Brooks Range closing in on Mustang startup

Alaska is on the cusp of gaining a new, albeit quite small, North Slope oil field. Brooks Range Petroleum CEO Bart Armfield said first oil from his company’s Mustang project should be flowing sometime in the next 90 days. The company is in the midst of prepping the infrastructure and facilities needed to support the flow of oil. “We’ve got a lot of activity taking place in the field right now with pipeline installation, electric and instrumentation, platform installation — a lot of trenching work on the pad itself,” Armfield said during an April 17 Alaska Industrial Development Authority Board of Directors meeting in Anchorage. With the 1,100-foot oil line nearing completion, the remaining major work includes installing a modular “early production facility” before production can commence, according to Armfield. The pipeline connects to ConocoPhillips’ main Alpine transportation pipeline, which serves as a primary artery for moving sales-quality oil produced from the west and central portions of North Slope oil development to the Trans-Alaska Pipeline System. Armfield highlighted that oil production from Mustang would make Brooks Range the first small independent company working on the North Slope to take a prospect from discovery and see it through to commercialization. “If little Brooks Range can do it anybody should be able to go to the North Slope and do it,” he said. The Mustang project is in the Southern Miluveach Unit just south of the very large Kuparuk River field operated by ConocoPhillips. The company is targeting the same sandstone formations that have helped produce more than 2 billion barrels of oil from Kuparuk. Mustang holds 22 million barrels of proven reserves, according to Brooks Range. Peak production estimates for the field have been in the range of 12,000 barrels per day. The latest timeline to first production is pushed back slightly from what Armfield forecasted in a December interview, when he pegged an April startup, but it still signals a major step forward for Brooks Range. The company has been working on Mustang for years, though the project has gone through fits and starts since oil prices collapsed starting in late 2014. Anchorage-based Brooks Range is owned through subsidiaries by the Singapore investment firm Alpha Energy Holdings Ltd. The small oil company has been subject to multiple ownership structures since starting the Mustang project. AIDEA first partnered with Brooks Range in December 2012 when the authority approved a $20 million investment in a nearly $30 million five-mile gravel road to access the prospect and 20-acre gravel pad to host production facilities. The gravel infrastructure was completed in April 2013. At the time, Brooks Range leaders said they wanted to have the field in production by fall 2014 and credited incentives in the just-passed and industry-supported oil production tax structure under Senate Bill 21 for improving the economics of the project and spurring it forward. In April 2014, AIDEA committed an additional $50 million of investment into a planned $225 million Mustang oil processing facility known as Mustang Operations Center-1, or MOC1, which authority leaders then saw as a facility other small companies prospecting in the area might potentially be able to use. However, when oil prices fell from $100-plus per barrel in late 2014 to eventually less than $30, it caused company and authority leaders to reevaluate their plan. “(At) $120 oil we sometimes make decisions that maybe should be rethought,” Armfield said April 17. Multibillion-dollar budget deficits — also triggered by the collapse of oil prices — also pushed the state to slow the pace of repaying its oil and gas tax credits starting in 2015, which further challenged Mustang. Brooks Range is owed approximately $20 million in tax credit payments, according to Armfield. AIDEA and Brooks Range owners agreed to rework their partnership last May when the authority approved a transaction to shift from an investor to a lender in Mustang by selling its stake in the holding companies set up under the original deals for the gravel infrastructure and processing facilities. That move freed Brooks Range to focus on getting to first oil — and cash flow — with a smaller, less expensive early production facility before eventually growing the operation. “MOC1 was the Cadillac and now we’re going with a Chevy that still gets us from point A to point B on four wheels safely in a proper manner,” Armfield said. He noted that while AIDEA has had to wait much longer than expected for its investments to bear fruit, the gravel road and pad have been used by numerous other companies as a launching point for exploration activities in the area. State officials in the Division of Oil and Gas have also pressed Brooks Range to find a way to production in recent years as the company failed to follow through on its stated drilling and development plans, but that trend appears to have been reversed. Once the early production facility is installed Brooks Range will begin production from the North Tarn-1A well the company successfully flow tested in November 2017. The North Tarn well produced nearly 1,300 barrels per day from a 10-foot section the Kuparuk C sandstone formation with only trace amounts of water during the test, according to a company release. Production is expected to start in the 1,000 barrels per day range. Once it’s sustained, the company plans to drill 6,000-foot lateral section in another partially completed well that should generate an additional 2,000-3,000 barrels daily. “It’s right above the Kuparuk sands. We just need to drill the lateral section in it,” Armfield said of the second well. The early production facility is designed to process up to 6,000 barrels per day, so as oil flow ramps up with the eventual drilling of up to 18 wells — split between producers and water injectors — permanent processing facilities estimated at roughly $350 million will need to be installed, according to Armfield. “We’ve been around for a while and we’re finally going to get this thing done and start (producing) oil and putting money in our pocket and in turn back into your pocket,” he told the AIDEA board. Elwood Brehmer can be reached at [email protected]

