Consultant reports higher gold content at Donlin Creek

A new assessment of the Donlin Creek gold deposit near the Kuskokwim River has upgraded the estimated quality of gold ore in the project.NovaGold Resources Inc. released results of a consultant report that indicates the average gold content of the ore is 5 grams per ton compared with an earlier estimate of 3 grams per ton.The indicated and inferred gold resource in the deposit is just more than 10 million ounces, but the higher estimate of gold content in the ore means the mine could become economically viable sooner.Tests show Donlin Creek could hold a total resource of 23 million ounces of gold, if ore of much lower quality is included, Greg Johnson, vice president of corporate development for NovaGold Resources Inc, said.If the Donlin Creek deposit is developed, it would be one of the largest gold mines developed in Alaska. It could possibly exceed resources at the Fort Knox Mine near Fairbanks.It could also mean hundreds of year-round jobs for the rural area, Johnson said. The San Jose, Calif.-based company is a partner in Donlin and hopes to begin mining in three years, he said.At 3 grams of gold per ton, the Donlin deposit is three to five times as rich as Fort Knox.It needs to be rich for development to begin, because the site is remote. Power and transportation will be a challenge, said Stan Foo of the state Division of Mining, Land and Water.More tests and an economic analysis are needed before a decision is made on whether to go forward with the project.The Donlin prospect is near the Kuskokwim River about halfway between McGrath and Bethel. Kuskokwim Village Corp. owns the surface land rights to the area, said KVC president Robert Ballow, and the Bethel-based regional Native corporation, Calista Corp., owns the subsurface rights.Established international mining company Placer Dome pulled away from the project as gold prices fell in recent years, focusing its exploration dollars around existing mines, said Johnson, a former Placer Dome employee.He and two other former employees started NovaGold and worked out a deal to continue at the Donlin Creek project, looking for high-grade ore that would make mining profitable. They bought a gravel mine near Nome and used cash from that to finance Donlin exploration.NovaGold put $2 million into exploration and development last year and will spend $8 million more this year, Johnson said.Foo said obtaining permits to begin work could take two to three years.If the economics of the project work out, 500 jobs in construction and mining could be created, Johnson said. The mine could last 10 years, he said, or 50 if more gold is discovered nearby, which is common."Those are awfully exciting numbers," said George Gardner, president of Chiulista Camp Services Inc., a subsidiary of Calista that supported the exploration with temporary help, housekeeping and catering.State labor economist Brigitta Windisch-Cole said 500 more jobs in the Bethel region would bump the area’s employment by 13 percent. And, she said, the average wage in the gold mining industry is $49,000, nearly twice that of the area."We’re lacking a Prudhoe Bay or Red Dog or Cook Inlet," Gardner said of Western Alaska. Developing natural resources is important for the cash-poor region and people."Ain’t no social program better than somebody being able to have a job," he said.The Associated Press contributed to this report.

Russian processors want piece of pinks

PETERSBURG -- A Seattle-based company wants a state permit to bring up to eight Russian fish processors into Alaska waters this summer, but U.S. processors say they will protest the entry.Global Seafoods North America wants to buy as much as 50 million pounds of pink salmon from Southeast and Prince William Sound but will need a permit from Gov. Tony Knowles to do so.If Knowles grants the permit, Global Seafoods President Oleg Nikitenko said as many as six processors would be positioned near fishing grounds in Southeast and two would go to Prince William Sound."Alaska can no longer rely on the North American market for its pink salmon. Those days are over and Alaska needs to open new markets," Nikitenko said. "I think Europe is a great new market for the fish. Eastern Europe is a great market for the fish. If Alaska won’t open the door to the new markets, then the business will die."By bringing floating processors into Alaska waters, Global Seafoods avoids duty tax, which can increase the cost of the fish by 30 percent.Nikitenko wants the pinks for the Russian market. The fish would be processed as whole frozen, whole gutless, and headless and gutless.Global Seafoods plans to pay 7 cents per pound for pinks.Last year pinks fetched 12 to 15 cents per pound at the dock and that price was considered low. But Nikitenko said Russian consumers cannot even afford to buy cheap farmed salmon, so the price of pinks needs to be low enough to make it affordable.Nikitenko said Russian consumers do not want canned salmon because they do not like the taste and they believe there is more value in a frozen fish."People are using the head and the tail for soups. If it’s a whole round fish, every housewife will buy the whole round fish hoping to find eggs inside the fish, which is an extra bonus," he said.Nikitenko knows paying 7 cents per pound is less than most fisherman want but he said he won’t impose any trip limits, which means he’ll buy as much as a fisherman can catch.He needs at least 300,000 pounds per processor per day to make it work. Nikitenko believes those without markets this summer may take advantage of his offer."Right now we have lots of phone calls from fishermen and people who call us that have no market for their pink salmon for this year and they’re happy to work with us," he said.Norquest Seafoods does not want the state to grant the permit. Company President Terry Gardiner said existing processors can handle the projected harvest for this summer.He said there are no untapped markets for pink salmon and domestic processors can’t compete with foreign boats that pay their crews third-world wages."The claim that they have a secret market for pink salmon, I believe, is totally bogus. One of the things that has reduced the value of canned and frozen pink salmon on the world market is the flood of cheap Russian pinks," Gardiner said.With a bleak market outlook for pink salmon, Icicle Seafoods President Don Giles said bringing in foreign processors could be devastating to the industry."We can weather the storm as long as we don’t have to compete with a bunch of foreign bottoms. And if we do, it’s going to create a problem for those who don’t think they have a problem right now," he said.While some processors say they can handle the projected harvest for this season, at least two companies are expected to reduce their fleets for 2002. That leaves some Southeast permit holders without a market for their fish.John Peckham, a board member of Southeast Seiners, said the Russian buyers may be a solution."As a fishermen, if you weigh everything out, it’s hard to believe that supply and demand and competition for our fish isn’t a good thing," he said.State officials will assess whether there is room for another processor and if the company has sufficient financial resources.Knowles makes the final decision on issuing the permit. Global Seafoods wants an answer by March 20 to get its processors ready.Knowles’ spokesman Bob King said the state has not received a formal permit request but is aware that it could be coming. The state already has begun a domestic processor survey to determine if there is a surplus of pink salmon that could be made available to a foreign processor.

