Audit says BP used Alaska workers, vendors for Northstar

ANCHORAGE -- Most of the $400 million BP Exploration (Alaska) Inc. spent to develop its Northstar oil field went to Alaska-based contractors and vendors, according to a new legislative audit.In terms of employment, the audit also found that 68 percent of workers hired by BP and its contractors were Alaska residents.Local hiring could have been even stronger had BP and the contractors better tapped a pool of unemployed labor in Alaska during Northstar’s development, the audit said.BP spokesman Paul Laird said May 21 the audit highlighted the company’s efforts to make good on promises to maximize Northstar benefits to Alaskans."The project brought a whole new industry into the state, the fabrication of large production modules," he said.Those modules, used for housing workers and processing oil and well fluids, rose like leviathans at the Anchorage port in the late 1990s. Building the structures, rising up to 10 stories tall, provided work for hundreds of workers through contractors such as Veco Corp. and Natchiq Inc. Before, such structures were built in places such as Louisiana and shipped north.The modules sailed by barge to a small, man-made gravel island about six miles northwest of Prudhoe Bay. Since it began production in November 2001, the Northstar field has produced as much as 64,000 barrels of crude oil a day. With about 175 million barrels of recoverable oil, it is the first offshore field in the Alaska arctic not connected to land by a causeway.Northstar was built after the Legislature passed a bill in 1996 to amend BP’s lease on the Northstar prospect, which was considered a marginal field on the North Slope, home to several larger fields.The new law offered financial incentives for BP to move ahead with Northstar. Part of the deal was that BP would "use its best efforts" to advertise for and hire Alaska residents, contractors and vendors."They were encouraged, but there were no mandatory thresholds," said Pat Davidson, legislative auditor.The audit found that from January 1997 through October 2000, BP spent about $400 million on contracts, goods and transportation for the Northstar project, with almost 70 percent of the money going to Alaska firms.

Defense bill contains $196 million for Alaska projects

The pace of military spending in Alaska will continue at a high level, if projects included in the Fiscal Year 2003 Defense Authorization Bill passed May 9 by the U.S. House eventually become law. The bill contained $196 million worth of Alaska projects.Alaska may also benefit from a portion of the bill’s $7.8 billion authorization for the National Missile Defense System. Work on part of the system is already under way at Fort Greely near Delta, with other work planned on Shemya Island in the Aleutians.Before the projects in the bill become a reality, a separate appropriations bill must pass to actually spend the money. Then, the projects must win Senate authorization and appropriation and be signed by the president."Alaska is a crucial piece of America’s defense plan, and I am pleased to know that Alaska has been taken care of in this defense bill," said Rep. Don Young, R-Alaska, in a news release.The bill also approves a 4.1 percent military pay raise.Fort Wainwright in Fairbanks got the lion’s share of Alaska projects. They include: $1.6 million for an automated sniper field fire range; $18 million for a battalion headquarters; $910,000 for specialized windows; $24 million for an infantry platoon battle course; $50 million for a mission support training facility; $16.5 million for a vehicle maintenance facility; $17.8 million for 38 units of family housing construction.The bill also approves $28.1 million for pollution control work at the Eielson Air Force Base power plant and $14.4 million to upgrade the power plant at Clear Air Force Station south of Nenana.For the bases outside Anchorage, the bill authorizes $21 million for a barracks at Fort Richardson and $10.4 million for a claim payment involving the new hospital at Elmendorf Air Force Base.-- The Associated Press contributed to this report.

Air Force finds housing solution

An innovative U.S. Air Force program is easing a housing crunch for military families at Elmendorf Air Force Base by turning to private developers to finance and build the housing.Elmendorf is the fourth Air Force base in the country to take advantage of the program, called Private Sector Financed Housing. It is the first to have the housing units built on the base, on land leased by the Air Force.The developer of the project is Aurora Military Housing LLC, jointly owned by the principals of Anchorage-based JL Properties Inc. and Hunt Building Corp. of San Antonio.Davis Constructors Inc. and Osborne Construction Co. are the general contractors for the project, according to Aurora officials.The $115.5 million project was financed with a $48 million loan from the federal government, another $48 million from the Alaska Housing Finance Corp. and private investors.The first phase of the project, consisting of 120 new housing units, was completed last fall. It’s part of a much larger series of projects that will end up with Aurora owning a total of 828 housing units on the base by the end of next year.That will go a long way toward relieving a shortage of military housing at Elmendorf. When the project began, the base had a waiting list of 700 families for its on-base housing; it took about two years for a family to get a home. Completion of the Aurora project should cut that wait in half, according to base officials.Housing is a key issue for an all-volunteer military seeking to retain its members, many of whom leave their families behind for months at a time when they are assigned overseas.

Copper River prices drop second time around

ANCHORAGE -- Fishermen in the Copper River Delta, hard hit by competition from a huge return of hatchery fish, saw prices for the second opener of the prized Alaska sockeye drop May 21 to $1.35 a pound and $4.50 a pound for kings.That compared with up to $3 a pound for first run May 16 of Copper River reds, and up to $5.75 for the chinooks, said Dan Ashe, biologist for the Alaska Department of Fish and Game."We just had a big glut of fish and we’re 100,000 reds above the projected harvest," Ashe said. The total king harvest stood at about 8,400 fish, about half of what Fish and Game predicted, Ashe said.The state forecast was for a return of some 36,000 sockeye to the Main Bay hatchery operated by the Prince William Sound Aquaculture Corp., compared with a harvest of 138,000 reds."It’s shaping up to be a good season," said Bill Webber, president of the Copper River Salmon Producers Association. "The fleet right now feels the wind is out of their sails because of the price drop, but we’ve got our whole season ahead of us."The 2001 drift gillnet catch alone for Prince William Sound was worth $21.25 million. For the combined drift gillnet, purse seine and setnet salmon fisheries, last year’s run came in at $45.2 million, Ashe said. There are some 450 to 500 vessels fishing.

