Movers and Shakers for Aug. 26

The University of Alaska Fairbanks has chosen Heather Brandon of Juneau as Alaska Sea Grant’s new director. Brandon is an environmental policy leader with experience in fisheries issues on a broad geographic scale, ranging from Alaska to the Arctic and Russian Far East. Before joining Alaska Sea Grant, Brandon was a foreign affairs specialist for NOAA’s Office of International Affairs and Seafood Inspection. Brandon has also worked for World Wildlife Fund, Juneau Economic Development Council, Pacific Fishery Management Council, and Alaska Department of Fish and Game, and served on the U.S. Department of Commerce Marine Fisheries Advisory Committee. She has a master’s degree in marine affairs from the University of Washington and a bachelor’s degree in biology from the University of Oregon. Alaska Sea Grant, one of 33 such programs around the country, is a partnership between NOAA and UAF. Through research, outreach and education, Alaska Sea Grant works to enhance the sustainable use and conservation of Alaska’s marine and freshwater ecosystems and coastal economies. Credit Union 1 promoted Melissa Aningayou to branch manager of its Midtown Branch in Anchorage. Aningayou was initially hired in 2007 as a teller at the credit union’s Nome Branch before transferring to Anchorage in 2010. She has since held the positions of senior teller, member service officer, member service supervisor, assistant branch manager and branch manager of Credit Union 1’s Abbott Branch prior to this promotion. Dr. Gabriel Wolken of the Division of Geological and Geophysical Surveys has been awarded an international research fellowship to study and map Alaska’s snow avalanche hazards. The six-month fellowship beginning Sept. 1 in Davos, Switzerland, promotes collaboration between visiting senior-level scientists and the Swiss Institute for Snow and Avalanche Research. Wolken manages the Climate &Cryosphere Hazards Program at DGGS and is affiliated with the Alaska Climate Adaptation Science Center at the University of Alaska Fairbanks. He investigates the impacts of changes in snow, ice, and permafrost on Alaska’s landscape, natural resources, and the built environment. Alyssa Norris recently joined the LONG Building Technologies team as an account executive in the Fairbanks office in July. Norris grew up in interior Alaska and completed a bachelor’s degree in civil engineering at Washington State University. While earning her degree she interned at the U.S. Department of Energy headquarters in Washington, D.C, served on the university Board of Regents, started her own small business, and was actively involved in mentorship programs to help support and retain women in engineering through the Society of Women Engineers. LONG provides HVAC mechanical solutions, building automation systems, security solutions, and equipment for commercial properties. Norris will also be specializing in the C-PACE program as it gets kicked-off in Alaska. LONG Building Technologies has offices in Anchorage and Fairbanks. Col. Phillip Borders became the 28th commander of the U.S. Army Corps of Engineers Alaska District during a change of command ceremony today Aug. 14. Borders, a native of Lawrence, Kan., replaces Col. Michael Brooks, who served as the district commander since July 2015 and retired after 25 years of service. He will also be responsible for the district’s support to the U.S. Pacific Command designing and constructing humanitarian assistance projects throughout Southeast Asia. Under the Defense Department Foreign Military Sales Program, the district also oversees master planning, requirements validation, design and construction of infrastructure for the Government of India’s C-17 aircraft at Hindon Air Force Station. Before assuming command in Alaska, Borders attended both the National Security and School of Other Nations programs under a U.S.-bilateral arrangement at the Canadian Forces College in Toronto, Ontario. Previously, he served as chief of the Engineer Plans Branch for U.S. Central Command at MacDill Air Force Base in Florida. Borders has deployed for 42 months in support of Operation Iraqi Freedom, Operation Enduring Freedom, Operation Freedom Sentinel and Operation Desert Storm. He has earned the Airborne Badge, Air Assault Badge, Ranger Tab and Combat Action Badge. As a decorated Army officer, some of Borders’ awards include the Bronze Star with two oak leaf clusters, Army Commendation Medal with six oak leaf clusters, Army Achievement Medal with three oak leaf clusters, and National Defense Service Medal with two Bronze Service Stars. Borders graduated with a bachelor’s degree in architecture from the University of Kansas in 1996. He also earned a master’s degree in engineering management from the University of Missouri-Rolla and is credentialed as a project management professional. Chief Master Sgt. Winfield Hinkley, Jr. assumed responsibility of the senior enlisted leader position of the Alaska National Guard through the passing of the Non-Commissioned Officer’s Saber to Maj. Gen. Laurie Hummel, the adjutant general of Alaska, during a change-of-responsibility ceremony Aug. 13. For the past two and half years, Chief Master Sgt. Paul Nelson, the outgoing SEL, led the AKNG enlisted force by advancing priorities of the Department of Military and Veterans Affairs with legal, moral and ethical focus. Nelson helped establish the Ethical Fitness Program, expand the Senior Enlisted Development Program, and exposed NCOs to experiences outside of their core competencies. As the third AKNG senior enlisted leader, Hinkley comes to the organization from being commandant of the Chief Master Sergeant Paul H. Lankford Enlisted Professional Military Education Center at McGhee Tyson Air National Guard Base in Tennessee. Hinkley also has roots in the AKNG with prior service as a comptroller flight superintendent for the Alaska Air National Guard’s 176th Wing. Sitnasuak Native Corp. added Norm Resnick to its management team as general counsel effective July 24. His credentials and experience have involved important work with Alaska Native Claims Settlement Act issues, commercial and real estate transactions, business acquisitions, corporate law, land and resource management, and government contracting. He also has experience in litigation, alternative dispute resolution, human resources and employment law, probate, and shareholder support. Resnick has previously represented private individuals, business enterprises, and local, state and federal agencies. Most recently he was general counsel for Calista Corp. Northrim Bank hired Sarah Maycock as Electronic Banking support manager and Kristin Oberman as associate vice president, branch manager. Susan Stenstrom was promoted to associate vice president, assistant corporate secretary. Maycock joined Northrim Bank with 10 years of banking experience. She recently moved to Anchorage from Wisconsin where she worked at a community bank in Milwaukee. Maycock holds a bachelor’s degree in communication from the University of Wisconsin-Milwaukee. Oberman joined Northrim Bank with seven years of experience in the financial industry. She has worked with Alaska USA Federal Credit Union and First National Bank Alaska. Oberman holds a bachelor’s degree in psychology with a minor in human resources management from the University of Maryland. Stenstrom has been with Northrim Bank for 10 years and has 43 years of experience in the financial industry. Stenstrom was the 2013 recipient of the Northrim Bank President’s Award.