FISH FACTOR: Net recycling effort spreads to Southeast; almanac seeks stories

The Panhandle plans to be the next Alaska region to give new life to old fishing gear by sending it to plastic recycling centers. The tons of nets and lines piled up in local lots and landfills will become the raw material for soda bottles, cell phone cases, sunglasses, skateboards, swimsuits and more. Juneau, Haines, Petersburg and possibly Sitka have partnered with Net Your Problem to launch an effort this year to send old or derelict seine and gillnets to a recycler in Richmond, British Columbia. “We’re going to be working in a new location with a new material and sending it to a new recycler,” said Nicole Baker, founder of Net Your Problem and the force behind fishing gear recycling in Alaska. Baker, a former fisheries observer who also is a research assistant for Ray Hilborn at the University of Washington, jumpstarted recycling programs for trawl nets, crab and halibut line two years ago at Dutch Harbor and Kodiak quickly followed. The nets can weigh from 5,000 to 25,000 tons and can cost $350 to $500 per ton for disposal in landfills. The community/industry collaborations in both towns have so far sent 300,000 pounds of gear in seven vans to Europe for recycling. “Each fishing port will have its own special logistics plan but the general role is the same,” she said. “You need somebody to give you the nets, truck them around, load them and ship them.” No two plastics are the same, and the B.C. recycler opened the door for removals of seine and gillnets made from nylon. Baker said only gear that contains lead, such as longline gear or leaded lines, cannot be accepted for recycling. “The recycler I have been using in Europe told me it is illegal to import lead into the EU. So that is something that is still a bit of a struggle,” she said. “But as far as polyethylene and polypropylene trawl gear, or nylon seine or gillnet gear, I can recycle all of those at the moment.” The pace of the fishing seasons will determine the best time for the Southeast towns to begin collecting the nets from fishermen, Baker said, and she hopes to hear from other communities that have net pile ups. “If you are dealing with this issue please feel free to reach out to me because I am happy to try to establish the logistics for a program in your community,” she said. “My goal is to expand slowly but surely and add one new location every year while still continuing support for recycling efforts at the previous locations.” Baker will start off the Southeast tour in Haines during its Earth Day events on April 19. Hatchery numbers Salmon that got their start in Alaska hatcheries are maintaining a decade long trend of comprising one third of the statewide catch. In 2018, a hatchery harvest of 39 million salmon — mostly chums and pinks — was 34 percent of the total statewide take, valued at $176 million to Alaska fishermen. Forty-one million adult salmon returned to Alaska’s 29 hatcheries last year, shy of the 54-million fish forecast, and below the 61 million 10-year average. That’s according to the 2018 salmon enhancement report released each year by the Alaska Department of Fish and Game. Prince William Sound is Alaska’s largest hatchery salmon producer and last year’s catch of 19 million fish accounted for 76 percent of the region’s total, and 75 percent of the value to fishermen at $65 million. Southeast is the second biggest hatchery producer. The 2018 catch of about 8 million fish was 46 percent of the region’s harvest, and 59 percent of the value to fishermen at $63 million; $53 million of that was from chums. At Kodiak, just less than 4 million fish from two hatcheries made up 42 percent of the Island’s total catch last year. The fish were valued at $7 million, or 25 percent of the salmon value. At Cook Inlet, a catch of just more than a half-million hatchery salmon accounted for 26 percent of the total harvest and 30 percent of the dockside value of $5.3 million. About 70 percent of those fish were pinks. Nearly 1.8 billion tiny salmon were released to the sea in 2018 from pink and chum salmon eggs collected in 2017, and from chinook, sockeye, and coho eggs collected in 2016. Alaska hatchery operators forecast a return of about 79 million fish in 2019. This includes returns of 54 million pink, 21 million chum, 2.5 million sockeye, 1.5 million coho, and 109,000 king salmon. Almanac calls Personal glimpses that chronicle the fishing life make up the Alaska Young Fishermen’s Almanac and the call is out for submissions. The second version of the Almanac is in the works and sales of the first run last year were so good, it’s covering costs for the whole project. “People loved it. They’d ask which submission is yours. And you’d be eternally flipping to the picture of the fillets and peanut butter you fed your crew all summer,” said Jamie O’Connor, a Homer-based fishermen and head of the Alaska Young Fishermen’s Network for the Alaska Marine Conservation Council. “It’s a really fun way to communicate to people outside of this community about the culture of fishing, especially from the perspective of the young fishermen.” Last year’s 141-page Almanac featured nearly 60 items from almost every region of the state. “Everything from essays to recipes to photos, poems and art. There’s also a lot of useful stuff in there,” O’Connor said. “Plus, fun stories, a little bit of mischief, pro tips from more mature fishermen to people who want to get into the industry.” The Almanac is styled similar to a younger version of a publication for farmers that dates back to 1792. “It’s modeled after the Young Farmer’s Almanac as a way to share the culture and put out a touchstone every year that people can refer back to or share with their families,” O’Connor said. “That’s what we’re hoping to do for young fishermen as well.” “We’re looking for anything people want to send in. We’re hoping they really flex their creativity, she added. Deadline to submit to the Almanac is Sept. 1 at www.akyoungfishermen.org or via email at [email protected] Fishing watch Lots of April fishing is underway all across Alaska. One sad exception is the roe herring fishery at Sitka Sound where seiners have yet to wet their nets. Typically the fishery has come and gone by mid-March and the harvest this year called for a nearly 13,000-ton haul. The herring, which are valued for their eggs, are showing up but they are too small to call an opener. The last time a fishery was called off at Sitka Sound was in 1977. Golden king crab also has been slow going: 10 to 15 crabbers have pulled up less than 50,000 pounds out of a 76,000-pound limit. The crabs have paid out at $11 per pound, making each worth $70 to $80 to fishermen, reported KFSK in Petersburg. Southeast’s winter Tanner crab catch of 1.3 million pounds was the third-best in 15 years. The month-long fishery was valued at $4.2 million for a fleet of 69 crabbers. Divers are still going down for geoduck clams and Southeast’s spring troll fishery for chinook begins on May 1 in some districts. There’s lots of fishing action at Prince William Sound with a shrimp pot fishery opens April 15 to the 23. Ninety-nine boats will compete for 68,100 pounds of the popular prawns. A sablefish season also opens on April 15 for 134,000 pounds. And due to weather, the Tanner crab fishery was extended in parts of Prince William Sound to April 18. A one-day a week herring fishery opens at Upper Cook Inlet on April 20 through May 31, and a small smelt fishery opens on May 1. Kodiak’s herring fishery kicks off on April 15 with a harvest set at just over 1,400 tons. And spotters are already flying at Togiak looking for early herring arrivals there. That herring fishery, which should come in at around 23,000 tons, usually opens in May. Halibut and sablefish are still crossing the docks and fisheries for cod, pollock, flounders and other whitefish and more are ongoing throughout the Gulf and Bering Sea. Believe it or not, in just a few weeks Alaska’s salmon season will officially begin with runs of reds and kings to the Copper River in mid-May. ^ Laine Welch lives in Kodiak. Visit www.alaskafishradio.com or contact [email protected] for information.

