Molly Dischner

Broadband service improving in rural Alaska

General Communication Inc. is making progress on its TERRA expansions, which will improve broadband service in rural Alaska. GCI launched high-speed broadband service in 16 Bristol Bay and Yukon-Kuskokwim Delta communities earlier this month, including Chevak, Hooper Bay and Russian Mission. Those were just the most recent additions as part of the TERRA-Southwest upgrades. In total, 40 communities have been added to the network this year, according to the company. The extended service is the result of more than 400 miles of new fiber-optic cable and 13 microwave towers in rural Alaska. The TERRA networks use a terrestrial connection, which reduces the latency inherent in satellite-based systems. That latency comes from the time it takes for communication between land-based users and satellites positioned above the earth. According to GCI, the upgrade means that residents of those communities can opt for the terrestrial broadband service, which offers faster download speeds at a similar price as the satellite-based system. The company is just beginning phase three of the TERRA-Northwest network, which will add six microwave sites between Shaktoolik and Kotzebue at a cost of about $28 million. That will extend the TERRA network 205 miles in Northwest Alaska. “The main benefit of the (phase three) expansion of TERRA-NW will be higher speed, lower latency data service, supporting education, healthcare and internet, enhacing the quality of life and economic opportunity for rural communities throughout the Northwest Arctic Borough,” said GCI President and Chief Executive Officer Ron Duncan. Phase one of the Northwest component, which will extended the TERRA upgrades from Shageluk to Unalakleet and Shaktolik, is expected to be finished this December. Shageluk was the northern end of the TERRA-Southwest work. Phase two will extend the network to Nome, and is scheduled for completion in December 2013. GCI has applied for the permits for phase three, and expects to finish construction in 2014. Broadband cable modem service is expected to reach Kotzebue by the end of October.

North Pacific Fishery talks Stellar sea lions

Steller sea lions, vessel replacement, crab management and central Gulf of Alaska rationalization were all on the table at the North Pacific Fishery Management Council meeting in Anchorage Oct. 3 to 9. The agenda included more than the council could accomplish, and some crab management issues and a vessel monitoring system discussion paper were postponed. The council moved on Steller sea lion issues Oct. 7, based on the advice of the Steller sea lion mitigation committee. The council’s motion, which was passed with the objection of National Marine Fisheries Service Alaska Region Administrator Jim Balsiger, noted Center of Independent Experts peer review findings that faulted the science behind fishing restrictions in the western Aleutian Islands to protect food sources for endangered Steller sea lions. The council motion made several recommendations to the National Marine Fisheries Service, or NMFS, asking the agency to update its management and science based on new information. NMFS is currently engaged in an appeal of a lawsuit brought by the State of Alaska and the fishing industry over the 2010 Steller sea lion biological opinion, and in the midst preparing a court-ordered environmental impact statement, or EIS, regarding the sea lion issues. On Oct. 8, the plantiffs in that lawsuit - the state of Alaska and fishing industry representatives - filed the CIE opinions with the Alaska U.S. District Court and stated the peer review would be part of the EIS decision process. The biological opinion and fishing closures were upheld by Judge Timothy Burgess, but he found that NMFS violated the National Environmental Policy Act by not preparing a full EIS to support the action and ordered one to be prepared. The council’s recommendations asked NMFS to change its management measures to reflect the CIE opinions before the 2013 fishery starts, expedite completion of the environmental impact statement currently in the works, and prepare a supplemental biological opinion that incorporates the new science. The motion was largely based on the work of the mitigation committee, which made similar recommendations from a nearly-consensus status. The council also weighed in on the EIS scoping process, suggesting certain alternatives for that process, including looking farther out geographically than just the central and western Aleutians. The council’s motion said the CIE reviewers thought the 2010 biological opinion was not based on scientific evidence, and that many of the conclusions and actions taken from the opinion were not support by science. That biological opinion was the basis for management that shut down Pacific cod and Atka mackerel fisheries to protect the Steller sea lion population. During a presentation to the council before a decision was made, NMFS said it was proceeding with the court-ordered timeline for the EIS and did not intend to make other changes before that process was finished. The current timeline calls for the EIS to be completed by March 2014. A decision would likely be finished by February of that year. There might be enough work done to discuss an emergency rule by October 2013.   Gulf of Alaska rationalization The council also discussed creating tools to better manage prohibited species catch in the central Gulf of Alaska trawl fleet. Representatives of that fleet, including Brent Paine, came to the council asking for a rationalization, or catch share, program that would allocate the harvest and the prohibited species catch among vessels, cooperatives or other entities. “You guys have the power to do this, and we ask you to do it,” Paine said. The council also heard from those in other fisheries who wanted the council to consider the protections they would need to avoid hurting their fleets in an effort to rationalize the central gulf trawlers. Terry Haines said he wanted to see the process enhance the Kodiak economy, not hurt it. “I think that we have a culture and a community that’s worth preserving and saving,” Haines said. The council asked for the public to come forward with ways to institute a catch share program, and creative management tools, when the issue is back before the council.   Vessel replacement programs The council also moved forward with three vessel replacement programs Oct. 7. The council took final action on a licensing change for Bering Sea freezer longline vessels, unanimously recommending that those vessels be allowed to build longer replacements. Under the recommended program, the vessels can be replaced or rebuilt with larger freezer longlines that have different processing capacities. The new vessels can be as long as 220 feet. They’ll likely be more efficient in addition to safer, and could have a better ability to reduce bycatch, as well. The council heard from the Freezer Longline Coalition Executive Director Kenny Down on the need for replacements, as well as from the U.S. Coast Guard and the National Institute on Occupational Safety and Health. All stated a need for safer vessels. Many of the Bering Sea vessels also operate in the Gulf of Alaska, where other freezer longliners are licensed to operate only in that region, and will not be eligible for the replacement program. To protect the Gulf-only vessels not upgrading their boats, the Bering Sea vessels, which are part of a voluntary cooperative, are working towards an agreement with those vessels, Down said. The fleet also includes some pot cod licenses. Those will have to choose to upgrade the boat and give up the pot cod license, or retain the license without upgrading past their current length limit. The council also directed staff to bring forward an analysis on a replacement program for the Amendment 80 fleet in the Bering Sea. The Amendment 80 fleet are groundfish trawl catcher-processors. The analysis will consider a status quo option, as well as an annual or one-time election to allow American Fisheries Act (pollock fleet) catcher-processors to replace Amendment 80 vessels, with the condition that the replacement vessels are subject to most AFA sideboards and other Amendment 80 regulations.   Crab stock assessments Council Plan Coordinator Diana Stram also updated the council on crab stock status. Stram said that Bering Sea tanner crab, which is closed for the third straight year, is no longer considered to be in a rebuilding status. Changes to the tanner crab model, approved by the council Statistical and Scientific Committee, alter the recruitment aspect of the model to consider a different base time frame. As a result, the stock is concerned to be at an acceptable biomass, and not working towards rebuilding to a higher level. The state of Alaska’s Department of Fish and Game recently announced the total allowable catch, or TAC, for several crab fisheries. The TAC is set by the state of Alaska, after it is provided with an overfishing limit and acceptable biological catch from federal scientists and regulators. For Bristol Bay red king crab, the TAC is holding steady at 7.853 million pounds, the same as last year’s quota. Just more than 7 million is for the individual fishing quota, or IFQ, program, while the Community Development Quota, or CDQ, portion of the TAC is 785,300 pounds. St. Matthew’s blue king crab has a TAC of 2.028 million pounds, down slightly from 2.36 million pounds in 2011-12. IFQ holders can take 1.47 million pounds of that, with the remaining 163,000 pounds going to CDQ groups. The snow crab TAC was set at 66.3 million pounds, down 25 percent from last year. The department announced the quota Oct. 5. IFQ holders will be able to harvest 59.7 million pounds, while CDQ programs will take the remaining 6.63 million pounds. Portions of the snow crab fishery will be closed to protect the Pribilof blue king crab stock. The department announced Oct. 2 that the Bering Sea tanner crab fishery will again be closed because the estimate of mature female tanner crab biomass is below the harvest strategy threshold. That fishery was declared overfished in 2010, and closed in 2011.

Cook Inlet issues set to dominate work session

Agenda changes, chinook research, and stock of concern statuses are up for discussion at the state of Alaska’s Board of Fisheries work session Oct. 9 and 10 in Anchorage. The board has 21 agenda change requests, or ACRs, to consider, ranging from gear changes in salmon fisheries to a new herring designation. Several of the agenda change requests ask the board to consider various Cook Inlet issues, which are not scheduled to come up under the regular, three-year meeting cycle until 2014. Kenai River Sportfishing Association, or KRSA, has said it would like to see all Kenai River king salmon issues considered, and submitted one of the proposals, but several other Cook Inlet groups offered only partial support for the taking up the controversial Cook Inlet issues out of cycle. The Alaska Department of Fish and Game submitted one of the proposals, which would allow the board to consider amending the Kenai River late-run and Kenai and Kasilof River early-run management plans to reflect new escapement goals for the 2013 season based on the new sonar counters. The department prepared comments on the other ACRs, but did not offer explicit support for taking up other Cook Inlet issues. KRSA Executive Director Ricky Gease said the department’s comments were neutral at best. “The Alaska Department of Fish and Game appears to be recommending against a full hearing of the Kenai River king salmon issues by the Alaska Board of Fisheries before the 2013 season. Such a decision is surprising, given the aftermath of the 2012 Upper Cook Inlet salmon season…” Gease said in a statement. Senior Assistant Attorney General Lance Nelson offered the Department of Law’s opinion that two of the Cook Inlet suggestions were not actually ACRs. According to Nelson, an effort to declare early-run Kenai River kings a stock of concern is not a regulatory change, and would have to come from the board in consultation with ADFG, rather than the public. A gear change for eastside Cook Inlet set gillnet permit holders could be beyond the scope of the board, according to the department, because it discusses fish traps, which are prohibited by state statute. That gear change was proposed by Brent Johnson. Kenai fisherman Brian Gabriel wrote in support of amending that to allow fishermen to submit their ideas of gear for testing. That could enable the fishery to find ways to harvest sockeye salmon without impacting kings, Gabriel said. A group of eastside setnetters submitted comments opposing out-of-cycle consideration of Cook Inlet issues beyond ACR 17, the proposal to consider some Kenai-area escapement goals. KRSA asked for a modification of the Kenai River late-run king salmon management plan, which was opposed in comments by United Fishermen of Alaska and the Kenai Peninsula Fishermen’s Association, or KPFA, which represents setnetters. United Cook Inlet Drift Association opposed most of the changes for that area, according to comments from Executive Director Roland Maw. The drift association did agree with the premise behind further work to determine what personal-use fishery users were not submitting their permit information to the state at the end of the season, as proposed in ACR 18. Pacific herring are also up for discussion. Subsistence user Aaron Bean submitted an ACR for the species to be designated as a forage fish under the Forage Fish Management Plan. That proposal would close commercial herring fisheries statewide, according to comments from Fish and Game. Herring were not included in the original forage plan, which mirrored a federal plan that also excluded them. The herring fishery is also a long-time commercial fishery, according to the department. In comments on behalf of the Southeast Herring Conservation Alliance, Executive Director Steven Reifenstuhl asked the board to reject the request. Herring fisheries are healthy overall, and increasing in biomass, Reifenstuhl said. The Alaska Federation of Natives and Sitka Tribe of Alaska both submitted comments in support of the proposal, as did other individuals. Fishing groups, including United Fishermen of Alaska and Southeast Alaska Fishermen’s Association submitted comments opposing the designation. Nelson’s department of law opinion said several of the proposals are not true ACRs because they address matters that could be considered on the agenda as-is. Those requests address gear for the Lower Yukon salmon fisheries, salmon seine gear measurements in the Alaska Peninsula area, changing the definition of salmon stream terminus statewide, and the commissioner’s salmon management authority in-season, each of which could be addressed at a meeting scheduled for this year. The opinion suggests that if the board wants to consider the ideas in those proposals, it could do so by generating its own proposals. The date for public proposals has passed. A change to the timing of when Pacific cod issues are discussed also would not be an agenda change because it isn’t a regulatory issue, but could be considered during the work session as miscellaneous business, according to Nelson’s opinion. The Board will also hear from the Department of Fish and Game regarding stock of concern statuses in the fisheries it is set to discuss at its meetings this year. In a Sept. 24 memo, the department recommended designating Swanson Lagoon sockeye salmon, in the Alaska Peninsula/Aleutian Islands area, as a stock of concern. The Swanson Lagoon Section was closed this summer to protect the stock. For the Arctic-Yukon-Kuskokwim region, the department recommended that four salmon stocks retain their status. Those are Nome chum salmon, Golovin and Elim chum salmon, Shatoolik and Unalakleet king salmon, and Yukon River king salmon. The department did not recommend any additional designations in that region. In Bristol Bay, the department is recommending removing stock of concern status for Kvichak River sockeye salmon. The board will also discuss escapement goals for those fisheries. A presentation on the Western Alaska Salmon Stock Identification Project is scheduled for Oct. 11.