House panel OKs $6 million for tourism

The House Finance Committee has approved a $6 million special appropriation to the Alaska Travel Industry Association to boost tourism marketing. House Bill 359 is now in the House Rules Committee, awaiting placement on the calendar for floor action in the state House.Sponsored by the Finance Committee, the bill would help market Alaska in the wake of a decline in travel and tourism following the September terrorist attacks in New York City.Property rights clarifiedSen. Loren Leman, R-Anchorage, has introduced SB263, clarifying legal rights of property-owners to make improvements on property obtained from Alaska Native corporations. Transfer of some lands has raised certain title uncertainties, which can be resolved by state law, Leman said."This legislation will help Native corporation shareholders who received property from their village corporations and were deeded only surface rights, while the regional corporations retain subsurface rights," Leman said.Some property owners have been prevented from making improvements, he said. The bill is in the Senate Labor and Commerce Committee.State mechanical inspectionsA bill that allows the state Department of Labor to collect fees to support its mechanical inspection programs has passed out of the House Labor and Commerce Committee and is now in the Finance Committee. Sponsored by the Labor and Commerce Committee, HB262 will help eliminate a backlog of elevator and boiler inspections in the state, the labor department said.Bill will prioritize budgetsRep. Fred Dyson, R-Eagle River, has sponsored a bill requiring state agencies to submit their budgets in a form that ranks the department’s priorities. The bill, HB349, was passed out of the House Finance Committee and is now in the Rules committee, awaiting floor action in the House."Budget decisions are always difficult and legislators struggle to get the information necessary to set dollar amounts that should be available for each department," Dyson said. "The Knowles administration has steadfastly resisted legislative efforts to obtain input about where budget reductions can be made or what governmental activities are optional."State laws on trustsThe Senate Labor and Commerce Committee passed out HB 157, updating state statutes relating to trusts. The bill clarifies who may provide fiduciary services in Alaska, expands who may be a trust company, establishes what a trust company’s powers are and establishes provisions for permissible activities including interstate or intrastate business expansion.The bill is now in the Senate Judiciary Committee. Rep. Lisa Murkowski, R-Anchorage, is prime sponsor of the bill.Hot springs exemptionThe House Resources Committee has approved HB263, relating to the regulation of natural hot springs. The bill exempts hot springs resorts, spas and other facilities from having to treat their naturally recycling waters with chlorine or other chemicals as long as coliform counts in the water remain low.Rep. Hugh Fate, R-Fairbanks, said the bill is intended to protect the natural character of hot springs. The bill is now in the House Rules Committee, awaiting floor action in the House.

Revenue report: Few benefits of owning stake in pipeline

JUNEAU -- Alaska has few incentives to owning a stake in a natural gas pipeline from the North Slope to the Lower 48, said a Department of Revenue report.But the report stopped short of warning against such an investment."Ultimately it’s a public policy call in terms of how much direct involvement the state should have in developing its resources," said Larry Persily, deputy director of the Department of Revenue.The report, ordered by the Legislature amid talk in the oil industry about such a project, was released Jan. 31.It concluded that Alaska does not have the money to own a great share of the project without tapping into the Alaska Permanent Fund and its financing options are uncertain.If the state owned the pipeline facilities, it could cost up to $14 billion that would not begin to show a return for seven years, the report said.Declining oil revenues have left Alaska with an $865 million deficit that is projected to grow to $1.1 billion by next year. The state’s Constitutional Budget Reserve is expected to be empty by 2004.The prospects of financing such a project through loans is unclear, the report said.Gov. Tony Knowles has asked for approval of a large general obligation bond package to pay for school construction and maintenance to public facilities.If the bond package is approved by the Legislature and voters, it could exhaust the state’s capacity to take on debt, the report said."The only way we could see state financial participation being a benefit is if there were a way under the law to seek tax-exempt financing," Persily said.The Revenue Department also concluded that oil companies do not need financial assistance and oil and gas interests interviewed for the study do not favor having Alaska as a shareholder.The industry commissioned its own $100 million study to determine whether the cost of a gas pipeline would be profitable.The oil companies’ report, which considered routes through both Alaska and Canada, has been completed.Results of the report have not been made pubic, but the industry has tentatively said neither route appears economically viable.Sen. John Torgerson, R-Kasilof, who chairs the Joint Committee on Natural Gas Pipelines, said the report will be useful in helping lawmakers to decide a course."We knew that there was going to be barriers in any direction we went," Torgerson said.But he said he had hoped the Department of Revenue would answer the most pressing question of whether Alaska should be a shareholder in the project.While the report repeatedly cautioned about the pitfalls of investing in or owning a pipeline, it never conclusively recommended one course or another."I’m certainly not going to discount anything that’s in there, but I think I would have been happy with a summary that says, ’no’ rather than ’maybe,’ " Torgerson said.

Out of Court February 10, 2002

Glass eye not enough to spring drunken driver with ’glassy eyes’A Philadelphia public defender was representing a man accused of drunken driving. The arrest report submitted into evidence indicated that the arresting officer believed the accused was drunk because, among other things, he had "glassy eyes." During the trail, the public defender contested this charge by plucking a glass eye from his client’s eye socket and showing it to the court. The judge, however, was not swayed. "You’re missing the point," the judge told the lawyer, "It’s only a glass eye. The police officer said ’eyes.’ "One dollar short, one day in jailA Nebraska woman was fined $169 after pleading guilty to disturbing the peace. Several weeks later, the woman’s daughter paid the fine with a check for $168, one dollar less than the amount of the fine. When paying the fine, the daughter claims that the court clerk did not dispute the amount and accepted the check. Nine days later, a warrant was issued for the mother’s arrest. She was eventually arrested and put in jail. Jail personnel chipped in and came up with the dollar that set the woman free.When jurors decideEver wonder when jurors make up their mind? A recent survey by the Tennessee Law Review may help answer that question. Jurors were asked at what point in the proceedings they decided how they would rule. Almost 4 percent said they made up their minds during opening. Another 20 percent decided after the presentation of evidence and another 8 percent during jurors’ discussions. More than 46 percent of the jurors surveyed said they reached their decision during jury deliberations.State Bar declines to ease tortureRepresentatives of the California Committee of Bar Examiners recently proposed that the California bar examination be shortened from three days to two. They argued that the shorter exam would save money and reduce stress. They also pointed out that most other states have a two-day exam. One representative called the current exam "grueling" and "almost cruel and inhuman treatment." The Bar’s Board of Governors, however, was not impressed and voiced concern that a shorter exam might be perceived as a "dumbed down" exam. The board voted unanimously to keep the California exam three days long. Said one governor, "I took a three-day exam and by God, so should they."Hearsay"No, I’m with the Department of Motor Vehicles."-- A potential juror when asked if he was in a helping profession.Have something to share with Out of Court? E-mail it to Chet Olsen at ([email protected]).