Biologist asks fishermen to count killer whales three days in July

KODIAK -- The Alaska Killer Whale Count is a new project being launched this summer by researchers, and they’re asking for help.Andrew Trites, a well-known marine mammal biologist at the University of British Columbia, is traveling around the state to promote the unique research effort. He is also updating people on the latest research findings in a 45-minute presentation called "Steller Sea Lion Declines: Overfishing; Killer Whales; Environmental Change?"In the past, Trites has focused on nutritional studies, specifically, the role that pollock plays in the sea lion diet. His years of research have revealed that pollock is like "junk food" to the marine mammals. Now, more people are beginning to look very closely at predation on sea lions by killer whales, he said."We know mathematically that it would not take too many killer whales to have caused the decline in Steller sea lions, or right now to prevent them from recovering. That’s why this research is so important," Trites said.A major part of the Alaska Killer Whale Count will come from fishermen and anyone else who can report sightings for three days this summer -- July 19 through 21. "Counting killer whales on those days will help give a minimum estimate of how many there are, and whether there are any hot spots where we can direct researchers to study them more in depth," Trites said.Fishing bottoms outLumberjack is the only job that ranks lower than being a fisherman, according to the sixth edition of the Jobs Rated Almanac, just released by Barricade Books.Other worst jobs are cowboy, ironworker, seaman and taxi driver out of a ranking of 250 jobs on the list.Fisherman, No. 249, also scores near the bottom in each of the six criteria used: work environment, income, outlook, physical demands, job security and stress.Fishing is ranked No. 229 among all the jobs for stress and No. 230 among jobs for pay. The almanac estimates starting pay for fishermen at $11,000 with mid-level fishermen earning $21,000 and top fishermen earning $43,000.The almanac also sees fishing employment going down significantly through 2005. "Limited geographic flexibility, highly seasonal work and increased automation all combine to create a dismal employment outlook for small-scale commercial fishing," the book says. "Independently operating small-boat owners will find competition with the larger companies tough."The almanac says biologists rank No. 1 overall because "they are highly sought, well-paid, respected, and enjoy low stress and high autonomy in the workplace." That’s fueled in part by the growth of bioengineering and genetically modified agriculture. For best jobs, biologist is followed by actuary, a person who computes insurance premium rates, dividends and other things based on statistical data, financial planner, computer systems analyst and accountant.Fishing fundsState-managed fisheries are eligible for the first time for Saltonstall-Kennedy grants, which are expected to be funded with $10.3 million in the new federal fiscal year starting Oct. 1. In the past, the funds, which are derived from import duties, have been made available only to federal water fisheries and other reports that the National Marine Fisheries Service is setting aside $5 million for projects relating to the farmed Atlantic salmon industry in Maine and efforts to minimize potential impacts on wild Atlantic salmon.Specifically, the Maine aquaculture grants are targeted toward projects that address more secure cages; faster growing brood stock strains that are more resistant to disease and less likely to interact genetically with wild salmon; tags to trace escaped fish; vaccines to prevent transfer of disease to wild salmon; and better methods to monitor sea cage integrity and farmed fish disease.Kodiak-based free-lance writer Laine Welch can be reached via e-mail at ([email protected]).

Economist says there's still time to close gap

Despite the Legislature’s failure to deal with the state’s long-range fiscal gap this year, University of Alaska economics professor Scott Goldsmith said there will still be time next year for lawmakers to enact a package of new revenue measures so that the transition can be done without severe harm to the economy."Obviously the timetable will be more compressed, but it can still be done," Goldsmith told an Alaska Support Industry Alliance meeting in Anchorage on May 23.Goldsmith said he was surprised that a package of fiscal proposals got as far as it did, passing the state House by a wide margin.Goldsmith said he’s now optimistic that "we can get our act together" and put a plan in place before the state drains the Constitutional Budget Reserve, its ready asset account.The fiscal "gap" is the difference between state general fund expenditures and the state’s ongoing general revenues, which are still mostly from oil royalties and taxes.Goldsmith has been studying the state’s fiscal situation for several years. In the late 1980s he published a series of papers on fiscal policy, setting out a "safe landing" strategy for the state. He is now director of the Institute of Social and Economic Research at the University of Alaska Anchorage.Because oil production has been declining for some years, Goldsmith explained, the difference between spending and general revenues is approaching $1 billion this year.To cover the deficit the Legislature has been taking money from the reserve fund, which at one time held several billion dollars from one-time settlements of oil and gas tax and royalty litigation. That fund will be depleted in the fall of 2004 unless some action is taken sooner, Goldsmith said.If nothing is done and a billion dollar-plus deficit must be covered with new revenues in one year, the effect on the state’s economy will be very harmful, he said.But if a plan is put into place earlier, new taxes will have less of an impact on economic growth in the state, Goldsmith told the Alliance.A "generic" fiscal plan he developed has being promoted around the state by Alaskans United, a coalition of business and community leaders. It incorporates a broad-based tax, either an income or sales tax, as well as changes in the way Alaska Permanent Fund income is managed so that some of the fund’s $1 billion-plus annual earnings can be used to support public services. The effect of this would be a reduced citizen dividend, but the dividend can at least be retained and made more sustainable, Goldsmith said.The plan Goldsmith developed for Alaskans United assumes a modest income tax. Despite the income tax in the generic plan, the combined effect across income groups would still leave Alaskans receiving more money from the government each year than they would pay in taxes because of the dividend, even for taxpayers with $100,000-per-year incomes.However, lower-income Alaskans would be affected more than those in income groups up to $100,000 per year, mainly because of the smaller dividend, he said.What the Legislature was considering this spring was an income tax that was graduated in a way that affected income groups the way a sales tax would. State House members were sharply divided between a sales tax and an income tax, so a compromise was worked out by Rep. John Davies, D-Fairbanks, for an income tax that worked something like a sales tax.A bill changing the way permanent fund income is managed also passed the House. Neither the income tax or the permanent fund income bills were approved by the Senate, however. Nor was a third part of the package, which would have provided grants to municipalities with money from the permanent fund.

