Air carriers see leap in insurance bills

Insurance premiums are skyrocketing for air carriers, and the number of companies willing to write policies in Alaska has dropped to just a handful in the past few years.High accident rates and repair costs, a slumping stock market, lawsuits and the terrorists attacks of Sept. 11 are just some of the reasons for soaring insurance costs in Alaska and elsewhere, air carriers and insurance officials say.The bottom line likely will be increased prices for airplane seats, as the costs will be passed on to passengers.Rates for Alaska air carriers have increased anywhere from 20 percent to more than triple in the past year, depending on the number of company claims, said Mike Salazar, a Ketchikan-based agent with Acordia Northwest, an insurance brokerage firm in Seattle."Most air carriers with a clean record had a 20 percent increase,’’ said Salazar, adding that those who had claims are seeing rates go up as high as 200 percent or more.Salazar is not unsympathetic to air carriers. For nearly 30 years before selling aviation insurance, he owned Ketchikan Air Service Inc., a company he sold in 1998."Certainly my time in the industry helped me understand the problems on their side of the fence," Salazar said.Mike Vanard, vice president of Seattle-based U.S. Aviation Underwriters Inc., said insurance his company offers generally has risen 18 to 30 percent in the last year."Insurance is cyclical, it has big, sweeping curves. Right now we’re at the opposite (high) end of that curve," Vanard said.Orin Seybert, president of Peninsula Airways Inc., has been in the commercial airline business since 1956. The longtime Alaska aviator agreed the rates are cyclical."I look at insurance like a pendulum, it goes in cycles, every four to six years it goes up,’’ Seybert said. "It’s been edging up there and it is absolutely the highest I’ve seen it."Seybert said insurance accounts for about 10 percent of his company’s overall costs.Vanard’s company is one of about five or six companies willing to offer insurance in Alaska. A few years ago that number was at least a dozen, according to air carriers and insurance officials.Nationwide, there also has been a decrease in the amount of companies willing to insure air carriers.When selling insurance, companies, whether aviation or otherwise, bet that they will not have to pay out a claim; those buying an insurance policy are betting they may have a claim, said Thomas Turner, an aviation author and former insurance broker based in Cleveland, Tenn.In the case of aviation, both sides are losing, Turner said, as accidents are up and so are claim amounts.That also has prompted many insurance underwriters to get out of the aviation business, Turner said.Key to understanding aviation insurance industry is what is called "loss ratio," the amount of money paid out in claims versus what is taken in by the insurer, Turner said.Aviation insurance companies, who write both general aviation and commercial policies, have paid out as much as $1.25 for every dollar taken in, but the company would still make money -- 30 percent or more -- in investments during a healthy economy, Turner said."Until a few years ago underwriters could operate at a loss, turn around and take the money and invest it in the stock market and make a small fortune out of it," Turner said.Seybert, who has operated in Alaska for 46 years, said he believes the economy more than claims is what drives insurance costs."Rates are not determined by losses as much as on the economy in general," Seybert said.Simply buying aviation insurance is not the problem, but the amount of coverage offered to many carriers may not be not sufficient to cover lawsuits, air carrier and insurance representatives say.Many air carriers in the state are operating at minimum liability coverage levels, but not by choice."Some operators are at a $250,000 per person limit, and in this day and age, that is unrealistic. The carrier is exposed," Seybert said.Most carriers in Alaska, according to Salazar of Acordia Northwest, carry insurance liability minimums of between $500,000 and $1 million per aircraft passenger seat."Most attorneys will almost always try to breach that," Salazar said.The threat of lawsuits scares underwriters, Turner said, and most insurance companies know they’ll lose a jury trial. Out-of-court settlements are typical, he said."From a legal standpoint, pilot negligence is easy to prove, because almost all accidents do have some sort of pilot error," Turner said.

Knowles seeks again to resolve decade-long subsistence impasse

JUNEAU -- Gov. Tony Knowles introduced a constitutional amendment on subsistence Feb. 14 that he hopes will break a decade-long stalemate over the issue.Knowles is proposing an amendment to bring the state into compliance with federal law and allow Alaska to regain control of subsistence on federal lands and waters."The vast majority of Alaskans are united in demanding the opportunity to vote to protect the subsistence way of life," Knowles said in announcing the measure.He called on the Legislature to vote to put the matter on the November ballot. And Knowles again said that the amendment he has offered up is a starting point for debate on the issue.At least one lawmaker who had been opposed to past constitutional amendments on subsistence voiced support for the plan.Sen. Jerry Ward, R-Anchorage, said the federal subsistence rules that grant a rural priority to subsistence is "discrimination by zip code." Ward expressed support for portions of Knowles’ plan, but said he still has reservations about it."Without a doubt, we will have some very interesting caucuses," Ward said.Because of a conflict between the state constitution and federal law, the federal government took over subsistence management on its lands in Alaska.Alaska’s constitution requires equal access to its fish and game resources, something that was important in the push for statehood."The passion involved in this subject is obviously very deep," Knowles said.To regain control over subsistence on the two-thirds of Alaska that is in federal hands, Alaska has to provide for a rural priority in such practices.Knowles, a Democrat in his last year in office, has made resolving the issue a top priority. He wants voters to decide on a constitutional amendment that gives rural residents first priority to subsistence resources.The measure also says the Legislature may grant a secondary priority for subsistence to urban residents who have a history of dependence on the resource.But administration officials concede it will be a tough sell before the Legislature, which has refused such an amendment despite five special sessions on the issue.This year’s efforts are made more difficult by an increasing frustration expressed by Knowles’ chief allies on subsistence, the Alaska Federation of Natives.The federation board of directors voted Feb. 12 to back Knowles’ efforts. But Albert Kookesh, a board co-chairman and state representative from Angoon, said some in the Native community don’t want a resolution to the conflict."The Native community is very satisfied in rural Alaska with the federal board, they are very satisfied with the response they get from the federal board," Kookesh said.He said Native organizations have spent $20 million over 10 years seeking a resolution to the dilemma. If there’s a resolution to the conflict, they want it soon.AFN leaders have vowed to push for amendments that make any state deal on subsistence closely mirror the federal management scheme, which allows for Native participation in deciding subsistence issues locally.Senate President Rick Halford, R-Chugiak, who has been a key opponent of changing the state constitution’s equal access provisions, could not be reached for comment.But Halford said earlier that he is considering proposing an amendment that would grant a local preference to allow Natives and others in urban areas with ties to subsistence to also participate.The House has passed a constitutional amendment in the past, but it has failed in the Senate."Having experienced the position of the Senate over the last several years, to hear them suggest this particular approach I think is a giant step," said House Speaker Brian Porter, R-Anchorage.Porter said both House and Senate legislative leaders plan to meet with the AFN officials "within the next month" to discuss several issues, including subsistence.

Stevens puts fish labeling into Farm Bill

WASHINGTON -- The U.S. Senate unanimously approved three amendments to the Farm Bill, which were authored by Sen. Ted Stevens, R-Alaska, and aimed at helping Alaska’s commercial fishing industry.The Farm Bill passed the Senate Feb. 13 and now must be reconciled with the House version of the bill.The first amendment requires that seafood be labeled with its country of origin and provide information on whether the product is farm-raised or caught in the wild. In the case of wild salmon, the state of origin must be included. Stevens said the measure will help consumers make better-informed decisions about the seafood they eat.The second amendment would make wild seafood eligible for an organic product promotion effort.The third measure calls on the aecretary of Agriculture to report to Congress on efforts to expand the marketing and purchase of canned salmon within the department’s food and nutrition programs.Stevens said using up existing inventories of canned salmon is critical to Alaska’s salmon industry.