Southwest doesn’t plan to use Boeing Max jets until August

DALLAS (AP) — Southwest Airlines customers relaxing on April 11 evening got an email that may mean their summer vacation could be more stressful and expensive than they planned. Southwest, the biggest operator of Boeing jets, is removing the grounded 737 Max from its schedule until at least Aug. 5, well past the peak of the summer high season. Company President Tom Nealon wrote in his email that the airline is taking the Max out of its schedule two months longer than previously planned to reduce the need for last-minute changes during the summer travel season. The decision, he wrote, would make the schedule more reliable. Other airlines are likely to follow Southwest’s example, putting pressure on Boeing to finish fixing software on an anti-stall system implicated in two deadly crashes. Last month, Boeing and federal officials said privately that the company would finish its work before the end of March. Instead, it was delayed by an unexpected problem that Boeing hasn’t fully described, and the company is now aiming to complete its work by late April. Boeing CEO Dennis Muilenburg said the company’s pilots have flown 96 test flights totaling 160 hours with the new software and will operate more in the coming weeks to prove that the fix works. The changes must be submitted to the Federal Aviation Administration for approval. Foreign regulators including those in Europe and China will then do their own reviews — significant because foreign airlines account for about 85 percent of Max orders, according to analysts for financial services firm Cowen. It remains uncertain how willing passengers will be to board the Max after crashes in Indonesia and Ethiopia killed all 346 people on board. “The general flying public seems to be asking more questions about the airplane than they have with prior fleet groundings,” said Goldman Sachs analyst Noah Poponak, referring to the 2013 grounding of Boeing 787s because of overheating lithium-ion battery packs. The 787 survived and became a hit with airlines and passengers. FAA officials including acting chief Daniel Elwell met in Washington with representatives from Southwest, American and United and their pilot unions. An FAA spokesman said they went over the early findings from the two crash investigations, upcoming changes in the Max software, and pilot training for those changes. Elwell promised that the agency would be transparent about decisions to clear the plane to fly. American Airlines 737 pilot Dennis Tajer, who was in the meeting, said unions pushed for a stronger pilot-training program including troubleshooting items only indirectly related to the anti-stall software. He said FAA seemed receptive. “This will not be a minimum-training event to just get by,” he said. The longer the Max planes sit on the ground, the more money airlines lose. Southwest already figures that just the first three weeks the Max had been grounded, along with other setbacks, cut the airline’s first-quarter revenue by $150 million. Southwest has been canceling about 90 flights a day because its 34 Max jets have been grounded since mid-March. Spokesman Chris Mainz said the new schedule eliminates about 160 daily flights to assure customers that it will operate the flights they booked. That is 4 percent of Southwest’s 4,000 daily flights during summer. Still, unless the airline finds replacement planes quickly — and that can be a complicated process — Southwest will scrap about 10,000 flights that could have carried nearly 1.8 million people between now and early August. American Airlines doesn’t expect its 24 Max jets to be flying before June 5, and it too is canceling about 90 flights a day. United Airlines, with 14 Max planes, says it is shuffling its fleet and mostly covering flights that were scheduled with the Max in mind. Without those planes, travelers will have fewer flights to choose from, and fewer planes to carry passengers whose flights are canceled for other reasons such as bad weather. There could also be fewer fare sales. “Travelers who have not already booked their summer reservations may end up paying a slightly higher airfare,” said Henry Harteveldt, a travel-industry analyst with Atmosphere Research Group, “but it’s not going to be the summer from hell.” Harteveldt said he expects airlines that don’t have Max jets — a list that includes Delta, JetBlue, Alaska Airlines and Spirit — will court travelers with price-cutting. The cost of the Max crisis to Boeing also rises the longer the plane is grounded and jets coming off the assembly line pile up around Seattle. With aircraft orders booming, Boeing shares have soared for more than two years, although they dropped about 14 percent from March 1 through the April 12 close. Most of Wall Street has expressed confidence that Boeing can fix the Max quickly and regain momentum. Poponak, the Goldman Sachs analyst, said however there is a risk that Boeing orders could suffer for the next few years. He said some airlines seemed to view the Airbus competitor, the A320neo series, as superior, and some aircraft-leasing companies faced a challenge to place the Max with airline customers. Since its launch in 2017, the Max had emerged as Boeing’s best-selling jet. Fewer than 400 have been delivered, but about 4,600 are on order. However, the company took no new orders for the Max in March — not even before the March 10 crash in Ethiopia — and only 10 in the first three months of the year, down from 112 in the same period last year. It could be that airlines interested in the plane had already placed orders. Boeing stopped deliveries and announced last week that it was cutting production of 737s from 52 to 42 a month. Airlines in China and Norway have said they want compensation for their grounded planes. While other airlines have kept silent, analysts expect Boeing will make concessions that could total hundreds of millions of dollars. The Chicago-based company also faces a growing number of lawsuits by families of the crash victims. Boeing hasn’t provided numbers on the financial impact from the Max crisis.

