FISH FACTOR: Begich shares thoughts on fisheries issues in Kodiak

“With fisheries, it’s almost the forgotten resource of our state as an economic driver. It’s almost like they are an afterthought. We have to realign that,” said Mark Begich, Democratic candidate for Alaska governor, as we readied for an interview during his trip to Kodiak last week. Begich came to Kodiak despite the cancelled fisheries debate caused by a no show by his Republican opponent, Mike Dunleavy, who has not responded to requests to share his ideas and vision for Alaska’s oldest industry. “I think it’s appalling,” Begich said. “I think it shows his lack of respect for our coastal communities and their importance to the economy of this great state and the people who live and work here.” Begich spoke easily and at length on a wide range of fishing industry topics. He called state funding for fisheries research and stock assessments a top priority. “We are never going to be able to manage our fisheries resource the proper way without it. And I think there are opportunities through federal, state as well as foundation money that I believe is out there to help us do this,” he said. Begich said he is a strong supporter of Alaska’s hatchery program. “I know there is some conversation going on about hatchery fish impacts in the ocean … But there is no real science around that and the hatcheries have been very successful for us as a state,” he said. In terms of selecting an Alaska Department of Fish and Game commissioner, Begich said good management skills and the ability to bring people together are critical. “People are frustrated. They feel like their voice isn’t heard. We need commissioners who are willing to step up to the plate and recognize that it’s their job to bring people together, solve problems and move forward,” Begich said. “Obviously, I would want him or her to be knowledgeable about fisheries. We need someone who understands the controversies that are out there, the uniqueness of our resource, and how to balance it with making sure we do things for the long term and not for the moment.” The average age of Alaska’s fishing permit holders is 50, and Begich believes the state can help fend off a “graying of the fleet” crisis and give young entrants a boot up. “First we have to make sure the fisheries remain as stable as possible so future generations can get into that business. Another issue is the capital it takes,” Begich said. “We should look at how to utilize the Alaska Industrial Development and Export Authority, which is a financing arm of the state, and is usually designed for big projects. “We should figure out if they can be a player in helping to bring low cost capital to the table so that people who want to get into fishing have a chance and are not denied because they don’t have the money or the capacity to borrow. I think there is a tool here that has been underutilized by the state for the fishing industry and a lot of the small business industries that we have.” The Trump Administration’s push for offshore fish farms gets a thumbs down from Begich. “Alaska is known for our premium product because we are wild caught,” he said. “Farmed fish could impact our natural stocks if improperly managed. I don’t want any of that in Alaska, for sure.” Begich also is no fan of Trump’s tariffs on seafood going to and from China, Alaska’s biggest customer. “This spat that the president has with China is costing Alaskans jobs and money and putting a damper on our products,” he fumed. “With fisheries, if we’re not careful it could add another $500 million to $700 million to the cost of our fish products sold to China. What they will do is decide to buy products from another place and once they do that, we’ll lose our market share.” “We should be teaming up right now with the governors of Washington, Oregon and the Gulf states, working with the Trump Administration and the State Department and start pounding on them that this is hurting American jobs,” he added. “These are dangerous games for us to be playing and the effects are long lasting.” Begich said as governor, he would reinstate the coastal zone management program, which would bring back Alaskans’ ability to have input regarding management of our coastline. Alaska is the only state that does not have that outlet for the public’s voice. A coastal zone management program in Alaska was in place starting in the 1970s but expired in 2011 when lawmakers and then-Gov. Sean Parnell failed to agree on its extension. “We need to have that coastal zone management program. It is about our own sovereignty in deciding what we want to do, and to have public comments on our coastal zone versus the federal government controlling it,” Begich said. “Secondly, it provides millions of dollars to the state that are rightfully ours and going to other states right now.” Other protein industries, such as beef and pork, use everything but the squeal. But in Alaska, most of the seafood trimmings end up as waste. Begich called that “short sighted” and said he believes that there is tremendous economic potential for Alaska’s billions of pounds of fish parts. “We need to have the financing available to build the infrastructure that will allow these companies to do maximum utilization of their seafood,” Begich said. “We also need to think about how we can use marketing in a way that helps utilize all