Tourism bookings still down 24%

A poll of Alaska visitor businesses shows bookings for this summer are down 24 percent compared with last year, leading the state tourism group to continue its push for legislative funding.The Alaska Travel Industry Association dispatched GMA Research to conduct a poll tracking inquiries and bookings. The pollster received more than 300 responses during a six-day period in early February.A similar poll was conducted late last year with statistics released in December. Both surveys aimed to reveal the effects on Alaska tourism businesses from a lagging travel industry after the terrorist attacks in September."Clearly the problem is as big now as it was in December," said Dale Fox, ATIA board chairman. Tourism bookings are still significantly off, he said.As of early February bookings were down by roughly one-fourth for many types of visitor industry companies, the survey results showed. According to the research, air taxi bookings are off by 28 percent; backcountry tours, 27 percent; airlines, 23 percent; cruise bookings, 24 percent; hotels, 26 percent; and package tours, 20 percent.The December survey of about 300 Alaska tourism businesses showed an average decrease of 23 percent in bookings compared with the same period a year earlier."An initial poll conducted in early December presented clear evidence that Alaska’s tourism industry was in crisis," said Tina Lindgren, ATIA president. "For anybody hoping the situation would simply improve on its own over time, the new data is an unwelcome reality check for one of the state’s major industries."Some differences showed up in the February results, said Dale, who operates a tourism business, Birdwatching Tours of Anchorage. While a few types of businesses showed gains from the previous survey, others listed further decreases for aggregate figures similar to December’s statistics, he said. One tourism company, Denali Park Resorts, which operates 500 hotel rooms plus retail, rafting and reservations services, has experienced reduced bookings.Between Sept. 11 and December bookings came to a standstill, said Jack Reiss, vice president of operations. Although January was a strong month for bookings and February hit even with 2001’s mark, the results so far haven’t overcome the fall setback, he said.Cruise lines have found some success in filling ships by discounting cruise rates, he noted. However, some of those visitors might not pay for land tour packages which include Alaska businesses, he said.Such research is part of ATIA’s efforts to secure marketing funds from state lawmakers."The purpose of this research is to show the Legislature it is indeed a problem, and if the Legislature doesn’t act in short order it may be too late," Fox said.Late last year ATIA officials said they planned to ask the Legislature for $12.5 million for special marketing efforts. Gov. Tony Knowles has proposed spending $10 million for the effort, Fox said. The state House of Representatives approved $6 million for tourism marketing, and that bill now goes to the Senate for approval, he said. Meanwhile, the Senate has its own bill for $9 million in tourism marketing funds, Fox added.ATIA leaders are encouraging state senators to approve the funding appropriation swiftly. Waiting until the end of the session in early May could be too late, Fox said.Some tourism operators, anticipating a certain level of summer business, tell Alaska businesses like hotels to save blocks of rooms. This year, some of those operators have said they can’t fill some of those rooms and canceled some designated room blocks, leaving hoteliers and others needing to find replacement business, he said."We need to get more visitors to help fill those rooms," Fox said.Without the marketing funds "hundreds of businesses and thousands of jobs are at risk," Fox said.

Global warming may open Northwest Passage to shipping

For centuries, explorers have dreamed of sailing through Arctic passages as a shortcut between Europe and Asia.Lorna Knaus says the dream of navigating the Northwest Passage and the Northeast Passage has never been closer to reality.Knaus, chief executive officer of Pacific Rim Board of Trades, says global warming and instability in Panama, which took over control of its famous canal from the United States in 1999, will prompt or require the use of Arctic shipping routes.The 69-year-old Anchorage business consultant, who has an office in Taiwan, says she believes the routes will become viable in her lifetime and Alaska and the rest of the world must begin thinking about infrastructure that would support the shipping routes.The Northwest Passage winds through Canada’s Arctic archipelago and along the northern coast of Alaska between the Pacific and Atlantic oceans. The Northeast Passage goes around the top of the Arctic coasts of Norway and Russia.Knaus believes any coastal country along the routes will benefit tremendously by adding such things as port facilities and warehouses to accommodate the thousands of ships that would transit offshore. She believes Alaska could go as far as purchasing a state-owned icebreaker to help keep the ice-choked waters open.Now that the ice is melting, the possibilities are staggering, she said."I’m trying to get people to consider our future," Knaus said. "The weather is changing and we have the technology now to do this."Or, as Knaus likes to say to politicians, shippers and journalists, "Prove me wrong."She admits that her challenge of focusing on the Arctic routes generally has been met with a cool reception.But some Arctic experts believe Knaus’ ideas have at least some merit.Lawson Brigham, deputy executive director of the U.S. Arctic Research Commission in Alexandria, Va., has never met Knaus but said she’s "on the mark.""It sounds like she’s a visionary and taking a holistic view of our changing planet," said Brigham, who holds a doctorate in oceanography from Cambridge University in England and is considered an expert in Arctic navigation and sea ice. He is a former U.S. Coast Guard captain who commanded some of the service’s ice-breaking cutters.Brigham said that while scientist argue over what is causing global warming, they do agree that the rising world temperatures have caused the permanent ice cap over the North Pole to shrink in thickness by about 43 percent.That, he said, may allow the more popular Northwest Passage route to become navigable in the summer months in a few years, or even longer by midcentury, or earlier."We might see something within 20 years; the climate isn’t going to reverse itself anytime soon," Brigham said."A few years ago, no one would have dreamed of seeing a ship n the middle of the Arctic," Brigham said. "Since 1987 there have been 48 ships through or deep into the Arctic, most of them in the summer months."Ships traveling from Europe to the Far East via the Panama Canal must travel about 14,500 miles. The Northwest Passage cuts the distance to just more than 9,000 miles.It won’t be ice stopping ships from plying the Arctic, but economics or environmentalists, he said.Environmental concerns would be great, he said."The reality is a fair amount of folks would see ships plying Arctic waters as a negative thing," Brigham said. "The potential impacts to indigenous fishing grounds and the noise of the ships breaking ice would be great."He also said an oil spill in the Arctic would likely devastate the fragile ecosystem."All you have to do is look at the Exxon Valdez," Brigham said.Brigham said few of the world’s ships are built strong enough to handle even a watery Arctic passage, because of icebergs that would pierce all but the most durable double-hulled ice-breakers currently in use.Building ships with greater structural strength to handle icebergs would mean huge capital costs and additional fuel "to push that extra steel," Brigham said."If the economics are there, ships will sail," Brigham said.James O’Dell, a United States Coast Guard spokesman in Washington, D.C., said there are international concerns, too.Canada and Russia both believe the Arctic passages are waters within their countries’ boundaries. The United States believes them to be international waters.The Coast Guard’s new icebreaking cutter Healy, outfitted with special oceanographic equipment, successfully plied the Northwest Passage in 2000.Beyond researching the Arctic, the Coast Guard has no plans to keep the ice clear in either passage, O’Dell said."That decision will come from industry, not governments," O’Dell said."At this time, nothing seems to indicate it is being looked at as a viable source of transportation," O’Dell said."It’s a good concept just as several generations before us thought of it as a good concept," O’Dell said, pointing out many people over time have lost their lives attempting to navigate over the top of the world. "The Northwest Passage for centuries has been looked at as a possible transportation route, and that’s just what it remains today, a possibility."

Bush visits Alaska, calls for ANWR development

ELMENDORF AIR FORCE BASE -- President Bush, greeted by snowfall on his first presidential visit to Alaska, pressed his argument Feb. 16 for oil and gas drilling in the Arctic wilds here.The "Arctic warriors" stationed at this base some 650 miles south of the Arctic National Wildlife Refuge applauded Bush’s controversial call to open the preserve to energy exploration. His broad energy package is stalled in the Senate, where the Democratic majority fears the environmental impact of drilling in ANWR.Bush said dependence on foreign oil is a threat to national security."Folks, we got to find energy in our own country, and a great place to start is right here in the state of Alaska," he told troops in camouflage fatigues and fleece jackets.Stumbling a bit over his words after the seven-hour flight from Washington, Bush added that drilling at home is also in the nation’s economic interests."It’s good for jobs, it’s good for working people, it’s good for people to be able to put money on the plate -- money on the table -- so they can feed their families."With clear disdain, he brushed off environmentalist critics and summed up their opposition to Arctic drilling in this way: "Well you can’t do that; it’s going to ruin this or that.""Listen," Bush continued, "there’s no doubt in my mind ... there’s no doubt in the minds of people who take a sound scientific look at this, that we can do so without endangering the environment, that we can find energy for America’s people and at the same time preserve the beauty of Alaska."Bush was in Alaska on a refueling stop for Air Force One as it carried him, and an entourage including first lady Laura Bush and Secretary of State Colin Powell, overseas to a three-nation Asian tour.Bush, who briefly donned a bulky parka with massive fur-lined hood, boasted that he was the only U.S. president ever to call Alaska home. That was the summer of 1974, when he was 28 years old and working a desk job at a construction company in Fairbanks.In the 2 1/2 hours that Bush was in Alaska, he also scooped up $400,000 for the state Republican Party. He headlined a $1,000-per-plate luncheon where big spenders willing to part with $10,000 apiece also got their photo taken with the president.Acknowledging the novelty of such presidential politicking in the country’s northernmost reaches, Bush made brief mention of the 2000 election recount and Alaska’s role in putting him just barely over the top: "Who said your three electoral votes didn’t matter?"