Gap doesn't slow legislative spending

Old habits die hard. Despite an $800 million budget shortfall, the state Legislature continued its tradition this year of making direct grants to organizations and communities across the state for a wide variety of purposes.In addition, traditional steel and concrete projects like highways and public building improvements were funded.The state capital budget was approved during the special session lawmakers called when they couldn’t resolve certain issues during the regular session, including the capital budget.In separate legislation, legislators also approved $463.5 million in education and transportation bond authorizations that will go before voters in statewide general elections this November.In its regular capital budget, lawmakers approved $1.15 billion in total spending, with just over $1 billion from federal and other funds, and $110.5 million from state general funds.Some of the state general fund appropriations are required state matching funds for federal highway, airport, sewer and water projects, but much of it is to fund specific projects or purchases of equipment for state agencies.A lot of this is for "soft" projects, not steel and concrete. For example, $500,000 appropriated to the Alaska Oil and Gas Conservation Commission will fund a study of long-term natural gas development on the North Slope.A grant of $250,000 to the Department of Environmental Conservation will fund a conference on "best technology" practices in oil spill cleanup. A $500,000 appropriation to the Department of Natural Resources will finance an aerial geophysical survey, part of an ongoing state program to do aerial mapping of potential mineral deposits.Lawmakers also approved $10 million in special school aid to Delta Junction to help the community meet the impacts of construction of missile defense facilities at Fort Greely and another $1 million to Delta to pay for a court settlement of a lawsuit arising over a proposal for a private prison there.The University of Alaska Fairbanks will get $32 million for a new supercomputer, which proponents said will help attract new research programs.Community organizations and municipalities will also share in the Legislature’s largess. Here are selected examples: Anchorage Economic Development Corp. will receive $500,000 for a continuation of its Global Logistics Center marketing effort, a plan to build on Anchorage’s air freight capacity by attracting warehousing of time-sensitive inventory items to the community. World Trade Center Alaska will receive $100,000 to study the feasibility of a World Trade Center facility in Anchorage, a proposed central office not only for the organization but to centralize facilities for fisheries regulatory and research agencies as well. Anchorage will get $50,000 for an Avalanche Awareness Center; the Southeast Conference in Juneau will get $150,000 for Southeast Intertie electric grid studies. Nuvista Light and Power, a subsidiary of Calista Corp., will receive $200,000 for studies of supplying power to the Donlin Creek gold mine; Nome Utilities will receive $500,000 to pay for power line extensions; the Midnight Sun Boy Scouts Council in Fairbanks will receive $150,000 for a challenged camper campsite and $67,500 for a climbing tower on a training course. Food Bank of Alaska will receive $34,000 for a new forklift, while $93,000 was approved to help a program promoting a Cook Inlet salmon brand. The Alaska Zoo in Anchorage will receive $24,000 for new animal cages.A lot of the state capital budget does go for traditional steel and concrete projects, as well as major repairs to state buildings, such as roofs.As part of the state’s ongoing program of highway and transportation improvements, legislators approved $20 million for a new fast ferry for Prince William Sound, to replace the aging MV Bartlett, as well as $4.5 million to refurbish the MV Malaspina, another state ferry vessel that is past its prime.Anchorage will also receive $4.5 million for a Ship Creek Intermodal Marine Freight and Passenger Facility, which will help the city market its port to cruise ships.Rural airport projects are also included in the state capital budget. Among projects funded this year is a $12 million new airport runway at Atka in the Aleutians; $4 million for a runway relocation at Stevens Village in Interior Alaska; $2.3 million for relocation of a runway at Tuntatuliak in Southwest Alaska; and $2 million for environmental studies of a new runway at Unalaska in the Aleutians.Some $74.3 million in airport improvements at Ted Stevens Anchorage International Airport are also included.Road projects are traditionally a part of the capital budget, although most of the money comes from federal highways funds.Besides major highway improvement projects around the state, such as continuing improvement of the Parks, Glenn and Dalton highways, the state will undertake an extension of C Street from Dimond Boulevard to O’Malley Road for $4.3 million, a reconstruction of DeArmoun Road for $3.4 million and reconstruction of Muldoon Road to $2.1 million.