of every product.” Begich did not hesitate when asked what he views as the biggest threat to Alaska’s fisheries. “Climate change,” he said. “Ocean acidification, warming waters — these are things that right now we don’t have enough information about to understand what the long term impacts are going to be, and it is clear that there are going to be impacts.” “The state must put investment into research and better utilizing our university so we understand what we can do, if at all, to mitigate the impacts of climate change to our fisheries,” Begich said, adding that the state also has its own goal to reach. “We have to get to our goal of 50 percent or greater of renewable energy so we can start doing our part in this world of making sure we put less emissions into the air.” “We have to do it to prepare and protect our environment, our industries and our economy,” Begich said. “Secondly, we are the natural lab for a changing climate and we can become a leader in figuring out solutions to the challenges we face and show the rest of the world how to do it right.” EM sign up Pot cod and longline vessels fishing in federal waters were able to sign up by Nov. 1 for electronic monitoring of their catches for 2019. This year was the first time that the EM systems got the go ahead for use on boats under 60 feet; the program has now expanded to include more and larger boats. “The cap for 2018 was 145 vessels. Since then the North Pacific Fishery Management Council in June increased the number of vessels that can participate in the EM pool to 165,” said Abby Turner-Franke, project coordinator at the North Pacific Fisheries Association in Homer, which has helped get the program out on the water. Malcolm Milne, NPFA president, said the EM system is simple to use. “Once your boat is wired you get a camera and instead of carrying a human observer, you just turn the cameras on and they record everything coming over the rails,” he explained. “When the set is done, the camera is off and at the end of your trip you mail in the hard drive to be reviewed in Seattle. It took a trip or two to get used to the whole system, but after that, you don’t even realize it’s there at all.” In years of test trials, the EM cameras proved they could track and identify over 95 percent of the species required for fishery management decisions. All costs are covered by grants from the National Fish & Wildlife Foundation. Laine Welch lives in Kodiak. Visit or contact [email protected] for information.

AGDC meets with FERC to stay on schedule

The state corporation in charge of developing the Alaska LNG Project has already submitted its first round of answers to questions posed three weeks ago by federal regulators preparing the project’s environmental impact statement. The response came as the Alaska Gasline Development Corp. is looking for the Federal Energy Regulatory Commission to stay on schedule for its release of the project’s draft impact statement in February 2019. State project team members met with federal regulators last week to discuss the timeline and seek clarification on specific items among the almost 200 data requests presented by FERC on Oct. 2. AGDC submitted several hundred pages of answers and data on Oct. 22, with another round expected by Nov. 19. AGDC asked FERC staff at the Oct. 18 meeting in Washington, D.C., if the corporation’s timeline for responses would be sufficient to maintain the environmental impact statement, or EIS, schedule. That will depend, commission staff said, on whether the answers are complete or if they prompt substantial follow-up questions. FERC and state project staff held a similar technical conference in March to review information needed for the EIS. In addition to AGDC and FERC staff, the Matanuska-Susitna and Kenai Peninsula boroughs, along with the city of Valdez, sent representatives to the Oct. 18 meeting, as all three Alaska municipalities are advocating that the gas liquefaction plant and marine terminal be built in their community. All three have filed with FERC, pushing for the impact statement’s alternatives analysis to consider their community. The site-selection debate, however, did not come up at the meeting. In a more general discussion, FERC staff on Oct. 18 reiterated that the EIS will analyze each project alternative on three criteria: If it meets the project’s needs; if it is economically and technically feasible; and if it provides an environmental advantage. If the environmental review process stays on schedule, FERC plans to issue the project’s final EIS in November 2019 — which would allow the full commission in February 2020 to grant authorization for construction. The state filed its application with FERC in April 2017. The state proposes to build a $43 billion project to pipe Alaska North Slope natural gas more than 800 miles to a liquefaction plant and marine terminal in Nikiski, on the eastern shore of Cook Inlet. In addition to the FERC authorization, the state team is working to line up gas supply agreements with North Slope producers, contracts with customers for the LNG, along with investors and financing for what would be the country’s most expensive oil and gas project. Development funding, however, could run out late 2019 unless AGDC is able to find investors or the Alaska Legislature appropriates additional money. Issues covered at last week’s conference