Upgrades coming for Alaska health care facilities

Around Alaska, new health care projects are at every stage of construction, from breaking ground to opening doors. Health-related construction was projected to cost about $325 million in 2012, up seven percent compared to 2011, according to data from the University of Alaska Anchorage’s Institute of Social and Economic Research. That puts the healthcare industry in the top five construction spenders this year. Among the largest projects statewide are a new facility in Fairbanks owned by the Tanana Chiefs Conference, a remodel of the maternity center at The Children’s Hospital at Providence, and a new hospital in Nome. Maternity Center Clinical Manager Cathy Heckenlively said the new facilities at Providence will help the hospital keep pace with population growth and demand for services. “We see the increase today,” she said. That project is one of the largest, with a $150 million price tag and multiple construction phases. There’s already a need for more space and more services, Heckenlively said. “I know it’s going to be busy,” she said. The center serves statewide needs as the only hospital in the state with a level three Newborn Intensive Care Unit, or NICU, and specialists who work in antepartum care. Antepartum care, which will be provided through the 14-bed Prenatal Unit, serves high-risk pregnancies. Women can spend 100 days or more waiting to give birth at Providence. The Prenatal Unit will free up space in the Mother-Baby Unit, where mothers go after giving birth. The 31-bed Mother-Baby Unit opened Oct. 6, the first part of the new center to open. The Labor and Delivery unit, scheduled to open in 2014, is also undergoing construction. That unit is open during the work, with closures and construction shifting around operational areas, Heckenlively said. Construction started in 2011. For now, staffing will remain about the same. Most of the physicians are independent, although Providence has some specialists on its staff. Heckenlively said new support roles might be needed, and as the number of patients increase, there might be a need for more nurses or other staff. In Nome, the $90-million Norton Sound Regional Hospital is expected to create about 100 more jobs than the old hospital. The hospital will move in phases this fall, with administration transitioning first, and other departments following, said Public Relations Specialist Monica Watchman. The new facility, which will open its doors to patients in the new year, is about triple the size of the old building, Watchman said. It serves 15 Native villages in the Bering Sea region in addition to the Nome area. The Norton Sound Health Corp. started working toward the hospital in the 1990s, starting with an Indian Health Services application for construction priority, Watchman said.   Funding growth The work has been funded by a variety of sources, including private donors and federal funds. Several projects received grants or loans from the American Recovery and Reinvestment Act, including the Sunshine Community Health Center’s new clinic in Willow, the Valley Native Primary Care Center in Wasilla, and the Norton Sound Regional Hospital in Nome. The Nome hospital was one of several projects to receive funding assistance from the Denali Commission over the past decade. The commission’s health facilities program provides funds for planning, designing, constructing and equipping health facilities around the state. Those projects usually require a local cost-share. The Rasmuson Foundation has contributed about $10 million in cost-sharing to Denali Commission projects since 2002, as well as other grants to healthcare projects. “I think really our motivation has always been improving the quality of life and I think health care access is a huge part of that,” said Senior Program Officer Sammye Pokryfki. Rasmuson grants go to a variety of projects. “A lot of the grant making that we’ve done in the health arena is for construction of facilities, but there’s a significant amount of it that’s for equipment or renovations of existing facilities,” said Communications Manager Cassandra Stalzar. So far, the foundation has awarded about $2.9 million to health projects for 2012, but that number could still grow. The recipients include the Anchorage Neighborhood Health Center, for equipment, and the Kodiak Area Native Association’s Alutiiq Health Clinic, for dental clinic upgrades. The foundation has been giving healthcare grants for more than just 10 years, though. The first project with a health tag in the foundation’s database was a grant to the Alaska Crippled Children’s Association Treatment Center in 1962, just seven years after the foundation became operational, said Stalzar.   Design components Each new healthcare facility has involved drawing in a variety of stakeholders to come up with a design. The new Chief Andrew Isaac Health Care Center in Fairbanks, owned by Tanana Chiefs Conference, is the first new building the Tanana Chiefs Conference, or TCC, was involved in designing from the start. “We focused on creating a space of wellness and healing,” said architect Tracy Vanairsdale, from Bettisworth North, one of the firms working on the project. The 95,000 square-foot building, which had a budget of $44 million, has significant cultural and environmental components. Vanairsdale said incorporating all the different aspects required regular meetings looking at medical planning, cultural design and sustainability. “It was pretty methodical and organized and integrated,” Vanairsdale said. The building has received initial approval for Leadership in Energy and Environmental Design, or LEED, gold certification, although the final determination from the United States Green Building Council won’t come until the building is operational. Ventilation, energy efficiency and water systems are part of the criteria for that certification. Vanairsdale said the building also includes symbolic or recognizable cultural components. Mature trees were preserved on the building site to ensure harmony with the land, and traditional art forms, like beading patterns, were incorporated throughout the building. The facility was designed with room for future growth, Vanairsdale said. A second floor could be built above much of the first floor, and some site prep work was done beyond the building’s footprint. The building’s mechanical, vertical circulation and other systems can also handle increased use if more space is added. In total, there’s room for about 15,000 to 20,000 square feet of additional space. Vanairsdale said the expansions are part of the building’s long-term plan. “They do forsee (the growth),” Vanairsdale said. Providence’s Maternity Center also used a new design process. Patients, physicians and nurses were involved in determining what made for the most comfortable setting and safe, efficient workflows, Heckenlively said. Like the Fairbanks facility, the project is on-track for LEED certification. The design of the NICU represents a paradigm shift, Heckenlively said. In the past, babies in the NICU might be in a separate area from their moms to receive the highest level of care. The new unit will contain rooms that have a room for each baby and family, with all the technological needs as well as private family space. “They do require a space where they can just kind of go and debrief and relax a little bit,” Heckenlively said. The Mother-Baby Unit is also meant to be more efficient. Three 10-room neighborhoods each share a common nursery, and a room with all the supplies a nurse might need. Dividing the unit into neighborhoods means nurses don’t have to go as far to find what a patient needs, Heckenlively said. The Providence project also honed in on smaller details than just the design of each unit. White boards in each room in the Mother-Baby Unit have spaces for the details new moms said they most wanted to know, and are printed in multiple languages so that families know what they’re looking at. The Prental Unit includes gathering spaces so that families who are there for the long haul have something to do beyond sitting in their rooms. Families even had input on the furniture selection and placement, Heckenlively said. Other major projects popping up around the state include the Anchorage Neighborhood Health Center, which move to a new building in September, work at the Alaska Native Tribal Health Consortium, a new clinic in Kaltag, and work at the medical center in Wrangell.

9th Circuit stops work at Port MacKenzie; 200 workers idled

Work on the Port MacKenzie rail extension was stopped Oct. 1 by a panel of judges from the U.S. 9th Circuit Court of Appeals. A 2-1 decision granted an emergency motion for stay until a review is completed of the Surface Transportation Board’s November 2011 order allowing the project to move forward. The 32-mile rail extension would connect Houston and Port MacKenzie at a cost of about $272.5 million. Port MacKenzie is a deepwater port, with about 9,000 acres, or 14 square miles, of industrial staging and storage. Alaska Survival, Cook Inletkeeper and the Sierra Club filed the petition for review in January, and the emergency motion for stay Sept. 21. The Surface Transportation Board, a federal regulatory body for railroads, and U.S. government are respondents in that case, and the Alaska Railroad Corp., Matanuska-Susitna Borough, and the State of Alaska are listed as respondent-intervenors. According to the motion, the court finds a “serious question” regarding whether the Surface Transportation Board, or STB, complied with the National Environmental Policy Act, or NEPA, in determining the “purpose and need” of the project in the final environmental impact statement, or EIS. The Oct ruling states: “The court further finds that the balance of hardships tips sharply in petitioners’ favor, that petitioners are likely to suffer irreparable harm in the absence of a stay, and that a stay is in the public interest.” Oral argument for the case, which has now been expedited, is scheduled to begin Nov. 8 in San Francisco. Mat-Su Borough Public Affairs Director Patty Sullivan said the stay likely means the borough can’t proceed with a bid that was out for work on a third segment of the project. “We’re definitely disappointed,” Sullivan said. Sullivan said the borough is considering an appeal of the stay, but could also wait and argue the full case in November. Stopped work means a loss of about 200 jobs, about 70 on each of three different contracts. Those range from jobs out in the field, to associated office work. Work on three segments was planned for this fall: a section of rail at tidewater, one near the Parks Highway at Houston, and a segment running north from Ayrshire Avenue to just south of Papoose Twin Lakes. In total, the project is supposed to create about 3,000 construction jobs and 4,000 mining jobs. The project was scheduled for completion in 2016, but Sullivan said she didn’t know exactly how the stay will affect the project’s timing. Some right of way and permitting work can continue despite the stopped of on-the-ground efforts. The STB allowed the Alaska Railroad to construct and operate the rail extension from Port MacKenzie to Houston as long as it completed certain environmental mitigation measures and used the environmentally-preferable route. On Sept. 10, the U.S. Army Corps of Engineers issued a permit authorizing the railroad to fill 95.8 acres of wetlands as part of its effort to create the rail extension. Cook Inletkeeper Executive Director Bob Shavelson said the nonprofit is still considering appealing that decision as well. Much of the nonprofits’ concerns center around wetlands impacts. The nonprofits contend that the STB decision allowing the project to move forward violated NEPA and the statutes authorizing that body to waive certain requirements for some projects. The alleged NEPA violations were in the framing of the EIS for looking too heavily at the Railroad’s corporate objectives rather than a balance of corporate, governmental and public objectives, lack of evaluation of a project design without the road component, and an EIS that didn’t have enough ground-level studies. Judges Stephen Reinhardt and Kim Wardlaw wrote the majority opinion, with Carlos Bea dissenting. Reinhardt was appointed to the court by President Jimmy Carter in 1979. Wardlaw was appointed by President Bill Clinton in 1995, and Bea joined the court in 2003, an appointee by President George W. Bush. In his dissension, Bea said there is no “serious question” regarding NEPA compliance raised in the complaint, and that petitioners did not exhaust their ability to get a stay from the Surface Transportation Board, as is the usual protocol. The majority opinion said a federal rule means that requesting a stay from the STB is not a prerequisite for the court to issue one, and that the petitioners demonstrated that a stay from the STB would have been “impracticable.” Bea’s dissenting opinion counters that the petitioners did not submit evidence that getting a stay from the STB would have been “impracticable,” and had no grounds other than speculation. Bea’s opinion also asserts that the STB did consider the alternatives preferred by the nonprofits that they say were not fully considered as part of the EIS process. Shavelson said the stay bodes well for the November hearing. Sullivan, however, said that because the stay was issued by just three judges, the case could still fare well when considered by the full court.

