Posted Wednesday, November 14, 2018 - 5:46 pm
Gov.-elect Mike Dunleavy has made former state Division of Oil and Gas Director Corri Feige his pick for Department of Natural Resources commissioner Wednesday afternoon.
He announced the decision Wednesday afternoon during a brief speech at the Resource Development Council for Alaska’s annual conference in Anchorage.
Dunleavy called DNR one of the most important agencies in the State of Alaska and said Feige is “the perfect choice to lead it, especially given our shared vision to revitalize our natural resource sector,” in a formal statement.
“She has a proven track record,” he said when talking with reporters. Her experience and her knowledge is phenomenal.”
Feige led the Division of Oil and Gas within DNR for a little more than a year under outgoing Gov. Bill Walker. She resigned abruptly shortly after Walker’s administration settled a months-long stalemate with BP over the information the company would provide state officials regarding its plans to prepare the Prudhoe Bay field for a potential gasline project.
For her part, Feige said Wednesday that “maximizing our resources and getting the state’s economy back on track” will be a primary objective for DNR under her leadership.
“When our resource partners are doing well Alaska is doing well,” she added.
As DNR commissioner, Feige will oversee Alaska mineral resources, which are owned by the state and managed by DNR. She will also manage the roughly 103 million acres of state-owned land.
Dunleavy has hinted at a plan he's said will be unveiled soon to transfer more state acres into private ownership as a way to spur development.
Most recently, Feige worked as president of The Castle Mountain Group Inc., an Alaska-based oil and gas consulting firm.
Feige is a geophysicist and engineer by training and has held numerous other oil and gas related positions in Alaska government and the private sector.
Her appointment is subject to confirmation by the Legislature, but Feige is generally well respected by individuals familiar with her work in state government.
Last week Dunleavy announced former Gov. Sean Parnell would advise him on the $43 billion Alaska LNG Project during the administration transition.
Dunleavy also said Wednesday that he has asked the Walker administration to "freeze" the implementation of new regulations until his team has a chance to review them.
“Our goal is to pause any new regulations before our team has had the opportunity to assess whether they are needed or will hurt the economy,” he said.
Elwood Brehmer can be reached at [email protected]
Posted Wednesday, November 14, 2018 - 10:28 am
After nine years with the Alaska Seafood Marketing Institute, Executive Director Alexa Tonkovich has resigned.
The organization announced Tonkovich’s departure Nov. 10, though she will stay on as executive director until mid-December while the board of directors searches for a replacement. She plans to pursue a master’s degree in international business and has been accepted to a number of programs in the U.S. and abroad, according to a press release.
“After nine years at ASMI, the timing felt right to further my education and prepare myself for wherever the next steps in my career may lead,” she said in the release.
Tonkovich became executive director in 2015, taking over for former executive director Michael Cerne. Previously, she served as the international director for ASMI. She worked primarily in developing emerging markets in southeast Asia and Brazil, with an office opening in the latter in 2011.
She said the opening of that office as one of the most memorable moments of her time as the international marketing program.
“I love market exploration and expansion,” she said. “There have been a few ups and downs (with Brazil’s economy) … we still see good potential there, particularly with the loss in access to the Chinese market (from retaliatory tariffs).”
She plans to continue her studies in international business, which is a key part of the seafood industry. Depsite the recently souring global trade positions in the U.S. — the nation has been caught up in an escalating trade war with China over a set of tariffs implemented by President Donald Trump’s administration, including on seafood products — Tonkovich said she hopes it isn’t forever.
ASMI has spent years cultivating its relationship with China, but there are potentially other trade relationships on the horizon, too.
“I’m hoping this is just a passing phase,” she said. “…(International trade) really is such an important part of the (seafood) business.”
For now, she said she’s looking to international business schools in London.
The board plans to meet Nov. 19 to discuss appointing a candidate for interim executive director and drafting a notice for recruitment. ASMI Communications Director Jeremy Woodrow said in an email that the board members should have more details about the parameters of the recruitment after that meeting.
“With a heavy heart, the ASMI board accepted Ms. Tonkovich’s resignation,” said ASMI board of directors Chari Jack Schultheis, the general manager of Kwik’Pak Fisheries. “Her dedication to Alaska and the Alaska seafood industry is unparalleled. While she will be missed, we also support her decisions and wish her the very best in what is sure to be a very bright future.”
ASMI has gone through a number of changes in the past few years, particularly since the budget cuts began in 2015 as the state descended into a fiscal crisis. The organization cut expenses, closed its Seattle office and changed out staff, Tonkovich said.
The industry has changed in her time at ASMI, too, she said — more women are moving up into positions of power, and more people of diverse economic, educational and cultural backgrounds are beginning to step in.
In the future, innovation and product development will continue to be issues for the Alaska seafood industry to keep pace with the world, Tonkovich said. Addressing the graying of the fleet and bringing more young people into the seafood industry is an issue in Alaska as well as the rest of the world that needs to be addressed, she added.
With a degree in Asian studies, Tonkovich said she didn’t originally seek a job in seafood, but is glad for the time she spent there.
“I’ve been so honored and it’s bee such a pleasure (to work with ASMI),” she said. “I really grew up here … the organization is in great hands.”
Times have tightened financially at ASMI. While the organization, a public-private partnership intended to market Alaska wild-harvested seafood, used to receive state funding, the Legislature has been working on eliminating its support from the general fund, zeroing it out in the fiscal year 2019 budget.
This year, the organization plans to request an additional $3.75 million from the Legislature to support programs, according to an Oct. 30 news release from the Department of Commerce, Community and Economic Development.
The funds would go to support a match for competitive grant funding, according to the release.