Knowles' capital budget in millions

Gov. Tony Knowles has launched an ambitious initiative for new construction around the state, much of which will be paid for in future years from the state budget.Included are: $136 million in major maintenance on state-owned buildings and other facilities; $212 million in new school construction and repairs to existing schools; $39 million in repairs and upgrades to state-owned harbors; and $435 million in accelerated funding for federally financed surface transportation projects.Most recently, the governor laid out a plan for $136 million to be spent on major deferred-maintenance projects on public facilities around the state, to be paid for by certificates of participation, a type of revenue bond."It’s time to step up to the plate and take care of long overdue maintenance at these buildings," Knowles said as he introduced legislation on a portfolio of projects Jan. 25. Included are major repairs to state prisons, Pioneers’ Homes, state office buildings, National Guard armories and other facilities.Two days earlier, the governor unveiled a proposal for $212 million in state general obligation bonds, which would be used to fund new school construction around the state. The plan would see $100 million in new schools built in fiscal 2003, the budget year starting July 1, and $109 million in construction the following year.If approved by the Legislature, the bond issue would go before voters in the November general election.Major elements of the state deferred maintenance plan include: $12.2 million for repairs and renovations to Pioneers’ Homes across the state; $8.8 million for deferred maintenance projects on health clinics and juvenile justice facilities, including renovation and expansion of the Nome youth detention center; $25.8 million for repairs to adult detention centers; $11.1 million for state trooper and Fish and Wildlife Protection facilities; $20.2 million for repairs to facilities maintained by the Department of Administration, including repairs to roofs, elevators, water and electrical systems; $16.6 million for major maintenance for facilities operated by the Department of Transportation and Public Facilities, including repairs to office buildings, courthouses and highway maintenance stations; $5.5 million for University of Alaska facilities; $2.5 million for Americans with Disabilities Act projects at the University of Alaska and state facilities; and $4 million as the state’s share for construction costs for veterans’ housing.Other new construction proposed by Knowles, in addition to those mentioned above, includes a $12.5 million new seafood and food safety laboratory to be built in Anchorage and financed by certificates of participation, and $39 million in repairs to state-owned harbors in coastal communities, financed by revenue bonds.In addition, the governor is pushing legislators to approve a proposal made two years ago to accelerate federally funded surface transportation projects by issuing state revenue bonds, called "Garvee bonds," against anticipated receipt of future federal transportation funds.Knowles is proposing a plan to accelerate some $425 million in transportation projects. These would be built sooner than later, under the governor’s plan.On the major maintenance proposal, the governor said he is following recommendations made two years ago by the Legislature’s Deferred Maintenance Task Force, urging attention to repairs needed to public buildings.That year state lawmakers approved about $500 million on a list of some $1.2 billion of backlogged projects. The proposals made this year by Knowles address critical needs that remain."Pioneer’s Homes in Anchorage and Fairbanks have electrical and fire code violations that create safety hazards to residents, visitors and employees," the governor said. "In Juneau, areas of the lobby of the State Office Building were recently roped off because concrete ceiling pieces were falling to the floor."The problem developed in the 1980s when cuts to the state operating budget led to many major maintenance projects being delayed. The backlog soon exceeded $1 billion.Annual debt service on the Certificates of Participation will be $13 million, the governor said.The proposed state general obligation bonds for school construction would fund eight new schools. The state’s priority list has 57 new schools needed around the state, at a total cost of $490 million, and a deferred maintenance backlog on schools consisting of 115 projects with a price tag of $151 million."In many cases, Alaska’s classrooms and school buildings are inadequate. We’ve made decent progress in the last two years, but there’s more work to do," Knowles said, in announcing his legislative proposal."I propose this as the first of three installments to complete the entire existing statewide education priority construction list in six years," the governor said.Knowles’ plan emphasizes the major maintenance needs and would cover 60 priority projects in fiscal 2003 and 21 more the following year, if the bonds are approved by the legislators and the voters."A steady flow of funds into construction and maintenance inspires confidence," in the state’s system of ranking and funding school needs, the governor said."Experience has shown that funding the priority list at about $100 million per year is optimum," Knowles said. "Too little funding results in higher costs as backlogs grow and local plans become outdated. Too much money going out in a single year can result in higher bids and more out-of-state contractors.""Working off both priority lists (new schools and major maintenance) utilizes a combination of larger-scale construction firms for new construction and smaller firms, such as roofing and plumbing contractors, for repairs," the governor said.In recent years the state has funded its backlog of new schools from unusual or one-time revenues, such as money from tobacco litigation settlements or dividends paid by the Alaska Housing Finance Corp., a state-owned housing corporation.These revenues are not available this year, Knowles said, and it is time to fund these facilities with state funds.The state has not issued general obligation bonds in more than two decades because there has been enough revenue from oil production to fund state capital projects with cash appropriations.Anticipated annual debt service on the school bonds will be $21 million, Knowles said.

Missile defense contractors face giant task to make bids

FAIRBANKS -- Construction contractors face a daunting chore to put together a $100 million-$250 million proposal that will detail how they will build a missile defense test site in Fort Greely.They have to read a foot-and-a-half-thick stack of paper detailing the project’s specifications and requirements.Contractors have to make sure they can get their hands on materials quickly; they’ll start building this spring if awarded the contract.And they’ll have to have to find subcontractors, including minority, veteran or disabled-owned small businesses.The companies’ final bids will require five volumes, each with specific information outlining how the job will get done. Bids are due Feb. 26.Not many companies can do it, but those who can will."In a military minute," said R.J. Parker, vice president of project development for Fluor Daniel, a multinational engineering and construction firm.The U.S. Army Corps of Engineers intends to award the project April 12. The project includes building five missile silos, a missile assembly building, an electrical substation and a control station at Fort Greely.Representatives of at least a half-dozen major engineering and construction companies, including one Alaska contender, were in Fairbanks Jan. 30 to hear the Corps explain its proposal process. They were joined by nearly 300 more people, many representing Alaska businesses.The Corps took busloads of potential contractors to the site Jan. 31 and was to spend the next day answering questions and holding one-on-one sessions with contractors.It was the third such meeting in the last two years, said Lt. Col. Jay Smith of the Air Force Missile Defense Agency. In all likelihood, firms have been preparing to submit proposals on the multimillion-dollar project since the first meeting two years ago, he said."These guys are pros," Smith said of firms attending the conference. "They know how to put together a project."In addition to Fluor, some of the major companies at the conference included Bechtel National Inc., Jacob Engineering and Anchorage-based Veco Alaska Inc.Fluor built all the pump stations for the trans-Alaska oil pipeline, Parker said. The company has an Alaska Native business partnership with Anchorage-based Alutiiq. The two will likely refurbish the U.S. Embassy in Brazil this year, Parker said.Another familiar name is Bechtel, which worked on the construction of the trans-Alaska oil pipeline. Bechtel has been working on its proposal for a while, said Mike Lewis, operations manager."We are ready," Lewis said. "We have been anticipating this for two years from the original kickoff meeting."Lewis said the 2,500-page project requirements document even specifies the type of bolts that have to be used."It’s highly complex," he said. It cost $245 to make one copy at a local copy store, he said.The project was put out to bid Jan. 27.During the meeting Jan. 30, several key project staff members for the missile defense project emphasized important points for contractors."We will have every brick in place, the last microchip in place, by 30 September, 2004," Smith said.The missile defense project includes an infrared satellite system, space, air and land-based lasers, early-warning radars and interceptor rockets, Smith said.The Boeing Co. has been working on the design of the system, including specifics at Fort Greely, Smith said."Boeing does the real rocket science," Smith said.Potential contractors will have to adhere to several subcontractor and hiring stipulations, said Patricia Davies, a Corps contracting officer. A potential company’s previous experience in those areas will be checked, she added. Another issue will be whether the contractor can deliver on time, she said."The schedule is so critical," Davies said.Once the construction is completed in 2004, the missile defense system will be operational on a "limited, emergency" basis, Smith said."What we are going to have here is the whole enchilada to defend the whole United States," Smith said.