Council committee struggles with federal Cook Inlet salmon plan

Two-and-a-half years after a federal court directed the North Pacific Fishery Management Council to develop a fishery management plan for the Cook Inlet salmon fishery, there is still a lot of work to do. The commercial salmon fisheries of Alaska are primarily managed by the state, including in Cook Inlet, where part of the fishery takes place in federal waters. The North Pacific Fishery Management Council for years deferred management of the salmon fishery there to the Alaska Department of Fish and Game, finally removing Cook Inlet completely from its FMP in 2012. The United Cook Inlet Drift Association and the Cook Inlet Fishermen’s Fund sued, saying the federal government had a responsibility to manage that fishery to ensure it complies with the Magnuson-Stevens Act. In 2016, the 9th Circuit Court of Appeals agreed, and the council reluctantly turned back to developing a management plan. Many of the commercial fishermen there have a longstanding dissatisfaction with the Alaska Fish and Game and the Board of Fisheries, stemming from a belief that the department’s allocation decisions governed by the board are politically rather than scientifically motivated and that the escapement goals for sockeye salmon on the Kenai River are too high. They sought to exercise federal influence over state management through the lawsuit, and now are running into roadblocks on federal authority to do so. The Cook Inlet Salmon Committee, which the council convened to gather stakeholder feedback on developing the FMP, has been hung up on philosophical differences at meetings. Council staff Jim Armstrong, who serves as the plan coordinator for the Cook Inlet salmon FMP, told the council during its meeting on April 7 that there are still some major points of disagreement between the stakeholder council members, the council’s Scientific and Statistical Committee and the council staff. “There’s a lot of frustration and they have perspectives on the way that these salmon fisheries should be managed and how escapement goals are set and the biological impacts of spawning stock reaching the carrying capacity, and they feel it has,” he said. “That’s the theme that has woven through my report and experience of these meetings. We’re not just going in there with an agenda and checking boxes. They’ve come in with a certain plan and we’re trying to reconcile that with what’s possible under the federal system and the council process. It’s taking some time.” One of the core tenets of the fishermen’s grievances is the belief that ADFG’s sockeye salmon escapement goals on the Kenai are too large, exceeding the carrying capacity of the system and thus reducing the overall return of fish as well as commercial harvests and therefore not delivering the required maximum sustainable yield. The committee requested a scientific analysis of how different stock-recruitment models fit the Kenai River and at what level the river could be considered overcompensated — essentially, how many sockeye salmon it would take for the stock to begin crashing rather than producing more fish. Dr. Curry Cunningham of the Fisheries, Aquatic Science and Technology Laboratory at Alaska Pacific University developed the analysis. The Kenai River is the largest sockeye salmon-producing system in Cook Inlet, replete with large lakes and gravel bottoms for sockeye spawning and rearing. Cunningham’s results concluded that an escapement of between 1.03 and 1.78 million sockeye would achieve a maximum sustainable yield of 2.97 million to 3.55 million sockeye on the Kenai River. After looking at multiple models, he found that the model that best fit the data from the river — called a Beverton-Holt relationship — offered limited support for overcompensation in the river. “Given that a Beverton-Holt function does not provide for overcompensation, this indicates limited evidence for the overcompensation hypothesis with respect to the Kenai River late-run sockeye salmon stock,” he wrote. This is not necessarily the same case for the Kasilof River, a separate but nearby stock. Upper Cook Inlet fishermen harvest both stocks of sockeye, and while the Kasilof River produces fewer sockeye, it is important to the commercial fishery and sustains a sportfishery of its own. Fitting a model to the data on the Kasilof, Cunningham wrote that the model does not confirm that the Kasilof is overcompensating, but that it can’t be rejected. His results suggested a maximum sustained yield of 629,000 sockeye for an escapement of 235,000 on the Kasilof. Cunningham’s findings about the Kenai River generally agree with ADFG’s calculations about escapement on the river. In a memo released March 26 detailing proposed escapement goal changes for Upper Cook Inlet, department staff indicated that results based on the traditional Ricker model indicate that the current escapement goal is too low and recommended raising the goal by 50,000 sockeye on the lower end and by 1 million on the upper end. Fish and Game noted that the data the department has doesn’t conclude anything about overcompensation but noted that escapements after 1979 are more consistent than those between 1968 and 1978, and so excluded the earlier years in model estimations. Using data from years 1979 to 2012, a goal that would produce 90 percent of maximum sustainable yield would be between 774,000 and 1.7 million sockeye, according to the escapement goal memo. The committee members have repeatedly said they wanted the federal government to influence the state’s escapement goal development, Armstrong said. “This was framed as a fundamental question, as in if this can’t happen, what’s the point of this whole exercise?” he said. “That’s not a committee statement, that’s just a flavor (of the discussion).” The state has jurisdiction over inland waters and out to three nautical miles from shore. The court decision doesn’t give the federal fisheries managers rights to manage inside the state waters, nor does it allow them to overrule state management of fish in those waters. That is another fundamental disagreement between the stakeholders and the council, Armstrong said; some members of the committee believe the federal government should extend its management into the freshwater salmon habitat. Some council members expressed frustration at the delay in the work so far. Council member Bill Tweit of Washington noted in his comments that the council has specific rules under federal law. “I think the more time the committee spends debating those kinds of issues, the longer this process is going to take and the longer it’s going to take to actually develop an FMP,” he said. “If the committee members want a salmon FMP, they’d be well advised to play within the boundaries of the ballfield that is the Magnuson-Stevens Act. None of us get to play outside those boundaries.” Committee member Hannah Heimbuch, who commercially fishes in Cook Inlet, told the council that there is still significant confusion among stakeholders about the council process, as the state management process is more familiar to them. “Some are fairly hopeless and think federal management is the only way to manage the fishery,” Heimbuch said. “Some are understandably frustrated that we even went down this road. And some are very confused … That all with a 40-year low harvest (of salmon in 2018). I think understandably there is a lot of emotion and tension. For me that meant selling my boat last week and leasing this year. “To the extent that the council would be able to do any community outreach that communicates that beyond the scope of the committee, I think that would be helpful.” Elizabeth Earl can be reached at [email protected]