Law students expect to earn $125,000 per year to start

A recent survey by Corporate Legal Times of 700 law students found that almost 50 percent of all first-year law students expect to make more than $125,000 a year upon graduation. Interestingly, only 17 percent of third-year law students expect to make that much.Over 600 of the participants in the survey say they expect to work at a law firm upon graduation while only 22 expect an in-house position. The most interesting finding is that 573 of the 700 students surveyed say they expect to leave the legal profession. A lawyer’s worst nightmareWhether they pass or fail, most bar exam takers are certain that there has been a mistake made when they receive their results. In the case of Jordan Sebold and one other person, they are right. Sebold received a "we regret to inform you" letter from the New York Board of Law Examiners.It turns out, however, that a clerical error was made and that Sebold actually passed. That same error means that someone who received a congratulatory letter failed the exam.Evidently, the entrance ticket number given to Sebold at the exam center did not match his name or Social Security number. The error was discovered by Sebold, who remembered his seat number and saw a different number on the letter from the Board.Said Sebold of the incident, "My entire Thanksgiving was basically ruined." No word yet about all the things that were ruined for the person who learned later that he or she actually failed the exam.The singing juristA California judge has been reprimanded for making "undignified comments on the bench." To be more specific, for singing undignified comments on the bench. While presiding over a misdemeanor arraignment court, the judge sang to an accused shoplifter "when you’re stealing, when you’re stealing" to the tune of "When You’re Smiling." More attorneys, fewer attorneysAccording to the Bureau of Labor Statistics, the number of lawyers in the United States will increase by 28 percent by the year 2005. This is approximately twice the rate of increase expected for other occupations.While there are more lawyers, there are also more nonpracticing lawyers. Between 1990 and 1995, the number of law school graduates practicing law dropped from 82 percent to 76 percent.HistoricalIn the early 1900s, an elephant was tried, convicted and hanged for murdering a politician’s daughter during a circus parade.FootnoteWhen called up on stage by a comedian at a comedy club, a Georgia man confessed to committing several bank robberies. "I have something on my mind that I want to share with you," the man said during the performance. The club owner had the police called and the man was arrested.Have something to share with Out of Court? E-mail it to Chet Olsen at ([email protected]).

Companies ask to stop gas pipeline permitting

ANCHORAGE -- A group of pipeline builders has asked the state to stop the permitting process for a natural gas pipeline to the Lower 48, saying they cannot move ahead until producers of Alaska’s vast gas reserves commit to the estimated $20 billion project.Foothills Pipe Lines Alaska Inc. asked the Alaska Gas Pipeline Office in Anchorage to stop processing an application to run the gas line across state land and along the Alaska Highway.With no project to permit, some Gas Pipeline Office employees could face layoffs as the agency prepares to shut down this summer in reaction to the news, said Bill Britt, the agency coordinator.The announcement May 28 comes a month after three companies with rights to produce most of the North Slope’s proven gas reserves of 35 trillion cubic feet concluded the project does not make financial sense at the moment.Phillips Alaska Inc., BP and ExxonMobil Production Co. are awaiting the outcome of federal legislation that could sweeten the project, including tax breaks.Until the producers commit, Foothills and its partners do not have a pipeline to build.-- The Associated Press

Private sector eyes Alaska's future

Most of the 2002 discussion on Alaska’s future economy has been focused on the annual legislative debate over the state budget and the perennially predicted shortfalls in revenue, the cash that fuels government, second only to oil as Alaska’s biggest "business." The budget may have consumed most of the news and commentary since January, but there’s been significant discussion occurring in the private sector over Alaska’s future as well. It’s been a discussion focused primarily on "what if" questions: What if there were steadily declining oil revenues, no congressional delegation with the seniority to pump billions of federal dollars into the 49th state, and contraction in state government spending back to the basics. In other words, what if Alaska had an economic environment more similar to the rest of the nation in the entrepreneurial creation of wealth and investment through the production of goods and services. Simply stated, Alaska is creating little wealth, measured by such factors as per capita income, private capital investment, or exports of products and services. Alaska’s economy is driven by oil revenue to the state and by federal expenditures, recirculated through the populace. There may be a bright future for our children in Alaska if they happen to choose government as a profession. But if they’re looking for promising and stimulating careers in the private sector, our kids are more likely to think about seeking their fortunes elsewhere. The discussion has been engaged on a number of important levels to think strategically about home-grown economic development. The Alaska Humanities Forum’s 20/20 project is reaching out to Alaskans and communities to develop a consensus on our future 18 years from now and beyond, in ways that can be benchmarked as an annual scorecard of our progress. The agenda includes the economy, health, education, environment and public services, evolved from a first forum of some 500 Alaskans held in November. Now comes the hard work of drawing out the opinions, hopes and dreams from Alaska’s diverse cities, Bush villages, institutions like schools, nonprofit organizations and industry trade groups, and Alaskans who might be called the silent majority. On the streets now is a citizen’s questionnaire on the five topic-area visions and draft goals to achieve them. Alaska 20/20 is an ambitious undertaking, with most of the work performed by subcommittees in the five topic areas, supported by the university and other researchers who are attempting to tie visions and goals to solid numbers that can be tracked over time. In the case of the economy, a benchmark might be per capita income, prevailing wages or employment among industries. In another initiative that began last year, a working group of business organizations has analyzed the reality of the Alaska economic base to identify the components that represent actual wealth-creating activity as opposed to pass-through activity from state and federal spending. Their goal is to develop a market-sustainable economic model that can guide true economic diversification. You could think of it, for example, as "value-added" processing of raw resources from oil, timber, fish and minerals, or the creation of new enterprises in the new, knowledge-based industries, or capitalizing on geographic advantage such as air cargo hubs. In other words, cash-producing enterprise that can flourish whether or not government largesse continues to flow. The Alaska State Chamber of Commerce, Resource Development Council for Alaska Inc., Alaska High-Tech Business Council, and Alaska Science & Technology Foundation’s goal is to stimulate public understanding of our current base, government and oil, in ways that can suggest new directions in economic development and public-private investment. The working group also is acting as the economic development committee for the 20/20 project. Among the more disturbing realities of these efforts is the recognition that neither the state nor most communities have adopted effective economic development plans as a foundation for growing sustainable private wealth. Nor have they engineered strategies for economic vitality as communities across the United States have done. These discussions and activity by business and industry leaders over the past year in part have stimulated a broad-based project in Anchorage to create an economic development plan. Led by the Anchorage Chamber of Commerce, the Anchorage Economic Development Corp. and a score of other organizations, the project has formed a steering committee, retained community economic development consultants and recently completed a first round of focus group meetings. The focus groups discussed Anchorage’s education, workforce, technology and natural resource industry assets and opportunities. The goal is to craft an executable plan of action. Much has been written and debated in Juneau on the necessity for a fiscal plan albeit framed solely on new tax sources as a path to lead the state of Alaska out of its budget dilemma. No less important are well-constructed, privately led economic development plans and strategies at both the statewide and regional levels. Instead of a statewide "we’re-going-broke" mentality, the economic development conversations that have taken root are exploring the exciting possibilities and grassroots routes to achieve them. Watch for them at a forum near you. Sally J. Suddock is executive director of the Alaska High-Tech Business Council trade association and its Information Technology Careers Consortium. She can be reached via e-mail at ([email protected]).  