“Specifically, this appropriation would bolster the match on a federal grant program, which will strengthen ASMI’s annual application for federal funding,” the release states. “The competitively awarded federal grant for international marketing allows ASMI to market Alaska seafood internationally, funding consumer and trade programs in 30 countries. ASMI competes each year against such national stalwarts as Sunkist Growers, Washington Apples, the Cotton Council Incorporated, and the U.S. Meat Export Federation.”
Elizabeth Earl can be reached at [email protected]
Posted Wednesday, November 14, 2018 - 10:28 am
The Alaska Chamber announced 12 new members of its board of directors. Cory Baggen, vice president for Samson Tug &Barge, will continue to serve as chair of the 2019 board of directors. The new members are: Kari Ann Baker, attorney at the Law Office of Charles Evens; Richard Berkowitz, director of operations at the Transportation Institute; Damian Bilbao, VP, Commercial Ventures at BP Exploration Alaska; Larry Cooper, chief financial officer at TDX/Tanadgusix Corp.; Darlene Gates, Alaska Production manager at ExxonMobil; Aleashia Huber, personal banker II/bank officer at Wells Fargo; Elaine Kroll, VP and senior industry specialist at Wells Fargo; Pam Long, broker/owner of Haines Real Estate; Robin Moore, sales &marketing manager at the Alaska Wildlife Conservation Center; Lucas Parker, project manager at Kuchar Construction; Deenie Robertson, Barge Division manager at Petro 49, Inc./Petro Marine Services; Tim Sullivan, manager of External Affairs at the Alaska Railroad.
The Matanuska Telephone Association Inc. board of directors has selected Thomas Newman to fill a vacant seat. Previous MTA board member George Trabits resigned to pursue business opportunities. Newman’s professional experience includes surveying on and offshore, software development, project management and corporate management. As a founder and leader of TerraSond Limited, he has grown the company from three partners and a few part-time staff working solely in Alaska to a multinational company that has performed projects in 28 countries, with offices in several U.S. states and foreign subsidiaries. Newman has direct experience with a wide variety of technology for both land and marine surveys and has incorporated the latest technology available through three decades for surveying, positioning vessels at sea, and measuring the depth and character of the ocean. Newman has an MBA from the University of Washington; a bachelor’s degree from the University of Alaska and an associate’s degree from Anchorage Community College. Other members of MTA’s board are Catherine Fosselman, chief governance officer; Roxie Mayberry, secretary; Nicholas Begich III, director; and Larry Wiget, director.
PDC Engineers recently hired Morgan Miller to serve as its new Proposal Specialist. Miller brings four years of A/E/C experience to PDC. She will soon be completing her bachelor’s degree in economics at the University of Alaska Anchorage and has ambitions of attainting her masters in project management, both of which having a focus on sustainable and economic development in Alaska. PDC has worked extensively throughout Alaska, serving over 250 communities, as well as globally, reaching Antarctica and Greenland. PDC specializes in the facilities, transportation, utilities, and land development services markets.
Posted Wednesday, November 14, 2018 - 10:28 am
Alaska salmon fishermen harvested 114.5 million fish during the 2018 season for a payout of $595 million at the docks. That’s down 13 percent from the value of last year’s salmon catch.
A preliminary wrap up of the 2018 salmon season by the Alaska Department of Fish and Game provides summaries for every fishing region across the state.
It shows that sockeye salmon accounted for nearly 60 percent of the total value and 44 percent of the statewide salmon harvest. A catch of 50 million sockeyes added up to nearly $350 million for Alaska fishermen.
Chums were the second most valuable catch at $125 million and made up 18 percent of the statewide catch at just more than 20 million fish. Pinks accounted for 36 percent of the harvest and 12 percent of the value at nearly $70 million. Coho salmon comprised just 3 percent of the catch at 3.6 million fish valued at $35.5 million.
The chinook salmon harvest of 234,614 fish was the lowest since limited entry began in 1975, with a value of $16.3 million.
Salmon prices paid to fishermen increased across the board this year.
Chinook salmon averaged $5.98 per pound, compared to $5.86 last year. Sockeyes averaged $1.33, up 20 cents.
Coho prices at $1.34 increased 15 cents per pound. Pinks averaged 45 cents, an increase of 13 cents over last season; chum prices at 78 cents were up 12 cents per pound.
The dock prices don’t include postseason bonuses and adjustments and the salmon harvests and values will change as fish tickets are finalized.
Forecasts for the 2019 salmon season already are trickling in.
At Bristol Bay, a run of just more than 40 million sockeye salmon is projected next summer which would allow for a catch of 26.6 million fish: 26.11 million at Bristol Bay and 1.49 million in the South Peninsula fisheries.
ADFG said more salmon forecasts for the 2019 season “will roll out in coming weeks.”
Some major Alaska fisheries are winding down for the year, while others are still going strong.
In Southeast, a fishery opened on Nov. 8 for seven different kinds of rockfish.
About 170 divers are still going down for more than 1.7 million pounds of sea cucumbers, and more than 700,000 pounds of giant geoduck clams.
The Dungeness crab fishery is ongoing and Southeast’s golden king crab fishery ended district wide on Nov. 13.
Trollers also are out on the water along the Panhandle targeting winter king salmon.
Pollock fishing closed to trawlers in both the Bering Sea and Gulf of Alaska on Nov. 1. Ditto for cod except for boats using longline, jig and pot gear. Boats also are still fishing for flounders and many other species of whitefish.
Crabbers are close to wrapping up the four million pound red king crab fishery at Bristol Bay; likewise, the take of 2.4 million pounds of Bering Sea Tanner crab is going fast. No landings are reported yet for snow crab; that fishery typically gets underway in mid-January.
Fishing for halibut and sablefish (black cod) closed on Nov. 7. For halibut, 95 percent of the nearly 20 million pound catch limit was taken; for sablefish 79 percent of the 26 million pound quota was caught.