Key ANCSA players take audience back in time

For aficionados of Alaska political history, four University of Alaska Anchorage seminars this spring on the 1971 Native claims settlement are a trip down memory lane.The first two of the seminar series, "ANSCA Revisited: A Fair and Just Settlement," were held Jan. 26 and Feb. 16 at UAA.The final two seminars are set for March 16 and April 20 at the Anchorage Museum of History and Art.On Jan. 26 former Democratic U.S. Sen. Mike Gravel and Robert Zelnick, one of Gravel’s major antagonists during his bid to defeat incumbent Sen. Ernest Gruening in 1968, shared the stage.Zelnick, who now heads the journalism department at Boston University, was a political columnist at the time for the Anchorage Daily News.Two well-known Alaska Native leaders, Joe Upicksoun of the Arctic Slope and Nels Anderson from Western Alaska, appeared with Gravel and Zelnick at the first symposium.In 1968 the sparring between candidate Gravel, who ultimately won, and reporter Zelnick, an admirer of Gravel’s opponent, Gruening, was a campaign highlight.The two have since made up, Zelnick told friends in Anchorage in January. But faint echoes of the 1968 battles could be heard at UAA as Gravel and Zelnick talked about Alaska politics and the claims settlement effort. "The 1960s was a time of political awakening for Alaska’s rural people. The Native land claims was both a cause and a result of that," Gravel said.Prior to the mid-1960s most Alaska politicians handn’t paid a lot of attention to rural voters. They had traditionally voted democratic and the state’s elected leadership, mostly democrats, largely took them for granted, Gravel told his audience.Now living in Virginia and active in public affairs, Gravel said he owes his election to the Senate in 1968 to Native voters who heavily favored him because he actively solicited their support.Zelnick spoke of his own experiences as a reporter learning about the cultural differences between rural and urban Alaska. The Daily News at the time had done a prize-winning series of articles on poverty in rural Alaska, which brought rural problems to many urban readers for the first time.Zelnick also defended the earlier generation of Alaska politicians, including Gruening, in their concerns and accomplishments for rural Alaskans.Joe Upicksoun, one of the founders of the Arctic Slope Native Association, spoke of the early frustrations of the North Slope people in seeing the state of Alaska take title to lands they thought was theirs and lease those lands to major oil companies. Major oil discoveries were ultimately made.Upicksoun was one of three Inupiats of the Arctic Slope who signed the first large aboriginal land claim in 1966. That triggered other large Native claims and started a move toward the 1971 settlement.Nels Anderson, a Native leader in the Bristol Bay region who helped form Bristol Bay Native Association and who served in the Legislature in the 1970s, spoke of the importance of education in fostering the political awakening of Alaska Natives.Education continues to be crucial to rural young people. Anderson’s daughter recently received a master’s degree in business administration from the UAA.Speaking at the February 16 conference were Esther Wunnicke and John Havelock. Both were influential in forming early state of Alaska positions toward land claims in the 1960s.Havelock was attorney general under Gov. William Egan in the late 1960s and early 1970s.The March 16 seminar will include Sam Kito and Janie Leask, two Native leaders; John Shively, who helped NANA Regional Corp. in its early development years; and Guy Martin, who was a staff member to Nick Begich, the Alaska Democratic congressman who played a prominent role in passing the claims act and who was later killed in a plane crash.The last seminar, April 20, will include Willie Hensley, who helped form NANA Regional Corp. and who was a major influence on the land claims movement; Bill Van Ness, who as staff to former Sen. Henry (Scoop) Jackson played a key role in claims legislation; Mary Kapsner, a Native legislator from Bethel; and Lee Gorsuch, chancellor of UAA and who was involved in working with the Native regional corporations in their years of early development.

Salmons packs more omega-3s than tuna's 'Viagra of the Sea'

KODIAK -- The omega-3 fatty acids found in fish have been credited with everything from reducing heart attacks and some cancers to improving eyesight. Now, the U.S. Tuna Foundation is gleefully comparing canned tuna to "Viagra of the Sea." The group was referring to a new book by dietitian Ellen Albertson, "Temptations, Igniting the Pleasure and Power of Aphrodisiacs," which claims that diet changes can "awaken a sleepy libido." Albertson says one way to improve your love life is to eat more tuna fish sandwiches. In reviewing the book, the February issue of Prevention Magazine said: "If you use white albacore tuna, you up your intake of omega-3 fats. More and more researchers now believe that omega-3s help ward off depression, surely one of the worst enemies of feeling sexy." Thus the conclusion that eating more canned tuna lifts your spirits, resulting in a better love life. Canned tuna is the most widely consumed seafood product in the United States. Alaska’s salmon industry could easily ride on the coattails of the tuna folks’ sexy claims. For more than a decade, reports by health scientists all list salmon as containing more omega-3s than tuna. International Health News, for example, states that all fish are not created equal, and it’s important to choose fish with high levels of polyunsaturated fat. "Salmon scores well here. By comparison, albacore tuna and cod have considerably less of the good fatty acids and may not produce the result you need," a recent report states. Fatty acids are basic units of fat molecules, arranged as chains of carbon, hydrogen and oxygen. Fats are mixtures of different fatty acids. Essential fatty acids are not made by the body, but must be supplied by the diet. Omega-3 fatty acids are highly polyunsaturated and are found mostly in higher-fat fish, such as salmon. It’s estimated that 85 percent or more of the people in the Western world are deficient in omega-3 fatty acids. If canned tuna can turn you on, eating canned salmon should result in a sexual revolution. Unwanted aliens Bio-invaders cost billions of dollars in damage to marine ecosystems, and if they take hold, in some cases, they can eliminate native marine and plant species. The unwanted aliens are, for the most part, tiny hitchhikers that are dumped along with the ballast waters of ships that traverse the world’s oceans. They are credited with being involved in 70 percent of native aquatic species extinctions in the last 100 years. Cornell University scientists reported three years ago that more than 30,000 non-native species cost the United States roughly $123 billion a year in economic loss. This includes $35.5 billion for alien weeds, $20 billion for insects, $19 billion for rats and $3 billion for zebra mussels alone. A more recent report by the Pew Oceans Commission said, "At least 7,000 different species of marine life are likely transported each day around the world. ... Ballast water carrying this wide array of non-native life arrives in the U.S. at the rate of 2 million gallons per hour." Studies around the world reveal a remarkable array of invaders, representing all of the major and most of the smaller groups of life. Certain viruses and the bacteria that cause cholera have also been detected in ballast water. The commission urged the government to quickly develop mandatory programs to attack the problem. There are some regulations already on the books to prevent introduction of exotic species into U.S. waters, but they are largely voluntary and mostly ignored. The Invasive Species Act of 1996 provided ships entering American ports with a three year window to undertake a voluntary program whereby coastal derived ballast water would be exchanged on the high seas, followed by re-ballasting with midocean water. The program went into effect in July 1999; however, during the first year only 12,170 of the 58,000 vessels arriving in U.S. ports had filed a mandatory reporting form. Attempts to stave off these stowaways have included in-hull filtration systems, heat treatments and biocides, all of which are either too expensive or harmful to the environment, or both. Now, the Fish Information Service reports that a group of industrial engineers at Sumitomo Heavy Industries in Japan has come up with a simple solution. The one element that sustains safe passage for the invasive stowaways, and which also promotes hull corrosion, is oxygen. Pumping nitrogen into the ballast tanks would displace the oxygen. One test showed that after introducing nitrogen for two days, the diminished oxygen environment resulted in significant population reduction: 79 percent of the tubeworms, 82 percent of the zebra mussels and 97 percent of the green crabs. On top of that, the rust and corrosion rate dropped by 90 percent, which translates to an average annual reduction in maintenance costs of $70,000. "It’s not perfect and it doesn’t kill everything," Mario Tamburri of the Monterey Bay Aquarium Research Institute told FIS. "But until international law mandates that ballast water contain no living organisms, why not require this technology that saves industry money and is also good for the environment?" Alaska’s waters are not exempt from the foreign invaders. "Up to a dozen species from Asia have been identified in the waters of Valdez and Prince William Sound from all the oil tankers over the years," said Bob Pierkowski, former head of Alaska Department of Fish and Game’s Mariculture Division. He added that state biologists are on the lookout for green crabs, which since 1990 have migrated from California to Washington. The tiny crab have wiped out all other crab they’ve encountered, including much larger species like Dungeness. "We expect to see them in Southeast Alaska. It’s not a matter of if, it’s a matter of when," Pierkowski said. Interestingly, the Pew report considers the thousands of Atlantic salmon escaping from fish farms in the Pacific Northwest among the bio-invaders.  