Drug testing progams protect businesses and employees

A program for the substance abuse testing of employees is becoming a more commonly observed component of an employer’s human resources policies and procedures. Although not legally mandated for most employees, transportation employees in safety-sensitive positions being the exception, testing is being considered and evaluated by employers for a variety of reasons.The development and implementation of such programs require careful thought and attention but can produce business benefits well worth the investment of time and resources.Justifying a drug testing programAn initial and obvious reason for a testing program is compliance with legal requirements. Federal law, for example, mandates the drug testing of transportation workers. Other safety sensitive jobs are certainly susceptible to the review of public policy makers. Some state legislatures, as well, have enacted drug testing legislation applicable to private employers.A second and related reason concerns public health and safety. Alcohol and illegal as well as legal drug use imposes a substantial economic burden on the state and the nation as a whole. Our local, state and federal governments annually spend billions of dollars to combat drug and alcohol misuse and additional billions to treat the health effects of the misuse.The noneconomic social and emotional costs are immeasurable. An employer’s attentiveness to the health and safety of employees, including a well thought-out drug testing program, can assist in reducing such economic and social costs.Such employer attentiveness, third, can also promote individual employee well-being. Drug abuse is frequently symptomatic of deeper problems and issues. A positive test result can lead to a constructive course of professional counseling and rehabilitation for an employee who otherwise might never receive such services.A fourth and basic business consideration is the legal liability to which an employer may be subject because of employee substance abuse. An employer in many situations may be legally responsible for an employee’s job-related activities.Like anyone else, employers are held generally to standards of reasonableness for their own actions and those of their agents within the scope of their employment.A properly conceived and properly implemented drug testing policy can forestall events giving rise to liability and can, as well, provide evidence of due and reasonable conduct on the part of the employer where such events nonetheless occur.Fifth, an appropriate testing program can enhance profitability by enhancing workforce productivity. Individual employee productivity frequently declines with substance abuse. Moreover, the abuse of one individual can adversely affect the performance of a business unit.Other employees, though not substance abusers themselves, may have to cope directly and daily with the fallout of abuse by a co-worker. The negative effect on efficiency and morale can prove debilitating to business operations and directly impact the bottom line.Finally, public expectations, particularly where that "public" includes clients and customers, may necessitate rules of business conduct that include a drug testing policy.Consumers are increasingly sophisticated in all commodity sectors. They are quick to perceive the direct and indirect manifestations of substance abuse, whether through personal interaction or business performance. Inattention to detail, missed commitments and poor attitude will drive customers and their buying power to other suppliers in a hurry.Appropriate drug testing policies can thus serve multiple business, employee and customer interests on a positive cost-benefit basis.Developing a drug testing programWhile careful analysis and planning are required, the development of a functionally and legally sound drug testing program is not an overly complex undertaking. An all-inclusive testing policy typically requires substance abuse testing under the following circumstances: Upon employee hire, promotion, transfer or demotion, as the final step in the selection process; Testing when an employee is involved in a motor vehicle accident while performing job duties if the accident results in a moving violation, serious injury, or property damage; Upon reasonable suspicion; and Periodic, unannounced, random testing of employees.A policy may be tailored to fit an employer’s business, its needs and the resources available to implement the policy. Just like any other resource available to an employer, the promulgation of a substance abuse testing policy necessitates a review of the enterprise.That review could begin with a human resources audit in which employer and employee comments, including goals and objectives, are collected and analyzed. If a drug problem exists within the business, an audit would serve to ferret it out.An audit also provides a better understanding of the workplace and conditions therein. This less confrontational approach than the unilateral institution by the employer of a mandatory drug testing policy without defining its parameters. It also provides the employer with much needed insight as to how to effectuate a testing policy that not only benefits the enterprise but also the employees upon whom the employer relies.It is from such gathering of information that, if a problem exists, a solution often develops prior to the finalization of even the audit itself. Because the review is inclusive, rather than exclusive, the employer is seen as being part of a solution rather than being labeled autocratic or dictatorial by employees.Finally, program development should consistently reflect the considerations recited above that justify imposition of the program in the first place. Maximum business and personal benefit will occur only to the degree the drug testing program is structured to produce those benefits.By clearly articulating all of the goals up front, an employer can ensure that resulting policies will produce the greatest dividends for the business, its employees and customers.Former Anchorage Municipal Attorney Mary K. Hughes is affiliated with Hughes Thorsness Powell Huddleston & Bauman. She can be reached via e-mail at ([email protected]).