Homer regained its title as Alaska’s top port for halibut landings, followed closely by Seward and Kodiak.
The industry will get its first look at potential halibut catches for next year at the International Pacific Halibut Commission meeting set for Nov. 27-28 in Seattle.
Finally, the state Board of Fisheries meets in Dillingham from Nov. 28-Dec. 3 to take up 47 management proposals for Bristol Bay commercial, sports and subsistence fishery issues.
Fishing jobs jump
After a steep drop in 2016, seafood harvesting jobs grew 8.3 percent last year, the most in percent terms among all Alaska industries.
Harvesting hit a record in 2017 at 8,509 monthly jobs on average and jumped to nearly 25,000 jobs in July.
According to the state Department of Labor’s November Economic Trends, salmon fishing jobs grew overall but varied considerably by region. The crab fisheries had the only employment loss.
By region, harvesting jobs in the Aleutians jumped by nearly 20 percent, mostly through gains in groundfish catches.
Bristol Bay’s fishing jobs also grew overall by 6.2 percent.
The Southcentral region continued its trend of harvester job gains, adding 116 jobs for 7 percent growth.
Southeast Alaska’s fishing jobs were up by 7.7 percent with halibut harvesting growing the most by150 jobs.
Kodiak was one of the few areas to lose fishing jobs. While halibut and salmon harvesting jobs increased, losses in groundfish pushed down Kodiak harvesting employment by 81 jobs each month on average.
The Yukon Delta also lost fishing jobs in groundfish and salmon for an overall decline of 12.7 percent.
The November Trends shows that among all Alaska industries, seafood processing tops the list for injuries.
A rate of 8.8 injuries per 100 full time workers is more than double for other Alaska industries, and is 1½ times the national average for food manufacturing.
The magazine also spotlights the six small communities that make up the Aleutians East Borough.
Alexa Tonkovich is leaving the helm of the Alaska Seafood Marketing Institute to pursue a master’s degree in international business. Tonkovich has been at ASMI for nine years and has been executive director since 2015. She will leave her position in mid-December.
After more than a decade as director of NOAA’s northernmost research lab at Kodiak, Dr. Bob Foy has been named as Science and Research Director for the Alaska Fisheries Science Center.
Foy will be based at the Auke Bay lab in Juneau starting this month and will oversee nearly 500 employees at facilities in Seattle, Oregon and Alaska. Foy has gained international recognition for his work on Bering Sea crab stock assessments and impacts of climate change on crabs and other marine organisms.
Laine Welch lives in Kodiak. Visit www.alaskafishradio.com or contact [email protected]
Posted Wednesday, November 14, 2018 - 10:28 am
The Alaska Gasline Development Corp. told federal regulators Nov. 6 that it plans to start building construction camps and access roads at the natural gas liquefaction plant site in Nikiski in the first quarter of 2020 and along the 807-mile pipeline route by the second quarter.
The state-led project’s latest timeline still shows first liquefied gas production by fall 2024.
Sticking to that schedule assumes the state corporation can sign LNG customers to binding long-term contracts, complete the deals to buy gas from North Slope producers, find investors and financing for the estimated $43 billion project, acquire the rights to about 900 acres of land in Nikiski, secure any state legislative approvals that may be needed, work through all the required federal and state regulatory authorizations, and reach terms with contractors and suppliers for one of the most expensive energy projects in U.S. history.
LNG developments proposed along the U.S. Gulf Coast, in Canada and elsewhere in the world face many of the same issues.
AGDC has been talking for the past year with Chinese interests about taking 75 percent of the Alaska project’s LNG capacity while financing 75 percent of development costs. No firm deals have been announced.
The project’s latest schedule presented to the Federal Energy Regulatory Commission also says work would start in early 2019 on relocation of a few miles of state highway in Nikiski to make way for the gas liquefaction plant and marine terminal.
However, the state corporation leading the North Slope natural gas project lacks funding to buy land for the highway relocation or to contract for its construction.
AGDC’s work schedule presented to FERC is not binding; it’s the corporation’s best estimate of what it wants to accomplish. Federal regulators on Oct. 2 asked for an updated project timeline to include in the draft environmental impact statement, or EIS, which is due for release in February 2019.
But unless the Legislature appropriates additional state money or the corporation raises funds from other sources, the project could run out of funding by the end of calendar year 2019, about the same time FERC is scheduled to release its final EIS in November 2019, according to a spending plan prepared for the AGDC board’s Nov. 8 meeting.
As such, the corporation is planning to approach potential investors in late 2018 or early 2019, according to a report at the board’s Oct. 11 meeting.
The presentation for investors “will outline equity offer terms, methods of investment and commercial structuring,” according to the information given to the board.
The corporation plans to spend between $3 million and $4 million per month in the current fiscal year that ends June 30, 2019.
The project schedule submitted to FERC on Nov. 6 assumes the commission issues its authorization for construction by February 2020 — within the 90-day deadline after the final EIS.
“The forecasted schedule for both the draft and final EIS is based on AGDC providing complete and timely responses to this and any future data requests,” FERC reminded the project team Oct. 2 when regulators presented the state with 63 pages of information requests. The potential for any new information requests will depend, commission staff told AGDC representatives at an Oct. 18 meeting, on whether the corporation’s information is complete or prompts follow-up questions.
If AGDC and its partners move quickly to a final investment decision after receiving FERC authorization, the project schedule calls for site preparation to begin in early 2020 at the LNG terminal and later that year along the pipeline route. Sealifts of large production modules aboard barges to the North Slope would start in 2023.
The state project team on Nov. 6 provided FERC with some of the additional information requested last month, as AGDC nears the end of submitting data needed for the draft EIS. The latest information included:
• A list of 34 potential sites where four rock crushers would be set up and moved as needed to provide material during pipeline construction, operating 24 hours a day between eight and 49 days at each site.