Halibut fleet concerned about new observer plan

Another major concern for the commercial halibut fleet is the restructured Gulf of Alaska observer program on the agenda at the North Pacific Fishery Management Council October meeting. The National Marine Fisheries Service will outline the deployment plan for the program, which will include halibut boats for the first time in 2013. Most fishing vessels are required to carry observers onboard at least a portion of the time they’re at sea, although halibut vessels have not been part of the program. The restructured program will include boats less than 60 feet, which captures much of the halibut fleet, random placement of observers and improved data collection. The program, passed by the council in October 2010, is slated to be finalized this fall and implemented in January. According to the draft program presented to the council Observer Advisory Committee, which met Sept. 17 and 18 in Seattle, vessels will be selected and receive observation based on random selection from a pool of all vessels in that program. The updated program does not apply to the full-coverage or no-coverage vessels. The full-coverage fleet are those longer than 125 feet, mostly catcher processors and motherships that may process and discard fish while underway. Zero-coverage vessels are generally less than 40 feet, have small amounts of catch, or are fishing only in state Guideline Harvest Level fisheries where the federal government does not have jurisdiction. Although the Alaska Longline Fishermen's Association was supportive of extending the observer program to the halibut industry, Executive Director Linda Behnken said the proposed plan isn’t what they were hoping would be implemented. “So far, it looks like a program that’s not going to work well for our small boat fleet,” Behnken said. The Southeast Alaska longline fleet consists mostly of smaller boats, less than 60 feet long, often with just two or three people onboard. The relatively big boats might have four. Those boats represent most of the commercial halibut sector in Southeast. “The boats are small. There’s just not enough room for another person,” she said. According to the report from the Observer Advisory Committee, vessels that are too small to accommodate an additional body will be able to tell NMFS and receive an inspection to confirm that. Behnken said the program, as proposed by NMFS, would give every boat an equal chance of observation. That could actually decrease monitoring on the larger pollock and groundfish trawl boats, where chinook salmon and halibut bycatch is a concern, she said. “A big part of the reason for doing this whole upgrade to the observer program was to increase coverage and accountability for bycatch,” Behnken said. The fleet was willing to pay for the observer program — 1.25 percent of their landings — in part because it wanted to see better accounting for bycatch, and thought the electronic monitoring option would help balance out the space concerns. Because the fleet takes high value species such as halibut and sablefish, it will be funding the majority of the new observer program. Electronic monitoring was developed as a way to have a camera record every fish that comes on board, Behnken said. As currently drafted, the electronic monitoring program would be separate from the observer program, and a camera would likely not replace a human observer. The advisory committee is recommending that the council make several suggestions to NMFS about the observer program, but whether or not the council will take action is unknown. Behnken said she thought it might take a directive from the State of Alaska to change the program. Department of Fish and Game Commissioner Cora Campbell is a member of the council, which has six of its 11 members from Alaska.

Steller sea lions and crab to be discussed

The North Pacific Fishery Management Council, which meets Oct. 3-9 in Anchorage, is poised to act on a vessel replacement plan, as well as discuss Steller sea lions and the Bering Sea and Aleutian Islands crab and groundfish fisheries. Halibut management and observation will also be on the table. The council is slated for final action on a vessel replacement program for freezer longline licenses authorized for Pacific cod in the Bering Sea and Aleutian Islands. The preliminary preferred action, which is supported by the Freezer Longline Coalition, would allow catcher-processor vessels to have a maximum length overall of up to 220 feet long. The licenses that also have a pot Pacific cod endorsement would have to surrender that endorsement in order to take advantage of the new size limits, and would have 36 months to make a decision one way or the other. According to the council’s regulatory impact review, 37 licenses could be affected by the change, most for vessels currently between 124 and 174 feet. The replacement program is primarily meant to address safety, said Freezer Longline Coalition Executive Director Kenny Down. The larger sizes are meant to make new vessels financially feasible. “The current size limitations don’t allow you to build a vessel that’s efficient enough to cover the cost of construction, so it’s a fleet that’s going to continue to age without replacement without action by council,” Down said. The other alternatives allow new vessels as long as 150 feet, with certain conditions. Down said the increased boat size could increase revenue by about 20 percent for a freezer longliner. The financial benefit would come largely from improved processing capabilities on the vessels, Down said. Currently, various fish components can’t be processed onboard. Down said that skate wings, which are sold to retail markets in Asia and domestically, and various cod parts – like livers, heads and stomachs – are potential revenue sources on new vessels. The target species for the freezer longliners are Pacific cod, sablefish and Greeland turbot, but vessels also retain incidental catch of skates, rockfish, arrowtooth flounder and pollock. Larger boats or more powerful engines won’t be able to catch more fish, because the longline vessels catch fish by hook, Down said. The economic benefits are needed to outweigh the cost of vessel replacement, which is substantial. Vessel loans are typically 10 to 15 years, Down said. “The payback on building a new vessel is very, very long term,” Down said. The Coast Guard also supports the replacement plan. Newer vessels will make the fleet safer. Older vessels tend to have more fatal injuries associated with them, Down said, and the current freezer longliners are about 39 years old, on average. Shipyards in Alaska and Washington could also benefit if new boats are purchased. “I think the shipyards in those areas are very excited about the prospects of the replacement of the freezer longline fleet,” Down said. Steller sea lion review The council is also scheduled to talk about Steller sea lions. A 2010 National Marine Fisheries Service, or NMFS, biological opinion concluded that removals of Pacific cod and Atka mackerel in the western Aleutian Islands were likely to jeopardize food sources for endangered Steller sea lions and adversely modify their critical habitat. From that conclusion, NMFS imposed wide-ranging closures to all cod and mackerel fishing in an area half the size of Texas in the farthest west Aleutians, in addition to other restrictions. The State of Alaska and a coalition of fishing groups sued to overturn the biological opinion, of BiOp, and closures. Alaska U.S. District Judge Timothy Burgess allowed the rule to stand but ordered NMFS to prepare an environmental impact statement to support the action, requiring it to be complete in two years and demanding quarterly progress reports. The EIS discussion by the council will likely center on the recently released independent review of the biological opinion. NMFS contracted with the Center for Independent Experts to analyze the BiOp, with all three reviewers concluding the study was based on flawed science. How the CIE opinion will trickle into management is still unknown. The council is set to talk about the approach to the EIS, which was ordered by a judge. Larry Cotter, from the council Steller sea lion mitigation committee, said the EIS is supposed to look at all available information, which could include the new CIE opinions. “I think it’s going to be very interesting to see what the EIS concludes,” Cotter said. He said there are several possibilities for how the EIS will play out. The judge ordering the EIS only mandated that the assessment consider the Aleutians and the Bering Sea, but didn’t mention the Gulf of Alaska. The EIS now could conclude that the Gulf needs to be considered as well. “And it may be that they conclude that the biological opinion erred, and that jeopardy and adverse modification do not exist, and then we’ll see what happens,” Cotter said. If the EIS concludes that the biological opinion erred, Cotter said it’s hard to know what will happen. If the opinion is struck down, it is unknown what would replace it or how long that would take. Burgess allowed the current management to remain. Beyond the EIS, any direct action resulting from the CIE study is up in the air. “The big question is whether the NMFS will do anything, and if so, what are they going to do,” Cotter said. The council could advise NMFS to dismantle the rule and develop a new biological opinion, just discuss the EIS process, or take a different course of action entirely, Cotter said. “What will be frustrating is if nothing happens,” Cotter said. In a letter to Jane Lubchenco, head of the National Oceanic and Atmospheric Administration, Down asked NMFS to withdraw the biological opinion. But Down said he doesn’t expect any direction action from the council based on the independent review. The Freezer Longline Coalition, which had prime cod grounds with a valuable export market closed by the rule, was among the groups who sued NMFS. The case was appealed to the 9th Circuit Court. Crab quota to be adopted Crab and groundfish management and research for the Bering Sea and Aleutian Islands will also be part of the meeting. Bering Sea snow crab and Bristol Bay king crab quotas are due to be announced Oct. 1, and approved as part of the meeting. On the groundfish side, the council will adopt proposed catch specifications. The council will consider initial reviews of proposed regulatory amendments for management of the Bering Sea and Aleutian Islands king and tanner crabs. Council documents discuss changing certain time requirements for communities’ right of first refusal for processor quota shares, as well as defining active participation requirements for acquisition and use of owner shares. The council will also look at regulations for crab economic data reporting, review the tanner crab rebuilding plan, and other related issues. Research on how crab and fish populations may expand northward into subarctic regions has been under way for several years, with some preliminary results showing that the species present are not commercially viable. The council will review a discussion paper on those efforts, which also looks at the potential of opening the area to bottom-trawling.

Final action scheduled for charter-commercial halibut split

The North Pacific Fishery Management Council will consider several alternatives for Pacific halibut allocations at its October meeting. The council meets Oct. 3 to 9 in Anchorage, and has scheduled two full days for halibut issues. The council is slated to take final action on the halibut catch sharing plan for Southeast, or Area 2C, and Southcentral, or Area 3A. The council is tasked with finding a way to split a combined catch limit, set by the International Pacific Halibut Commission, or IPHC, between commercial and charter fishermen. The council must decide between four potential regulatory amendments that would create a catch sharing plan, or CSP, with sector allocations dependent on halibut abundance. Each alternative before the council would allocate a certain percentage of the halibut harvest to the charter sector. In Area 2C, the charter sector could receive between 15.1 and 21.8 percent of the catch. For Area 3A, the allocation could range from 14 percent to 20.7 percent. In each scenario, the lowest percent would be at times of high abundance, and the highest percent at the lowest abundance. Allocations are based on the combined catch limit. In Area 2C, less than 5 million pounds is the lowest, while a range of 5 to 9 million pounds is the middle abundance tier, and the greatest is a total catch greater than 9 million pounds. In Area 3A, the tiers are: less than 10 million pounds, between 10 and 20 million pounds, and 20 million pounds or greater. But according letter from Rex Murphy, of the Alaska Charter Association, the charter industry would see a reduction in allocation at many of the step-ups in abundance. Instead, the association suggests an approach that would eliminate those “jinks," using an equation that creates allocations that float with abundance. The council’s alternatives are based on the halibut catch sharing plan, or CSP, passed in 2008, which was set to take effect in 2012 until a flood of charter opposition last fall forced the council to reconsider the allocations. Of the allocation alternatives now under consideration, the original CSP would give the charter sector the lowest share of the catch, with a range of 14 to 15.4 percent for Area 3A, and 15.1 to 17.3 for Area 2C. The council’s preliminary preferred alternative is alternative three. That modifies the 2008 plan by eliminating a 3.5 percent buffer range around the allocations, and adjusting the allocations based on how harvest numbers changed when converted from a statewide harvest survey to logbooks data. Under the original CSP, if the charter sector was projected to be in either 3.5 percent above or below its target allocation, different management measures come into play such as bag or size limits. The matrix of charter options has since been discarded in favor of an annual selection of management measures for the charter sector. The charter sector would receive different allocations in Area 2C and 3A. Ricky Gease, from the Kenai River Sportfishing Association, said Kenai guides don’t support that option. Portions of the charter industry, including the Kenai organization, would prefer alternative five, which would make the greatest increase to the charter allocation. Like alternative three, it would eliminate the 3.5 percent target range and adjust allocations to reflect the harvest survey to logbook data difference. “We’re saying, we want alternative five to allow us the greatest degree of flexibility in management going forward,” said Heath Hilyard, from the Southeast Alaska Guides Organization. The ACA in Southcentral isn’t in favor of any of the options. “There is no need to rush to final action a second time on a plan with so many outstanding issues,” Murphy wrote in ACA’s comments. The allocations are based on halibut abundance, and were developed from the council’s 2008 preferred alternative. That alternative used the charter sector’s past percent of the harvest to determine the formula for its future share, with different years factoring in depending on different levels of abundance. The choice of which years to use is contentious. The Charter sector has grown over the past two decades. The no-action alternative sets the allocation based on 1995-1999 data; the other possibilities would set the levels using a formula based on the 2001-2005 harvest for times of low abundance. In times of higher abundance, the harvest for Area 2C would be based on 2005, while Area 3A would be based on 1995-1999 levels. For the charter sector, returning to past harvest levels is seen as a cut. But for the commercial side, it’s a way to preserve the investments they made in quota in the 1990s, said Linda Behnken from the Alaska Longline Fishermen’s Association. In 1995, the charter sector was taking 9 percent of the combined charter and commercial catch in area 2C, Behnken said. In 3A, they were taking 12 percent. “What’s on the table now could increase those percentages as high as 20 percent.” Behnken said for a long time, allocations were determined by deducting the subsistence, sport and charter needs from the IPHC’s total amount of halibut. But a growing charter sector meant that commercial operators had a reduction in their allocation, Behnken said. “When people have purchased quota in the commercial sector for 30 to 36 dollars a pound, to have that just reallocated away when you’re still making payments, you’ve got your house as collateral, it’s pretty hard for people to take,” Behnken said. According to the council’s analysis of the various alternatives, the price of halibut fluctuates only minimally based on harvest levels, so commercial vessels cannot expect to make up for decreased fish with higher prices. “An allocation to the charter sector that decreases the commercial allocation is expected to result in a small increase in ex-vessel price, but an overall decline in the net revenue of commercial harvesters,” according to the analysis. In his comments on behalf of ACA, Murphy suggested that the council reconsider its options, and look at combining the entire recreational sector. “The ACA suggests that a wiser approach might be to revise the CSP to include the entire recreational sector. Taking this route would solve the issues with guided and unguided accountability and sector separation, while allowing the time needed to analyze a permanent allocation transfer mechanism and sector accountability,” Murphy wrote. The alternatives also propose different ways to reconcile years where the target allocation is exceeded differently. Under the first two management scenarios, no action would be taken in such a situation. In the latter three, the council would provide IPHC an annual analysis and management recommendation for the upcoming season. Also on the table as part of the alternatives is the Guided Angler Fish program, or GAF. The GAF program, as discussed at the last council meeting, would allow IFQ shareholders to lease their quota to charter operators. The leasors would offer up a certain weight, which would then be converted into fish based on prior year’s size data, and would be limited to leasing 10 percent of IFQ holdings or 1,500 pounds in Area 2C, and 15 percent of 1,500 pounds in Unit 3A, whichever number is greater. Operators would have certain marking and reporting requirements for fish caught and retained under the GAF program. Behnken said the Halibut Coalition sees it as a fair way for charter operators to increase a client’s ability to catch fish. “The GAF allows them to lease quota from the commercial fleet,” Behnken said. She said that route levels the playing field. Gease said KRSA doesn’t support the program as a long-terms solution, but sees it as as a temporary measure. In the long-term, Kenai guides want to see a sector-wide program, he said. Hilyard said Southeast charter operators see the utility of the program, but don’t think the current iteration is ideal. The GAF, Hilyard said, is a viable option for some operators, but it’s unfair across the playing field, and could lead to confusion for clients when some operators can take them out for more fish and others can’t. Hilyard said charter organizations expect that the GAF will be included, but want to see it revised in the future. Ideally, they’re looking for a statement from council that its only temporary, he said. The council’s April motion, as amended in June, calls for a complete review of the GAF program within five years, meant to look at the economic effects for both sectors. Hilyard said operators would rather see allocations purchased on behalf of the entire charter industry, and applying to the whole group, perhaps done by area. The industry is working on a proposal for such an effort, in hopes that the council would consider it in the future. “The goal is to create a funding mechanism that allows a common pool approach,” Hilyard said.