included FERC’s Oct. 2 requests for: • More details on AGDC’s plans for horizontal directional drilling, or HDD, to install the pipeline beneath water crossings. The state team reported it has not contracted with an HDD contractor and therefore cannot provide all of the clarifications requested by FERC. The type of equipment used, for example, might be specific to the contractor, AGDC said. Commission staff clarified that FERC is requesting a general plan with such information as HDD worker training, drilling monitoring, contingency plans, source of drilling water and use of drilling mud. • More specific information on the pipeline’s water crossings, including the proposed crossing method, width of the banks, fisheries habitat and population, and whether any fish spawning occurs at the crossing or upstream. AGDC said it has not visited every crossing — almost 450 along the project route — but it has aerial photos of each location. The state team asked FERC if it would be sufficient to list the areas where its information is incomplete. Commission staff said they need a consolidated table with each crossing, listing the construction method (such as open-cut trenches) and other details. FERC staff said the state team should send in what it has, even if there are information gaps. • More information on the project’s potential impacts during construction and operation on surface water and groundwater. AGDC said some of the information — such as the treatment, location and volume of water discharges — would not be known until a project construction contractor is hired. The state team said it could not anticipate water use and discharges by contractors it has not yet hired. Commission staff responded that AGDC is the project applicant and, therefore, ultimately responsible for environmental impacts. FERC staff explained they are particularly interested in any potential impacts on municipal water sources. AGDC answered that state law governs water use, with specific permitting requirements. FERC recommended AGDC submit information on the state permitting process and how the project would be held responsible for mitigating any impacts on water sources. • An updated groundwater monitoring plan for protecting public and private wells. AGDC reported it is not working with individual land owners on a monitoring plan, though it has notified potentially affected landowners in the project’s path. FERC suggested AGDC identify wells that could be affected by project construction and operation, explain exactly what information it has and where and why it is limited in some cases. FERC clarified that its focus on groundwater monitoring is not limited only to construction camps but applies to the entire project. The state team said additional information would be available before the project’s construction phase. • Cumulative impact estimates for sulfur and nitrogen emissions in sensitive areas at each compressor station along the pipeline route and at the LNG plant site west of the Kenai National Wildlife Refuge. AGDC asked why FERC is applying a more stringent level of analysis for some federal lands than is required by the Clean Air Act. The state team noted that the U.S. Department of Interior had written to FERC, pulling earlier requests from department agencies for such analysis. FERC explained that in some cases it requires additional reporting beyond what is requested by other federal agencies. Commission staff recommended that AGDC make its case why it should not be required to model additional analysis of emission impacts on federal lands far from the direct emission source and FERC would consider it. Issues addressed in AGDC’s Oct. 22 filing with FERC included: • A revised migratory bird conservation plan that addresses questions about vegetation clearing during construction, raptor surveys and nest management. • More information about AGDC’s plans to use granular-fill work pads during construction, particularly in areas of thaw-sensitive permafrost. • AGDC’s response to the possibility of hauling dredged material — pulled from the seafloor to make way for the freight offloading dock at Nikiski — to beach-nourishment sites 40 to 60 miles away on the Kenai Peninsula. AGDC said using the material at distant sites would not be feasible, due to the time and cost of moving the dredged material. The project proposes disposal offshore, in nearby deeper waters in Cook Inlet. FERC requests on the state’s list for response by Nov. 19 include: • Additional details on construction plans to lay concrete-coated pipe across 29 miles of the seafloor from the west side of Cook Inlet to Nikiski. • A revised groundwater monitoring plan, providing “proposed avoidance, minimization and mitigation measures for potential effects on groundwater supply wells” near the pipeline and project sites. • Further information on potential impacts on permafrost during and after construction. • A table of all areas of thaw-sensitive soils along the pipeline route. • Additional geotechnical and geophysical studies of the feasibility of trenchless pipeline crossings at specific waterways. • An updated discussion of seismic risks to the project, reflecting the magnitude 6.4 quake that hit the North Slope in August. Larry Persily is a former Alaska journalist, state and federal official who has long tracked oil and gas markets and projects worldwide.