June-Issue-1 2002

Agency predicts more oil in petroleum reserve, ANWR

ANCHORAGE -- Undiscovered oil and gas reserves on federal lands on Alaska’s North Slope are much larger than previously estimated, according to a government report released May 16.The U.S. Geological Survey report says that the 23-million-acre National Petroleum Reserve-Alaska contains a mean amount of 9.3 billion barrels of recoverable oil, more than four times the amount predicted in a previous 1980 study.The report says even more recoverable oil, an estimated mean of 10.3 billion barrels, is in the 1.5 million-acre coastal plain of the Arctic National Wildlife Refuge.By comparison, the Prudhoe Bay oil fields on the North Slope, the largest in the United States, have an estimated recoverable reserve of 12 billion barrels of oil and 30 trillion cubic feet of natural gas.The USGS says the NPR-A contains a mean of 59.7 trillion cubic feet of gas.The new study benefitted from sensitive seismic technology that can detect reserves that previously would have been nearly invisible, said Kenneth Bird, a USGS research geologist who presented the study at a news conference in Anchorage. A news conference also was held in Washington, D.C.The reassessment was prompted by recent oil discoveries at Phillips Alaska Inc.’s Alpine oil field, a 429-million-barrel field just east of the NPR-A. The Alpine field went into production last November and is performing better than expected.Bird said in doing the reassessment, USGS scientists extended the geologic trend found at Alpine west into the NPR-A."I think these numbers are very realistic given what we now know of the geology of the area," Bird said.The study underscores the importance of opening ANWR’s coastal plain to oil development, said Sen. Frank Murkowski, R-Alaska.The senator said the report proves that ANWR would be a better source for oil than the NPR-A because the area for drilling would be more concentrated and oil could be extracted more cheaply.The study says that if oil prices are below $35 a barrel, the refuge would be the better economic alternative. Prices above $35 a barrel favors the reserve. Alaska North Slope crude has been trading in the $27 a barrel range recently for delivery to West Coast markets."Development in the coastal plain would be far more concentrated, likely improving the economics and certainly lessening the environmental impacts," Murkowski said in a statement.The report, if anything, supports arguments to stay out of ANWR, said Eleanor Huffines, Alaska regional director for The Wilderness Society. If the report is right and substantial reserves can be found in the NPR-A, it makes even less sense to go into the refuge, she said.

Forest Service recommends no new Tongass wilderness

JUNEAU -- No new areas of the Tongass National Forest would be designated as wilderness based on a recommendation in a draft environmental impact statement released by the U.S. Forest Service May 16. But officials say the determination isn’t final."This is very much just a starting point. We haven’t closed the door to the potential of new wilderness recommendations," said Dennis Neill, Forest Service spokesman. "It’s certainly within the range of alternatives to make those kind of recommendations."In a three-volume, court-ordered analysis of possible new Tongass wilderness, the Forest Service recommends no action, in effect using a 1997 forest plan revision that was the result of "a significant collaborative effort," according to the draft. It doesn’t make sense to walk away from the previous work, said Larry Lunde, Forest Service project team leader."We need to let people come up to speed with the new information, work together and see if there’s another balance that works," he said.The idea of protecting undeveloped portions of the Tongass has been the subject of court battles and public hearings in recent years. Wilderness areas are created by an act of Congress and afford permanent protection against road building, logging and other development.The draft supplemental impact statement comes in response to a March 2001 order from U.S. District Judge James Singleton. His ruling said the Forest Service violated federal law by not considering some areas as eligible for wilderness designation in the 1997 Tongass Land Management Plan.In response, the Forest Service began work on a supplemental environmental impact statement last year, evaluating 115 inventoried roadless areas for additional protection.The draft study looks at eight possible recommendations, ranging from 723,000 to 9.5 million new acres of wilderness.Deirdre McDonnell, an attorney for environmental law firm Earthjustice in Juneau, said she was surprised the preferred alternative recommends no new wilderness."From our perspective, we certainly hope that they’re open to changing their minds when they see the public comments," she said. "I do think it’s significant in that it’s one of the first tests of the new administration in terms of protecting wilderness."Because only Congress can designate wilderness, areas selected in the proposal would be managed as "recommended wilderness" until congressional action occurs.Public hearings on the proposal are scheduled throughout Southeast Alaska in the weeks ahead, including a June 18 hearing in Juneau.