A bunch of variables must be sorted out for gas project

VALDEZ — The variables involved in selling Alaska’s natural gas are numerous, but from the North Slope to Cook Inlet and Prince William Sound alike, support for some sort of project is widespread. The proposals vary greatly: a large pipeline, a small pipeline, gas destined for the Lower 48, liquefied natural gas, or LNG, exports to Asia, floating liquefaction, and several potential locations for tidewater terminal in Prince William Sound or Cook Inlet, among other ideas. And the wide-range of possibilities could be Alaska’s ticket to marketing its gas, said Sempra Energy’s Octavio Simoes at the Alaska LNG Summit in Valdez Sept. 13 and 14. Approaching it with a flexible mindset and a blank sheet might make it easier to see something come to fruition, he said. “I think the key is, the project is viable and should be here,” he said. Historically, the range of possibilities is unsurprising. Some form of natural gas production has been discussed for 47 years, said Alaska Gasline Port Authority General Counsel Bill Walker. Now, the state and other entities are working on a variety of efforts. The three North Slope producers have agreed to align on a project by Sept. 30, a deadline agreement reached between the companies and Gov. Sean Parnell. But once chosen, any project will have to navigate the regulatory process. For now, part of that process is on hold at the federal level, said Larry Persily, federal coordinator for the Alaska Natural Gas Transportation Projects, in a presentation at the Alaska Oil and Gas Congress Sept. 18. There are about a dozen applications for export licenses before the Department of Energy, but all are on hold until a study commissioned by the department is released later this year, he said. That study is one of two the department commissioned to help make decisions about LNG exports. The first, and smaller, said that exports would have a nominal impact on domestic natural gas prices. Persily said that forthcoming study doesn’t look at Alaska, and past opinions have considered Alaska LNG exports a separate issue from Lower 48 natural gas, but that a project could still get caught up in the political discussion about exporting American LNG. Persily said the export license is one of the first steps for most projects, in part because it’s a cheaper application than the Federal Energy Regulatory Commission, or FERC, process. “Project developers apply for that export license long before they go to FERC,” Persily said. When the federal government looks at whether or not to grant an application to an Alaskan LNG project, it will likely consider several decades of law and opinions. Among those are a 1938 act that assumes exports are OK unless proven otherwise, a 1976 act that says Alaska North Slope natural gas can’t go anywhere other than Canada and Mexico unless the president says otherwise, a 1988 opinion by then-President Ronald Reagan asserting that LNG exports from Alaska to foreign markets were fine, and more recent laws related to the proposed pipeline from the North Slope to Alberta. Persily said that his personal opinion is that the Department of Energy will eventually allow the export licenses, and then leave it up to the market – and the rest of the regulatory process – to determine which projects succeed. For now, no Alaska project has completed the process, although the route of the All-Alaska line was once permitted by the Yukon Pacific Corp. Before permitting is finished, one project focus needs to be determined, said Rep. Don Young via a video address at the Valdez event. “Do it collectively, or we’re going to be talking about it the next 20 years,” Young said. The Alaska Gas Pipeline Office was created in 2007 and its purpose is to streamline the state regulatory process and coordinate state-backed efforts. Currently, the state’s efforts are two-fold: a major pipeline from the North Slop to Alberta that has essentially been shelved for lack of demand in the Lower 48, and a smaller in-state natural gas bullet line. The Alaska Gasline Development Authority has proposed the bullet line, while the larger effort stems from 2007 efforts by then-Gov. Sarah Palin. Palin and the legislature produced the Alaska Gasline Inducement Act, or AGIA, an agreement under which the state currently operates. TransCanada was granted an alteration under AGIA this summer to pursue the LNG export project over the Alberta pipeline. There’s also an effort, created by voter initiative, to aggregate demand for natural gas around the state, called the Alaska Natural Gas Development Authority. That’s mostly suspended for now, said Kurt Gibson of the Alaska Gas Pipeline Office. “This project has a history of false starts,” Gibson said. The state-backed efforts aren’t the only projects on the table. The port authority, an entity supported by the municipal governments in Valdez and Fairbanks, has proposed an All-Alaska natural gas pipeline from Prudhoe Bay to Valdez, with off-take points for in-state gas and a terminal for LNG exports to Asia. And former Gov. Frank Murkowski has been advocating for the state to revisit the contract he helped create in 2006, and edit it to send gas to Asia, rather than the Lower 48. “This was basically to un-strand our gas reserves on the North Slope,” Murkowski said at a Sept. 17 Chamber of Commerce event in Anchorage. That contract called for 20 percent state equity in the pipeline, and had preliminary approval from producers although it was never finalized by the legislature. Murkowsi said he thought that in general terms, it would still be acceptable to the producers. But any project will face significant permitting process before work begins. The port authority’s All-Alaska line has already begun that process, with an application for an LNG export license to non-free-countries. In Valdez, lawyer Craig Richards said the state’s best option is to build the line itself. According to Richards, producers would likely be amenable – even required by their leases – to sell gas through such a line if they had a reasonable expectation of profit. Richards said that the companies producing on the North Slope want fiscal certainty, but the extent to which they want it would be unwise for the state to give up, a key reason why the state should proceed on its own. Walker agreed that the state needs to stop waiting for producers to carry out a project. “They’re going to make a decision that’s in their best interest, and there’s nothing wrong with that,” Walker said. “We are fortunate to have large companies on the North Slope and that’s great. But for them to make a decision about when this goes to market and where it goes to market, and which market is not working.” State-owned and backed or producer-driven aren’t the only options. The possibility for a consumer-funded project also exists. Entities in Japan have been funding LNG projects elsewhere in the world, which might be a possibility for Alaska.

Lawmakers, stakeholders pitch Alaska LNG

VALDEZ — Politicians, lawyers and oil and gas industry representatives agreed on one key point at the Alaska LNG Summit in Valdez Sept. 13 and 14: the time has come for Alaska to develop its North Slope natural gas. “We can continue with the 47-year plan, because that’s how long since the first lease on the North Slope,” said Bill Walker, general counsel for the Alaska Gasline Port Authority. “Nothing has changed.” The summit, which was organized by the city of Valdez, and sponsored by the Alaska Gasline Port Authority and Excelerate Energy, discussed the possibility of exporting liquefied natural gas from Alaska to Asia. Various configurations of North Slope natural gas transportation plans have been on the table for several decades, but none has moved to the building stage. Now, different stakeholders have different visions of a natural gas pipeline, but support is growing for a project that exports LNG to Asia. “As we look to Asia, to Japan, there is considerable opportunity for us,” said Sen. Lisa Murkowski in an address via video. Octavio Simoes, from Sempra LNG, said the project is viable, but will face challenges. Alaska’s advantages in selling its natural gas include its cold climate, because natural gas needs to be transported at low temperatures, legal institutions, proximity to Asian markets, and existing deepwater ports, Simoes said. Simoes said that economics can actually give Alaska an advantage. “Alaska can be a price-taker,” he said, meaning that a project in the state can figure out a competitive cost to sell the gas at, and then take a profit after calculating all the costs. Gas to the Asian market is increasingly sold at spot prices, rather than the traditional oil-linked prices. But Simoes said the state has some disadvantages, too. Those include a lack of clear direction within the state about what do with natural gas, mixed interests amongst gas producers, federal issues and no clear mechanism to ensure a 20-year supply. The state’s lack of forward action doesn’t help, Simoes said. “Some of the credibility of Alaska has been damaged in the world market,” he said. And Alaska faces increasing global competition as other projects work through the regulatory process. In British Columbia, five different LNG export projects, of various sizes, are in the works. Those would come online as soon as 2016, 2020, and beyond, similar to the window that Alaska could develop in. “The timeframe for Alaska LNG in my opinion is the 2021-2025 timeframe,” Simoes said. University of Alaska Fairbanks Vice Chancellor Mike Myers said there’s no question about whether or not the North Slope has the gas for a development. Advancements are making it increasingly more possible to develop more and more natural gas, he said. “Environmental change is occurring on a great scale,” Myers said. “Technological change is occurring. … It’s an exciting time.” Myers said Alaska’s North Slope has a substantial amount of natural gas. “The scale of the resources is immense,” he said. Myers also dispelled the idea that the North Slope is a mature basin. The area has three wells per 1,000 square miles, which is less dense than the state of Wyoming, he said. In fact, the North Slope has among the most productive source rock in the world, he said. Myers said two of the main costs will be treating the gas, and mitigating the oil production lost when gas isn’t being reinjected. The federal tax structure also plays a role in determining whether the project pencils out, Myers said. Carbon dioxide sequestration would help with the project’s viability, he said. Support for an in-state component is also widespread. A panel of mayors from throughout the state talked about their communities’ needs for cheaper energy. Right now, the state uses 380 million gallons of diesel fuel each year, said Kathie Wassermen from the Alaska Municipal League. Replacing even a portion of that with LNG could be a boon to communities, and to the state which spends a considerable sum of the Power Cost Equalization program. Unalaska Mayor Shirley Marquardt said that her community could have increased industry — like on-shore, value-added fish processing — if energy were more affordable. Right now, it’s not competitive compared to production costs elsewhere in the world, but industry would help keep families in the area. “There is no greater concern of elected officials than how to keep our communities intact,” she said. Bethel Mayor Joseph Klejka from Bethel said that lower costs would simply keep people in his community. Myers said an idea of demand would help determine viability of speeding up the timeline for in-state gas. “You need to aggregate demand in a way that’s effective,” he said. Myers said that natural gas from the Cook Inlet basin could also help with in-state gas needs in the interim to a North Slope pipeline. Once gas storage meets have been filled, trucking or a small pipeline could be possibilities if exploration leads to increased production. Despite the agreement about a project being timely and necessary, not every sector was represented at the summit. Missing were the companies currently producing on the North Slope. “The key is getting producers in the room, because they hold the leases on the gas,” Myers said. The Valdez summit also focused on the strengths of that city’s port as a possible export site. Jeff Pierce from Safeguard Marine said a survey he did of the Alaska Marine pilots showed a significant preference from those who would be maneuvering the boats to export LNG from Prince William Sound rather than Cook Inlet. “We see both ends of this story and the questions I asked were very pertinent to what we’re going to see here,” Pierce said. Pilots prefer Valdez because it’s less icy, has good water depth, tug assists are more viable if needed, and there’s a strong support presence from the Coast Guard and Alyeska’s Ship Escort/Response Vessel System. Stan Lloyd, who called into the summit from Houston, said he has worked on a variety of LNG project designs. From what he’s seen of the Valdez area, there’s potential for a liquefaction terminal near the existing Alyeska Pipeline Service Co. oil terminal, he said. He thought the relationship could be symbiotic, helping Alyeska conduct needed improvements and cutting costs for the LNG project. Among the infrastructure needs for such a facility are a large power supply, the liquefaction site itself, gas conditioning – which would likely happen on the Slope – docking space, and other components. Lloyd said an LNG project would probably need two docks, but he could see rebuilding one of Alyeska’s docks as one of them. There’s enough room on that side of the port to satisfy safe-distance requirements, he thought, based on initial information. U.S. Coast Guard Commander Benjamin Hawkins said that much of the Coast Guard’s presence in Valdez dates back to oil shipments that started in the 1970s. The Coast Guard has significant operations related to oil industry safety in addition to its other missions. Among those components are two response boats at Station Valdez, a vessel traffic center, and other components. And they aren’t the only one watching out for the water in Valdez. Alyeska’s Betty McIntosh said that company also has a ship escort program that means any incident impacting a ship is responded to immediately.