Shemya radar, other missile defense projects await tests

Construction of the X-band radar installation at Shemya and some other Alaska projects related to a national missile defense program is being delayed while the system’s integration is being tested, Alaska Republican Sen. Ted Stevens told the state Legislature in Juneau Jan. 21.However, a test program that will involve two to three missiles being fired from Kodiak and a similar number from new silos built at Fort Greely will proceed, Stevens said."Full-scale deployment will not occur until the research and development phase has validated the system as a whole," Stevens said. "There are no new technologies involved, but the integration of the system must be tested, and this is as it should be," he said.Missile defense was one of a wide range of issues, from transportation to energy and the gas pipeline, fisheries and education, that Stevens touched on in his annual address to the Legislature.He also urged state legislators to set aside partisan politics to tackle critical issues like the state fiscal gap, citing a strong bipartisan effort under way now in Congress on major questions."In Congress, we sound in public as partisan as ever, but behind the scenes we are working very closely with the other party," he said.Significantly, Stevens did not mention subsistence, the first time in years that the state’s senior senator has not urged legislators to approve a proposed constitutional amendment that could stop the takeover of fish and game management in Alaska by federal agencies.In his talk he urged Alaskans to extend a helping hand to military families in the state who are affected by deployment of personnel overseas."When I served in World War II, there were few families, if any, around our bases," he said."Today our military is a family community, and many family members are alone with small children while their partner in life is deployed somewhere in the world," Stevens said.In remarks following the speech, Stevens expressed hope that Alaska’s four military bases will survive future base closings. Each has a major role, he said. Elmendorf Air Force Base is the major support base for security in the North Pacific, Eielson Air Force Base backstops Elmendorf, Fort Wainwright is a major training center, and Fort Richardson is a center for science and research in war fighting.But he predicted that the U.S. military is in for a major overhaul after current anti-terrorism efforts wind down, which Stevens predicted will last two to three more years. The "military of the future" will be robust, but high-tech, the senator said.On tourism, Stevens spoke favorably of efforts under way by the Washington and Hawaii delegations to waive Jones Act requirements, which would allow foreign-built cruise ships to travel from one U.S. port to another."This would help the cruise ship industry reposition ships from Europe that are now operating at less than capacity," because of the decline in travel after the Sept. 11 terrorist attacks.A major portion of Stevens’ remarks were devoted to fisheries."Fish farms now threaten the collapse of our salmon industry," he said. "Now foreign countries are also farming halibut and other species. Unless we take bold action it will be too late to turn the tide."During his address, the senator went on to outline a number of steps he will take."Shortly after the Senate reconvenes, it will turn to consideration of the Farm Bill. I have initiated a new pilot program for salmon insurance modeled after the successful crop insurance program. I am working also on amendments that will require the labeling of both imported and farm-raised fish."We will try to develop a plan to allow our wild salmon to be labeled organic to give it a share of the growing, lucrative health food market," Stevens said. Efforts to get wild salmon labeled as organic were turned down by the U.S. Department of Agriculture last year.Stevens said he has been asked by salmon fishermen to author a federally financed marketing plan to promote wild salmon."I will offer an amendment to add seafood to the agricultural marketing service, but that will only solve part of the problem," he said.He also said he will convene a salmon summit this spring to get a better understanding of the science and issues involved and to solicit testimony from industry and community leaders to develop a plan.There’s good news in fisheries too, Stevens said. Efforts to fund lucrative dive fisheries are beginning to bear fruit and progress is being made in efforts to recapitalize, and rationalize, the crab fisheries.The new Community Development Quota corporations are bringing $100 million a year into the state’s economy.They are also buying into the offshore fishing fleet, increasing Alaska ownership of the fleet to an unprecedented level.The American Fisheries Act, authored by Stevens, "has been successful beyond our wildest dreams. Our all-American fleet is the largest volume fishery in the country. It has spawned dozens of new products," and by mandating full utilization of the fish, it also operates more efficiently, Stevens said."For every pound of bottomfish harvested, utilization increased by a quarter pound. That translates into 100 million more pounds of edible seafood protein, adding $100 million to our economy."On natural gas, "all options are on the table, and the options should include state participation to build the gas line through Alaska," Stevens said.There is justification for some form of federal action to stabilize volatile gas prices for the project, because the initial impact on the market of delivering large quantities of Alaska gas will have an upsetting effect on prices, he said.However, Stevens said he does not support a ban on the over-the-top northern route, and that "we should wait until the gas producers finish their studies."But ultimately the gas pipeline should not leave Alaska via a route that will not allow Alaskans to use the gas for energy and economic development, he said."Energy is the most significant cost in our economy," he said.

More stores, more jobs forecast across state

Alaska’s retail sector should see continued growth and job increases this year with the opening of new stores by Fred Meyer and Lowe’s in Anchorage and Home Depot in Fairbanks.The retail sector, which includes restaurants, grocers and department stores, is expected to register strong job gains, second only to the services sector, according to a 2002 economic forecast by the Anchorage Economic Development Corp.Last year retail posted stronger job growth than the three previous years, said Neal Fried, economist with the state Department of Labor. The sector gained roughly 1,000 jobs, with half coming from eating and drinking establishments, to bring the statewide retail job total to 49,900, he said.National retailers will add to those totals this year. This month Fred Meyer will open its fourth Anchorage store, while Home Depot will open its second Alaska store in Fairbanks.Another large retailer, Lowe’s, is projected to open a new store this year in South Anchorage. Several restaurants are already in the works, aiming for 2002 opening dates. These include Applebee’s in East Anchorage, Chili’s Grill & Bar on the south side of town plus IHOP Restaurant and Boston Pizza in Midtown Anchorage.Fried believes several factors could contribute to new retailers entry into the Alaska market.In researching new store sites, assessing the community or state economy might be a factor, although store officials also could plan to open a store in an area before their competitor does, he said. Also, if the retailer already operates in Alaska, perhaps they gauge how well their other stores perform."I remember in the last boom we had people who said, ’What do they know that we don’t?’ " Fried said. The retailers probably did not have a tip on a major project that could benefit the state economy, he said. "Maybe they had more faith than we had."Also, the incoming retailers have been industry veterans bringing a different view or seeing opportunities in the market, Fried said.One industry analyst who follows Fred Meyer’s parent company, Cincinnati-based The Kroger Co., believes the company builds stores where they will post strong financial results.Kroger is adding stores in markets like Atlanta, where store officials see opportunity, said Charles Cerankosky, manager director at McDonald Investments of Cleveland.Meanwhile, other retailers including Kmart and Montgomery Ward are struggling, he said. Officials of grocer Albertson’s has said it plans to close some stores. By contrast, Home Depot, Walgreen’s, Kroger and Wal-Mart continue to open stores, he noted."I think companies that are doing well such as Kroger and Wal-Mart are positioning themselves for future growth," Cerankosky said.Kroger’s earnings continue to climb although at a slower pace than last year, despite a slowed U.S. economy, he said."In U.S. retailing the pattern has been to grow through economic slowdowns," he said.Fred Meyer has differentiated itself from other retailers much the way Target has, in competing with industry leader Wal-Mart, he said."Fred Meyer sort of parallels Target’s approach and also it is a very good food retailer," Cerankosky said.Fred Meyer differs from Wal-Mart, too, since it aims for high-quality products while Wal-Mart targets more price sensitive customers, he said."It’s a well-run superstore," Cerankosky said.