Education health care costs a roadblock to budget reductions

As the Legislature battles over cuts in the fiscal year 2020 budget, K-12 education is set to be one of the biggest items of contention. Districts around the state are bracing for major cuts and layoffs, but working around one major cost item largely out of their control: health care benefits. School district representatives have repeatedly identified health care benefits as one of their major cost drivers for increasing significantly each year. High health care costs are a problem for all employers, but for school districts, which depend heavily on state and local funding, the cost is coming under increased scrutiny as Gov. Michael J. Dunleavy proposes cutting more than $300 million from K-12 education and municipalities wrangle with other cost shifts that could reduce their own contributions to their school districts. Health care in Alaska in general is the most expensive in the country, and thus in the world. With a limited market, remote geography and high cost of living, providers in Alaska regularly charge many times more than providers in the Lower 48. Some school districts self-fund their insurance plans, and though public education is one of the largest employers in the state, the insurance pools are still relatively small. It’s a thorny problem for school districts, said Tim Parker, president of the Alaska chapter of the National Education Association. “NEA-Alaska is a steadfast in our resolve to provide the highest quality education to every student in Alaska but health care costs continue to be one of the primary obstacles to creating an educational environment that will allow us to hire and keep the best and brightest educators in the country,” Parker wrote in an email. The cost of health care benefits is pushing down teacher salaries, making Alaska less competitive in attracting teachers to work in the state, said Dr. Dayna DeFeo, the director of the Alaska Center for Education Policy at the University of Alaska Anchorage’s Institute for Social and Economic Research. In a presentation to the House Education Committee, she outlined a number of the reasons education in Alaska costs so much, one of which is health care. “Alaska has a teacher turnover problem,” she said. “It’s like a perfect storm. In the Lower 48 … we have fewer teachers coming from the system. Alaska hires most of its teachers from the Lower 48. The economy in the Lower 48 is booming, so districts are adding positions and offering more competitive salaries. Since we import most of our teachers from the Lower 48, we are competing in a national market.” Salaries for teachers in Alaska, adjusted for the cost of living, are 23 percent less than the national average. However, the cost of benefits are 11 percent greater than the average, the fourth highest in the country, she said. When school districts start with a fixed budget, the increasing cost in one sector means cuts in another part. Other driving factors include energy and the cost of staffing schools in the smallest communities. Districts have been grappling with the cost of health care for a long time. One of the pitched solutions is to create an Alaska Health Care Authority, which would pool together all state, municipal and school district employees into a single state-run health care plan in a bid to increase bargaining power to negotiate with providers for lower costs. In 2017, a feasibility study estimated that a health care authority could save the state about $200 million annually. The Legislature has not yet taken any action to establish an HCA. Rep. Josh Revak, R-Anchorage, told DeFeo during the committee meeting that he would be interested in exploring the option to move all school district employees to the state’s insurance plan, which serves state employees and the Legislature. However, some administrators of current health care pools say this would be a mistake. Rhonda Prowell-Kitter, the executive director of the Public Education Health Trust, said a state HCA would likely be more expensive than anyone anticipated because of the state’s lengthy procurement process and other legal roadblocks, and in the future could be politically swayed depending on the feelings of another governor. “This idea of pooling together for health care services doesn’t really play out,” she said. “You would see Medicaid, Medicare, Tricare being very successful (if they did). They are not sustaining the hospitals. They need commercial payers to come in and sustain them. I would prefer the state look at cost containment strategies, not pooling strategies.” The Public Education Health Trust serves school districts of various sizes in Alaska with eight different plans. Over the course of the 20 years since its founding, the trust has been able to negotiate lower costs for plan members. The average cost of health care went up about 3 percent for members last year, Prowell-Kitter said, while for others it went up 10 percent to 12 percent. That results in savings. She cited examples from Oregon and Washington, where the states have established HCAs. Both states are now debating what to do as the funding has been undershot — Washington by about $900 million. Most of the Public Education Health Trusts’ ability to reduce costs is because of the trust’s ability to move quickly, Prowell-Kitter said. “We’ve pulled together and been able to have great successes in tackling this problem,” she said. “I feel that the tactics and strategies that we’ve implemented over the last four or five year is finally bending the curve.” One major move that has helped reduce costs in the last few years and may shift the tide of health care competition in the state is the introduction of BridgeHealth, a third-party medical company that negotiates discounts for patients in elective non-emergency surgeries to fly elsewhere in the U.S. for surgeries. For Alaskans, that means flying to Seattle and staying in a hotel for a surgery and still saving money compared to having the surgery done in Alaska. Prowell-Kitter said the providers in Alaska were upset at first but now are starting to negotiate as they have to compete with prices three, four or five times lower in Seattle. BridgeHealth Alaska Region Vice President Sarah Brown said the company has been in Alaska since 2007 but significantly taken off in the last five years or so. Nationwide, the company operates in 34 states, with 50 employers and approximately 600,000 employees. The company only contracts with Centers of Excellence and provides transparent costs to members and patients, which help them foresee costs. “To encourage competition and we make it easy,” she said. “The plan sponsor doesn’t have to negotiate with the facilities themselves. We do it for them … We try to make it seamless and easy for the three individuals involved in our transactions.” Prowell-Kitter said the program saved her members $1 million alone last year. While that money is being spent out of state with other providers, it saves the cost of health care premiums going up the following year. Fred Brown, the executive director of the Pacific Health Coalition, agreed that a state HCA would likely not pan out with cost savings. In Oregon, school districts have wanted to opt out of the Oregon Health Authority but have not been allowed to, leaving them with a disadvantage to compete for teachers as that plan becomes more expensive, he said. “If you know (the Alaska state government’s) procurement process at all, it’s cumbersome,” he said. “Nimbleness is a good term describing the ability of those who are parts of smaller plans not to be bound by the restrictions that exist in the state’s procurement process but being able to seize opportunities almost immediately as they present themselves and be able to obtain substantial savings.” The Pacific Health Coalition has had a similar experience with BridgeHealth, using the program starting in 2012 and saving significantly on non-emergency surgeries for its approximately 110,000 Alaska members, which includes members beyond just public education. Greg Loudon, who consults for Pacific Health Coalition in Anchorage, cited a recent example of a negotiation the coalition made with an orthopedic surgery practice in Anchorage to reduce charges for members of the coalition’s health plans. “We’ve used BridgeHealth as almost a tool with a very sharp edge to negotiate with the local providers,” he said. “I don’t think it’s a coincidence that we were able to negotiate a good deal with the local orthopedic surgeons.” Fred Brown, Loudon and Prowell-Kitter all cited some existing problems in Alaska driving up health care costs — the 80th percentile rule and a perceived lack of competition among them. However, all three also said they’ve been seeing some changes in the provider market due to efforts like BridgeHealth and their collective bargaining power. School districts have begun some of their own efforts as well: the Anchorage School District opened its own health clinic in 2017; the Fairbanks North Star Borough and school district employees are pooled together in a health trust; and the Kenai Peninsula Borough School District began offering BridgeHealth services to its employees in 2018. “We’re the innovators,” Prowell-Kitter said. “Don’t interfere with what’s working.” Elizabeth Earl can be reached at [email protected]