Mackenzie gas producers award pipeline contract

CALGARY, Alberta -- Natural gas producers in Canada’s Mackenzie Delta have awarded a contract for preliminary engineering work for a proposed pipeline to bring their rich natural gas deposits to southern markets.The project is a rival to the proposed natural gas line from Alaska’s North Slope.The Canadian contract, announced May 16, went to ColtKBR, a firm with deep roots in northern Canada and connections to Dallas-based Halliburton. The company has been involved with the pipeline proposal for several years.ColtKBR will study and design the routing of the pipe’s main line down the Mackenzie Valley, as well as ancillary facilities such as compressor stations and gathering lines. The company will also look at infrastructure such as roads, helipads, boat docks and camp locations, said Hart Searle of Imperial Oil Ltd.The contract includes helping the producers and aboriginal groups involved in the project through the regulatory process. It will provide cost estimates to help with the decision on whether the project, estimated to cost $2 billion, is economically feasible.The line would be expected to move a billion cubic feet of gas daily, about a fourth the proposed capacity of the line from the North Slope. It could be completed by 2007 at the earliest.Imperial’s partners are Shell Canada Ltd., Exxon Mobil Corp. and Conoco Inc., which is planning to merge with Phillips Petroleum Co. later this year."I think it sends the message that we are moving forward. We are building momentum and we’re striving towards completing the work we need to do to file our regulatory application," said Searle of Imperial Oil.Gas producers in Alaska have concluded that a pipeline route down the Alaska Highway is too expensive and risky to build at this point.ColtKBR is a long-term joint venture between Calgary-based Colt Engineering and Kellogg, Brown and Root, a subsidiary of Dallas-based engineering multinational Halliburton Co.

Your bank should fit your needs

Banks in Anchorage offer the marketplace the most selection and best quality in years. Whether you need the services of the large multi-national Outside headquartered institution or the community bank with local ownership and control, we have it all. But how do you decide which bank meets your particular needs?First of all, review the qualities of the bank. What does it feel like when you enter the bank? Are the employees smiling? Is there someone new to help you each time you enter the bank? Do they show an interest in you?Also, do the employees seem more interested in what is on their desk? What does the facility look like? Is it clean? Does it look like there is pride in the work environment?Ask for the mission statement to determine what is important to the bank. What authority do the employees you deal with have? Can they reverse a fee, approve a loan or are decisions centralized at some higher level?Is the bank making changes, such as updating its Web site, renovations or new products? Answers to these questions can help you determine if the bank is a good employer, fair, efficient, looking for better ways to serve and fun with which to do business.The second issue is, of course, what products do you need and which bank can meet those needs. Every commercial bank is a "deposit-taker" and "loan-maker." If all you need in a bank is a place to park money or borrow money, any bank will do. It’s worth checking fees and rates for the best deal and you may want to consider how loan decisions are made. Some banks have an automated scoring system, others involve a review by someone outside Alaska and others are reviewed locally.If convenience is a factor, review the locations available and methods of product distribution. Large banks can allow you to visit a branch while traveling statewide or nationally and are great for that Alaska student attending a college away from Anchorage.Other convenience features to ask about are the ability to deposit or borrow money through a bank’s Web site. Also, does the bank offer online banking? Can the bank receive your payroll electronically? How does the bank respond to telephone inquiries? Will the bank come to your place of business to pick up deposits, discuss loans or address other needs?Many banks offer a much greater portfolio of financial services than others. Some examples would be financial planning, trusts, investment management, credit card processing and even insurance.Finally, consider the safety of the bank. Often, answers to the first issue will provide clues: Employees smiling could imply the bank is doing well.What are ways to determine the safety of a bank? Chartered commercial banks are highly regulated. Financial statements are delivered quarterly and are available to the public.Rating agencies review banks quarterly and provide a "safety" grade. Do not take one agency’s rating at face value, however. Each rating agency establishes its individual grading scale. As any bank lender would tell you, "Get behind the numbers to determine the true financial condition."The three most widely known rating agencies that review Anchorage banks are Bauer Financial, Veribanc and Weiss. Each weighs risk differently.A recent example showed a local bank with satisfactory ratings from Bauer and Veribanc, but a weak rating from Weiss. Another received the highest rating from Bauer, "good" with Veribanc and barely "above average" from Weiss.As with any outside analyst’s review, don’t use a grade assigned by a rating agency as your reason for a decision. The safety grade assigned to a bank each quarter should prompt you to ask further questions of the bank.The bottom line is: Pick a bank that you like, that feels good to you, that you enjoy going to and that fits your needs.Ron Kukes is president and chief executive of Alaska First Bank & Trust. He can be reached via e-mail at ([email protected]).

Wilderness proposed in Chugach forest

ANCHORAGE -- The U.S. Forest Service is recommending that 1.4 million acres of Alaska’s Chugach National Forest be set aside as wilderness. But environmental groups weren’t pleased that none of the proposed wilderness is in the Copper River Delta near Cordova.The proposal came to light May 16 when the federal agency inadvertently posted a news release on its Internet site that said the Forest Service will ask Congress to protect a quarter of the 5.4-million-acre Chugach from logging, road-building, mining and other activities.The proposed wilderness area is around Prince William Sound. It marks the first wilderness recommendation by the Forest Service in more than a decade, the agency said.The forest currently has no areas congressionally designated as wilderness, which would put most development activities off limits."The public has an overwhelming desire to keep the forest as it is today, wild in character," wrote Denny Bschor, Alaska Regional Forester.Sen. Frank Murkowski, R-Alaska, welcomed the proposal. He said it creates new bear habitat conservation areas on the Kenai Peninsula and protects special areas while observing the spirit and letter of the "no-more" clause inserted into the Alaska Lands Act specifically to protect Alaskans from more administrative land withdrawals.The plan permits the current 1.8 million board feet level of yearly timber harvest to continue, Murkowski noted."Given the danger of wildfire on the Kenai due to the spruce bark beetle infestation, it is important that this plan provides the flexibility to improve forest health while protecting the unique areas of Prince William Sound that Congress had previously set aside for study as potential wilderness," he said.Environmentalists jumped all over the Forest Service’s plan, saying it fails to protect the biologically important Copper River Delta."I’m angry. It seems like the public process has been ignored," said Jim Adams, lawyer for National Wildlife Federation in Anchorage.Adams said thousands of public comments poured into the Forest Service, the majority expressing support for wilderness in the Copper River Delta, on the Kenai Peninsula and along the coast of Prince William Sound.Nicole Whittington-Evans, Wilderness Society assistant regional director in Alaska, was also disappointed with the area the Forest Service is recommending for wilderness designation."A good portion of it will be rock, ice, mud and sand," she said.Whittington-Evans said she supports the Forest Service’s decision to reduce the amount of Chugach on the Kenai that’s open for motorized use to 82 percent.