Rail extension at Port MacKenzie moves forward

The Matanuska-Susitna Borough is continuing work to extend the Alaska Railroad to Port MacKenzie, opening it up for enhanced use by Interior Alaska mines and businesses. The 32-mile rail extension would connect Houston and Port MacKenzie at a cost of about $272.5 million. Port MacKenzie is a deepwater port, with about 9,000 acres, or 14 square miles, of industrial staging and storage. Mat-Su Borough Manager John Moosey gave a presentation about the project at the Anchorage Chamber of Commerce on Sept. 10. The borough is working with the Alaska Railroad Corp. on the rail extension to the port. So far, the project has received $116 million in five separate appropriations since the 2008 fiscal year, leaving about half the funding still needed, although the general obligation bond up for a vote this November contains an additional $30 million for the project. Some of the preparatory work for the rail expansion has already been done. Much of the work so far at the port has revolved around state and federal permitting. On Sept. 10, the U.S. Army Corps of Engineers issued a permit authorizing the railroad to fill 95.8 acres of wetlands as part of its effort to create the rail extension. That was a necessary endorsement for the project to be completed. The project also received a record of decision to move forward in 2011 based on an environmental impact statement. That decision, however, is being challenged in the U.S. 9th Circuit Court of Appeals. Some construction is also under way, mostly on the embankment that will form the base of the project. In 2011, 2.9 million cubic yards of soil were removed. Another 1.5 million cubic yards were taken out of the ground this year. A contract could be awarded this fall for some of the rail work, and the entire project is projected to be completed in 2016. Then, the line will have an industrial rail loop that allows for efficient loading and unloading of 100 railcars, making it the largest loop in the state. As the port grows, the borough wants to put in a second loop, Moosey said. The port includes a significant amount of land for staging and other logistics needs, Moosey said. There are no immediate neighbors, making it easier to accommodate development. The port already has customers. PacArctic Inc., a subsidiary of Koniag Inc., the Alaska Native corporation for Kodiak, has a 20-year lease at the port, largely because of the rail link, Moosey said. That company has used the port for its work on Fire Island and elsewhere. Vitus Marine also has its tank farm at Port MacKenzie. Other users include Koniag, Kinross Gold USA, Inc., Sumitomo Metal Mining, and Alutiiq, a subsidiary of Afognak Native Corp. Moosey said a rail expansion would enable the port to handle mineral exports from from a variety of sources, as well as benefit other resource development projects. In a filmed segment of an Anchorage Chamber of Commerce presentation Sept. 10, Bill Brophy, from Usibelli Coal Mine, said the extension would allow Usibelli to increase its exports. Currently, the company ships coal out of Seward. But that port is at capacity, and an additional site would enable further exports, Brophy said. Other resource developers near Fairbanks, including Kinross Gold, the owners of the Fort Knox gold mine, Pogo Mine, and Livengood have said they would benefit from the project, Moosey said. The port could also help future projects, such as serving as a staging area for the proposed Susitna Dam, enabling goods to be moved for a new natural gas pipeline, serving a growing cement industry, and prompting the creation of future mines. The rail route from Port MacKenzie to Fairbanks passes several mineral prospects, including copper, lead, zinc, nickel, platinum, and others, Moosey said. Moosey said the rail link could foster 4,000 jobs at mining projects along the rail line. Industrial development at the port itself would create about 3,500 jobs, he said. For now, access to the port is by a road, paved for 15 miles, and dirt for the remainder. If all goes according to plan, the remaining two miles will be paved in spring 2013, Moosey said. The port has already had some sizable deliveries, which Moosey described as heavyweight, high-value cargo. In May, $5.5 million of cargo was offloaded at the port on its way to Fire Island. That delivery included electric lines that are now on the ocean floor between Fire Island and Kincaid Park, and 220 tons — or two spools — of cable. Other deliveries that month included a crane that can be used to lift up to 220 tons, and a sizable load of spruce logs from the Kodiak area.

Feds declare disaster for king salmon fisheries

The U.S. Department of Commerce issued a resource disaster designation for the Yukon River, Kuskokwim River and Cook Inlet king salmon fisheries Sept. 13. The Yukon River designation was made for 2010, 2011 and 2012; the Kuskokwim River commercial failure was declared for 2011 and 2012; and the 2012 declaration was made for Cook Inlet, according to a letter from Rebecca Blank, acting Secretary of Commerce, to Gov. Sean Parnell. Runs on each of those rivers were well below average. “Some Cook Inlet salmon fisheries have experienced revenue losses of up to 90 percent of their historical average during the 2012 season, seriously hurting local economies that are dependent on fishing,” said Blank in her announcement. Although the declarations are for commercial fishery failures, Blank’s letter confirms that the commercial failures can also involve economic impacts for subsistence and sport fisheries, as were felt on the Yukon and Kuskokwim Rivers and in Cook Inlet. The state is estimating economic damages exceeded $10 million, according to Sharon Leighow, a spokeswoman for Parnell. The governor’s office was asked for information on how the $10 million figure was calculated, but unable to respond by press time. Leighow said the Alaska Department of Commerce, Department of Fish and Game, and the governor’s office are working together with Alaska’s congressional delegation to determine the damages and get an appropriation from Congress. If Congress appropriates funds for disaster relief, the National Marine Fisheries Service will help determine who administers the money. NMFS would first solicit the state of Alaska for a grant proposal, according to a statement from the service. But there are other potential administrators as well. The Pacific States Marine Fisheries Commission administered the $5 million congressional appropriation after the 2009 Yukon king disaster, NMFS said. In terms of timing, the best-case scenario would be for funding to reach affected communities in 90 days, according to the NMFS. But there’s no statutory timeline, and it could depend on the conditions of the appropriation, the entity administrating the funds, and other factors. The declarations follow Parnell’s July and August requests for the designation. Parnell initially requested a the designation for the 2011 and 2012 chinook seasons on the Yukon and Kuskokwim in July, and then asked for a disaster declaration for upper Cook Inlet chinook in August. Although the request for the designation came from Parnell, Alaska’s delegation worked together to support it. “This is an important declaration for the people of Alaska - especially those living on the Yukon River, Kuskokwim River and Cook Inlet,” said Rep. Don Young in a statement. “The fact is, Alaskans depend on fish for survival and with such a terrible run of Kings this year, people are hurting.” The impacts were widespread. On the Yukon, damages were felt by in the commercial and subsistence sectors. Commercial chinook fishing, which has had an average value of $1.5 million over the past ten years according to the state’s Department of Fish and Game, was completely shutdown. Commercial chum fishing was also limited to preserve chinooks. Subsistence chinook fishing was also significantly limited. This was the fourth year of limited chinook fishing on the Yukon, and the disaster declaration was for 2010, 2011 and 2012 as an extension of a 2009 designation. The Kuskokwim was also closed to commercial chinook harvests, with limited commercial fishing for chum and sockeye, and had limited subsistence fishing. The resource disaster designation was given for the past two years, as 2011 also saw a weak return. Cook Inlet closures also had a larger impact than just commercial chinook fishing. Northern District set gillnetters and east Cook Inlet setnetters both faced restrictions, as did sport fishermen. Fish and Game estimated that the east side setnet fishery had an ex-vessel value of $1.1 million, which is about 10 percent of the five-year average. On the sport side, a total of 103 chinooks were caught, about 99 percent below the five-year average, with rippling effects for sport-related businesses. In 2007, sport angler expenditures totaled $732 million. Much work remains before it is known how much aid fishermen will receive, or the form that assistance will take. Paul Shadura, from the Kenai Peninsula Fishermen’s Association, said it’s too early for the group, which represents Cook Inlet setnetters, to say very much about the declaration. “We really don’t know what all this means yet,” he said. The association hasn’t talked to the state about the declaration or how any aid might affect fishermen. Nor was it contacted for information about how the low runs impacted them this summer, Shadura said. The group is hoping for more answers at a Sept. 21 town hall forum it organized in Soldotna. The meeting will bring together fishermen and the community to talk to state and federal, representatives about the summer’s fishing and the recent disaster designation. “We’re asking for answers and we’re hoping to hear something,” Shadura said. Although the process seems slow to some, so far it’s going faster than the state’s last resource emergency. In 2009, the designation didn’t come until January 2010. “The fishery disaster process can seem frustratingly slow since each program is unique,” said U.S. Sen. Mark Begich. “It has to be designed to meet the needs of fishermen and funding has to be secured. It’s our intent to work with the state, affected fishing groups and others here in Congress to speed up this process and get help out to Alaskans as quickly as possible.” The National Oceanic and Atmospheric Administration created a policy for considering such requests in 2011. The National Marine Fisheries Service, or NMFS, evaluates requests for fishery disaster declarations under authority from the Magnuson-Stevens Fishery Conservation and Management Act and the Interjurisdictional Fisheries Act. Once a declaration is made, Congress may appropriate funds for disaster assistance. The NMFS plan does not dictate a timeline for the funds to be dispersed, or even a protocol for determining how much is necessary, so it can vary from disaster to disaster. Over the past two decades, the federal government has made a handful of disaster declarations for Alaska fisheries, the most recent coming in 2000 and 2009. In 2009, the designation was for the Yukon River kings. The 2000 designation applied to salmon fishing in the Norton Sound and Yukon and Kuskokwim Rivers. That time, more than just kings were part of the picture: chum and sockeye salmon fisheries were also declared failures. The Federal Emergency Management Agency coordinated federal efforts after the 2000 declaration, with home energy assistance, emergency food supplies, small business loans, and other aid provided by various departments. In that case, some of the support was actually appropriated before the disaster declaration. Other designations, in 1997 and 1998, landed $57 million in federal assistance, according to a press release from the National Oceanic and Atmospheric Association. The cause of Alaska’s low king returns in unknown. Fish and Game has said that a variety of biological factors, like survival in prior years and ocean conditions, could be at play. In July, Parnell created a state team of fisheries scientists to study the issue of low king returns throughout the state. That group is expected to present a research plan at an October meeting in Anchorage. Alaska was one of several states to receive the fisheries disaster designation this fall. In the Northeast, a disaster determination was made for the 2013 groundfish fishery. Sen. John Kerry, D-Mass., said he will work to secure $100 million in relief for New England fishermen. Mississippi’s 2011-2013 oyster fishery and 2011 blue crab fishery were also declared commercial fishery failures.