Alaska Air Group ready for results from Virgin acquisition

Alaska Air Group Inc. had a solid third quarter netting $217 million, but company executives said during an Oct. 25 earnings call that they are not satisfied with the results. CEO Brad Tilden said the company has completed about 90 percent of its work to integrate Virgin America into Alaska Airlines since it closed on the purchase of the West Coast competitor nearly two years ago and has done so as fast as any other merger in the industry. Air Group leaders are now ready for that work to start paying off in the form of higher revenue and profit margins. “The performance of our core business remains strong and our brand and products are gaining increasing traction in California,” Tilden said. Seattle-based Alaska Air Group is the parent company to Alaska Airlines and regional carrier Horizon Air. The $217 million profit was down from $259 million for the same period in 2017. It translated into earnings of $1.75 per share. Air Group paid a dividend of 32 cents per share during the quarter and has repurchased about 582,000 shares of common stock for $37 million so far in 2018. Air Group stock opened trading Oct. 31 at $63.16 per share. The $217 million came on the back of $2.2 billion in operating revenue, which was up 5 percent year-over-year on 4.8 percent capacity growth. That equated to flat per-unit revenue for the quarter, the best result in five quarters for the metric that had been trending in the wrong direction, according to Chief Commercial Officer Andrew Harrison. “This is only the beginning, and we expect our unit revenue momentum to continue as we execute on a number of substantive initiatives to ensure our recent trajectory continues into the fourth quarter and beyond,” Harrison commented during the Oct. 25 call. The company expects to capture $130 million in synergies next year as Virgin America aircraft and employees are fully blended into Alaska operations, Tilden said. Flight attendants are being trained to work on both Alaska’s fleet of Boeing 737s and the fleet of former Virgin America Airbus A320 series aircraft that Alaska now operates; he said they would start working in both types of aircraft next February. Harrison added that Alaska is working through IT issues for paid upgrades on Airbus flights and will be reconfiguring the Airbus cabins to increase first class capacity by 50 percent. “We expect to see significant revenue increases from the front cabin in 2019,” Harrison said. And while Alaska Airlines’ popular Club 49 loyalty program mostly insulates Alaskans from baggage fees, the airline recently announced its fees for non-mileage plan members would go up $5 to $30 for the first checked bag and $15 to $40 for the second bag, bringing them in line with fees charged by other major carriers, according to Tilden. Additionally, Tilden said the company would begin what he called “the difficult but we believe necessary step” of cutting some management positions next year, but he did not elaborate as to which positions or how many employees would be let go. “This will save overhead but more importantly it will improve the speed of decision-making and the flow of information through our organization,” he said. Higher fuel costs have been a major contributor to the decreased margins, according to Tilden, who said the industry as a whole has not yet adjusted to them. Fuel can be upwards of one-third of an airlines’ overall operating expenses and despite significant hedging efforts, Air Group’s fuel costs were up 39 percent year-over-year to $513 million in the third quarter. In response, Air Group plans to slow its growth in 2019 and executives are comfortable with the company’s position in that regard, Tilden said. By the end of 2018 the company will have paid down $800 million, or roughly 40 percent of the debt it took on to acquire Virgin America, he added. Alaska Air Group had a debt-to-capitalization ratio of 49 percent at the end of the third quarter, compared to 59 percent when it bought the airline in December 2016. The company also held $1.4 billion in cash on Sept. 30. “We feel confident we’re on the road to producing better returns in the quarters ahead as we work together as a single team to demonstrate the true power of our combined company,” Tilden said. ^ Elwood Brehmer can be reached at [email protected]

Interior gas officials agree to explore Siemens’ plan