Fred Meyer, Carrs stoke grocery competition

The Anchorage grocery market heats up this year as Fred Meyer opens a new store this month and competitor Carrs-Safeway expects to begin construction this spring on a replacement store.Both stores will be in South Anchorage, within blocks of one another, on Abbott Road.Last fall two other grocery choices came online in the South Anchorage corridor.Changes to the city’s grocery market in a roughly one-mile area include Kmart on Dimond Boulevard adding groceries in October alongside Sam’s Club, which recently completed renovations. Sam’s Club officials said some merchandise is geared to reach shoppers buying smaller-scale items, not just bulk items.Kmart converted four existing stores into Super Ks in Anchorage, Fairbanks and Juneau.In 2002 two other grocery players join that market.The new Fred Meyer store will open Feb. 20, company officials said. With the opening Fred Meyer marks its fourth Anchorage store and its ninth in Alaska.The $28.5 million store will total about 170,000 square feet, Fred Meyer officials have said. Features include a gas station and an in-store Starbucks Coffee counter. Portland, Ore.-based Fred Meyer is owned by grocery giant Kroger Co. of Cincinnati.Plans are under way for Alaska store No. 10 in Eagle River, which could see construction this year. The proposed store would be built at the intersection of the Old Glenn Highway and Northgate Road, just north of downtown Eagle River.Fred Meyer has received site plan approval from the municipal Planning and Zoning Commission, said Tom Gibbons, Fred Meyer project manager. However, the approval came with conditions needed to comply with the city’s "big box" ordinance, which aims to improve the architecture of large retailers."We’re now working on more detailed drawings," Gibbons said.Changes include an altered roof line, additional site landscaping and pedestrian walkways that connect to existing bike paths, he said. The drawings would then be resubmitted to city planners. The next step will be completing acquisition of the land and construction start-up, he said."We’re hopeful to get under construction in late spring or early summer and open early next year," Gibbons said.Likewise, Safeway, which operates Carrs Quality Centers, is finalizing plans for a new store. The store on Abbott Road in Anchorage will replace the existing store on Dimond Boulevard and the Old Seward Highway, said Glenn Peterson, Safeway district manager."I started at that store 27 years ago. It’s a great location," he said, but noted that it was too small for current market conditions."We needed a 21st century store," he said.Safeway owns the current Dimond location, but Peterson believes the property is valuable real estate and probably will picked up quickly once the grocery store relocates.The new store will measure 64,000 square feet, compared with the current store at 40,000 square feet, just slightly smaller than the Huffman Road store in Anchorage, Peterson said.He did not list a price tag for the new store.Construction could begin later this year."It would be nice to go in the spring and finish up by the holidays," he said.The location near grocery competitor Fred Meyer may provide some synergism for Carrs, Peterson said."The winner is the customer," he added.Safeway officials presented store drawings to the area’s community council, receiving favorable reviews, he recalled."It’s very upscale looking," he said.He believes the new Carrs will coordinate with plans for a proposed town center at Abbott Road. The site also will include a gas station and three or four pads in the parking area for additional retail, he said.Inside, Carrs will feature the same departments although layout might differ from existing stores, he said.

Tesoro posts record year earnings

ANCHORAGE -- Tesoro Petroleum Corp. reported record profits of $88 million for 2001, up 32 percent from the previous year.The San Antonio, Texas-based oil refining and retailing company said revenue reached $5.2 billion, up 2 percent.The company said the higher earnings were due to better profits on its refined products -- mainly gasoline, diesel fuel and jet fuel -- more refining throughput and improved operating performance.In the fourth quarter, profit fell to $4 million from $24.4 million a year earlier, a decline attributed in part to the Lower 48 recession and warm weather.Fourth-quarter revenue was $1.3 billion, down 11 percent. Tesoro has refineries in Nikiski as well as in Hawaii and three Lower 48 locations. Its Alaska refinery handles almost 51,000 barrels of product a day, 14 percent of the company’s production.Its gasoline is sold through more than 600 branded stations, including about 130 in Alaska.

Commission says Alaska supports mining industry

The Alaska Minerals Commission submitted its annual report Jan. 28, lauding Gov. Tony Knowles and state legislators for their efforts to help the state’s mining industry."Partly as a result of the responsive action of the governor and the Legislature over the past few years, the global mining industry considers Alaska a favorable place to do business and is demonstrating its growth potential," said Irene Anderson of Nome, who is chairwoman of the commission this year.The commission cited a recent mining industry survey by the Fraser Institute of British Columbia, which found Alaska eighth among 35 countries and states in terms of investment attractiveness.Most recently the state has helped the mining industry with certain actions, according to the report. These include: Reconstitution of a core permitting team at the Department of Environmental Conservation, preserving valuable experience and knowledge of DEC staff familiar with mining permits; Continued support for state-sponsored airborne geophysical surveys. The results of these, made public, have attracted considerable new investing in minerals exploration; and Online access to files in the state Recorder’s Office and the Land Records Information System in the Department of Natural Resources.The 11-member commission includes representatives from industry, which make annual recommendations to the governor and Legislature on ways to mitigate constraints on mining in Alaska.Although the industry has been hit hard by declining metals prices and poor market conditions, Alaska has fared better than many parts of the world in continuing to attract investment for exploration, according to Dick Swainbank, a state minerals analyst.Steve Borel, executive director of the Alaska Miners Association, said a key part of what attracts new mining investment here is political stability in Alaska compared with many developing countries, and what mining industry executives perceive as a favorable political environment in Alaska for mining.

Massage therapy seminars at Alaska Club

The Alaska Club Network has scheduled several seminars for February. Three massage therapy workshops run from 7-9 p.m. Feb. 12, 19 and 26 at The Alaska Club West, 1770 W. Northern Lights Blvd. in Anchorage.Each workshop costs $20 for members or $30 for others. Cost for member couples is $34 and $50 for nonmember couples. Registration is required. Christine Netland, a licensed massage therapist, will lead the sessions.The Feb. 12 session will address basic Swedish massage techniques for muscle and body relaxation.On Feb. 19 Netland will discuss Jin Shin Do acupressure, a technique to ease physical and emotional tension in the body.The Feb. 26 workshop will demonstrate and discuss foot reflexology.Another seminar at the fitness center, a free session on lower back pain, is set for 7 p.m. Feb. 19 in Wasilla and Feb. 27 at The Alaska Club West’s new location, 1400 W. Northern Lights Blvd.Licensed physical therapist Alec Kay, who specializes in sports physical therapy, will teach participants how to strengthen the lower back and modify exercise routines to ease back pain. Registration is required.For more information or registration, call 907-274-5510.

Kodiak rockets launch millions into economy

KODIAK -- The Kodiak Star launch in September brought $4.4 million into the Kodiak’s economy and increased the size of Kodiak’s payroll by about $1.3 million, according to a university report.In all, Alaska’s economy was boosted by $6.8 million and jobs were generated in industries from food service and hotels to business and health services, according to the report.The latest summarized findings of the economic impacts of the September launch were released by the University of Alaska Anchorage Institute of Social and Economic Research.The Kodiak Star, which launched four satellites on Sept. 29, drew expenditures from the Alaska Aerospace Development Corp., Lockheed Martin and NASA. The estimated expenditures were distributed across 36 industries.Lockheed Martin’s contract with AADC for use of launch complex, plus additional costs due to launch date changes, totaled $700,000.