• The location, acreage, number of crew beds and duration of use for the 29 pioneer work camps that would be set up for initial site prep and access road construction along the pipeline route. Each camp would cover about four acres, with accommodations for 120 workers, with the first camps going in by the second quarter of 2020.
AGDC plans to submit by Nov. 19 the final batch of information requested last month by FERC, including:
• Additional details on construction plans to lay concrete-coated pipe across 29 miles of the seafloor from the west side of Cook Inlet to Nikiski.
• Further information on potential impacts on permafrost during and after construction.
• Additional geotechnical and geophysical studies of the feasibility of trenchless pipeline crossings at specific waterways.
Larry Persily is a former Alaska journalist, state and federal official who has long tracked oil and gas markets and projects worldwide.
Posted Wednesday, November 14, 2018 - 10:28 am
Alaska Gasline Development Corp. leaders have approved the formation of a subsidiary firm to manage funding for the $43 billion Alaska LNG Project as they look towards what will be a critical year for the massive natural gas export plan.
Unanimously approved by the AGDC board of directors at its Nov. 8 meeting, 8-Star Alaska LLC provides the state-owned parent corporation with a place to hold equity investments in the project while maintaining the benefits of the federal tax-exempt status as a government entity, according to AGDC President Keith Meyer.
8-Star is where equity contributions from general third-party investment companies, groups or individual Alaskans would be placed, while strategic investors with experience in the LNG realm or technical expertise would put their money into another tax pass-through.
That second company, Alaska LNG LLC, would build, own and operate the gas pipeline and liquefaction system, Meyer said. AGDC would have to transfer project authorizations, permits and data to Alaska LNG or enter into use agreements that would allow the operations subsidiary access to what it needs to do its work.
“This is all part of getting ready for the equity road shows and equity offering that we’ll really put in high gear next year,” he said at the meeting.
He stressed that the tiered companies are necessary because AGDC won’t sell shares in itself; it will remain completely state-owned.
As the Alaska LNG Project funding is currently envisioned, 75 percent of the estimated $43 billion construction cost, which includes $9 billion in contingencies, would be debt-financed through the Bank of China in exchange for selling Chinese oil and gas giant Sinopec Corp. rights to three-quarters of the project’s 20 million tons per year of LNG production capacity. The remaining roughly $11 billion would be raised through equity investments going to 8-Star and Alaska LNG LLC.
“This nested structure does give us a little bit of a leverage advantage in that because of the way this is contemplated 8-Star would own a controlling interest in the project — 51 percent let’s say — by providing 51 percent of the $11 billion. But then we, AGDC, could have a controlling interesting in 8-Star, which could be a little more than half of 8-Star,” Meyer described. “So, if you do that math you could actually control the project company for about $3 billion.”
The name 8-Star references the eight gold stars on the Alaska flag, but Meyer also noted that Article 8 is the portion of the Alaska Constitution that places the state’s natural resource wealth in public ownership and the number eight is considered lucky in some Asian cultures — and places AGDC hopes to sell into.
In concurrence with setting itself up to move into the financing and contracting stage of developing the Alaska LNG Project, AGDC is in the process of finalizing the commercial agreements that will underpin the project financing.
“We’ve now got the banks fully engaged. We’ve got Goldman Sachs fully engaged on the equity side; so now it’s shepherding a lot of paperwork and we want to start to get into what I call preconstruction activities,” Meyer said, adding that corporation officials need to start making decisions regarding where they will get the 800 miles of 42-inch steel pipe and placing other orders with material manufacturers in the near future.
In March, AGDC contracted with Goldman Sachs to assist in soliciting equity investments in the project. The nationalized Bank of China is leading the debt roundup.
On the commercial side, Meyer said President Donald Trump’s trade dispute with China has not slowed down negotiations with Sinopec, although China’s 10 percent tariff on U.S. LNG imports still applies for now.
A team of negotiators from Sinopec and Bank of China traveled to Anchorage in late October, and experts from Sinopec also met with BP and ExxonMobil officials for confidential, technical briefings on the Prudhoe Bay and Point Thomson field gas resources that the companies operate and would feed the Alaska LNG Project, according to Meyer. The two companies have signed preliminary gas sales agreements with AGDC.
“That gave them a pretty good check in the box that, ‘ok, the resource is actually there.’ Up until that point we’d been providing them studies but they really wanted to look at the underlying data,” he said.
Additionally, a delegation from Vietnam including the country’s vice minister of industry and trade and PetroVietnam Gas CEO Duong Manh Son was in Anchorage Oct. 22 to further LNG supply talks between the government-owned corporations.
PetroVietnam Gas is one of several potential smaller LNG customers that could augment sales to Sinopec as an anchor customer.
Meyer said PetroVietnam Gas would likely start as a 1 million tons per year LNG customer with the opportunity to increase sales as the country grows its textile and manufacturing sectors.
Parnell to review project for Dunleavy
Meyer has long acknowledged that AGDC’s schedule to have the Alaska LNG Project in service by as early as 2024 is aggressive, but he said Nov. 8 that now-tightening global LNG markets mean Alaska needs to continue moving quickly to keep up with the competition.
“Acceleration is sort of the word I’ve picked for 2019,” he said.
Ever-growing demand from China for LNG has pushed the expected global market equilibrium point from about 2025 closer to 2022, according to Meyer. That has pushed potential sellers in other countries to advance their projects while taking shots at U.S. competitors.
In early October, a Shell-led consortium formally approved LNG Canada, a $40 billion, 14 million tons per year export project ending in Kitimat, British Columbia, just south of Alaska. The future of that long-discussed project had been up in the air previously.