Utility officials have signed a one-year agreement with Siemens Government Technologies to further investigate the company’s plan to get more and cheaper natural gas to Interior Alaska. The Interior Gas Utility board of directors voted 4-2 on Oct. 23 to enter into a memorandum of understanding with Siemens. Company representatives have said for more than a year that they, leading a consortium, can put together an LNG supply chain that is competitive with the Interior Energy Project plan IGU and the Alaska Industrial Development and Export Authority have already agreed to. The Siemens team also contends its “turnkey” project would relieve IGU from much of the work it would have to do for the Interior Energy Project; all the utility leaders would have to do is sign a liquefaction services agreement, or LSA, and wait for the Alaska Railroad to deliver LNG to the utility’s storage tank in south Fairbanks. The agreement prohibits IGU from negotiating or soliciting potentially competing gas supply plans other than the Interior Energy Project plan IGU is currently developing. However, either party can terminate the MOU with 30 days notice. It also calls for Siemens and IGU to finalize an LNG supply contract term sheet by the end of the year and for Siemens to make a fixed-price LNG supply offer to the utility within five months of the term sheet being completed, which would be May on the current schedule. “It’s really just an agreement to collaborate; that was the way that I thought about it,” IGU attorney Robin Brena said before the vote. Siemens is working with the Knik Tribe and Knikatnu Inc. to put together its 20-year LNG supply chain from Southcentral. At the heart of the plan is a pair of Siemens’ modular “LNGo” gas liquefaction units that can produce up to 30,000 gallons of LNG per day. The plan is to initially install two LNGo units at a proposed industrial park on Knikatnu land near Alaska Railroad Corp. tracks in Houston. The fuel would travel by rail to IGU’s 5.25 million-gallon LNG storage tank currently under construction in south Fairbanks for regasification and distribution to residents and businesses. Once gas demand grew to where more than four of the LNGo units were needed, the company would look at installing a single, larger LNG facility, according to Siemens officials. Siemens Energy and Infrastructure Director Kelly Laurel and other Siemens officials have acknowledged that the company hopes to parlay work with IGU into more gas supply projects in the state, notably at Interior military bases. A crucial element of any Interior LNG plan, Laurel said Oct. 23 that Siemens has agreed upon terms with a Cook Inlet producer for feedstock natural gas. She would not name the producer, but said the company and potential gas contract terms could be disclosed to those doing due diligence to validate the LSA, but that would be done under confidentiality as well. Siemens has consistently stated a belief it can get feedstock gas for $5 per thousand cubic feet, or mcf, or less, which would be significantly cheaper than pricing much larger Southcentral utilities have been able to secure in recent years on much higher volume supply contracts. IGU currently has a short, three-year gas supply contract with Hilcorp Energy for $7.72 per mcf. AIDEA officials participated in negotiating that contract and generally consider it a win given it is for a small base load of roughly 1 billion cubic feet, or bcf, per year with expected, but unsure, demand growth once liquefaction capacity is added in some form. The Siemens-led group is also investigating the prospect of developing potential gas reserves in the Houston area, which would bring the feedstock price down to $4 per mcf, according to the company’s project documents. Gary Wilken, a former AIDEA director who was recently appointed to the IGU board, voted against signing the MOU on a belief it will unnecessarily drag out the Interior Energy Project that AIDEA and the Fairbanks utilities have been working on since 2013. “From the beginning this project has been dancing on the head of a pin,” Wilken commented during the meeting. “I’m very concerned that we are doing nothing but extending this project and creating continued uncertainty that will hurt us financially and it’ll hurt us with the very customers that we are trying to elicit support (from).” AIDEA and IGU have estimated their plan, with its state financing support, would result in an initial $17.30 per mcf burner tip price to consumers in 2020. That price could drop to the $15 per mcf IEP goal by 2022 more customers are brought online. Using IGU’s contract price, Siemens would get LNG to the Fairbanks storage tank for $17.98 per mcf, according to the company — plus $5 to get it all the way to customers. Wilken has long said he is open to alternatives — several of which AIDEA has evaluated — to the current plan of adding LNG capacity to the small Titan LNG plant that is now IGU’s, but he’s skeptical of the Siemens plan largely because of the company’s unwillingness or inability to provide firm pricing on key elements of the project. IGU vice chair Jack Wilbur joined Wilken in voting “no,” saying he doesn’t have any confidence Siemens will have a firm offer for the utility to consider by next May. Board chair Pamela Throop said the MOU is needed to finalize