Better communication needed to combat closures

Kenai and Ketchikan might be more than a thousand miles apart, but charter fishing operators are finding a stronger tie than the map might indicate. When a river in one place in Alaska closes, guides throughout the state feel the hit. “Bad news anywhere in the state translates to a dropoff everywhere,” said Heath Hilyard, executive director of Southeast Alaska Guides Organization. And that’s bad news for the state economy, said Ricky Gease from the Kenai River Sportfishing Association. Guided fishing trips contributed about $641 million to various sectors of the Alaskan economy in 2007, according to a study produced by Southwick Associates for the Alaska Department of Fish and Game. Nonresident anglers spent $652.5 million in 2007. According to Gease, angling activity contributed about 40 percent of the value of the tourism industry that year. This summer, both the early and late king Salmon runs on the Kenai River were closed. That news hurt guides on the Kenai and in Southeast Alaska alike. “I don’t know how many clients ended up actually canceling,” Hilyard said. “I know that I heard from operators that they were fielding phone calls from clients who had yet to come who were saying they were thinking about canceling.” Now charter operators want to make sure that in future summers, anglers are clear on all their fishing options, and how the season is going around the state — not just where they can’t fish. Hilyard is working with the Alaska Department of Fish and Game on getting data more easily throughout the season. But numbers aren’t the only solution, he said. “We have to really do a better job of telling the story throughout the season and before the season to those people to say, ‘look, just because you hear about a closure on the Kenai River doesn’t mean it’s in anyway going to affect your fishing experience in Sitka,’” Hilyard said. In Southeast, the problem stemmed in large part, he said, from a mid-summer Wall Street Journal article about king Salmon closures. “Certain clients saw that article and started talking to operators, saying, ‘well, you know, maybe I’m not going to come, maybe I’m going to cancel,’” Hilyard said. Gease said the king closures definitely hurt business on the Kenai. But some anglers transitioned to other rivers and fish in Southcentral. And the Kenai Peninsula netted a few anglers when Anchorage and the Mat-Su were closed to silver fishing, he said. Despite those increases, Gease said the king closures had the largest impact on the economy locally, and it wasn’t a positive one. “I know some guides had lost up to half their bookings this summer,” Gease said. But the Kenai Peninsula did see some additional fishing clients when there are other closures. One example of that, Gease said, is when the Mat-Su was closed to silver fishing, some people traveled to Kenai or Homer or Seward. Those anglers often returned home with pinks, too, he said. There are fewer destination-changes across the Gulf of Alaska on the Panhandle, however. Last year, Southeast operators were concerned that business would migrate to Southcentral because of new halibut charter rules, Hilyard said. Under the 2011 halibut rules, charter customers in Area 2C — or Southeast Alaska — could keep one fish 37 inches or smaller. The bag limits in Area 3A, or Southcentral, allowed anglers to keep two fish of any size. This year, the charter bag limit in Southeast was relaxed to allow retention of one fish per day, either up to 45 inches or greater than 68 inches. A measure known as a “reverse slot limit,” halibut between 45 inches and 68 inches are required to be gently returned to the water. A few clients moved from Southeast to Kodiak in 2011, but for the most part operators didn’t see that sort of transition, Hilyard said. In Southcentral, about half the clients are Alaskans and half are from Outside. Alaskans, particularly on the road system, can move their trips around. But the Outside clients are less likely to change their destination, as about 90 percent of the customers in Southeast are visitors. While it might be hard to predict or prevent the closures in many cases, Hilyard said this fall, he’s working on a way to at least help guides with concrete evidence for clients that fishing in their region was still strong. “Not just hey we think that it’s pretty good,” Hilyard said. “We need to be able to say, ‘Alaska Department of Fish and Game is saying x.’” Hilyard said he’s working with ADFG on that effort. Lagging data The Alaska Department of Fish and Game mostly uses logbook information to track fishing. That information is only collected periodically and has to be entered into the system, there’s no instant data source. The logbooks are accurate, and a change charter operators were happy to see enacted, Hilyard said. But they’ve had some unintended consequences. “It has created a problem in terms of collection and analysis and reporting in terms of timeliness,” Hilyard said. This summer, when Hilyard wanted to quantify how the season was going, it took three to four weeks to get very rough estimates, he said. Hilyard said operators would like to see more frequent collection of the logbook information. He is talking to the department about the possibility of real-time data reporting, maybe even electronically so that the data can be turned around more quickly. Hilyard said the department has the same desire for more frequent data collection; it’s mostly just a matter of funding. A smartphone app is in the works that would allow for electronic data transmission, he said. “The department can then turn those numbers more quickly,” Hilyard said. Marketing is also part of the answer. “We can all peacefully coexist and enjoy prosperous fishing,” Hilyard said. “We all want to kinda say hey look, don’t mark Alaska off your calendar just because you heard there’s a closure.” Guides in Southeast have already been successfully upping their marketing efforts, Hilyard said. As a rough estimate, Hilyard said bookings were up about 10 percent overall in Southeast compared to 2011. “That experience is different from operator to operator, port to port,” he said. The increase was largely the result of marketing and ingenuity, he said. Early in the season, one operator on Prince of Wales had bookings up 20 percent to 25 percent compared to 2011. “That’s because they had really changed their internet marketing and social media strategies preseason and really worked on that a lot more heavily so their marketing tactics increased their bookings,” Hilyard said. Another Prince of Wales operator had a sizable increase as well — about 30 percent to 40 percent. In his case, the upswing was the result of an expanded season and additional offerings beyond fishing such as chartered bear hunting. “He tries to be kind of a turnkey full solution resort for families,” Hilyard said. “So hey, the wife shows up, she doesn’t want to fish at all, well we’re going to have guided nature hikes and crafts and you know, different stuff like that.” There are still a few operators who have the same experience, same clientele, as they have for decades. Hilyard spent time with a Sitka guide who took clients out this summer that had been coming back, year after year, for 15 or 20 years. “These guys are really serious fishermen,” Hilyard said. Southcentral slowed Gease said that the picture on the Kenai wasn’t as positive as in Southeast. Without logbook data, he couldn’t say exactly how bookings had fared. But from 2008 to 2011 they decreased by about a third. He attributed that to the economic downturn, and the continuing low king returns. This summer’s closures likely resulted in another decrease. “We’re just seeing the front end of the effects of the closure that we had this year,” Gease said. In the past, it’s taken about five years for bookings to recover after a summer with closures, Gease said. Complicating future bookings is the uncertainty introduced in the closures. It’s possible that early run king Salmon will be designated a stock of concern — there is a proposal in for the Board of Fisheries to consider such a move in October — which could change management. Exactly how the changes will play out is unknown, so guides don’t know exactly what sort of experience to market to potential clients. “That closure brings a lot of uncertainty into the business and inevitably that uncertainty will lead to decreased bookings until it becomes a more stable fishery once again,” Gease said.  

Aging Alaskans face uncertainty in retirement planning

Uncertainty over the market and taxes might be difficult to contend with, but Alaska has one sure thing: aging residents are an increasing part of the picture. According to data from the Alaska Department of Labor, the average age of Alaskans has always skewed young, but the figures are shifting upward. In 2000, just more than 5 percent is of Alaskans were older than 65. By 2030, the department predicts that will increase to 17 percent. Those retirees and soon-to-be retirees are keeping financial planners busy looking into the future, said TerriLee Bartlett, a Wells Fargo wealth advisor in Anchorage. Uncertainty is the bottom line for many of the soon-to-be retirees, but Wells Fargo advisors said that having a plan for retirement is the key to weathering any future changes. David Kennedy, a Wells Fargo communications officer, said 87 percent of people with a plan say it gives them comfort, a figure that has increased over the past year. “Having a plan really sets people at ease,” he said. Among the major unknowns are what taxes will look like in coming years with several increases scheduled to take effect Jan. 2 unless Congress acts. A slew of possible tax changes mean investors and soon-to-be retirees might not know what to prepare for, but planners suggest that a diverse income stream helps with adaptability in the future. “I always tell clients don’t let the tax tail wag the dog,” said Jave Ragan, a Wells Fargo wealth planning strategist. The potential tax changes include an expiration of the 2001 and 2003 income tax cuts enacted under President George Bush, the end of President Barack Obama’s payroll tax cuts, changes to taxes on dividends, the end of the alternative minimum tax patch, a new Medicare tax on investment income, and a steep increase in the estate tax, also known as the “death tax.” The death tax could rise from a 35 percent rate for estates greater than $5 million to 55 percent for estates greater than $1 million. If the current 15 percent capital gains tax rate expires, dividends could be taxed at ordinary income tax rates. Ragan said that when income taxes go up, people often save less. But the real ramifications of the upcoming changes are hard to predict because of nobody knows what Congress will decide to do in the coming months of an election year. Having a diversity of assets means that retirees won’t be hit as hard by any one change. That is one of Wells Fargo’s main recommendations, Bartlett and Ragan said, and is advice that holds true for business owners and non-business owners alike. Bartlett said that uncertainty over the future exists for all income levels. “People that might have several million dollars might think, ‘Do I have enough to live on?’” she said. Ragan said having a solid plan for retirement finances helps. “Without a plan, it’s difficult to now how much is enough,” he said. Ragan said creating a plan starts with an understanding of the complete bottom line — all of an individual’s accounts, future capital expenditures, property purchases and sales, and any other expenses or sources of income that are known. “The analytic piece of that is forecast that into the future,” Ragan said. Bartlett said part of the process includes something called discovery cards, which allows people to review their spending and saving options, and prioritize them. “They can tactically move these cards around,” she said. “It creates discussion that possibly they’ve never had before.” Bartlett said that people sometimes forget that retirement can be expensive. “The monies spent at that time actually go up when they’re ready to retire,” she said. Having fun is one cause for that spending – vacations, rental homes, and other pastimes can add up quickly. And then, added medical needed at a more advanced age can also add up. Ragan said that defining spending can be the most challenging part of retirement planning. Part of the plan also includes preparing for giving, whether to children or charities, Ragan said. Once that’s nailed down, there are equations to help figure out how much is needed. Bartlett said that many of those nearing retirement are in the sandwich generation – they have kids in college, and are also helping to support their parents. That can make it harder to save for retirement. But such savings are still key, Bartlett said. Taking advantage of an employer’s match in a 401k is a smart move, Bartlett said. “That’s free money for them,” Bartlett said. Part of the plan includes looking at what happens after death. Often, there are just nine months to pay Uncle Sam after someone dies, Bartlett said. Ragan said part of Wells Fargo’s planning process includes analyzing the liquidity of an estate. While the current, cloudy tax situation makes it a little difficult to plan for what taxes might be, it’s crucial to have enough liquidity to pay for them, Ragan said. Succession planning Ragan said the company has some business-specific ideas for retirement planning as well. Retirement planning can be a little different because an owner’s net worth is in their business, but the basic guideline – diversify – holds true. Ragan said that looking more than just four to five years into the future is crucial. Part of future planning for a business includes having a succession or transition plan for the owner. Ragan said three are four primary exit alternatives – an outright sale to a third party, a sale to a key employee or group, and a transition to children. Winding down a business is also a possibility, although it generally doesn’t result in the same return toward retirement. Hopeful-retirees often also find themselves preparing for the unexpected when they sit down and start planning. That means it’s also time to look at succession plans, including a buy-sell agreement if needed. Ragan said surprising number of businesses don’t have a plan or agreement, or have them but don’t have the liquidity needed to carry them out. If the plan involves one partner buying another out, the funds need to be ready to execute that plan, Ragan said. As far as metrics go, not all the data is a bad sign. According to the Labor Department, the percent of Alaskans remaining in the workforce past retirement age has gone from 15 percent in 2000 to 22 percent in 2010. That number is expected to keep growing in 2020, and beyond, as baby boomers continue to age. While the increasing number of seniors remaining in the workforce is sometimes the result of those without enough savings to comfortably retire, there’s also a non-financial component. Kennedy said part of that is because people are living longer. Bartlett said she sees a lot of people who like what they’re doing, so they keep doing it. Other times, people explore other fun jobs, and stay in the workforce in a new position.