“Canada pulled out all the stops. They dropped the tariffs; they’ve given tax breaks and then just two weeks ago the head of that project, LNG Canada, in Japan slammed the U.S. supply. Because of the trade war they’ve sort of said, ‘Look, the U.S. is not going to be a big contender but don’t worry there’s Canada,’” Meyer said to highlight the global LNG picture.
He also said that Russian officials have specifically targeted Alaska LNG as a casualty of the trade issues between the U.S. and China in state-run news reports to promote their own LNG projects.
“We’ve got some pretty good competition out there globally,” Meyer added.
Finally, he emphasized that state leaders need to be unified behind advancing the Alaska LNG Project to maintain the momentum the project has now.
Gov.-elect Mike Dunleavy, a Republican, and many Republicans in the Legislature — who may take back control of the House pending the final outcome the Fairbanks District 1 race — have been highly skeptical of Gov. Bill Walker’s state-led plan for the project.
“I’m hoping that under the new leadership and under the changes in the Legislature that government and AGDC are working in great harmony. I’ve sort of said to the AGDC people here that there’s just a whole new level of alignment and harmony here that will help us focus on the fight out there and not the fight in here,” Meyer said. “The fight is with the Russians and the Canadians and the Qataris and a couple others I won’t mention but we’ve really got to be focused on that broader perspective.”
Meyer said he does not think he needs to “sell” the project to Dunleavy’s incoming administration.
“I’m hoping that our actions and results will sell the project on their own,” he said in an interview.
Former Gov. Sean Parnell, who now practices business law at the national firm Holland and Hart, will advise Dunleavy on the gasline project during the transition of administrations.
Parnell emphasized in a brief interview Nov. 13 that he is volunteering on Dunleavy’s transition team and is not part his administration. Parnell had not yet signed any agreements with AGDC to review confidential documents, he said, as he was in the early stages of the work.
Under Parnell’s leadership in 2014 the state partnered with BP, ConocoPhillips and ExxonMobil to advance the Alaska LNG Project with the companies collectively owning a 75 percent equity stake in the venture and the state taking a minority role along with TransCanada, a pipeline company.
The Legislature bought out TransCanada’s interest during a special session in 2015. Walker chose to put the state in the lead in early 2016 when the companies decided to slow the project as a result of depressed global energy markets at the time.
Posted Wednesday, November 14, 2018 - 10:28 am
This season was a sour one for salmon fishermen across the Gulf of Alaska, and participants in multiple fisheries are seeking funding for relief.
The Board of Fisheries and Gov. Bill Walker already granted a disaster declaration for Chignik, which harvested next to zero sockeye salmon this year due to an unprecedented poor return to the Chignik River on the Alaska Peninsula. Sockeye salmon runs across the Gulf of Alaska failed to deliver this year, either in timing or in size, at a huge cost to fishermen.
Now the Upper Cook Inlet fishermen want a chance at federal funding to recover some of their losses. The set gillnet and drift gillnet fleet in Upper Cook Inlet harvested about 1.3 million salmon, 815,000 of which were sockeye, or about 61 percent below the 10-year average harvest of sockeye.
This year was forecasted to be lower than the average, but the harvest as of Oct. 5 — when all Upper Cook Inlet salmon fishing closed for the 2018 season — brought in about $11 million in ex-vessel value, a little more than a third of the $31 million recent 10-year average.
The total run, however, was about 32 percent below what was forecast, according to the 2018 salmon fishing summary from the Alaska Department of Fish and Game issued Oct. 22.
The trick of it was that the Kenai River sockeye run — the heavy-hitting run of the region, which usually peaks in July — didn’t arrive in force until August. For only the second time in Fish and Game’s records, more than half the run arrived after Aug. 1.
That late arrival was exacerbated further by the existing management structure around the high-tension commercial, sport, personal-use and subsistence fisheries on the Kenai River.
“In the previous 10 years, the average date where 50 percent of sockeye salmon passage has occurred in the Kenai River is July 23,” the report states. “In 2018, 50 percent of the final passage estimate did not occur until August 3, or 11 days later than average. The late run timing and smaller peak complicated management in 2018 as management plans with specific dates and triggers were developed to account for average run entry timing and magnitude.”
The Kenai City Council unanimously adopted a resolution in October asking Walker to declare an economic disaster in the Upper Cook Inlet fishery for 2018, with Mayor Brian Gabriel abstaining due to a conflict of interest because he commercially setnets.
With the city of Kenai’s support, the fishermen and a number of organizations and businesses are now seeking support from the Kenai Peninsula Borough Assembly to declare an economic disaster in the fishery as well.
The assembly will consider a resolution to support the request at its Nov. 20 meeting. Cook Inlet Aquaculture Association, the Cook Inlet Fisherman’s Fund, Copper River Seafoods and the Kenai Peninsula Economic Development District all submitted letters in support of the resolution, citing the difficulty to the fishery participants this year.
“Most fishermen didn’t even cover expenses,” wrote Cook Inlet Fisherman’s Fund President Steve Vanek in the organization’s letter. “…Resident commercial fishermen are an important contributor to the economy of the borough. We appeal to the borough for assistance.”
Copper River Seafoods Corporate Development Officers Martin Weiser wrote that the organization, which has “expansion plans in Cook Inlet,” doesn’t have a choice but to absorb the loss, but the fishermen don’t.
“Being a large company with operations in almost every major fishery in this state, we will absorb this loss (as we do not have a choice) and continue with business. This is not the case for many of the folks who focus their fishing activities in Cook Inlet,” he wrote. “It is for their sake and the sake of the future of this fishery that we write this letter in support of a disaster recovery effort on the part of the State of Alaska.”
Disaster declarations made by the governor then go to the federal Department of Commerce, requiring the Secretary of Commerce’s approval. Congress can then appropriate the funds to return to the fishermen. That process recently concluded with $56 million in relief for the 2016 pink salmon disaster, taking nearly two years before funds surfaced. A federal disaster was also declared in 2012 for low king salmon returns to Cook Inlet and the Yukon and Kuskokwim rivers, for which $21 million was eventually appropriated.