the details of the plan and without it the alternative plan would die now. “I’m happy to give them the time to do what they need to do to put together a proposal. I think we owe that to this community,” Throop said. IGU director Steve Haagenson said he was in favor of the MOU because IGU has ostensibly been bound to AIDEA’s LNG development plan for years and needs to be able to evolve with new information. As for the current plan, IGU General Manager Dan Britton said he expects the utility to have completed engineering and design on the Titan expansion plan by mid-May as well. The utility should have prices on project components at that point, according to Britton, but a final construction price will still need to be penciled out. Expanding the Titan plant to meet expected natural gas demand growth in the Fairbanks area is currently estimated to cost $46 million. Additionally, the AIDEA board of directors would have to approve of IGU formally contracting with Siemens or any other LNG provider because the Titan expansion plans were part of the $331 million package in which AIDEA sold Fairbanks Natural Gas to IGU and agreed to finance gas supply and distribution infrastructure build out with Interior Energy Project grants, loans and bonds the Legislature approved in 2013. ^ Elwood Brehmer can be reached at [email protected]

Aleutians borough seeks subsidies for ‘copter service to Akun airport

UNALASKA — After four years in storage, the hovercraft that shuttled to and from Akun Island has been sold to a buyer in Kazakhstan and replaced by helicopters for the ride to the new airport. Now, the Aleutians East Borough wants federal funding for the helicopter service to end a unique situation where the subsidies terminate short of the final destination in the federal Essential Air Service program. No doubt about it, Alaska is unique and so is the way the Essential Air Service operates subsidized passenger service in the state, especially because it’s the only state in the nation where the program ends one island short of the final destination, in Akutan, leaving a local government stuck with a helicopter bill. That’s according to the program’s top administrator Joel Szabat, the deputy assistant secretary in the U.S. Department of Transportation Office of Aviation and International Affairs. Szabat, a career federal administrator, repeatedly remarked on Alaska’s unique transportation situations, compared to the Lower 48 where state transportation departments plow snow off roads and not airport runways. Szabat visited Unalaska on his way to his program’s most unique destination, Akutan, where federal funding ends six miles across the water from the six-year-old airport on Akun, where a hovercraft formerly completed the trip. That spendy machine was finally sold earlier this year to a Kazakhstan company, Circle Maritime Invest, after about four years of indoor storage in a hanger in Akutan. Now, the Aleutians East Borough wants the federal government to step up to the plate and fulfill its responsibilities to an isolated community with unique circumstances, where it was too expensive to carve a runway out of the side of a mountain. So instead the state built the first airport on land across the bay on the smaller, but more importantly flatter, island of Akun in 2012. The project was not inexpensive, but was within the budget of about $50 million on the island that’s uninhabited except for cows and horses and a borough-operated hotel for weathered-in passengers originally built for the construction workers building the airport. Szabat couldn’t commit either way to a helicopter subsidy, saying it’s neither allowed nor forbidden by federal law, but repeatedly remarked on Akutan’s unique place in the EAS program, because it doesn’t get passengers where they’re going, and instead deposits them on another island, with the borough providing the subsidies for the helicopter ride from Maritime Helicopters at substantially less cost than the hovercraft but still not cheap. The EAS program currently subsidizes the airplane ride to Akun from Unalaska/Dutch Harbor, about 40 miles away, via Grant Aviation. The hovercraft was finally sold in February, for $4.4 million, to Circle Maritime Invest, in the Central Asian nation of Kazakhstan according to Aleutians East Borough Manager Anne Bailey. In May, the borough assembly decided to spend hovercraft sales proceeds on transportation expenses, including $2.5 million for the Akutan-Akun link, $1.3 million for the King Cove Access Project, and expenses involved in the sale of the watercraft. The hovercraft was originally used for a few years in King Cove for travel to the all-weather airport in Cold Bay, as an alternative to the controversial road proposed through the Izembek National Wildlife Refuge opposed by environmental groups. The hovercraft, named Suna X, was purchased