Business Profile: Web Weavers

Name of the company: Web WeaversEstablished: 1997Location: 565 University Ave., FairbanksTelephone: 907-479-9322Web site: www.webbweavers.comMajor focus of services: Web Weavers handles Web site design plus graphic and logo design, interactive multimedia presentations, Web hosting and CD or CD-ROM duplication.History of the company: David Duplessis and Ginger Stock, who had worked together at KIAK-FM, founded the company. Operating from Duplessis’ kitchen, they started with one computer but no business startup loans. Business grew during the next two years, and Duplessis and Stock added two other computers, an intern and a part-time employee and moved to the current office location.Web Weavers first designed Web sites, then began updating and hosting sites. After more than three years in business the company began providing interactive multimedia services, CD duplication and database application programming.Duplessis, who specializes in the technical side of the business, and Stock, who handles graphic design, are self-taught Internet designers and programmers.A turning point for the company came as the Internet grew in popularity for businesses. One growth area is CD duplication for musicians or custom CDs for graduations or weddings.Web Weavers’ clients include Chena Hot Springs Resort, the Greater Fairbanks Chamber of Commerce, KUAC-FM, ABC Alaska’s Superstation, the Fairbanks Concert Association, an ABC affiliate in Santa Barbara, Calif. and a jazz musician in Boston. Most clients are based in Alaska and more than one-third are nonprofit organizations.The company employs eight people including one in Vancouver, British Columbia.Top accomplishment of the company: In October Web Weavers received the Alaska State Chamber of Commerce Bill Bivins Small Business of the Year Award. Although the company already tallied 300 clients at the time, the award provided increased statewide recognition for Web Weavers, Stock said. Strong customer service also is a key ingredient for success, Duplessis said. "I think it really boils down to customer service and that people trust us," he said.Major players: David Duplessis and Ginger Stock, owners, Web Weavers.Duplessis, who earned a theater degree from the University of Utah, moved to Fairbanks 13 years ago. He helped start the Fairbanks Shakespeare Theater. Stock, born and raised in Fairbanks, earned a marketing degree from the University of Alaska Fairbanks. She worked for the Fairbanks News-Miner. Duplessis and Stock worked in sales at KIAC-FM before starting Web Weavers.-- Nancy Pounds

This Week in Alaska Business History February 10, 2002

Editor’s note: "This Week in Alaska Business History" revisits events that shaped our past."Those who cannotremember the past arecondemned to repeat it."-- George Santayana, 1863-195220 years ago this weekAnchorage TimesFeb. 10, 1982NANA, mining company plan ventureCominco American Inc. and NANA Regional Corp. have tentatively agreed to join the evaluation and potential development of the Red Dog mineral deposit in northwestern Alaska.The agreement, reached last Friday and announced by Cominco, provides for the completion of a feasibility study and, if feasible, the development of a mine at the site of the large zinc-lead-silver deposit. The decision is subject to ratification by the boards of directors of both firms, and a final decision on whether to develop the mine is expected to be made in 1983.Cominco, a wholly owned subsidiary of Cominco Ltd., said capital and operating costs of the venture will be "significant" because of the remote location.Anchorage TimesFeb. 10, 1982Watt disappointed with Alaska oil, gas lease saleBy Betty MillsTimes Washington BureauWashington -- Interior Secretary James G. Watt admitted today the results of the first private industry oil and gas lease sale on the National Petroleum Reserve-Alaska were disappointing.Watt, testifying before the Senate Energy Committee on the department’s budget request for fiscal year 1983, told Sen. Frank Murkowski, R-Alaska, "We were disappointed in the NPR-A bidding. We have not yet determined why it happened. We suspect the reason may be the companies are holding out for all the other projects" in Alaska.Murkowski referred to the agency’s accelerated offshore leasing schedule for Alaska, saying, "These areas are much more costly to develop. I wonder if the department has considered the possibility it may not generate the revenues ... realizing industry can only do so much.Watt replied that the department "has a pretty good track record" of increasing its expected receipts from offshore lease sales, and expects to make the $18 million target of revenue received in fiscal 1983.10 years ago this weekAlaska Journal of CommerceFeb. 10, 1992Alyeska: Pipeline volume may drop as much as 200,000 barrels a day in ’92By Ray TysonBased on Alyeska Pipeline Service Co.’s projected daily flow rate for 1992, North Slope oil production and the massive state revenues it generates would be far less than what state officials are forecasting for the year.Alyeska President Jim Hermiller told the Journal of Commerce the company has budgeted an average of 1.625 million barrels of oil a day this year, roughly 200,000 barrels a day less than what passed through the trans-Alaska pipeline in 1991.If Alyeska’s oil budget holds, pipeline throughput in 1992 would fall about 10.8 percent, nearly three times the annual decline rate since North Slope production began slipping three years ago.Average yearly production for all North Slope fields to date has decreased 3.5 percent. Prudhoe Bay alone has slipped 4.7 percent a year.A decrease of 200,000 barrels a day over a period of a year, a total of 73 million barrels, means the state would collect about $180 million less in royalties and taxes, depending on oil prices.Alaska Journal of CommerceFeb. 10, 1992Dutch Harbor opens new dockBy Margaret BaumanUNALASKA -- A jumbo ocean-going container ship pulled out of the Unalaska/Dutch Harbor Marine Center recently, en route to Yokohama, Japan, marking a new era in shipping from this bustling Aleutian port.The newly completed $15 million marine center, which doubles the container-handling capacity for deep-draft ships, was saluted Jan. 31 and Feb. 1 with ribbon-cutting ceremonies at the 790-foot dock, as 36 container loads of Alaska seafood were hoisted aboard Sea-Land Services’ MV Defender for the six day trip to Yokohama.Nearby stood the U.S. Coast Guard Cutter Storis, an auxiliary ice breaker commissioned in September 1942, brought to Dutch Harbor for the occasion.The new dock, financed by a private/public partnership, is a vital step toward making the port a hub for Pacific Rim trade, said Mayor Frank Kelty.-- Compiled by Ed Bennett.