Pending Gulf rockfish lawsuit has major policy implications

Motions for summary judgment have been filed in a lawsuit over the new rockfish catch share program in the Gulf of Alaska. Four companies with processing operations in Kodiak sued the National Marine Fisheries Service, or NMFS, in the U.S. Western District of Washington in January to overturn the new Gulf of Alaska rockfish catch share program, which took effect in May. In their July 20 motion for summary judgment, the processors also requested an opportunity for oral argument Oct. 5. As of Sept. 5, Judge Marsha Pechman had not yet ruled on the processors’ request for oral argument. NMFS filed its motion for summary judgment on Aug. 23. The lawsuit revolves around whether processors should receive a guaranteed share of the rockfish harvest, and has policy implications for the rockfish program, Gulf of Alaska fisheries management, and catch share programs as a whole nationwide. Catch share programs allocate shares of the total harvest to indivdual owners, typically based on catch history. The Kodiak processors — Trident Seafoods, Ocean Beauty, Westward Seafoods, and North Pacific Seafoods — want to be guaranteed delivery of a portion of the harvest each year. The current rockfish program does not give them that guarantee, as the past five-year pilot program did from 2007 to 2011. The processors argue that the legal opinion upon which the harvester-processor linkage was severed was flawed, and offered contradicting management examples and segments of the Congressional record. The 2009 opinion on which much of the case rests was a memo from general counsel of the National Ocean and Atmospheric Administration, or NOAA, to the North Pacific Fishery Management Council stating that the Magnuson-Stevens Act did not give the council the authority to give on-shore processors a guaranteed share of the harvest. The North Pacific council was in the process of revising the rockfish program in advance of its 2011 sunset date, and the NOAA legal opinion stated processors were not “fishing” operations under the Magnuson-Stevens Act and therefore were not entitled to quota allocations. The motion filed on behalf of the processors July 20 stated: “The 2009 Opinion is premised on the assertion that the term ‘fishing’ in the (Magnuson-Stevens Act) does not include on-shore processing. That Opinion is inconsistent with the MSA, other (NOAA) legal opinions, and agency practice.” Attorneys for the processors did not respond to calls for comment. A share of the fishery for processors was part of the prior rockfish program because Congress created the program through legislation that specifically authorized such a linkage requiring harvesters to deliver to the processors where they had historically made deliveries. The NMFS motion for summary judgment explains the rationale that led managers to sever the tie between catcher vessels and processors, and details possible consequences of leaving the linkage intact. The NMFS motion reads, in part: “Plaintiffs are on-shore processors who seek to expand the definition of ‘fishing’ to include on-shore processing, which could have the effect of creating individual processor quota or justifying ‘fixed linkages’ following expiration of the Pilot Program.” The program eventually passed by the council in June 2010 replaced the expired rockfish pilot program, and was the first catch share program created after the Magnuson-Stevens Act was reauthorized by Congress in 2007. Management programs for pollock and crab in the Bering Sea, which took effect in 2002 and 2005, respectively, currently give processors a share of the harvest. The rockfish program was a purposeful step away from that policy, and could be the model for future programs if the judge upholds the severed tie in the new program. United Catcher Boats Association Executive Director Brent Paine said the lawsuit could have an effect on any effort by the North Pacific council to have a multi-species management program in the Gulf of Alaska. “This will set a precedent for what any council in the United States will have to do when they consider development of a catch share program,” Paine said. UCB vessels operate in the Gulf, as well as in Bering Sea fisheries and elsewhere on the west coast. UCB, along with Gulf harvester association Alaska Whitefish Trawlers, moved to intervene in the case to defend the rockfish program as crafted by the council. The harvester associations were denied their motion to defend the rockfish program, but will be allowed to participate in the remedy phase should Judge Pechman elect to order changes in her eventual ruling. The relationship between processors and catchers impacts the price processors pay for the fish. In their lawsuit, the processors argued that without fixed linkages, they would be forced to compete for fish, and pay more for it, effectively cutting into their profit. “Really what’s going on here is who gets the power, when you sit at a bargaining table, to determine the price of fish,” Paine said. The Magnuson-Stevens Act will be up for reauthorization in 2013. The lawsuit could be the beginning of an effort to include processors in future programs as part of the redrafting. “I think you’ll see processors proposing language that gives them a little better footing or gives them more consideration than what is currently defined by law if they lose this lawsuit,” Paine said. Under the pilot rockfish program, on-shore processors were guaranteed a portion of the harvest because catcher vessels had to deliver their catch to one processor, based on historic relationships. When the program was revised in 2010, that requirement was purposefully struck from the new program based on NOAA legal advice. “The (state) didn’t feel or believe that, as a matter of policy, the processors be granted a share of the fishery, a harvester quota, or have some kind of forced delivery requirement that vessels would have to deliver specific processors,” said council member Duncan Fields of Kodiak at the time. “The closed class of processors in the pilot program was something the state of Alaska just didn’t think was good public policy.” The program allocates northern rockfish, pelagic shelf rockfish, Pacific Ocean perch and secondary, more valuable targets: sablefish and Pacific Cod, to trawl catcher vessels and catcher-processors. Rockfish are large, colorful fish that congregate either in schools (pelagic) or stay close to the bottom in rocky areas (non-pelagic). Despite the changes in the rockfish program, the council built in some protections for the processors. The program requires catcher vessels to belong to a cooperative that is associated with a shore-based processor, but allowed more flexibility in that vessels can change cooperatives and cooperatives can change processors without repercussion. The program also prevented any one processor from receiving more than 30 percent of the harvest, ensuring that at least four receive business. The council also set the program to come up for review in three years, rather than five, which is what is usually required under the Magnuson-Stevens Act. “The council wanted to make sure we did it right,” Fields told the Journal in 2010. “An earlier review will particularly look to, are vessels leaving the fishery or are crew losing jobs? Are processors being disadvantage? These are some of the things we’ll review.”

Summit to showcase Valdez as best for Alaska LNG exports

A two-day conference in Valdez will explore the potential for developing and marketing Alaska’s liquefied natural gas. The Alaska LNG Summit is scheduled for Sept. 13 and 14 in Valdez. Bill Walker, general counsel for the Alaska Gasline Port Authority, said the event will include a number of speakers who have hands-on experience with LNG projects. The City of Valdez conceived the conference as a way to showcase its offerings as a possible site for LNG export, Walker said. Then, Excelerate Energy and the Alaska Gasline Port Authority agreed to sponsor the event. Valdez Mayor Dave Cobb said the summit is an opportunity to showcase Valdez to the people of Alaska, and to the world. “I think the key for us is the assets that the city of Valdez and the port of Valdez have for shipping LNG out of Alaska,” Cobb said. The port authority has supported a buried LNG line that would run from the North Slope to Valdez, alongside the trans-Alaska oil pipeline. That route was once permitted by the Yukon Pacific Corp., although it would need new permits now. Excelerate is a Texas firm that perfected floating LNG terminals, popular in other markets. Walker said the summit will feature speakers with hands-on experiences with LNG projects, varying from LNG financing to port management. Valdez’s existing infrastructure is a key component of what the city has to offer. Ben Hawkins, from the U.S. Coast Guard, will discuss Valdez’s infrastructure and assets and will be joined by Stan Lloyd, from Lloyd Engineering, and Jeff Pierce, from Safeguard Marine, who can speak to the logistics of the port. AGPA also has a study from last spring showing Valdez as a safer option than a Cook Inlet port. Another presenter will be Octavio Simoes, the president of Sempra LNG, a San Diego-based company with a fairly long history in Alaska, Walker said. They have an LNG terminal in Mexico, and interest in exporting Alaska’s LNG. “They’ve seen the benefit of Alaska,” Walker said. Mayors – or their representatives – from Alaskan cities such as Unalaska and Fairbanks with an interest in LNG will also participate in a panel. The conference will also include a discussion of where to send Alaska’s gas. Only a portion would be needed in-state, giving the state an opportunity for exports. A panel discussion will revolve around the potential of selling to Asian and domestic markets. Hawaii is one potential buyer, but has the same problem as Alaska: it doesn’t need as much gas as an effort to produce would need to be profitable. “We’d love to see Alaska gas going to Hawaii, but that’s not the tipping point,” Walker said. Barbara Treat, the program manager for Hawaii Gas will talk about that state’s high cost of electricity, and interest in LNG. The summit agenda also includes an update on the Alaska Gasline Inducement Act from Kurt Gibson. Mark Myers of University of Alaska Fairbanks, the former Director of the U.S. Geological Survey, will talk about North Slope natural gas, and Greengate’s Radoslav Shipkoff, an LNG financing consultant, will talk about the financing of such a project. Cobb said financing options in Valdez include support from the city. In the past, the city helped provide funding for industry when building infrastructure in the port. That’d be an option again in the future, he said. Walker said they expect a pretty good turnout at the event. The event is targeted at anyone interested in the LNG discussion – Cobb said that includes legislators, producers and individuals from the state of Alaska.

Incumbents Menard, Wagoner defeated; Davis eeks out win

With most ballots tallied, Alaska’s Aug. 28 primary results will send a couple newcomers to the state Senate and set up tough matches for incumbents in the Nov. 6 general election. Among the newcomers are Peter Micciche, R-Soldotna, and Mike Dunleavy, R-Wasilla. Each won his seat outright in the primary with no Democrat filed in either race. Micciche defeated incumbent Sen. Tom Wagoner, R-Kenai, for his seat in District O. Micciche is Soldotna’s mayor and the superintendent at ConocoPhillips liquified natural gas plant in Nikiski. “I look forward to all of the incredible things we’ll do together as a district and for the great state of Alaska,” Micciche told the Peninsula Clarion. “To all of our supporters and the citizens that took the time to vote, the Micciche family and our team that worked so hard on this campaign thanks you.” Wagoner, 69, is a former educator, businessman, and a commercial fisherman. He was formerly a member of the Kenai City Council and mayor of Kenai. He served in the state senate since 2003. “Well, I think negative campaigning works,” Wagoner told the Peninsula Clarion. “Too bad, but we did everything we could do and everything we should do and we wouldn’t do it different.” Wagoner, a member of the Senate bipartisan coalition, told the Clarion joining the majority was the right thing to do. “We thought we did the right thing by joining in the coalition and throughout the state it is showing that people didn’t like that,” he said. “Well, let me tell you, our district would have been a lot worse off had I not been in the coalition to do what I got done for the capital end of things. That’s just the way it is. I can live with what’s happened. It is not a big deal.” Dunleavy beat incumbent Sen. Linda Menard, R-Wasilla, with 2,257 votes to Menard’s 1,620, in the new District D. After redistricting, many of Menard’s core areas in her current district were removed, with new regions added where she was an unknown. Members of the senate’s bipartisan coalition will face competitive races in November that will determine the future of the 16-member group of 10 Democrats and six Republicans. Longtime Anchorage Democrat Sen. Bettye Davis retained her seat in a narrow victory over fellow Democrat and former state Rep. Harry Crawford, taking home 1,294 votes compared to Crawford’s 1,219. Davis’ district was changed significantly by redistricting. She lost much of her core constituency, and had less familiar Eagle River territory added to the mix. “I didn’t how how it was going to turn out,” Davis said. Davis said the two had similar platforms, but she had more experience to back her up. “I have a proven track record,” she said. Davis is the longest serving female in the legislature. She’s been part of the Senate’s bipartisian majority coalition since 2006, with a total of 18 years in the legislature. Davis will face Anna Fairclough, the current Eagle River representative, in the November election. Fairclough earned 4,160 votes in the primary, more than Davis and Crawford combined, and has represented much of the Eagle River territory in the past. Sen. Hollis French, a prominent opponent of oil tax changes and a key part of the current Senate coalition, could also be in for a tough race. Anchorage Republican Bob Bell beat Liz Vasquez to face French in November. Bell, who landed 2,318 votes compared to Liz Vasquez’s 1,527, said he wouldn’t join the coalition if elected. He described that body as convoluted. “Our system of government is set up for partisan politics,” he said. Bell said he thought his message and experience had been well-received in the primary. “I’m a quintessential Republican and feel like we should have minimum government and let the private sector run things,” Bell said.   Here’s a look at the rest of the contested Senate primaries:   District C In a new district without an incumbent, Republican Click Bishop, a former commissioner of the Department of Labor and Workforce Development, won the nomination against two opponents, former state senator Ralph Seekins, a local businessman, and David Eastman, a resident of a Palmer area that’s now part of District C, which runs from Valdez to Fairbanks. With 18 of 19 precincts counted Aug. 29, Bishop garnered about 48 percent of the ballots, or 2,434 votes. Eastman took about 21 percent, and Seekins had 30 percent. “I’m surprised,” Bishop told the Associated Press. “I knew I had a race on my hands right from the get-go and I’ve been running scared from Day One and working hard every day and not taking anything for granted.” Bishop will face Fairbanks Democrat Anne Sudkamp in November.   District H Don Smith won the Republican candidacy with 1,137 votes to Clint Hess’ 777. He’ll face Democrat Berta Gardener, who has served in the house since 2004, in the general election.   District K Sen. Lesil McGuire, R-Anchorage, was also tasked with campaigning in a district with much new territory. Her South Anchorage district included more of Midtown than in the past, and, like Menard, was challenged for caucusing with the Senate coalition. She won by almost 500 votes, or 11 percent of the ballots, over Jeff Landfield, and will face Democrat Roselynn Cacy in November.   District N Despite running in a district that was vastly different territory than her old one, Sen. Cathy Giessel, R-Anchorage, beat Kenai Peninsula challenger Joe Arness for the Republican nomination. She’ll face Ron Devon in November, a non-affiliated candidate who landed a spot on the ballot with a nominating petition. Senate District N’s new area included almost all of the Seward Highway, and Giessel said she spent several days a week campaigning on the Kenai Peninsula. “As I talked to folks, we really seemed to connect, had shared issues,” Giessel said. Those shared issues centered largely on the economy – filling the Trans Alaska Pipeline is her number one priority – and family values, she said.