with $9 million in federal funds before eventually relocating to Akutan where it rode above the water on an aircushion, before the borough decided it was too expensive and frequently unable to operate because of rough weather. In Kazakhstan, hovercrafts shuttle between shore and oil rigs in the Caspian Sea, and one Alaskan company, Cruz Marine, nearly bought the Suna X for North Slope oil field support, but backed out when oil prices collapsed four years ago, according to former borough manager Rick Gifford. The hovercraft was replaced with another “extremely expensive” way of getting from the airport at Akun to the main island and village of Akutan, Bailey said. Akutan is also the site of a Trident Seafoods plant with around 1,000 workers. Helicopter service costs $1.7 million a year, with only $400,000 from ticket sales at $100 for a one-way flight. The borough pays the balance of $1.3 million, Bailey said. The borough is now in the early stages of planning a small boat harbor and breakwater at Akun, she said. U.S. Sen. Dan Sullivan told borough officials at an assembly meeting this year that he strongly supports federal funding for the proposed Akun harbor project. Troy LaRue, a top administrator of the Alaska Department of Transportation from Anchorage, accompanied Szabat in Unalaska, and said a water link to Akun may help the airport “maximize” its economic potential, if Trident Seafoods can get seafood onto aircraft economically, which was feasible with a hovercraft, but is too expensive to ship fish even a short distance with a four-passenger helicopter. LaRue also said that Akutan is looking at building homes on Akun, within city limits. Another way Alaska is unique in the EAS program is with airports operated by the state government, unlike Lower 48 states where roads and highways, but not aviation, keeps state transportation departments busy, Szabat said. Szabat praised the Alaska DOT for keeping the feds informed of airports that shouldn’t be on list of EAS-eligible communities, and were removed this year. Szabat said holding down costs is a top priority, and in 2011 the program was limited to existing communities LaRue said those three were Funter Bay and Chatham, both in Southeast, each with no more than two residents, and Aleknagik, near Dillingham, where the airport hasn’t been used for airline service since a bridge was built across the Wood River. Yet now another isolated rural community wants to join the program. Aleutians East Borough Assembly Advisory Member Justine Gunderson of Nelson Lagoon wants her community added to the EAS list, although borough staff said it would take an act of Congress for the Alaska Peninsula village to qualify. Szabat said Unalaska doesn’t get at EAS funds because it doesn’t need them, as commercial airlines operate profitably because of the large volume of passengers due to the seafood industry’s large presence. Former Unalaska city councilor, ex-bookstore owner, and retired city employee Abi Woodbridge protested spending taxpayer dollars on aviation improvements benefiting the little village of Akutan and one seafood company, ridiculing the millions spent building the Akun airport as a “boondoggle,” she told Szabat at the October meeting at Unalaska City Hall. She said she believed most Unalaskans shared her view that the Akun project was wasteful. Prior to the airport at Akun, passengers from Anchorage flights were flown to and from Unalaska directly to Akutan on Peninsula Airway’s amphibious antique Grumman Goose which landed on the water in front of the village. Pen Air eventually sold the Goose, citing the high cost of maintaining the plane built in the 1940s. LaRue said that since the Akun airport opened, more people are arriving in Akutan by air, and fewer on Trident’s fishing vessels from Unalaska. While the helicopter is presently the only way to the airport, some Akutan residents would rather avoid the flying machine altogether, and instead wait for seasonal arrivals of the state ferry Tustemena for travel to Unalaska and connecting flights to Anchorage. Szabat said he was touring Alaskan communities at the request of Sullivan. Szabat was formerly the executive director of the federal Maritime Administration, and said his previous aviation experience was limited to rebuilding airports in war-torn Iraq. Presidents always try to kill the EAS program, which serves 160 communities, a third of them in Alaska, Szabat said, but Congress always refuses to go along, and saves the $300 million annual federal Essential Air Service subsidy program that provides passenger service to communities where it’s not otherwise affordable. Half the funding is from special taxes on airlines, and the other $150 million comes directly from the federal budget, he said. Jim Paulin can be reached at [email protected]


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