Business Profile: Anchorage Messenger Service

Name of the company: Anchorage Messenger ServiceEstablished: 1964Location: 1035 W. Fireweed Lane, AnchorageTelephone: 907-278-2736Major focus of services: Anchorage Messenger Service provides courier services either as part of its route deliveries within two to three hours or for rush orders delivered in 30 minutes to an hour. The firm also offers overnight delivery statewide or to Washington and Oregon as well as same day delivery to the Matanuska-Susitna area.History of the company: In the 1960s several lawyers urged Betty Hicklin, a court clerk, to start a courier service for filing legal paperwork. Anchorage Messenger Service originally operated from the courthouse, and Hicklin ran it as a side business. She built up the company, eventually serving about 200 clients, until she sold it to Mattson Investigations LLC in 1995.Other couriers had entered the market since Anchorage Messenger Service started, so the company had about 90 clients and four couriers by the mid-1990s.In 1999 Anchorage Messenger Service grew to 380 clients. Additional competition, including some firms run by former Anchorage Messenger employees, has affected the company, which now totals 320 clients.After working for Mattson Investigations for several years Victor Ratz acquired Anchorage Messenger Service in mid-2001. The courier service employs 12 drivers, and Ratz hopes to add two or three others this year to serve an expanding route system."What makes our type of courier messenger service different is that we specialize in court work," said managing director Ratz.Other clients include accounting, engineering and construction companies, physicians and state and city government.Routes are dictated by a computer-aided mapping program from Microsoft.Top accomplishment of the company: Ratz is pleased with the company’s customer service, which he describes as consistent, accurate and affordable. Customer retention is difficult, since Anchorage Messenger Service sells a service rather than a product, he said.Major player: Victor Ratz, managing director, Anchorage Messenger Service.While living in London Ratz ran a retail music store. He next worked for Trace Elliot, a sound equipment manufacturer, where he was European sales manager and artist relations manager for five years. In Hawaii he studied at Chaminade University of Honolulu. He moved to Alaska to live near his extended family and began working for Mattson Investigations in 1995.-- Nancy Pounds

Knowles says railroad could pay for gas line

Alaska Gov. Tony Knowles has proposed that the state of Alaska finance a $17 billion North Slope gas pipeline using tax-exempt bonds issued by the state-owned Alaska Railroad Corp. The railroad has special authority to provide tax-exempt economic development financing, granted by Congress in 1983 when the railroad was transferred from federal to state ownership.Congress took away most powers for states and municipalities to issue tax-exempt industrial development bonds in the 1986 tax reform act, but the special provision for the Alaska Railroad was one of three exceptions allowed in 1986, Knowles told the Alaska Gas Policy Council, a citizen advisory board, in Anchorage Feb. 7."Our state-owned railroad has the unique ability to do this kind of financing without limit as to amount or geographic scope," the governor said, meaning that sections of the pipeline built in Canada as well as Alaska could benefit from the arrangement.The railroad would issue "conduit" bonds to provide the financing, meaning that the credit of neither the railroad nor the state would be at risk. Similar conduit tax-exempt financing has been done for years in Alaska for various private projects that qualify under the Internal Revenue Service code."This is worth about $1 billion to the North Slope producers, in today’s dollars, off the financing costs of the project," Knowles said.The interest rate on tax-exempt debt would be about 2 percent below the cost of conventional taxable financing, according to Neil Slotnick, deputy commissioner of the Alaska Department of Revenue.Jeff Brown, a Goldman Sachs Co. vice president who works with Alaska on special financing, said the 2 percent difference could translate to about $150 million per year in lower annual debt service. He said that would translate into a possible reduction of 10 cents to 12 cents per thousand cubic feet on the tariff charge for transporting North Slope gas from northern Alaska to markets in the Lower 48 states.However, that might not be enough to substantially improve the marginal economics of the project. The tariff has been estimated at about $2.10 per Mcf for a northern partly offshore route to $2.40 per Mcf for a southern route through Interior Alaska in studies of a gas pipeline by three North Slope gas producers, BP Exploration (Alaska) Inc., ExxonMobil Production Co. and Phillips Alaska Inc.The state of Alaska favors a southern route, which is more costly. The state’s financing offer extends only to the southern route, according to the governor’s office. But the estimated 10 to 12 cent savings is only about a third of the difference between the gas transportation costs of the two routes.Knowles told the policy council that the railroad’s financing authority, which has never been used for a nonrailroad project, has long been known, but it was only in recent months that the governor asked the Revenue Department and the state’s bond counsel to research whether the railroad could finance a very large, unrelated project like a gas pipeline.The governor said the producers have been briefed on the state’s proposal, and that Alaska Lt. Gov. Fran Ulmer was in Washington, D.C., meeting with federal transportation officials."So far, their responses have been positive," the governor said.Gas producing companies involved in the pipeline acknowledged they had been briefed, but declined to comment. One senior manager, speaking on condition his name not be used, said any proposed tax-exempt bond issue for the project would need approval of the Internal Revenue Service before it would be considered in financial markets.The state’s studies of the idea have assumed that a project-financing approach to building the pipeline would be used, similar to that used with other major gas pipelines built in North America in recent years, Slotnick said.Project financing means that debt is linked to the project itself for repayment, rather than the credit of its owners. Bond holders look to the signing of contracts for use of the facility being financed, in this case contracts from producers shipping gas through the pipeline, as a financial guarantee.The assumption was also that the producers, or an independent pipeline consortium, would finance about 30 percent of the project as an equity investment, and then finance the remaining 70 percent through offerings of debt, he said.Essentially, the private pipeline consortium would borrow the money from the Alaska Railroad, which would in turn raise funds by issuing tax-exempt bonds. The pipeline itself would be privately owned, Slotnick said.Alaska has considered special financial arrangements for a North Slope gas pipeline in the past. In 1979 the state created a state gas pipeline authority to help finance the Alaska Natural Gas Transportation System, a previously unsuccessful effort to build a pipeline from the North Slope.The state has also carried out tax-exempt financing to build road and port infrastructure to support mine development, and docks and harbors, although none on the scale now envisioned for the North Slope pipeline.The Alaska Railroad’s special tax-exempt provision recognized that the federally owned railroad had not been adequately maintained in recent years and needed substantial investments in new track and other modernization.