Crouching Grouches Caucus works for cuts before taxes

It appears that the Fiscal Policy Caucus is starting to understand that budget reductions are essential complements to its proposals to close the state’s budget gap by raising revenues. We have a great deal of respect for most of the folks in the caucus, and we appreciate the courage and diligence that they have shown. Nonetheless, they appear to see a somewhat different road to a solution than we do.The caucus realizes that most Alaskans do not understand the magnitude of our fiscal problems, but the caucus does not fully understand that most of the public will not support it until they see significant cuts in government programs, and that Alaskans will not support taxes or the use of the Alaska Permanent Fund earnings without cuts in government spending that hurt.We know that we cannot cut $900 million in general funds from the state budget, but we must make significant cuts before we hope to win public support for any new revenues. Members of the Crouching Grouches Caucus have previously suggested many of these steps to reduce the cost of government: Lowering public assistance and Medicaid qualifying standards, possibly dropping them from 200 percent to 150 percent of the federal poverty level; Cutting legislative expenses, possibly by shortening sessions, or cutting our own pitiful salaries and office expense accounts; Cutting 25 percent from the salaries of appointed state workers paid more than $60,000 per year; Prioritizing all nonessential government functions and beginning to cut back or eliminate services like public broadcasting, parks and recreation, libraries, museums, municipal assistance and revenue sharing, educational support for extracurricular activities, coastal zone management, winterization subsidies and so on; and Limiting travel budgets in favor of increased use of teleconferencing and video conferencing.Although many of our caucus members personally enjoy and support many of these functions, Alaskans are apparently not willing to pay for all of them at this time, and we should not go into debt to continue providing these services at their present levels.When the Canadian province of Alberta, with an oil-driven economy like Alaska’s, was faced with similar budget problems, the province’s leaders responded by making significant cuts in government services, starting with a 20 percent across-the-board cut in education spending. As Alaskans dither, British Columbia is making 25 percent cuts in every department.Though a previous British Columbia administration spent the province into near-bankruptcy, a new, conservative administration is binding its wounds and getting its fiscal house in order. BP just cut executive perks by 25 percent, after significant layoffs. Alyeska Pipeline Service Co. is likewise cutting staff and expenses. What is the Legislature going to do to show the public that there really is a serious crisis?The caucus has apparently not given any consideration to former Gov. Jay Hammond’s brilliant suggestion to set up a tripwire triggering taxes and budget cuts when our fiscal problem reaches some predetermined level. Hammond suggested using the balance of the Constitutional Budget Reserve as the tripwire mechanism; my wife suggested using the level of state income from natural resource extraction. Such a policy would soon convert beneficiaries of every state program into enthusiastic champions of building a natural gas pipeline or opening Arctic National Wildlife Refuge for development.In addition, the caucus makes no provision for revoking taxes or restoring budget cuts if state natural resource revenue should increase significantly. We must protect Alaskans from taxes that only go up. One-way valves or check valves are great in bilge pumps, but they have no place in tax policy.One of the brightest of our former finance chairmen suggested indexing budget cuts and taxes to resource income in an elegant way that would adjust automatically the vagaries of state finances. This certainly works for us in the Crouching Grouches Caucus.If the Knowles administration and/or the Fiscal Policy Caucus succeed in implementing income taxes, then our caucus would suggest we work to implement tax deductions or credits for people investing their own money in alternatives to government programs, such as credits for tuition, retirement plans, private health insurance, foster care, care for handicapped people or care for senior citizens.We do not in any way wish to be disrespectful of the Fiscal Policy Caucus and its work. We propose to work closely with its members to use the legislative process to move our fiscal agenda in a way that provides us all as much comfort as possible, and that will work for all Alaskans.We should never blind-side that caucus or take cheap shots at its ideas. If we are not more successful in convincing them to use our ideas, at least in part, then we in the Crouching Grouches Caucus will try to move our amendments at appropriate times.Rep. Fred Dyson, R-Eagle River, is chairman of the Crouching Grouches Caucus, an ad hoc group of legislators working on alternate approaches to resolving the state’s fiscal crisis. He can be reached at 907-465-2199.

Going broke in Alaska has gotten complicated over years

I have practiced as a commercial lawyer in Alaska for more than 20 years. During good economic times, I have devoted considerable attention to putting together business transactions and real estate purchases and sales. During less prosperous economic times, I have focused on loan workouts, foreclosures and ultimately bankruptcy and insolvency procedures.Twenty years ago, we saw a lot of what one of my former senior partners called "Alaska bankruptcies," in which the debtor simply closed the doors to his or her business, gathered up any remaining assets and essentially dropped out of sight, never to be seen or heard from again.Sometimes debtors in that circumstance actually filed formal bankruptcy petitions in the Bankruptcy Court for the District of Alaska. In some of that type of case, few if any bankruptcy schedules were filed (notwithstanding the earnest efforts of debtors’ counsel) and ultimately the Bankruptcy Court dismissed the cases. However, the debtor was still never to be seen or heard from again.Over the years, we have also observed a good number of legally improper, but nonetheless creative schemes and methodologies undertaken by some debtors to attempt to avoid paying their debts. Outright fraudulent conveyances, or conveyances of assets with intent to hinder, delay or defraud creditors continue to occur and can be set aside as a matter of state law or by a bankruptcy trustee.There are also variations on fraudulent conveyance activities. An example is where a corporate debtor ceases doing business, leaves creditors unpaid, but the same principals of that corporation form another one and essentially operate the same business under another name.Another variation on the old style "Alaska bankruptcy" occurs where the debtor chooses to stay in Alaska, but is constantly on the move, sometimes working in Bush Alaska, but generally keeping out of touch, and sometimes quite successfully, with his or her creditors.Alaska law and the Alaska economy have matured and become more sophisticated in the past 20 years. Alaska courts and state and federal law enforcement authorities in Alaska have become more strict in enforcing both civil and criminal laws in the creditor/debtor arena. In addition, more sophisticated "skip tracing" services as well as the Internet have made it more difficult for debtors to simply vanish.The courts have also played a role in stricter accountability. In 1993, the Alaska Supreme Court issued its decision in Summers vs. Hagen in which the court ruled that the recipient of a fraudulent conveyance could be liable for damages to a creditor of the debtor based on that person’s participation in a conspiracy to commit a fraudulent conveyance.Thus, being a participant in a fraudulent conveyance scheme or activity in Alaska exposes the recipient of the property to liability arguably even if he or she no longer retains the property received. The liability is not limited to returning the property. As a result, the rule in Summers vs. Hagen can be used by creditors to vigorously pursue the personal assets of third parties in circumstances involving fraudulent debtor conduct.In the criminal arena, Alaska governmental lawyers are also more rigorously scrutinizing apparently improper business transactions. In the case of bankruptcy proceedings, the administration of bankruptcy cases is now watched over by the Office of the U.S. Trustee, which is a part of the federal Department of Justice here in the District of Alaska and elsewhere.The U.S. Trustee’s office is charged with seeing that bankruptcy cases proceed in a timely way and in accordance with the Bankruptcy Code and rules. The U.S. Trustee also oversees the actions of the various bankruptcy panel trustees and provides input and guidance to them with regard to pursuing fraudulent conveyances by debtors in bankruptcy.The Office of the U.S. Trustee also makes referrals to the prosecutors of the Office of the United States Attorney in cases of suspected bankruptcy fraud. In the past year or so, at least two cases that were referred to the United States Attorney resulted in prosecutions, convictions and sentencing. One case principally involved a debtor lying under oath in written and oral statements in bankruptcy court proceedings. Another case involved concealing or a failure to disclose the existence of assets.Outside of the bankruptcy arena, the Alaska U.S. Attorney’s Office has in recent years prosecuted as a matter of "white collar crime" actions involving criminal bank fraud in which the defendant knowingly executes or attempts to execute a scheme or artifice to defraud a financial institution.In that regard, the U.S. Attorney’s Office in 2001 did prosecute the principal in a corporate recreational vehicle dealership in Anchorage for bank fraud and obtained a conviction at the trial court level.Serious financial difficulties are generally very stressful and trying for all concerned, including the debtor, his or her family, creditors and various parties otherwise affected. Both Alaska and federal law are tending to become more strict in terms of protection of creditors’ rights and courts are paying attention to those enhanced creditor rights and remedies.Nevertheless, while old time "Alaska bankruptcies" are probably becoming a thing of the past, Alaska state and federal law still provides significant protections to a honest debtor who acts in good faith and performs his or her obligations to the best of his or her abilities.Frederick J. Odsen is a member of the law firm of Hughes Thorsness Powell Huddleston & Bauman LLC.