The process is too slow to help the people of Cook Inlet, Weiser noted in his letter.
If a disaster is declared, it could open up opportunities for legislative appropriation of assistance grants as well as the opportunity of assistance to permit holders who have loans through the Commercial Fishing Revolving Loan program and may not be able to meet the terms of their loans, noted Cook Inlet Aquaculture Association Executive Director Gary Fandrei in his letter.
The sockeye salmon fishery on the river was stop-and-start, with commercial fishing closed for up to six days at one point to boost passage in the Kenai River. Fishermen complained about the closure on sockeye, the most valuable commercial species in the Inlet, and their complaints were exacerbated later by restrictions on harvest to chum salmon stocks in Kamishak Bay due to low numbers of chum salmon in aerial surveys and a lack of offshore test fishery information to provide for openings for late sockeye salmon.
Managers were working within tight date and opening confines, trying to meet strict Kenai River king salmon goals and multiple sockeye salmon sonar goals while opening up sockeye fishing opportunities with various tools.
Adding to the complexity was the relatively decent-sized run of sockeye returning to the Kasilof River, mixed along the shore with Kenai River king salmon. This year marked the first time the North Kalifornsky Beach area was opened within 600 feet of shore in an attempt to focus harvest on Kasilof River sockeye while minimizing Kenai sockeye and king harvest.
As the Kenai sockeye run continued to fail to materialize, the Kasilof run kept coming back, and managers used the 600-foot fishery in the Kasilof section and ultimately the Kasilof River Special Harvest Area — a one-mile square area around the mouth of the Kasilof River — to try to harvest that stock to prevent the run from surpassing the escapement goal. In the end, it did anyway, according to the salmon season management report.
Pink salmon harvests were also significantly lower than average— about 84 percent below the recent 10-year average — mostly due to fishing restrictions during the sockeye season. One bright note, however, was the coho harvest. Upper Cook Inlet fishermen brought in about $1.3 million in ex-vessel value for cohos, about double the recent 10-year average of $699,300, according to the management report.
Elizabeth Earl can be reached at [email protected]
Posted Wednesday, November 14, 2018 - 10:28 am
What’s a little more uncertainty among friends?
If there’s anything the Alaska resource industry has been certain about over the past four years, it’s uncertainty.
There was a huge sigh of relief Nov. 6 as the ill-conceived Ballot Measure 1 known as the Stand for Salmon initiative was shot down by a 2-1 margin and it appeared at the time that Republicans would regain control of the House of Representatives following a chaotic two-year rule by a Democrat-led coalition most notable for its endless tax proposals and three freshmen members either resigning or not seeking reelection for their unacceptable conduct toward women.
That pair of election results combined with the decisive win by Mike Dunleavy against Mark Begich seemed to cement at least a two-year respite from the constant trips to Juneau for resource industry representatives to deal with every hare-brained attempt by House Resource Committee co-chairs Geran Tarr and Andy Josephson to raise oil production taxes.
Gov. Bill Walker, who introduced a few oil tax increases of his own, never tamped down the worst inclinations of the House majority to keep fiddling with a tax system that not only produced revenue even as prices bottomed out but encouraged the industry to keep investing even as it lost billions of dollars.
Most of the GOP House members quickly assembled on Nov. 7 to declare themselves the majority and Rep. Dave Talerico of Healy as the Speaker of the House.
That started unraveling almost immediately as Valley gadfly Rep. David Eastman — who was censured by the House in 2017 for comments about rural Alaska women on the floor and stripped of his Ethics Subcommittee post in 2018 for leaking the existence of a confidential complaint to a reporter for this newspaper — declared he hadn’t decided whether to cast his vote for Talerico as Speaker.
The caucus became even shakier as votes continued to be tallied in House District 1 in Fairbanks, where Republican Barton LeBon’s 79-vote lead on Election Night turned into a 10-vote deficit to Democrat Kathryn Dodge on Nov. 13 with the count to resume Nov. 16.
A LeBon loss would produce a 20-20 split and set off a storm of wheeling and dealing by both sides to assemble a majority caucus.
On the federal level, the Democrat takeover of the U.S. House of Representatives will no doubt produce gridlock, a flurry of subpoenas for the Trump administration and brinksmanship on government shutdowns, but for the resource development industry the effect should be fairly muted as there is little they can do to stop deregulation, the Executive Branch push for energy dominance or the pending opening of the Arctic National Wildlife Refuge.
Pending projects such as Greater Mooses Tooth-2, Hilcorp’s Liberty offshore development and the Donlin gold mine have their key federal permits in hand, and a large-scale plan is being crafted for ConocoPhillips’ promising Willow prospect in the National Petroleum Reserve-Alaska.
All in all, Alaska has about 400,000 barrels per day of production in some stage of permitting or construction that could come online in the early- to mid-2020s.
Prices have been slipping lately, but the roughly $10 spread between Brent crude — to which Alaska North Slope oil is pegged — and West Texas Intermediate appears to be holding steady and makes the state an attractive place to invest by more than offsetting the transportation costs for getting it to market.
If the Dunleavy administration follows through with its plans for real budget reform and sets a tone that restores credibility with the investor community, Alaska has a chance to set itself on a sounder footing while buoyed by an increase in oil prices that could considerably narrow the budget gap, at least temporarily.
The state’s resource industry has good reason for optimism, and if LeBon pulls out the win in District 1 the state business climate will be well positioned for a way out of this lingering recession.
Andrew Jensen can be reached at [email protected]
Posted Wednesday, November 14, 2018 - 10:28 am
This has been a big year for those behind the Donlin Gold project.