Abbott Road Fred Meyer gears up for opening this month

While other retail stores bustled with post-Christmas shoppers Dec. 26, Michael Vinson reported to his new Anchorage Fred Meyer location to focus on cleaning, hiring and stocking rather than customer returns.Even before arriving at his new Abbott Road office as store director, Vinson began preparing for the Feb. 20 opening. Nearly four months ago, he started coordinating efforts to debut the new store, which typically stocks more than 225,000 food, apparel and general merchandise items.As Fred Meyer finishes its opening preparations timeline, a similar countdown is under way in Fairbanks where Home Depot is set to open Feb. 28.Fourteen weeks before the February Fred Meyer opening, Vinson began hiring department managers, including some employees new to the retail industry while others transferred from Fred Meyer stores or other retailers. The store will employ 320 workers with about 60 percent full-time employees, Vinson said.For some of the experienced retail staff, landing a job at a new store fulfills an objective."Their goal is to open a store," he said.Vinson has helped open other Fred Meyer stores in Portland, Ore. In 1997 he moved to Alaska to serve as Juneau store director. In 2000 he was chosen to lead the Dimond Boulevard store in Anchorage.On the countdown with nine weeks to go, Vinson dispatched workers to clean floors among other duties.Hiring the remainder of the staff began eight weeks before the store’s grand opening. Fred Meyer worked with the Anchorage Job Center to recruit applicants during a three-week process, he said.With five weeks left, employee training began, including orientation plus cash register and telephone lessons. Meanwhile, contractors installed shelves and departments took shape.In late January workers began stocking the shelves of the new store.One challenge to opening a new store is planning for shipping times, which in Alaska can be up to six days longer than in the Lower 48, Vinson said.Depending on the size of the store, stocking initial inventory can range from 150 to 350 trailer loads, said Curt Stoner, Alaska sales manager for Totem Ocean Trailer Express.Two, three and sometimes four weeks before a store opens, the retailer is ordering merchandise to replenish stocks, Stoner said, including the new Fred Meyer store.With nine days to go, Vinson and his crew were on schedule, fine-tuning the setup and installing a few final fixtures."At this point we’re buttoning it up," he said.Perishable products like produce, meat and bakery items, however, would not arrive until arrive Feb. 17, three days before opening, Vinson said.The 179,000-square-foot, $25 million Fred Meyer store will include design features new to the retailer and Anchorage. Cherry-wood decor accents check-out stand dividers and shelves, contributing to what Vinson called an upscale look. The magazine and books section will offer a seating area, while the paint department will include a service seating area.Alaskans will see other differences in the chain’s ninth Alaska store and fourth in Anchorage. Changes include a self-service shoe department and a kitchen for cooking demonstrations. Also, instead of building materials the store will have expanded home decor, furniture, storage and garden sections.Two tenants with inside entrances are Alaska USA Federal Credit Union and Vista Optical. Other tenants, Papa Murphy’s Take ’N Bake Pizza, Cafe del Mundo and Perfect Look hair salon, will have outside entrances.Store director Vinson believes his main role is to encourage and lead employees. "I’m kind of like the glue that holds everybody in place," he said.He delegates some tasks to department managers with whom he meets daily at 1 p.m. Vinson also endeavors to lift morale which can falter during hectic pre-opening preparations."Just have fun at what you do. That’s what I tell them every day."

Port to get electricity by summer

PALMER -- Port MacKenzie will be lighting up this summer. According to port director Marc VanDongen, two vital utilities should be in place within the next four months."Three-phase electrical power lines will be extended 10.5 miles down the Point MacKenzie Road to the dock by June," VanDongen said. "Design and marking of the right-of-way is already near completion. Clearing ... and installing the electrical lines will follow this. The first 8.5 miles will be routed above ground, and the last 3 miles will be buried in the Port District."Another utility that will be strung along with the electricity will be telephone lines," VanDongen said. "That’s a big plus for the existing industry that is already at the port, and for future industries."Two years ago the port found itself under the cloud of a U.S. Army Corps of Engineer’s report that basically said the infrastructure was unstable. The report cited the potential for damage in the event of an earthquake. VanDongen says the borough is committed to making the port safe this year."We have continued to work with the Corps to make the necessary upgrades," he said. "The major emphasis at Port MacKenzie in 2002 will be to finish the final compaction and gravel cap on the dock, and continue infrastructure projects to improve the Port District. That should effectively make this port one of the safest in the state."Several studies are also being conducted in 2002. They include a railroad corridor location study and a feasibility study and an environmental assessment for a deep-draft dock and ferry system.Last May, Port MacKenzie opened for limited operations. A total of 4.4 million pounds of cargo were exported during the 2001 summer shipping season, including 40 homes. Alaska Manufacturing Contractors, the first tenant to operate at the port, received orders to build 49 homes in their first full year of operation. The construction of these homes generated $7 million to $8 million in gross revenues.According to VanDongen, the home manufacturer is proof the port has potential."AMC’s presence at the port has been a double blessing for us," he said. "Much of the revenues flowed primarily back into the Mat-Su Borough in the form of wages to employees and payments to subcontractors and material suppliers. These revenues provided more than a 100 percent return on the borough’s investment in just the first year. In addition, AMC produced new jobs for approximately 45 employees."Last year, Afognak Native Corp. purchased a 51 percent controlling interest in AMC. This year, AMC has plans to step up production of its homes for Native communities throughout Alaska.The Mat-Su Borough is focusing on three main infrastructure improvements to make the Port District attractive to commercial development: utilities, a year-round ferry, and paving the last 14 miles of the Point MacKenzie Road."After electric and telephone are routed to the port, we hope to also extend a natural gas line about 15 miles down the Point MacKenzie Road," VanDongen said. "This will allow commercial companies and property owners along the route to tap into both electric and gas for their businesses and homes."VanDongen says the ferry will also open up areas on the Point MacKenzie side of Cook Inlet for residential expansion and provide recreational opportunities for Anchorage residents without having to drive long distances. He said there are also a number of public safety advantages."The ferry could also be used in emergency rescue operations in case of a plane crash in Upper Cook Inlet," he said. "It will be ice-breaker capable, have bow and stern ramps, and will be equipped with life rafts, life jackets and radios."To facilitate the ferry system, a memorandum of agreement between the Mat-Su and the Municipality of Anchorage is pending approval by both assemblies. If approved, it will outline the responsibilities of both parties in cooperatively proceeding with the feasibility study, environmental assessment, permitting, design, preliminary engineering and funding for the development of the ferry landings at the Ship Creek Small Boat Launch and Port MacKenzie.If the memorandum does move forward, it has the potential to accommodate two of the needs of both governments. Anchorage needs land to continue growing, and Port MacKenzie has thousands of acres of both industrial and residential land ready for development, just 1 1/2 nautical miles away from the Port of Anchorage.Chas St. George is a free-lance writer living in Palmer. He can be reached at [email protected]

EPA asks industry to provide priorities

John Iani, newly appointed administrator of the Environmental Protection Agency’s Region 10, says he has gotten his priorities straight just a few months into the job.Iani, who was born and raised in Alaska, was a commercial fishing industry advocate and attorney as well as a former aide to Sen. Frank Murkowski and Rep. Don Young, both Alaska Republicans. He was appointed Region 10 administrator in September.Iani, the featured speaker at the Resource Development Council for Alaska breakfast forum Feb. 7, said he returned to Washington Jan. 15 to meet with EPA Administrator Christine Whitman and other regional administrators.When asked for his top priorities, Iani said he produced a short list of three items for Region 10, which covers the states of Alaska, Washington, Oregon and Idaho. Iani said his top priorities are: Smoothing the way for Alaska oil and gas development, because it dovetails with President Bush’s national energy policy and is one of the biggest issues for the region; Resolving a long-running cleanup of a Superfund site in northern Idaho; and Developing ways to preserve the endangered salmon runs of the Columbia River Basin and its tributaries.Iani said Whitman and her staff were completely supportive of his priorities and his plans for tackling them."Gov. Whitman understands that problems need to be solved at the local level," he said.Iani said Alaska is well-positioned in Washington because Whitman is working for the state’s interests.However, Alaska’s public and industry leaders should take the lead in working for Alaska interests and set priorities of their own to bring to EPA, he observed."Give us your real priorities, not 40 projects, but those you really want done, and we’ll try to see that they happen," Iani said.Iani also warned Alaska’s resource industries to be careful about "trying to take out" the Alaska Department of Environmental Conservation, because if DEC falls, then EPA would step into the breach, but likely move at a much slower pace."It’s important for industry to have a good relationship with the state, otherwise you could end up with total gridlock" like some states, such as Louisiana where development of many projects are blocked, Iani said.