Ferry system under fire seeks sustainable solution

Gov. Michael J. Dunleavy’s administration is moving ahead with its investigation into overhauling the state’s ferry system. The Department of Transportation on April 10 issued a public notice announcing its intent to award a consulting contract for up to $250,000 to the Anchorage-based firm Northern Economics to examine structural changes to Alaska Marine Highway System operations with the end goal of drastically reducing the cost to the state of running the ferries. Dunleavy proposed a $65 million cut to the ferry system’s General Fund subsidy in his fiscal year 2020 budget plan released in February. The governor’s cut would amount to roughly a 75 percent reduction in the system’s budget and ferry operations. The $21.8 million unrestricted General Fund appropriation Dunleavy put forth would allow for ferry service to continue through September before the vessels would be laid up for the remaining nine months of the state fiscal year, which begins July 1, according to DOT officials. AMHS advocates stress that major cuts to service would severely damage the 33 coastal Alaska communities the system serves as it not only provides reliable, affordable transportation, but is also used by businesses to move goods such as commercially harvested salmon regularly moved via ferry each summer. The current fiscal year 2019 budget allocates $86 million in unrestricted general funds to the ferry system to support an overall budget of $140 million. The state money fills the budget gap left after fare revenues are accounted for. The AMHS also collects roughly $17 million in formula-driven federal funds, which are usually used for large vessel maintenance projects. Deputy DOT Commissioner Mary Siroky told Senate Finance Committee members April 10 that the department chose to keep its published summer schedule intact and end service in October rather than spread the funding out over the entire year with drastically reduced service to meet reservations already made for summer travel “in order to maintain the system’s credibility.” DOT’s reduced budget plan would focus service on Southeast Alaska; there would be no September ferry service to Homer, Kodiak, Prince William Sound or Alaska Peninsula-Aleutian communities. Concurrently, the department plans to evaluate and implement a wholly new configuration for operating the state ferries, which will presumably be based on the conclusions of Northern Economics’ analysis. DOT’s request for proposals contemplates several options for full or partial Alaska Marine Highway System privatization; transforming it from a state agency to a public corporation, outsourcing portions of current service; increasing fares; and renegotiating AMHS union labor contracts to reduce operating costs. The consultant study is expected to be done by mid-October in order to give DOT time to implement its recommendations in time for restarting the system July 1, 2020, based on the administration’s plan. However, that work has already been done. 2016 study In May 2016, former Gov. Bill Walker signed a memorandum of understanding with the Southeast Conference — a community development group originally formed in 1958 to advance a transportation network that became the ferry system — directing DOT to partner with the nonprofit in addressing the system’s mission statement, governance structure, operations, revenue opportunities and other potential partnerships that could support major changes to the system. DOT also sponsored part of the ferry reform evaluation, though Southeast local governments, nonprofits and businesses paid for most of it. The original AMHS operational and business plan reform initiative resulted in two reports drafted by the Alaska research firm McDowell Group and the Seattle-based marine engineering and consultant firm Elliot Bay Design Group. The first report evaluated a suite of six potential operating structures the state could employ, from full privatization to remaining as a state agency, in part by studying other ferry operations in the Lower 48, Canada and Europe. That report concluded that a public corporation — similar to the Alaska Railroad Corp. — with an expert-filled board of directors would be the best option for Alaska’s ferries. The public corporation model would provide stability in management and board oversight that could translate into the long range planning that is needed to maximize efficiencies available in vessel operations and overall fleet management, according to the report. While it would not eliminate the need for an ongoing state subsidy, a public corporation ferry system also would at least be partially insulated from political influence, which has led to shifting priorities and continual budget debates. Year-to-year budget uncertainty translates directly to schedule uncertainty and has prevented ferry managers from maximizing revenue opportunities, many ferry stakeholders insist. State General Fund support of the ferries has fallen from a high of $123 million in 2013 to the current $86 million. The “Phase 2” ferry reform report analyzed current ferry operations and opportunities for increasing revenue. It concluded that forward funding the system would go a long way towards improving its ability to capture revenue. Historically, roughly 40 percent of ferry riders have been non-residents, according to the AMHS. The system is often marketed as an alternative to traditional cruise ships, particularly in Southeast Alaska. However, seasonal ferry schedules are finalized just a few months prior to implementation because the system budget is not known each year until the overall state budget is approved. To the contrary, prospective visitors often book their trips more than a year in advance, which can preclude the ferry system from being an option for them, said, Robert Venables, the Southeast Conference executive director and chair of the state Marine Transportation Advisory Board. “The revenue for next year is now in question as the whole existence of the Marine Highway System is one big question mark and folks choose to make other arrangements for that component of travel within Alaska,” Venables said. The report also contends that increasing passenger fares significantly would impact ridership to a point that it would negate the desired revenue benefits. Conversely, lowering fares would not attract enough new riders to offset the lost per-passenger revenue. It does suggest the AMHS employ demand management strategies as a way to grow freight revenue, which is currently about $2 million per year. Continuing service to Bellingham, Wash., is imperative to a successful ferry system, as it accounts for 44 percent of operating revenue, according to the report. Military personnel moving to and from Alaska, as well as tourists often utilize the Bellingham route. Standardization of the ferry fleet to the extent possible and replacing the most expensive ferries to operate will in the long run significantly save money, according to the report; and utilizing modern automated ferries could reduce on-vessel labor by up to 10 percent. Ferries for sale To that end, DOT recently put its “fast ferries,” the Chenega and Fairweather, up for sale as the twin 280-foot Tazlina and Hubbard “day boats” are prepped for service in Lynn Canal. The Tazlina is set to enter service in May with the Hubbard coming later. The 235-foot catamaran-style fast ferries are two of the newest ferries in the 10-vessel fleet, having entered service in 2004-05. However, they have proved to be expensive to run — favoring speed over fuel efficiency — and have been plagued by engine problems and hull cracking. DOT sold the 55-year old ferry Taku in January 2018 to a Dubai-based company for $171,000. The past AMHS reform work did result in House Bill 412, which would have transformed the system to the public corporation model. The bill was introduced by the House Transportation Committee late last session and was expected to be a priority for coastal lawmakers this year, but it hasn’t yet been resubmitted for consideration as legislators and staff continue to refine the major bill, which started at 53 pages. The version of the operating budget that passed the House April 9 cut the AMHS appropriation by about $10 million. Senate Finance co-chair Bert Stedman, R-Sitka, has said maintaining some level of year-round ferry service is a top priority for the committee. “We’re trying to come up with something that will work for the citizens of Alaska and for the budget. Of lesser concern is the administration and the employees,” Stedman said April 10. “First priority here is transportation to the citizens.” DOT’s Siroky said in an interview that current leadership at DOT is certainly aware of the existing ferry studies commissioned by the Southeast Conference, but said in her opinion the public corporation model would not result in significant cost savings. “We’re in a budget crisis, no? So the governor directed us to look at something that speaks to the cost right away, not just the political vagaries that AMHS may have responded to,” Siroky said of the public corporation model, adding that there should be a balance between cost and service. “I think it’s certainly worth us finding out if there’s people who can provide services cheaper than we can.” Seeking stability and savings McDowell Group principal Susan Bell said DOT’s move to largely repeat the work done over the past three years lends credence to the AMHS reform report conclusions. “That stability between changes in administration, the longer planning horizon — I think in some ways what’s happened in this last year helps show the value of the public corporation (model),” Bell said in an interview. McDowell Group did not bid on the latest AMHS reform contract. Northern Economics representatives could not be reached for comment in time for this story. Venables said administration officials did not consult with Southeast Conference officials before choosing to do their own study, but he noted that both reports and related documents are readily available for anyone to review. Bell added that former legislator and current policy advisor to the governor Ben Stevens spent several hours at a December joint MTAB-AMHS Steering Committee meeting in Anchorage. Siroky told Senate Finance that DOT officials are looking into outsourcing routes to some small Southeast communities as part of an alternative to completely shutting down service come October. According to the contracts the state has with ferry labor unions, service to Angoon, Gustavus, Kake, Hoonah, Tenakee and Pelican could be outsourced to another operator. That operator would bring their own vessels and employees and would not be required to use union labor, Siroky said. The concept would require nearly doubling Dunleavy’s proposed AMHS General Fund appropriation to $41.6 million and would provide 288 weeks of service. DOT also projects it would generate a fare box recovery rate of 50 percent. The long-term decline in AMHS fare box recovery is at the heart of efforts to improve, or reduce, service and what it costs. For many years fares from passenger, vehicle and freight service provided 50 percent to 60 percent of the system’s overall operating budget until the mid-2000s when the fast ferries and the Lituya —dedicated to serving Metlakatla south of Ketchikan — were added to the ferry fleet. Fare box recovery since 2007 has stabilized in 30 percent to 35 percent range of overall costs. Siroky said the change is primarily due to more reliable air service in rural Alaska. “People love to ride the ferry for that once or twice a year when they have it planned as part of a trip but for routine work transport, people fly,” she said. Siroky said she doesn’t know of a ferry system anywhere that fully covers its expenses with fare box revenue, but DOT is looking for someone to develop a more short-term plan to change the system and minimize its subsidy, ideally within three years. “We really look forward to somebody taking a really holistic look and saying, ‘This is what really makes sense and this is where you can look to outsourcing or look to have industry come in and help,’” Siroky said. She added that businesses using the ferry for commercial purposes could be displacing barge service, while some Southeast business owners say they rely on the more affordable transportation the system provides. Declining riders Ridership has declined over the past 20-plus years from about 350,000 ferry passengers in 1998 to 251,000 passengers in 2018. Recent ridership declines also correspond to a roughly 25 percent reduction in service since 2012, according to AMHS figures. At the same time, vehicle transport has remained steady at about 100,000 car, truck and van shipments per year. Despite the challenging passenger numbers, DOT Commissioner John MacKinnon noted in the system’s fiscal 2018 financial report that revenues per vessel operating week were the highest in the history of the Marine Highway in 2018. Venables said declining fare box recovery rates are the result of “a perfect storm” of additional vessels in the fleet and service to new, small communities without the ability to maximize efficiencies in utilizing the added ferries. Additionally, the major contractions of Southeast’s former flagship industry, timber, and more recent commercial fisheries declines, have challenged the ferry system, according to Venables. Siroky acknowledged DOT officials have not discussed what it would take to restart the system in July 2020 if the Legislature were to approve the governor’s AMHS budget plan, but said, “it would be a challenge.” “Until we knew what that budget was we wouldn’t have an idea where to even begin,” she said. Venables said the lack of a plan is somewhat concerning — a point echoed by stakeholders to other parts of the Dunleavy administration’s budget proposal — as is the idea of cutting service to smaller communities that are more expensive to serve on the hope the private sector will fill the void. Still, he said the Southeast Conference is ready to help in any way it can to find a long-term solution for the ferry system. “Hopefully at the end of the day we’ll be better off and still have a Marine Highway System that can be healthy and vibrant as possible with more certainty,” Venables said. Elwood Brehmer can be reached at [email protected]