They received a favorable record of decision from the U.S. Army Corps of Engineers and the Bureau of Land Management Aug. 13 — a first-of-its-kind joint decision for the project’s environmental impact statement and right-of-way approval for a natural gas pipeline across federal lands.
Later that month the Alaska Department of Fish and Game approved a slew of Title 16 permits for development activity in salmon habitat.
Donlin Gold was also one of the primary players in the successful effort to defeat Ballot Measure 1, which would have greatly increased the state’s requirements for obtaining a Title 16 permit and would have seriously challenged development of the mine, especially under its current plan.
However, there are still many unknowns surrounding the development and plenty left to do, according to Donlin Gold spokesman Kurt Parkan.
A 50-50 joint venture between Canadian companies Barrick Gold Corp., the world’s largest gold producer, and NovaGold, Donlin Gold LLC has spent roughly $500 million exploring and permitting the open-pit gold project over nearly 25 years, Parkan told a gathering at the Alaska Miners Association conference Nov. 8.
As a result, Donlin’s owners are resistant to putting a definitive timeline on the project, according to Parkan. And the price of gold plays a big role in that, too.
It’s safe to say, however, that current prices of about $1,200 per ounce will not suffice.
“They hesitate to really reveal what they feel is the trigger point because if we hit it that still may not be the time to pull the trigger,” he said while emphasizing the company is focused on the process of the project and letting extraneous factors settle themselves.
“It’s not going anywhere. The price of gold is going to go up, it’s just a matter of when and how much,” Parkan added. “This project will be developed at some point.”
As envisioned, Donlin would be one of the world’s largest open-pit gold mines, extracting about 33 million ounces of gold over an initial 27-year life.
Still, that money is not factored into the $6.7 billion estimated construction cost calculated during a 2011 economic study of the project. Parkan said in an interview that the seven-year-old figure is what the company continues to work from; the focus now is on bringing it down.
The company is open to partnerships to help build out much of its support infrastructure, which could help mitigate some of the high fixed costs the project faces, he said.
“If somebody wants to finance the pipeline, we’ll buy the gas. If somebody wants to build the power plant, we’ll buy the power,” Parkan said.
The 14-inch, 315-mile natural gas pipeline the company plans to build from Cook Inlet to provide feedstock for the 220-megawatt power plant at the Southwest Alaska mine site has been estimated to cost about $1 billion.
Additionally, the project will require about 30 miles of new roads and two new ports.
Parkan also noted that technical changes might need to be made to the current design in order to secure the remaining necessary permits, which could add cost as well.
While Donlin has its federal Clean Water Act Section 404 wetlands permit, the BLM right-of-way and a special permit from the Pipeline and Hazardous Materials Safety Administration, it still needs state approvals that will take several more years to acquire.
Parkan said Donlin is waiting on for rulings on its reclamation and closure plan and integrated waste management permit yet this year; the public comment periods for both are closed. In the coming years the company will look to get its pipeline right-of-way and other land authorizations from the State of Alaska as well as its water rights and dam safety permits.
The tailings dam safety permit will require additional field seasons for geotechnical drilling, he said.
All that work means the project is still a long ways from completion; the mine and associated infrastructure will take another four-to-six years to build whenever the last of the preconstruction work is wrapped up.
Elwood Brehmer can be reached at [email protected]
Posted Wednesday, November 14, 2018 - 10:28 am
At the top, at least, Alaska’s politics have shifted back to red.
That, along with the resounding defeat of Ballot Measure 1, the salmon habitat initiative, was welcome news to many in the state’s resource industries.
“With the defeat of Ballot Measure 1 and the election of Mike Dunleavy (for governor), Alaska is open for business again and we’re really excited about that,” Alaska Miners Association Executive Director Deantha Crockett said before introducing Dunleavy at the association’s annual convention in Anchorage.
Dunleavy, who was under the weather in the days following the Nov. 6 election, repeatedly emphasized that sentiment in some of his first remarks since winning the state’s highest office.
“Alaska is open for business. I’ll say it again; Alaska is open for business. It’s going to be my goal that when folks think about where they’re going to invest in the future that Alaska’s not a laughing stock, that Alaska’s not off the radar screen but Alaska’s a serious player in resource development in this country and in this world,” Dunleavy proclaimed to the Miners Nov. 8.
He commented that Alaska was purchased for its resources and geopolitical location and he suspects both will come into play in the coming years.
He stressed that processes will be adhered to and negative political influence will be left out of large project permitting as well— issues Pebble mine proponents have frequently raised, particularly after Gov. Bill Walker and his Natural Resources Commissioner Andy Mack declared they are against the project.
“We can take care of the environment but we’re going to seize opportunity here in Alaska,” Dunleavy said.
A group of House Republicans, who at the time believed they held a majority in the house, by the slimmest of margins, stressed some of Alaska’s consistent political battles wouldn’t be happening for at least two years.
“We do not need to have conversations about oil taxes; we do not need to have conversations about other taxes,” said Rep. Lance Pruitt, R-Anchorage, who was named the presumptive Finance Committee co-chair if Republicans secure a majority. “It’s time to get back to how can we get out of the way and let the private sector grow the economy in Alaska.
Changes one way or another to the state’s oil production tax have been a primary topic of nearly every legislative session since the mid-2000s.
Alaska Support Industry Alliance CEO Rebecca Logan said beyond the big philosophical battles over taxes she would like to see the Dunleavy administration address general regulations and licensing requirements for all businesses, regardless of industry.
As of this writing late Nov. 13 Democrat House District 1 candidate Kathryn Dodge had taken a 10-vote lead over Republican Bart LeBon. Dodge trailed him by 79 votes after Election Night. More absentee ballots would be counted throughout the rest of the week, according to the Division of Elections.