Feds look at security at Anchorage airport

Ted Stevens Anchorage International Airport is one of 15 airports in the United States whose security procedures are being studied by the U.S. Department of Transportation’s Transportation Security Administration.The new federal agency, created by Congress after the Sept. 11 terrorist attacks, said it will use its findings to improve security at all of the nation’s 429 airports with commercial service.With the help of consultant PricewaterhouseCoopers, the Transportation Security Administration over the next six weeks will trace the movement of passengers and cargo through security systems and then determine possible changes for increased security and better service to travelers, said Hank Price, a federal Department of Transportation spokesman in Washington, D.C."While each airport is unique, we seek to achieve a system that emphasizes consistency, both in security and in the treatment of travelers," Transportation Secretary Norman Y. Mineta said in a press release. "These studies will provide an important tool to enhance airport security systems nationwide.’"Morton Plumb, director of the Ted Stevens Anchorage International Airport, said federal and PricewaterhouseCoopers officials began reviewing the airport Feb.5, starting with a review of the cargo operations of major carriers Northwest Airlines, Federal Express and United Parcel Service.In addition to cargo operations, Plumb said separate teams will review passenger screening, luggage handling and the airport’s grounds and facilities.Teams will spend a few days reviewing each operation, Plumb said.DOT’s Price said the airport studies would not disrupt the movement of passengers and cargo and the work will be mostly unnoticeable to the traveling public."They won’t even know we’re there," Price said. "We’re going to be invisible, for the most part."Price emphasized that the airports are not being graded."We are there to observe, gain information and get data to apply at all airports," Price said.Plumb said he didn’t know for sure why Anchorage International was chosen to be studied, but he suspects, among other things, that it may be because of its location and the fact that its one of the busiest cargo airports in the United States."(The federal Department of Transportation) felt we would be a reasonable place to take a look at the security process," Plumb said. "It’s a compliment to the airport, when you look at the company we’re in."DOT’s Price said Anchorage International was chosen in part because of its location and large cargo operations.In addition to the Ted Stevens Anchorage International Airport, other airports in the study are: Hartsfield Atlanta International Airport; Baltimore-Washington International Airport; Boston Logan International Airport; Charlotte/Douglas International Airport; Chicago O’Hare International Airport; Dallas/Ft. Worth International Airport; Gerald R. Ford International Airport in Grand Rapids, Mich.; Louisville International Airport; Minneapolis-St. Paul International Airport; Mobile Regional Airport; New York’s John F. Kennedy International Airport; Orlando International Airport; San Francisco International Airport; and Spokane International Airport.

Major gas line developers protest state royalty gas sales

Three oil and gas companies working on natural gas development in northern Alaska are worried they will be shut out of a proposed 4.5 billion cubic feet per day gas pipeline.They have asked the state of Alaska to sell them royalty gas as part of a plan to assure capacity if the pipeline is built. The state opened bids for North Slope royalty gas Feb. 1.North Slope gas producers who are part of the consortium planning the pipeline, however, are opposing the idea."The way this is being done creates a major economic uncertainty for the gas project. It’s a clear step in the wrong direction," said Ken Konrad, gas manager for BP Exploration (Alaska) Inc., one of three producers involved in the pipeline group.Anadarko Petroleum Corp. and Alberta Energy Co. have submitted a joint proposal to buy 350 million cubic feet/day of state royalty gas that would become available if the pipeline is built. Chevron USA Inc. submitted its own competing proposal for 375 million cubic feet/day of state-owned gas.The three companies are not part of the consortium of BP, ExxonMobil Production Co. and Phillips Alaska Inc. studying feasibility of the $17 billion gas pipeline from Alaska.Anadarko and Alberta Energy are exploring for gas in the foothills region of the North Slope, and the state fears that if access to the pipeline isn’t assured for new gas discoveries, the exploration venture will be abandoned. Chevron owns gas reserves at the Point Thomson field on the Slope and is similarly worried about access to the pipeline for its gas.The three firms are concerned about access to the pipeline because they are not part of the consortium planning the project, according to Mark Meyers, director of Alaska’s Division of Oil and Gas.At the urging of Anadarko and Alberta Energy, the state solicited bids during December for its one-eighth royalty share of gas in the existing Prudhoe Bay and Point Thomson fields on the North Slope.When bids were opened Feb. 1 there were proposals from the two companies as well as bids from Chevron, Williams Energy and Alaska Power Co., a small Interior Alaska utility.Alaska Power wants to switch its diesel-based generating plants to gas. Williams is studying the feasibility of a gas-based petrochemical plant near Fairbanks, where the company now operates an oil refinery.The producer consortium is criticizing the royalty sale, however.Mike Hurley, spokesman for Phillips, told a state legislative panel in Juneau on Feb. 5 that the proposal would dampen the economics of the project."We believe the proposed royalty sale further burdens an already economically challenged project," Hurley told the Oil and Gas Committee of the Alaska House of Representatives.The claim was challenged, however, by Meyers of the Division of Oil and Gas."We’ve asked the producers to show us their numbers. They haven’t done so. They told us to run numbers ourselves. We did that and came to a different conclusion," Meyers told the legislators.The state’s assessment is that the sale of royalty gas does no economic harm to the pipeline project itself, although it would impose some costs on gas producers like Phillips, Meyers said.But there are ways those can be mitigated, he said.If Anadarko and Alberta Energy, or Chevron, win in their effort to buy state gas, they would be able to participate if an "open season" for nominations of gas volumes is declared by gas producers’ pipeline consortium, or any consortium building the pipeline, Meyers explained.Gas pipelines are typically organized as contract carriers. An open season for gas volume nominations is declared, and the pipeline is built to handle the volumes of gas committed.Once a shipping commitment is made it must be paid for whether there is gas or not. A purchase contract with the state gives these companies an assured supply of gas to ship until they can ship their own gas, Meyers said.Phillips’ Hurley said what troubles his company as well as BP and Exxon Mobil is that the royalty gas buyers can cancel the contract as soon as they develop their own supply, giving the royalty gas back to the state. The terms of Alaska’s oil and gas leases give the state the right to switch back and forth with six months’ notice between taking its royalty in-kind, selling it to others, or leaving it with the producers to market.That leaves the producers with the obligation, under the state lease, to sell the royalty gas, shipping it through their own space on the pipeline, Meyers said.This affects the producers adversely, Hurley said. If Anadarko and Alberta Energy can discover and ship their own gas, the producers would be required to reduce their own shipments to make room for the returned state royalty gas, because of the pipeline’s limited capacity.The reduction in producer-owned gas throughput could cost BP, ExxonMobil and Phillips "several billion dollars" in reduced cash flow over 15 years, Hurley said.The alternative is to build extra capacity into the pipeline at the start. But this could add "several billion" to the front-end capital cost, he said.This expense was disputed at the legislative hearing by Alan Sharp, of AEC Marketing, a division of Alberta Energy. Sharp said there should be relatively little cost of designing the pipeline at the start to handle an extra 200 million to 300 million cubic feet per day of throughput.The royalty sale is important to Alberta Energy, he said, because the cost of reserving capacity for 350 million cubic feet/day in the big pipeline project could be around $150 million per year. To make that commitment, the security of having the state’s gas to ship is critical as a backstop, he said.Sharp also disagreed with Phillips and others in the pipeline consortium that the Federal Energy Regulatory Commission will assure fair access to the pipeline.In a Jan. 15 letter to the state filing an appeal of the decision to hold a royalty gas sale, the three companies said FERC can compel pipeline expansions in certain circumstances."We disagree with their interpretation of FERC authority," Sharp said. Alberta Energy worries that once the initial open season on the pipeline passes it will be full with the three producers’ gas for many years."If there are additional open seasons for expansions they could be structured by the producers in ways that are onerous. We need some kind of backstop," he said.

CruiseWest closes office, cuts ship from schedule

HAINES -- A longtime fixture on Southeast Alaska cruise ship schedules won’t be back this year.Citing low passenger bookings, CruiseWest announced Feb. 11 it would not operate the Spirit of Alaska in the 2002 cruise season. In addition, the cruise line is closing its Anchorage reservation office and plans to lay off 20 to 25 workers at its Seattle headquarters.The cutbacks are the result of a "miserable" fall reservation season, said company spokeswoman Maureen Camandona.Bookings for CruiseWest seven- to 10-day Southeast Alaska tours slumped after Sept. 11, and didn’t recover until January, Camandona said.Camandona wouldn’t reveal the company’s percentage drop in business compared to 2001, but said it was enough to drop the 52-passenger vessel from the schedule and transfer pending reservations on the Spirit of Alaska to its sister ship, the Spirit of Endeavor.CruiseWest formerly operated as Alaska Sightseeing-CruiseWest. The company was started in the early 1980s by Alaska tourism pioneer Chuck West.