Indy to drill for oil at Point Thomson

A small Alaska explorer has plans to drill for oil inside ExxonMobil’s Point Thomson Unit. Jade Energy LLC received approval of its 2019 plan of development for Area F of the Point Thomson Unit from the state Division of Oil and Gas April 4. The company previously took a 62 percent interest in the Point Thomson Area F lease in the southeast corner of the unit from ExxonMobil in a transaction approved last November. The $4 billion Point Thomson development that ExxonMobil finished in early 2016 is focused on natural gas; the field is estimated to contain upwards of 8 trillion cubic feet of high-pressure natural gas. As a result, it is expected to be a lynchpin for any large gas export project. Point Thomson sits on the eastern edge of state land on the North Slope and is adjacent to the northwest corner of the Arctic National Wildlife Refuge. After dealing with technical challenges related to the high gas reservoir pressure at Point Thomson that hampered initial production— approximately 10,000 pounds per square inch, according to ExxonMobil — the major now produces nearly 10,000 barrels of natural gas condensates that are stripped out of the gas before it is reinjected into the reservoir. Jade Energy entered into a farm-out agreement with ExxonMobil in June 2018 to develop the Brookian oil prospects. The company acquired 3D seismic data from Area F during the 2017-18 winter, the results of which will inform its drilling next winter, according to Oil and Gas filings. The target is Brookian formation reservoirs in the 12,000-foot range that are believed to contain significant amounts of oil. BP drilled two exploration wells in the area in the mid-1990s known as the Sourdough wells and in 1997 BP and Chevron issued a press release stating they had confirmed approximately 100 million barrels of recoverable oil in the area. However, the economic viability of the prospect was unclear at the time and the confidentiality period on the Sourdough well data has been extended, according to the submitted plan of development. Anchorage-based Jade Energy is a startup explorer co-owned by Erik Opstad, who is the company’s managing member. Opstad has also recently been an Alaska manager for Accumulate Energy Alaska Inc., another Slope explorer that is the local subsidiary of Australian 88 Energy Ltd. Accumulate has led Brookian and unconventional oil exploration elsewhere on the Slope in recent years. Opstad could not be reached with questions in time for this story. Jade Energy plans to drill a well bore into the Brookian formations in next winter. From there, the rock samples will be evaluated to determine if they would be suitable for angled or horizontal development drilling, which the company believes is necessary to commercialize the field. If it’s concluded the reservoir is compatible with the modern drilling techniques the well would likely be reentered during the 2020-21 winter when a lateral well would be drilled to appraise the prospect. Elwood Brehmer can be reached at [email protected]