The House Republicans were counting LeBon in their 21-member majority, so if Dodge’s new lead holds, legislators will be scheming ways to poach members of the other caucus.
Rep. Tammie Wilson, R-North Pole, who was also tapped as a Finance Committee co-chair in waiting, said Republican Rep. Louise Stutes was invited to join the group in Anchorage but decided to remain in Kodiak. Stutes joined with a couple other Republicans to form a bipartisan majority with House Democrats in 2016.
Additionally, Senate President Pete Kelly, R-Fairbanks, saw his 11-vote lead flip into a 152-vote deficit to Democrat challenger Rep. Scott Kawasaki.
However, while that race would be a blow to Republican leadership in the Senate, they would still retain control of the chamber.
House Republicans have expressed some support for Dunleavy’s principal campaign pledge to restore Permanent Fund dividends to the historic formula calculation and repay dividend amounts forgone the last three years to make what has been estimated could be a $6,700 dividend in 2019 if the Legislature goes along with his plan.
Republican leaders in the Senate, on the other hand, pushed the 5.25 percent of market value, or POMV, draw through the Legislature last year with the support of Gov. Bill Walker.
They have been more judicious in responding to Dunleavy’s proposals regarding the PFD.
Sen. Cathy Giessel, R-Anchorage, said the Senate did not do a good job communicating with Alaskans about the need to use the earnings of the Permanent Fund for government and needs to continue to work on that.
“We didn’t actually secure that social license,” Giessel said. “We are aligned with the governor on the goals of keeping our families healthy, keeping our businesses productive and increasing Alaska’s jobs.”
She also said they are with the next governor in keeping “downward pressure on the (state) budget.”
On other issues, Dunleavy said he plans to audit state agencies in an effort to find efficiencies.
He said Medicaid programs would be reviewed to determine if the state can sustainably support them into the future.
Elwood Brehmer can be reached at [email protected]
Posted Wednesday, November 14, 2018 - 9:52 am
Working in Anchorage’s low-income neighborhoods, I have seen firsthand the toll the recession has taken on neighborhood businesses and the local economy. Commercial vacancies are up, unemployment is high, and small businesses are challenged across the city.
I also know that there is a huge pool of untapped talent in our community: neighbors who want to open their own businesses, and are already selling food by the plate, painting houses, or baking cakes for parties and events.
Opening a business takes a leap. It takes an enormous amount of time, money, support from friends and family, and belief in yourself and your idea. It’s a difficult journey, even if you have the best idea in the world.
In Alaska, less than half of all small businesses make it to the five-year mark. Opening a business, and keeping it open, is even harder if you’re part of a community with low access to capital and few friends and family members who have the money to invest in your business or support you in lean months.
That’s why only a quarter of small businesses in our state are women-owned, and only 11 percent are minority-owned. Even with those barriers to entry, we still meet people every day who are eager to make the leap into business ownership.
This year, we started a program called Set Up Shop to support neighborhood entrepreneurs who have the talent but may not have the access to resources they need to start or expand the business of their dreams.
Set Up Shop provides entrepreneurs with a pipeline of services, including training, business assistance, access to loans, and help with real estate.
In our first year, we’ve trained 36 entrepreneurs, helped 12 businesses access affordable business services, and lent $22,500 to help businesses grow inventory and buy equipment. 84 percent of graduates reside in low-income Anchorage neighborhoods, 78 percent of graduates are women and 85 percent are from minority or immigrant communities.
I’m proud of the talent emerging from Set Up Shop. Theron Biglow and Alicia George are a husband and wife entrepreneur team who own “Cali’s Smokey BBQ & Soulfood.”
Theron, or “Ron,” and Alicia, moved to Anchorage in 2013 with just $40 and a bag of their belongings. Ron is a disabled veteran, and Alicia spent several years managing a grocery store deli, where she perfected her barbecue technique.
Together they spent years grilling for their neighbors, family, and church members, and Alicia sensed that it was time for them to formalize and take the leap to small business ownership.
Ron and Alicia were confident in their product, but were ineligible for traditional financing and needed some brass tacks vetting of their idea. They enrolled in Set Up Shop, where they learned how to build a business plan that would enable them to grow into a full-time food cart.
With financing now in the works, they are planning to operate full time on Mountain View Drive starting in the summer of 2019.
While we can’t solve all of the problems that small business owners face, we can help provide the tools, access to capital, and ongoing support to move entrepreneurs to a next phase of growth.
When we capitalize on the drive of entrepreneurs like Theron and Alicia, we harness our city’s strength and can transform and grow our local economy and support small business corridors even in down times.
We work with residents every day in Mountain View, Fairview, and Spenard to make concentrated investments that disrupt concentrated poverty. By practicing a place-based approach, neighborhoods improve for the benefit of the whole community. Supporting neighborhood entrepreneurs is central to our work. Not only are we creating and retaining wealth within a community, these entrepreneurs are role models and community leaders who empower the next generation.
We hope you’ll join us during Start Up Week to celebrate our training program’s graduation and all of the neighborhood heroes that are making Anchorage a better place to live and work.
Set Up Shop Graduation and Neighborhood Heroes Awards Night - Thursday, November 15th at 6PM, at the Church of Love (3502 Spenard Rd.)
Alaska Startup Week is an opportunity for entrepreneurs to connect across the state and is a collaborative effort by multiple organizations to diversify Alaska’s economy, largely led by entrepreneurs. This year, Alaska Startup Week has grown from three communities to ten, with over 70 events in Anchorage, Fairbanks, Juneau, Sitka, Kenai, Soldotna, Palmer, Bethel, Homer, and Seward. Alaska Startup Week is on Facebook.
Kirk Rose is the CEO of the Anchorage Community Land Trust. ACLT is a nonprofit organization that has been working in Anchorage neighborhoods since 2004 to build small businesses and create economically healthy neighborhoods.