Around the World February 17, 2002

STATEKnowles proposes 20 percent income taxJUNEAU -- Alaskans would pay a state income tax that’s 20 percent of their federal tax bill under a plan being pushed by Gov. Tony Knowles.Knowles unveiled the specifics of his $400 million tax plan Feb. 11, detailing how he would begin to chip away at an anticipated billion dollar budget deficit.The tax plan would come through a mix of taxes on cruise ship passengers, an income tax, which is $350 million of the package, and an increase of the state’s alcohol tax to a dime a drink.Majority Republicans in the Legislature have been split on what action to take this year.House Republicans have said they plan to try to craft a package of revenue-raising measures this session to begin closing the state’s deficit.In the Senate, the majority has called for a cap on state spending to be approved by voters before any major tax plan is approved.Congressional audit delays Chugach planANCHORAGE -- A final revision of the Chugach National Forest management plan was due to be unveiled last month, but a congressional audit has delayed the process.Forest Service officials say they don’t expect release of the plan until at least March.Once complete, the plan will govern management of the forest for the next 10 to 15 years, regulating everything from where snowmachines can go to which lands can be developed.The draft Chugach management plan had called for setting aside nearly a third of the forest as wilderness, including much of the Copper River Delta.Alaska’s Rep. Don Young and Sen. Frank Murkowski, both Republicans, requested an audit into how the plan was put together.In particular, Young, Murkowski and Sen. Ted Stevens, R-Alaska, have questioned whether the Forest Service can legally recommend more lands for wilderness, which would preclude development.Legislature hires federal expert on gasThe Legislature’s Joint Committee on Natural Gas hired Hogan & Hartson, a Washington, D.C., law firm specializing in energy, to advise the Legislature on federal regulatory issues related to a North Slope gas pipeline."Most of the decisions on an Alaska gas pipeline will be made in Washington, D.C., by the Congress and the Federal Energy Regulatory Commission," said Sen. John Torgerson, R-Kasilof, co-chairman of the committee. "If we want to have a seat at the table, we need to develop a level of expertise on FERC issues and congressional legislation."Karol Lyn Newman, a partner with the firm with several years of experience in all aspects of gas regulatory issues before FERC and regulatory authorities, will serve as primary contact with the committee.NATIONWeyerhaeuser bid for Willamette approvedSEATTLE -- Weyerhaeuser Co.’s hostile takeover bid for timber rival Willamette Industries came to an official end Feb. 11 as nearly all of Willamette’s shareholders agreed to Weyerhaeuser’s $6.2 billion offer.Shareholders holding 97 percent of Willamette’s stock agreed to Weyerhaeuser’s offer to buy Willamette stock for $55.50 per share, according to Weyerhaeuser’s preliminary calculations. That makes Portland, Ore.-based Willamette a wholly owned subsidiary of Federal Way-based Weyerhaeuser.After more than one year of resistance, Willamette’s board finally agreed to the acquisition last month.WORLDJapanese minister fights price drops, bad debtsTOKYO -- Japan must clean up its bad bank debts along with fighting deflation if the nation hopes for economic recovery, the economy minister said Feb. 11.Economy minister Heizo Takenaka’s comments come as the government prepares a package of policies to fight deflation.Japan has been fighting price declines as it slides into its third recession in a decade. Deflation is a dangerous obstacle to a turnaround because it brings down income and further dampens economic activity.Pressures are high from some legislators and economists for the Japanese government and central bank to do more to fight deflation, such as setting price targets. The fall in the price of land used as collateral is also a threat to the health of the banking sector.The Bank of Japan, which has set interest rates virtually at zero in an effort to pump more money into the financial system, has promised to maintain its loose monetary policy until consumer prices clearly stop falling.-- Compiled from business wire services.

State plans millions in road projects throughout Mat-Su

PALMER -- One big contributor to the Matanuska-Susitna economy this year will be the state Department of Transportation and Public Facilities. Here is a look at the projects that are projected for 2002-2003.Under construction $8.6 million for completion of the Palmer-Wasilla Highway extension. The project will extend the Palmer-Wasilla Highway south of the Parks Highway and connect with Knik-Goose Bay Road at Glenwood Avenue. This construction project is expected to be open to travel and completed by late summer. $22 million for right of way acquisition, plus $16 million for construction on the Parks Highway from Mile 37 to Mile 39, Church Street to Seward Meridian Road. This project will upgrade the highway to a four lane divided highway with frontage roads, an interchange at Hyer Road, which also serves Fairview Loop on the south, and a paved separated bike path. The majority of construction should be completed by the end of summer. $21.6 million to complete the Parks Highway project from Mile 57 to Mile 67, from the Little Susitna River in Houston to White’s railroad crossing in Willow. The project will widen and repave the highway. It includes grade separating the railroad crossing and realigning portions of the highway to straighten curves. The project is expected to be completed this year. $4.1 million to complete the Hatcher Pass Road project from the Little Susitna River Bridge to the Motherlode Lodge. The project includes rehabilitating and paving the seven-mile stretch of road. The project should be completed by midsummer.Construction to begin this year $5.5 million to pave Four Mile Road, Buffalo Mine Road, Church Road, Collier Road, Cottle Loop and Willow roads leading to the Willow State Recreation Site and Deshka Landing. The project also includes paving Hatcher Pass and Gold Cord Road leading from the end of current paving project at Motherlode Lodge to Independence Mine State Historical Park.Other paving projects include Jensen Road, Lake View Circle, Peter Zell Circle, Rue Road, Scatters Way, Schelin Spur, West Matanuska Spur and 4.5 miles of Petersville Road from the end of the existing pavement. These projects should be completed by July 2003. $5.7 million for completion of the Palmer-Wasilla Highway rehabilitation project. The project will include repaving the highway and adding turn pockets and street lights in selected locations. The project is expected to be completed by Oct. 31. $48.1 million dedicated to the Glenn Highway/Parks Highway Interchange. The project includes a grade separation of the railroad crossing. The dirt work will start in midsummer, with the majority of work completed next year. $9.9 million for the Knik-Goose Bay Road rehabilitation. The road will be repaved and shoulders widened from Glenwood Avenue all the way to Point MacKenzie Road. The road from Point MacKenzie south to Goose Bay Airport Road will receive a fresh gravel overlay. A paved separated path will be constructed from Glenwood to Settler’s Bay. The project will be completed this summer. $10.7 million for Parks Highway construction from Mile 67 to Mile 72, Whites Crossing to Willow Creek. The project includes widening the highway, resurfacing the road, developing a separated trail and replacing Willow Creek Bridge. The project may be constructed this summer if right of way acquisition and utility relocation proceeds smoothly and if funds are available to advance construction. $40 million for the Glenn Highway from Mile 100 to 109. The project will reconstruct and widen the roadway and replace the Caribou Creek bridge. $5.5 million projected for rehabilitation of the Talkeetna Spur Road from the Parks Highway to the Alaska Railroad station in downtown Talkeetna. This involves repaving, widening shoulders and constructing a separated (bicycle/pedestrian) path along 14.4 miles of road.The total amount of federal and state dollars in Mat-Su road improvements over the next year comes to $181.7 million.

North Star to build mental health facility

North Star Behavioral Health System officials are pursuing plans to build an 18-bed hospital plus a 60-bed residential treatment facility for children in Wasilla.The move comes as the Legislature calls for more in-state treatment of severely emotionally disturbed Alaska children, because as many as 425 children are sent Outside for treatment every year."It’s a big project, and we’re excited," said North Star chief executive Kathy Cronen.The health care provider, which operates two facilities in Anchorage and another in Palmer, is working to acquire land for the project in the Meadow Lakes area north of Wasilla, she said.Another provider also is trying to boost the availability of children’s mental health services. Providence Alaska Medical Center is seeking approval from the state Department of Health and Social Services to build a $25 million, 60-bed psychiatric facility in Anchorage.North Star is expanding its other facilities as well. It plans to open nine new beds at its Palmer facility in mid-February and add another nine beds this summer, Cronen said.In Anchorage the DeBarr Road facility will gain another 18 beds, she said. Although a general contractor has not yet been chosen, Cronen said construction could begin in the next 60 to 90 days with completion set for summer. North Star officials are finalizing plans including the project cost, she said.The residential facility is an important component for treatment, Cronen said."It’s our belief that what is needed is not acute care but residential beds," she said.In-state treatment is a plus, too."We feel that the best service to the state and to the children is that the child be served in state," she said.Demand for mental health care services has climbed at North Star and Providence in recent years, according to state Department of Health and Social Services certificate of need coordinator David Pierce. In 1997 admissions totaled 1,008, and by 2001 climbed to 1,382. Of those figures, Alaska Psychiatric Institute held steady at about 185 annual admissions.The total number of bed days for patients in 1997 was 15,651. Last year that figure reached 28,273. The number of bed days declined at API during that time.Both the Providence and North Star project in Wasilla contain components for children’s psychiatric services, which is the focus of a bill now before the Legislature.Senate Concurrent Resolution 21 outlines a lack of in-state psychiatric treatment services for children and aims to support development of Alaska residential treatment facilities. It acknowledges a problem and looks at solutions, Cronen said.Sponsored by the Senate Health, Education and Social Services Committee, the bill was referred to the Senate Rules Committee Feb. 6.Text of the bill reports that "on Oct. 2, 2001 Alaska’s Medicaid program funded over 300 severely emotionally disturbed Alaska children placed in out-of-state residential treatment facilities by the Department of Health and Social Services or private parties."Of the 561 beds for all types of licensed child residential treatment in Alaska, only 108 provide the same level of treatment received by severely emotionally disturbed children in out-of-state placements, the bill said.The bill’s authors hope increased numbers of in-state beds would reduce the amount the state pays for treatment outside Alaska, said Jerry Burnett, legislative assistant to Sen. Lyda Green, R-Matanuska-Susitna, who serves as chairwoman of the committee working on the bill.Patients spend less time in treatment when they are at in-state facilities plus the cost per child lower, he said. More Alaska residential mental health care facilities for children could mean more jobs for Alaskans, too, he said.The bill, which doesn’t call for funding, touts the benefits to patients’ treatment closer to home and family. It also urges the governor to direct the state Department of Health and Social Services and other agencies to work together and make it a priority to develop in-state residential care for children who would otherwise have to be place in out-of-state facilities.Some regulatory changes might be needed for some facility development, Burnett said.Cronen did not release a cost estimate for North Star’s Wasilla facility. She said construction could be finished in less than two years.North Star chose to study sites in the Matanuska-Susitna area because it would be easier to find a lot size suited to the hospital and residential treatment cottage concept there than in Anchorage, she said. The health care provider’s Palmer facility includes 12 acres.North Star officials told the state health department they believe there is a need for mental health care services in the Palmer-Wasilla area.Life Quest Comprehensive Mental Health Services of Wasilla also provides services but primarily handles outpatient treatment, said chief executive Bill Hogan. The health care provider operates a seven-bed residential treatment center for teenagers in the custody of the Division of Family and Youth Services.A new facility built by North Star in the area would probably serve younger children, he said. However, Life Quest offers counseling services in the area and could work with North Star for children’s treatment once they complete residential treatment, he said.