Russian center organizes visit with Anchorage health care providers

The American Russian Center in Anchorage is coordinating its first educational visit by health care professionals from the Russian Far East as part of a federal program.Ten program participants from Yakutsk and Khabarovsk will tour Anchorage health care facilities and agencies through June 9, said Irina Dubinina, project manager for the University of Alaska Anchorage American Russian Center. They arrived in Anchorage May 18.The American Russian Center has hosted six other Community Connections delegations, training entrepreneurs as well as educational and government officials.The U.S. State Department’s Bureau of Educational and Cultural Affairs sponsors the Community Connections program, which aims to help develop a free-market economy in Russia. The Community Connections program for health care professionals seeks to promote professional development of Russian public health representatives.The program also works with other countries, formerly republics of the Soviet Union. Community Connections has trained more than 4,500 Russian entrepreneurs and other professionals in 50 U.S. communities in the past several years.Funding for the Alaska visit totals $29,000 for travel, administering the program and other costs, Dubinina said. Program funds come from a State Department grant.The center, which provides business training to Russian business people, has led more than 500 business and other courses to educate more than 18,000 participants since 1993.Dubinina has coordinated the itinerary, which includes visiting Anchorage health care professionals and facilities."I’ve been getting a lot of help from the medical community," she said.Program participants will attend lectures on health care management at the UAA College of Business and Public Policy, Dubinina said. They also will tour the Anchorage Neighborhood Health Center, the UAA School of Nursing and the Alaska Native Medical Center.Delegates will meet with representatives from private insurance companies, Hospice of Anchorage and the state Division of Epidemiology for information on HIV, hepatitis and tuberculosis programs.At Providence Alaska Medical Center, participants will learn about assisted living, cancer and telemedicine programs, Dubinina said.The American Russian Center also has arranged meetings for individual delegates. For example, one Russian HIV specialist will meet with representatives from the Alaskan AIDS Assistance Association.They also are scheduled to visit the Centers for Disease Control’s Arctic Investigation program, which studies infectious diseases and their affects in northern regions.The Russians may lend their expertise to Alaska health care agencies like the CDC program, said Jay Butler, director of the Arctic Investigation program."We have a lot of areas in common," Butler said.Butler and his staff may query the Russians for more information on infectious diseases in arctic areas, he said.The Russians’ visit to Anchorage aims to present advantages and disadvantages of some methods and programs, Dubinina said. The program is not a "panacea for their problems" but could help them understand risks and gains if they follow the Alaskans’ ideas, she said.

CIRI hit by Nevada gambling rules

ANCHORAGE -- Cook Inlet Region Inc. has hit a snag in its intent to reap casino profits from its Ritz-Carlton hotel, which is under construction at Lake Las Vegas.The Nevada Gaming Control Board has delayed a vote on CIRI’s request for a waiver from Nevada rules that could exclude some Native shareholders from receiving casino profits.Under Nevada regulations aimed at weeding Mafia influences out of the state’s gambling industry, anyone who has a criminal record or is incarcerated can be barred from sharing in casino revenue.Some of CIRI’s nearly 7,000 shareholders fall into that category. Thus they could be excluded from receiving profits, in the form of a dividend, from the Ritz-Carlton casino unless Nevada regulators grant a waiver, according to CIRI and Nevada officials.The Anchorage-based company and its partners hope to open the casino early next year.Mark Kroloff, CIRI’s chief operating officer, said the waiver is necessary because all shareholders must be treated equally under the Alaska Native Claims Settlement Act, which created Native corporations in 1971.Although CIRI has invested in another hotel-casino at Lake Las Vegas, the company has not sought state permission to share in the gaming profits. It acts as a landlord at the Hyatt Regency, and another company runs the casino, Kroloff said.At the new Mediterranean-style Ritz-Carlton resort, CIRI would co-own the casino and hotel. The casino would be larger and more lucrative than the Hyatt’s, and that’s why CIRI wants a stake.Kroloff said the snag with Nevada gaming officials largely stems from their lack of familiarity with Native corporations, which are privately held outside the scrutiny of the Securities and Exchange Commission."This corporation doesn’t fit within the traditional framework,’’ Dennis Neilander, chairman of Nevada’s gaming control board, told the Anchorage Daily News. "The way our laws are written is to accommodate the normal corporation.’’Gaming officials and CIRI staff are investigating the relevant laws and searching for possible solutions.One alternative might be for CIRI board members and officers to undergo criminal background checks and be licensed by the Nevada Gaming Commission, Neilander said.CIRI has committed to investing $40 million in the construction and ownership of the hotel, according to the company’s annual report. It also plans to invest $24 million in the casino. CIRI’s partners in the development are Transcontinental Properties and investors Sid and Lee Bass.


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