Alaska Native health providers with coverage in Southcentral. Alaska Communications representatives confirmed on June 21 that the company has drawn up a new five-year contract with Kodiak Area Native Association following the expiration of a previous three-year contract. The Federal Communications Commission will help Alaska Communication with rural broadband buildout with money from the Connect America Fund Phase II, granting $19.7 million a year for the next 10 years.  

Year in Review: Fisheries

After a hectic fisheries year in 2015 involving felony charges, forced retirements and resignations, the 2016 Board of Fisheries confirmation cycle was mild, with few of last year’s inflamed arguments. This board shakeup precedes the Board of Fisheries Upper Cook Inlet finfish meeting in early 2017, which is held once every three years and is highly charged by the conflicts between user groups. The last two years took a toll on fisheries leadership, including one botched interview, one forced resignation, three failed nominations, a fistful of felony charges against one of those nominees, and two recent resignations — one by chairman Tom Kluberton who cited political burnout and stress, the other by Bob Mumford, coming before he even had the chance to be confirmed by the Legislature. Unlike 2015, Board of Fisheries appointees had no trouble being confirmed in a rare occurrence for the Legislature. In April 2016, the Legislature unanimously confirmed Al Cain, Israel Payton, and Robert Ruffner to the Board of Fisheries, replacing Mumford, Fritz Johnson and Kluberton. Last year, Ruffner’s confirmation hearing went especially wrong after a sustained campaign by sportfishing groups to characterize him as holding commercial fishing sympathies. The Legislature failed to confirm him on a 29-30 vote in 2015 but unanimously approved him in 2016. No. 2: Drifters win lawsuit challenging Cook Inlet salmon management A federal court tossed a North Pacific Fishery Management Council rule that will change the tenor of the upcoming Upper Cook Inlet Board of Fisheries meeting in February 2017. A three judge panel of the U.S. Ninth Circuit Court of Appeals sided with commercial fishing groups against a 2011 decision by the North Pacific Fishery Management Council to remove several Alaska salmon fisheries from the federal fishery management plan, or FMP. Industry group United Cook Inlet Drift Association filed the lawsuit in 2013 to repeal the council’s decision, which was officially Amendment 12 to the Alaska salmon FMP. The initial suit was rejected by U.S. Alaska District Court Judge Timothy Burgess. The 9th Circuit remanded the case back to Burgess with instructions to find for the plaintiffs. Federal fisheries policymakers and state managers will now have to work together on a suitable FMP, which the council had hoped to rid itself of in 2011 by passing Amendment 12 in the first place. In December 2011 the North Pacific council, one of eight councils that oversee fisheries in federal waters from three to 200 miles offshore, gave the Alaska Department of Fish and Game management authority of Cook Inlet, Prince William Sounds, and Alaska Peninsula salmon fisheries, removing the historic fisheries from the federal oversight. Only Southeast Alaska remained under direct federal oversight due to the Pacific Salmon Treaty with Canada. No. 3: Another Bristol Bay bumper crop; salmon markets start to improve For the third season in a row, the world’s largest sockeye salmon run featured above-average numbers, a late run, and sub-average prices for the fishermen. Unlike last year, however, the fishermen’s pockets so far aren’t as empty in 2016, and the overall market outlook seems to have improved. In terms of output, the summer of 2016’s 51.4 million fish run blew previous sockeye seasons out of the water, second only to last year’s run of 59 million. Along with being an above average run, the 2016 Bristol Bay sockeye harvest surpassed ADFG forecasts. The 37.3 million sockeye salmon taken in the commercial harvest was 26 percent greater than the 29.5-million preseason forecast. The 2016 season repeated that of 2015 not only in quantity, but also in run particulars that made last year’s harvest so strange, including late timing and smaller fish size. The ex-vessel price for the salmon — what processors pay the fishermen — was above the final price for the 2015 season but still 25 percent below average. Processors paid 76 cents per pound for Bristol Bay sockeye. The run’s volume drove the overall value. ADFG estimates the ex-vessel value at $156.2 million, which is 40 percent better than the 20-year average of $111 million. A new market analysis had an optimistic outlook for the 2016 salmon season — and goes a long way in explaining why Bristol Bay sockeye salmon received a low dockside price for last year’s catch. Juneau-based economics firm McDowell Group completed the report under contract from the Alaska Seafood Marketing Institute. The report says processors simply had less capital to spread to fishermen in 2015, as they were beset by a host of negative market factors. Strong U.S. currency values lessened purchasing power for key foreign export markets, important export markets vanished, and massive supply caused led to a decrease in overall value. No. 4: Pinks miss forecast in big way Sockeye salmon mostly had a good year in 2016, but pink salmon performed miserably. Around the state, biologists are unsure of what led to the lowest pink salmon harvest since the 1970s in a season that led Gov. Bill Walker to seek a disaster declaration from the federal government to bail out beleaguered pink fishermen. “We caught 39 million pinks this year,” said Forrest Bowers, the Commercial Fisheries Division director for the Alaska Department of Fish and Game. The department forecasted a harvest of 90 million pinks. Bowers said he had to comb records back to 1977 to find a year that bad. In terms of overall value, pinks salmon pale beside sockeye, Alaska’s most valuable salmon species. Walker, urged on by Kodiak Rep. Louise Stutes, requested that U.S. Secretary of Commerce Penny Pritzker declare the season a disaster. This would pour millions in disaster relief funding for Kodiak, Prince William Sound, Lower Cook Inlet and Chignik, all areas with high dependence on pink salmon. Prince William Sound is almost entirely hatchery-produced pink salmon while the other fisheries saw their wild pink salmon runs decline. ADFG biologists note that inaccurate pink salmon forecasts are common. Unlike sockeye salmon, pink salmon have less predictable migration patterns and life cycles. No. 5: Crab cut way back Cuts and cancellations are causing anxiety for Alaska’s valuable crab fisheries, and even though prices will rise they will not likely make up for the sinking quota. The Alaska Department of Fish and Game closed the 2016-17 bairdi, or Tanner, crab season on Oct. 5, following a 15 percent cut in the harvest quota for Bristol Bay red king crab and a 50 percent cut in the snow crab fishery. Without intervention from the Alaska Board of Fisheries, requested by Tanner crab stakeholders, the millions of pounds and millions of dollars of bairdi will remain in the sea. Last year, the fishery’s total ex-vessel value was $45.3 million. Crab stocks are managed jointly between the Alaska Department of Fish and Game and the North Pacific Fishery Management Council. The North Pacific council sets the overfishing limits and annual catch limit for crab. ADFG then sets the total allowable catch, or TAC. Tanner crab was one of two stocks the National Oceanic and Atmospheric Administration charted as having a declined biomass. Always a costly product, the sharply reduced Alaska crab quota will surely raise prices, though nobody will know by how much until the season wraps up and processors set prices. The average dockside price paid to fishermen for bairdi Tanner, snow crab, and Bristol Bay red king crab from 1985 to 2015 is $2.17, $1.37 and $5.08 per pound, respectively, and have been rising for snow and red king crab over the same timeline.  

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