Frontier seeks Sept. 11 U.S. loan

Frontier Flying Service Inc. is asking for a $10 million federal loan to help it recover from the effects of the Sept. 11 terrorist attacks.The 52-year-old Fairbanks-based company is only the third airline in the nation to apply for the government’s $10 billion loan bailout offered to airlines to help with losses attributed to the East Coast attacks.In its loan application to the federal government, the company said its cargo and passenger operations saw a dramatic drop in activity following the terrorist attacks.Bob Hajdukovich, director of operations for Frontier Flying Service, said the decreased operations coupled with increased insurance costs prompted the company to apply for the loan.Hajdukovich emphasized that the company, established in 1950, is not seeking bankruptcy protection, nor are any of the airline’s 185 employees facing layoffs because of the jetliner attacks."We are a viable company,’’ he said. "We’re not going out of business."We felt like we met the criteria for the program and applied for it," said Hajdukovich, who also serves as president of the Alaska Air Carriers Association. Airlines take advantage of federal programAs of Jan. 24, 266 of the nations airlines have received more than $3.8 billion in federal aid to offset losses attributed to the Sept. 11 terrorist attacks.The Air Transportation Safety and System Stabilization Act passed by Congress in November offered $5 billion in direct aid to airlines to cover losses incurred after Sept. 11, plus $10 billion in loan guarantees. Federal Department of Transportation officials said more than 300 carriers have applied for the grant money.Only three, including Fairbanks-based Frontier Flying Service, have asked for loans.Following are Alaska-owned airlines and major carriers that operate in the state that received direct aid. 40-Mile Air Ltd.$1,516 Air Cargo Express$11,420 Air Logistics LLC$450,836 Alaska Airlines Inc.$71,561,638 Alaska Juneau Aeronautics Inc.$66,021 Alaska Seaplane Service$1,688 Alaska Skyways Inc.$15,963 Alpine Helicopters Inc.$3,496 Atlas Air Inc.$10,122,443 Bering Air Inc.$95,158 Delta Air Lines$528,876,565 ERA Aviation Inc.$204,531 Evergreen International Airlines Inc.$7,189,975 F.S. Air Service Inc.$906 Federal Express Corp.$100,679,072 Frontier Flying Service Inc.$133,589 Grant Aviation$42,848 Homer Air Inc.$8,569 Iliamna Air Guides Inc.$3,462 L.A.B. Flying Service Inc.$19,218 Larry’s Flying Service Inc.$6,811 Northern Air Cargo Inc.$235,102 Northwest Airlines Inc.$405,525,526 Peninsula Airways Inc.$196,612 Polar Air Cargo Inc.$1,277,000 Promech Inc.$74,231 Rusts Flying Service Inc.$63,999 Seaborne Aviation Inc.$13,322 United Airlines Inc.$644,086,267 United Parcel Service Co.$24,556,636 Venture Travel LLC$2,671 Warbelow’s Air Ventures Inc.$95,287 Wings Alaska$854Source: U.S. Department of TransportationShould Frontier Flying Service secure the federal loan it applied for in late January, the company would use the money to, among other things, purchase a fleet of five Beech 1900-series aircraft it has been leasing for the past three years."We want the financing package to purchase the aircraft we already have," Hajdukovich said.Insurance premiums have increased since the terrorist attacks, Hajdukovich said, adding that if the company were to purchase the fleet of airplanes instead of leasing them, the airline would be able to negotiate better insurance rates.Frontier Flying Service is required to carry the additional insurance coverage by its lessor, he said."We are required to have higher coverage than other carriers our size," Hajdukovich said."The purchase by Frontier of this fleet of aircraft will assure Frontier will continue to serve its markets for transportation needs, mail delivery, food, medicine and other life necessities,’’ the company said in its loan application. "And it allows Frontier to negotiate reasonable insurance at reasonable rates at acceptable limits."The Air Transportation Safety and System Stabilization Act passed by Congress in November offered $5 billion in direct aid to airlines to cover losses incurred after Sept. 11, plus $10 billion in loan guarantees.Some 266 of the nation’s airlines, including about 30 airlines that do business in Alaska, have been given $3.8 billion in direct grants.Frontier Flying Service received $133,589 in direct aid under the grant program.In addition to the Fairbanks-based airline, Vanguard Airlines, a small regional airline based in Kansas City, Mo., has applied for $60 million in federal loan guarantees.Tempe, Ariz.-based America West Airlines, the nation’s eighth largest, had a $380 million loan guaranteed in December by federal regulators.America West has received $98 million in a direct grant, and Vanguard, $7.2 million.As part of America West’s loan guarantee, the company had to offer a third of its common stock to the government, making it one of the airline’s largest shareholders.While airlines were quick to ask for grant money, they have balked at applying for federal loans, fearing a government stake in their companies.Hajdukovich said his company could not offer stock options to the government."We are a privately held company," Hajdukovich said. "We have nothing to offer.Hajdukovich’s father John bought the company in 1974, and remains its sole owner. The company carried a lot of debt in the 1970s and lost money over the next dozen years.Since 1987, the company has turned a profit, Hajdukovich said, adding that the year-end financial figures are not complete for 2001.Frontier Flying Service offers five daily flights between Anchorage and Fairbanks, Hajdukovich said. The company serves more than 50 communities in Alaska and is the largest commuter airline in the Interior.Hajdukovich said the bulk of his airline’s business comes in the summer months, so last year’s bottom line may not be too bad."If (the terrorist attacks) would have come in June, a lot of airlines would be out of business," Hajdukovich said.Under federal rules regarding the bailout loans, the federal government must be "compensated for the risk it assumes in making the guarantees ... (and) may consider the degree to which the government can participate in the gains of the air carrier through warrant or other equity instruments."Airlines have until June 28 to apply for the federal loans.Frontier Flying Service said in its loan application that credit from conventional lenders is not "reasonably available" to the airline because of market risks in the airline industry since the terrorists attacks.Hajdukovich said that while the events of Sept. 11 had a negative effect on the company’s ability to do business, he said the airline "is more concerned with future events."Securing the $10 million loan also would allow the company to refurbish nine other aircraft the company owns and provide needed working capital, Hajdukovich said.The airline would have seven years to pay back the loan."With the loan guarantee in place, Frontier feels confident that any risk taken by the taxpayer is more than offset by a safe and reliable transportation system in Alaska,’’ the company said in its loan application.

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