Farmed salmon oversupply ripples through wild fishery

The surge of farmed salmon on world markets is continuing at unprecedented levels, driving prices of salmon to record lows.Farmed salmon has been encroaching on markets for Alaska’s salmon for years, but in recent months Chilean farmers have been producing at record levels in a bid to gain market share, University of Alaska fisheries economist Gunnar Knapp says.The result is a crisis in the salmon farming industry, the equivalent to farmed fish that $9 per barrel oil prices in 1998 was for the world’s petroleum industry.Knapp outlined the gains salmon farmers have made at the expense of Alaska fishermen in a Feb. 1 talk before the World Affairs Council luncheon in Anchorage."It’s a classic problem of agricultural overproduction," Knapp said in an interview. "It’s a short-term problem, but major adverse effects are felt by the wild salmon fisheries, like Alaska’s."Despite the short-term nature of the current price dip, the long-term trend in salmon farming is toward more production, continued gains in efficiency and productivity, and lower prices.Farmed salmon is also beginning to encroach on other salmon markets. For now most of the competition is in the market for fresh or frozen salmon. But more and more farmed salmon is being canned, Knapp said.For example, Fred Meyer stores in Anchorage are now carrying a Bumblebee seafood smoked canned salmon that is labeled, "Product of Chile," Knapp said. It is obviously farmed because Chile has no wild salmon fisheries.Salmon farmers might also move into the lucrative salmon roe field, an area now reserved for wild salmon. If this happens it could further undermine wild fisheries, Knapp said.But the problem for Alaska fishermen is just not farmed salmon, he said in an interview. "Other challenges include variable and uncertain salmon runs, overproduction for the traditional canned salmon markets when there is a big run, changes in consumer taste and demand and the current world economic slowdown," Knapp said.Like salmon farmers, "these challenges are not going to go away and there aren’t any quick or easy fixes," he said."But if we don’t make changes, we face a bleak future in our salmon fisheries," Knapp said, painting a grim picture of an industry in a death spiral, with fewer and fewer processors, fewer fishermen and shrinking support infrastructure.Knapp thinks it’s possible that Alaska fishermen can innovate and find ways to meet the competition of farmed salmon, but they must find ways of cutting costs.Those efforts could be thwarted "by a management system that is not designed to create a competitive and cost-effective industry. Instead it is designed to achieve social and political goals of spreading the wealth, of maximizing jobs and income.""For a period of time this worked well, but not any more," Knapp said. "The reality is that we can’t achieve social and political goals from the Alaska salmon industry unless the industry is economically viable."One competitive advantage Alaska has is the increasing awareness of food quality issues among many consumers. There are more concerns about chemicals fed to farmed fish, and Alaska’s wild-caught salmon could develop an important marketing advantage, Knapp said.There are new regulations in Europe to label fish as to countries of origin, and the U.S. Congress is debating similar requirements.However, the vast majority of consumers are unaware of these distinctions, so there is a big marketing challenge for Alaskans, he said.

Legislators give salmon industry little hope for marketing help

KODIAK -- It didn’t take legislators long to loft an early volley at Alaska’s salmon industry.Finance leaders in both the House and Senate said Jan. 18 they have no plans to fund marketing efforts this session, and that problems facing the salmon industry "are unlikely to be helped by an advertising campaign."At the same time, a measure was filed to provide $6 million to boost Alaska’s tourism industry, which is anticipating a big drop in bookings because of the Sept. 11 terrorist attacks.Sen. Lyman Hoffman, D-Bethel, offered an amendment to spend $1.2 million on tourism marketing and $1 million for salmon marketing. It failed. Gov. Tony Knowles proposed spending $10 million each to fund marketing campaigns for tourism and salmon."We have our work cut out for us," responded Rep. Gary Stevens, R-Kodiak, who expressed surprise at the move by Anchorage Republicans to dislodge salmon from state funding dollars. Stevens said that in his view, any marketing dollars must include tourism and seafood in tandem.Stevens also introduced a bill that would put $12 million into the Alaska Seafood Marketing Institute’s budget over five years, $4 million the first year and $2 million for the following four years."People from fishing communities will demand equal amounts for salmon," Stevens said. The tug of war could all amount to nothing. The state faces a difficult budget deficit, and policymakers may decide against giving money to either industry.Cotten to represent boroughThe Aleutians East Borough has hired long-time Alaska commercial fisherman and former state legislator Sam Cotten as its chief resource analyst. Cotten will represent the region’s commercial fishing interests before boards, commissions and other fisheries management bodies in his new position.A lifelong Alaskan, Cotten spent a total of 16 years in the Legislature, including serving as speaker of the House. He also served as chairman of the Alaska Public Utilities Commission. He holds a lower Cook Inlet purse seine permit and has fished in several regions of the state. The Aleutians East Borough is home to the villages of False Pass, Nelson Lagoon, King Cove, Akutan and Sand Point.Fish Caucus draws crowdThe first Fish Caucus was well attended, according to Ian Fisk of Kodiak Republican Sen. Alan Austerman’s office."The caucus is directed at legislators not familiar with the fishing industry," Fisk said. The Juneau-based McDowell Group presented an overview of Alaska’s seafood industry, pointing out that while Alaska salmon might be getting clobbered in world markets, the markets for nearly all of the other major fisheries, halibut, groundfish and crab, are stable or positive.The McDowell report said Alaska’s salmon fisheries face serious challenges, "but we have outstanding assets to work with to meet those challenges." The overall value of Alaska’s seafood has remained relatively stable in recent years, and the diversity and size of harvests helps moderate peaks and valleys in individual fisheries. The mainstream media often overlook the big picture when reporting on the seafood industry, the report added.Free for ’small fry’Free educational materials about salmon are available for teachers and students in grades kindergarten through fifth grade. The materials, which were developed by the Alaska Seafood Marketing Institute, meet national science curriculum standards. They can be downloaded from the ASMI Web site. Also available are instructions for ordering an interactive poster for kindergarten through second-grade students, and a 14-minute video on Alaska salmon, which was broadcast as a National Geographic special.Salmon on a stickSalmon lollipops are the hit of the Park Avenue Cafe in New York City. Created by chef David Burke, the smoked salmon offerings take little time to make. WorldCatch provided this recipe, which would be easy to modify:For the center of the pop, mix cream cheese, mascarpone cheese, capers, lemon zest, red onions and a little of the smoked salmon in a food processor. Refrigerate until very firm. Roll them in chopped (not sliced) smoked salmon until they are evenly covered. Then insert the lollipop stick and chill again.As seen on the company’s "gourmetpop" Web page, the salmon pops look like a somewhat smaller version of caramel or candy apples on a stick. Chef Burke says that the salmon lollipops are very simple to do at home, but they require plenty of room in the refrigerator for chilling. Also, he says to "do yourself a favor" and get the lollipop sticks from a local grocer.Kodiak-based free-lance writer Laine Welch can be reached via e-mail at ([email protected]).


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