Battle brews over return of Johnstone to Board of Fisheries

Unsurprisingly, there is likely to be a tense vote in the Legislature over at least one of Gov. Michael J. Dunleavy’s appointments to the Board of Fisheries. A pair of resignations from the board added with the end of member terms give Dunleavy a chance to select a majority of the board’s seven seats with four up for confirmation. One — Marit Carlson-Van Dort of Juneau — drew some raised eyebrows because of past work with the Pebble Limited Partnership, and another — Karl Johnstone of Anchorage — sparked a fiery opposition from commercial fishermen and vocal support from sportfishermen. The other two, Israel Payton of Wasilla and Gerad Godfrey of Kodiak, drew little to no controversy. The members of the Board of Fisheries serve three-year terms and determine fishing allocation and opportunity in the state. The appointments are always controversial, with the governor selecting candidates and the Legislature interviewing them intensively before either confirming or rejecting them. While there are no dedicated seats on the board for either region or user group, stakeholders keep track of where members’ experience and interests lie and calculate the balance of the perspectives. This time, the commercial sector loudly objected to the governor’s appointments, saying the balance would heavily tip toward sportfishery interests. Bob Penney of Kenai, who has spent decades fighting for sport priority over commercial in Cook Inlet, was a major financial supporter of Dunleavy during the 2018 election. Johnstone, a retired Superior Court judge and a friend of Penney’s since the 1970s, was the main flashpoint of the group of appointments. Following seven years of serving on the board, he resigned in 2015 after then-Gov. Bill Walker told him he would not be reappointed after former House Speaker Mike Chenault, R-Nikiski, objected to how Johnstone handled the board’s interview process for candidates for commissioner of the Alaska Department of Fish and Game. Johnstone told the Senate Resources Committee in a hearing on April 10 that he was interested in taking up Board of Fisheries service again because he’s been keeping up with fisheries issues and he finds the work rewarding. “There’s an enormous amount of work involved if you do it right, and an enormous amount of time spent … I choose to consider the rewarding part of it, and that’s why I reapplied,” he told the committee. “I have the time and the energy and the desire to continue this work.” Johnstone comes with a heavy wake of controversy. During past service, records from the Alaska Department of Fish and Game showed that the department spent more money on lodging for Johnstone than any other member during board meetings in Anchorage, despite that Johnstone has a home in Anchorage. He maintains a home in Prescott, Ariz., and frequently travels out of state, though he told the Senate Resources Committee that he spends “much more time in Anchorage than I do elsewhere.” In 2000, he was publicly reprimanded by the Alaska Commission on Judicial Conduct for violating the legal parameters of hiring a coroner and was once recommended for nonretention by the Alaska Judicial Council in 1988 for being unqualified, ranking low in integrity, judicial temperament and overall performance. Within the fisheries world, he’s a polarizing character. Sportfishing advocates testified to the committee that he maintained a professional demeanor and always came prepared to meetings, running them fairly for the four years when he served as the chairman. On the other end of the spectrum, commercial fishermen ardently oppose his nomination because they say he is irreversibly biased in favor of the sportfishing industry and say that he created a hostile atmosphere at board meetings. A joint House Fisheries and Resources committee meeting April 15 attracted more than 100 commenters and ran for nearly four hours, with testifiers on both sides. The Senate Resources Committee meeting on April 10 similarly attracted a large number of testifiers on both sides, though the majority opposed Johnstone. The United Fishermen of Alaska, an organization representing 37 commercial fishing groups in the state, doesn’t usually endorse or oppose Board of Fisheries candidates because of the potential for repercussions if the person they opposed is confirmed anyway. In written comments to the committee, UFA noted it hadn’t opposed a board member nominee since 2006. Executive Director Frances Leach told the Senate Resources Committee that Johnstone’s record shows that he is aware of fisheries regulation processes through the board but has disregarded them. “We understand the risk that we are taking in opposing someone such as Mr. Johnstone because we understand there are repercussions that could cause us harm,” she said. “His blatant bias against commercial fishermen was illustrated heavily throughout meetings.” Commercial set gillnet fishermen on Cook Inlet’s east side have a particular axe to grind with him. As chairman, he oversaw an Upper Cook Inlet meeting in 2014 in which a board-generated proposal was introduced to set significant restrictions on setnetters paired to restrictions on the Kenai River king salmon sportfishery, which commercial fishermen saw as a violation of the public process because the proposal was introduced, deliberated and passed without public input during committees or public comment. A number of Kenai Peninsula setnetters testified against his reappointment to the board, with a number saying he used his position to belittle Alaska Department of Fish and Game scientists and members of the public. “My experienced with Judge Johnstone has been anything but fair and balanced,” said Ken Coleman, a Kenai-area setnetter. Though he’s been absent from the Board of Fisheries since 2015, Johnstone occasionally wrote in opinion pieces to Alaska newspapers focusing on fisheries. Some highlighted a belief that personal-use and sportfisheries needed to take precedence over commercial fisheries and referring to commercial fishing in the state as “the aged and fading sibling.” Sportfishing supporters wrote in and testified in support of all the candidates Dunleavy appointment, but particularly for Johnstone. The Kenai River Sportfishing Association hosted a letter-generating form on its website, producing a large volume of form letters from individuals, and other organizations noted that the Legislature awarded Johnstone a citation for his service on the Board of Fisheries in 2015. “We much appreciate that Chairman Johnstone prioritized managing for the sustainability of our fisheries resource first and foremost as well as his efforts to provide reasonable harvest opportunities for all user groups, particularly Alaska residents, most of whom do not own commercial fishing permits,” wrote Martin Meigs, the chairman of the Alaska Sport Fishing Association, in his public comment to the House Fisheries Committee. “People as experienced if (sic) fisheries and as dedicated and competent as Karl Johnstone are few and far between!” During the hearings, a number of legislators showed skepticism about Johnstone, in part because of concerns about how much time he spends in Alaska. Sen. Scott Kawasaki, D-Fairbanks, asked if Johnstone would release his 2019 Permanent Fund Dividend application — which details how many days a person spends out of state as a qualifier to receive the dividend — as a way of quelling public debate about whether he primarily lives in Alaska or Arizona. Johnstone, who said he was calling into the hearing from Arizona, said he did not have an objection but wondered “why you want it.” Applicants for the PFD who are gone from the state for more than 90 days must document their absences and must reside in the state for at least 185 days per year. According to Permanent Fund Dividend Division records, Johnstone did not apply for the PFD from 2002 to 2009, did apply for it while on the board from 2010 to 2015 and did not apply for it in 2016 and 2017 before applying for it once again in 2018. “By all standards, I’m a resident,” he said. “I do spend time outside Alaska. My interest in the winter at my age has waned a little bit, although I still enjoy it once in a while. I do travel quite a bit. I also travel to other states and countries in the winter … From every point of view I can think of, I’m a resident.” Rep. Louise Stutes, R-Kodiak, who chairs the House Fisheries Committee, passed the gavel at the end of the April 15 meeting to explain why she would vote against Johnstone in the joint House and Senate confirmation hearing. Saying she was “morally and ethically compelled” to oppose him, she added that she understood the governor would not appoint a commercial fishing representative to the seat but wanted to at least see an appointment from outside the Anchorage area. “I firmly believe that Mr. Johnstone’s reputation and history of biases show that he is not the right person for this board,” she said. A few commenters said they opposed Carlson-Van Dort because of her work with Pebble, though others supported her because of her background in environmental science and familiar with fisheries. Payton, who currently serves on the board, attracted a number of supportive comments from both sport and commercial interests. The committees forwarded the names to a joint hearing for consideration. ^ Elizabeth Earl can be reached at [email protected]

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