State House incumbents survive primary challenges

By the end of polling time Aug. 28, more than a half-dozen seats in the Alaska State House were decided for good with no candidate from an opposing party on the November ballot. Voters also weighed in on Ballot Measure 1, which would have given boroughs and cities the power to raise property tax exemptions from $20,000 to $50,000. As of Aug. 29, with 97 percent of votes counted, that measure was failing by more than 1,000 votes. Incumbent Rep. Kurt Olson, R-Soldotna, won his seat with 1,397 votes, about an 11 percent margin ahead of challenger Gary Knopp. Olson said he expected to have a close race with Knopp, a longtime Kenai Peninsula resident, but that he was glad to have a challenger. He said it’s a way to check in and confirm that he’s supported by his constituency. He wasn’t surprised to receive their votes, he said. “I know my district,” he said. Incumbent Reps. Bill Stoltze, R-Chugiak, Dan Saddler, R-Anchorage, Wes Keller, R-Mat-Su, and Neal Foster, D-Nome, each won their re-election in the primary as well. Stoltze beat Thomas Connelly by a significant margin – 1,585 to 348 – to do so. Saddler beat Glen Eichenlaub by about 800 votes, or more than 80 percent. Keller beat fellow Republican Roger Purcell 1,162 to 532. Foster, took more than 70 percent of the vote in District 39, where he faced challenger Woodie Salmon, a former representative. Foster’s new district includes much of rural Alaska, in an L-shaped region stretching from Nome, across Interior Alaska and down to the Panhandle. Democrat Ben Nageak, former mayor of the North Slope Borough, won a four-way race to take Reggie Joule’s seat in District 40, which includes north and northwest portions of the state and has gone back and forth between reps from the Kotzebue and Barrow areas. Nageak beat his closest challenger, Greta Schuerch, 653 to 600 votes. Robert Nelson and Adeline Hopson took 462 and 100 votes a piece. Republican Shelley Hughes, from Palmer, also won her seat outright, beating Daniel Hamm 1,467 to 562. Here’s a look at results from contested primaries:   District 1 North Pole Mayor Doug Isaacson won a four-way race against Republicans Lynette Bergh, Paul Brown, and David Gardner to face Democrat Janice Golub in November. Isaacson won by about 100 votes more than Brown, his closest opponent.   District 5 In Fairbanks, Republican Pete Higgins beat newcomer Aaron Lojewski, 1,324 to 1,223. Higgins will face Democrat David Watts in November.   District 6 Republican incumbent Eric Feige won a narrow victory over challenger George Rauscher, 1,107 to 993, to face Democrat Jamey Duhamel in November.   District 9 In a Mat-Su Valley seat without an incumbent, Lynn Gattis beat Mark Ewing by about 300 votes, or 20 percent, for the Republican spot on the November ballot. Gattis will face Blake Merringfield, a Democrat who was unopposed in the primary.   District 16 District 16, which includes much of midtown Anchorage, was one of few where candidates on both tickets had competition. Republican Jimmy Crawford will face Harriet Drummond on the November ballot. Crawford beat his opponent Roman Romanovski 681 to 309, while Drummond’s race saw higher turnout. The Democrat beat her opponent, Hugh Brown, 1,171 to 150.   District 17 Democrat Geran Tarr won the primary over Cal Williams, 558 to 449, to represent Mountain View in Anchorage. Tarr will face Cean Stevens in the general election.   District 20 Incumbent Rep. Mia Costello, R-Anchorage, had a significant victory over challenger Tamar Von Gemmingen, 1,616 to 398. Costello will face Democrat Michelle Scanlan in November.   District 25 An incumbent who won by more than 1,000 votes, Anchorage Democrat Pete Petersen’s biggest challenge will come in the November general election. Due to redistricting, he’ll face Rep. Lance Pruitt, also an incumbent. Petersen said he’s familiar with much of his territory already, but plans to do significant work in the portions of his district that were added during redistricting. “I think our strong point is probably our ground game,” Petersen said.   District 26 With 1,297 votes, Eagle River’s Lora Reinbold won over two other Republican hopefuls: Kim Skipper, who had 762, and Larry Wood, who had 786. Reinbold will face Democrat Roberta Goughnor in the general election.   District 30 Incumbent Rep. Paul Seaton, R-Homer, retained a spot in the general election against challenger Jon Faulkner, also of Homer,1,636 to 1,352. Seaton will face Elizabeth Diament in the general election.   District 33 Incumbent Rep. Peggy Wilson, R-Wrangell, had 989 votes, enough to beat challengers Agnes Moran of Ward Cove, who had 684 votes, and Patti Mackey, of Ketchikan, who had 476. Wilson will face Democrat Matt Olsen, of Ketchikan, in November, and incumbent Rep. Kyle Johansen. Johansen dropped out of the GOP primary in May and collected enough signatures to appear on the November ballot as an independent.

Begich proposes national seafood marketing program

Alaska’s seafood could get a marketing boost as part of a national effort to spread the word about American ocean products. A coalition of 75 fishing-related organizations and states are supporting new legislation to enhance seafood marketing throughout the nation and abroad. Sen. Mark Begich announced proposed legislation at a press conference Aug. 24 that would spend $50 million per year to market American seafood. The legislation is still being finalized, and will be introduced when the senate reconvenes in September. Begich said the initiative, “will bring forward a new way to market an incredible product.” Begich said the effort will work toward getting seafood from all over the country — from Gulf of Mexico shrimp to New England lobster — onto American and international plates. Selling seafood will, in turn, “promote industry and create jobs in the U.S. and enhance local economies and be able to ensure sustainable fisheries,” Begich said. Begich announced the legislation at Copper River Seafoods in Anchorage and was joined by others from the National Seafood Marketing Coalition. Bruce Schactler of Kodiak, director of the coalition, said he thought a national marketing effort could revitalize the seafood industry. “There’s great opportunity for us to expand and to bring more volume,” Schactler said. Schactler said the U.S. seafood industry has needed such an effort for a long time. Only 15 percent of the seafood eaten in America is produced domestically, he said. Begich said the legislation could increase that amount, and also boost sales of American seafood in foreign markets. “This is a great American job creator,” Begich said. “You’re harvesting from our own lands, our own waters.” Legislation creating the national coalition is modeled after the 2010 Travel Promotion Act, Begich said, which took two years to realize. Funding is still in the works, though Begich said he’s looking for a source, like duties, that would not add to taxpayers’ bills. The money would be used by five regional seafood marketing boards, established by the legislation, which would include harvesters, processors and others involved in the industry. The legislation also draws on the record of the Alaska Seafood Marketing Institute, or ASMI, which is paid for by a combination of state and industry funds. Schactler said that the success Alaska had at bringing the salmon industry back from the brink when farmed salmon depressed global prices could be replicated in other industries facing challenges. Outgoing ASMI Executive Director Ray Riutta, who is retiring in December, agreed. “I think Alaska’s a good example of the fact that marketing does work,” Riutta said. Riutta said marketing Alaska salmon a decade ago helped increase the value for fishermen four-fold, without increasing the size of the harvest. Such a success could revitalize coastal America, Begich said. The national marketing effort represents a unified effort to market an American product, Begich said. It brings together various regional entities, including gulf fisheries, Great Lakes representatives, and others. “We find it pretty exciting to now be moving ahead, to create national partnerships,” said Arni Thomson, executive director of United Fishermen of Alaska.

Support services see boost with Cook Inlet oil, gas exploration

The Cook Inlet saw an upswing in oil and gas exploration in 2011, with three independent oil and gas companies drilling new wells and another independent submitting more than 90 bids in the near-record Cook Inlet lease sale in June. The increased activity has had a direct impact on companies that support the oil and gas explorers. Those businesses do everything from drill wells to dispose of waste. Al Hull, from Petroleum Equipment & Services, Inc., said his outfit has felt the increased demand. “This is the busiest I’ve seen it in a long time,” Hull said. Randy Harris, from Rain for Rent, agreed. “We are really excited with all the new companies working in the area, there should be plenty of opportunity for support services,” he said. Petroleum Equipment & Services and Rain for Rent serve different oil and gas development needs, but both said the upswing is helping them out. Rain for Rent provides water-related services to the industry, including portable storage tank rentals, pumps, filtration and other goods. “Any time there is exploration the need for support services are in demand,” Harris said. “Buccaneer (Energy) is a good example.” Petroleum Equipment and Services offers a variety of services, with three related companies filling different niches. Petro serves the oil industry from the ground down, while subsidiary MRO Sales serves from the ground up, providing boots, drill rigs and anything else an oil company might need. The recycling arm, Astech, serves as the company’s Kenai Peninsula headquarters, housing all three businesses. To date the company has kept about 10 million pounds of metal and plastics out of the landfill, Hull said. Filling the increased demand at each business requires local employees, Harris said. “Our inventory has grown each year since 2002 when Rain for Rent came to Alaska,” Harris said. “We have went from two employees to five and will probably add more next year as business picks up.” Hull said the upswing has kept his company going despite the economy. In the summer, when more drilling activity is underway, Hull said his company adds extra college students. “We’ve been able to keep local people employed,” Hull said. “We’re 100 percent Alaska-owned and employed.” In addition to the trickle-down work for companies that service the growing contingent of independent oil and gas producers, there’s been a sort of trickle-up effect. Major oil and gas company ConocoPhillips announced recently that its Liquefied Natural Gas plant in Nikiski will be exporting LNG this spring. That comes after the company announced last spring that the plant would be mothballed at the end of 2011. The new plan is, in part, because of a contract with Buccaneer for the independent to supply the major with natural gas. ConocoPhillips spokesperson Natalie Lowman said the company had other contracts in the works, but would not say who the suppliers were. The increase in activity has had other unlikely effects. At a recent city of Kenai worksession, city manager Rick Koch said Buccaneer is looking to put down roots in the new Kenai Industrial Park, which is still being developed. Other oil service companies have also expressed interest in the project, Koch said. Continued growth is dependent on a positive climate for oil and gas development, Hull said. He hopes decision-makers in Juneau can help keep the industry going. “I think that our local alliance people are working hard to push us in the right direction,” Hull said.


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