Effort to transform ferry system a lift for next Legislature

Election Day is still months away but some coastal Alaska legislators are already ramping up to overhaul the state ferry system in the 2019 legislative session. House Transportation Committee co-chair Rep. Louise Stutes, R-Kodiak, said during an Aug. 16 hearing that a top priority of the committee for the upcoming session will be revising legislation to turn the Alaska Marine Highway System from a subset of the state Department of Transportation into a semi-independent public corporation. Stutes, who won her GOP primary Aug. 21, is a member of the bipartisan House Majority coalition, which currently holds a small majority over the House Republican Minority caucus. She said House Bill 412, introduced by the Transportation Committee late in the last session that ended in mid-May, received unanimous support from its members. Exactly what changes will be made to HB 412 are unclear at this point, but it also has backing from other Interior Alaska legislators, according to Stutes, who historically have questioned the cost of the ferries that require significant ongoing state funding support to operate. “Aside from maintaining healthy fisheries, revitalizing our ailing ferry system is probably the most important issue to coastal Alaska,” she said. State Marine Transportation Advisory Board chair Robert Venables stressed during the hearing that taking AMHS funding battles out of the Legislature’s annual debates as much as possible is crucial to forming a more effective and efficient ferry system. “Finding that mechanism for at least getting stabilized funding would at least allow the ferry system to capture the most revenue from the highest revenue months,” he said. Venables is also the executive director of the Southeast Conference, an economic and community development nonprofit for the region. Former Commerce Department Commissioner Susan Bell largely echoed Venables assessment. They emphasized that reliable state funding would allow AMHS leaders to publish sailing schedules, particularly for the busiest summer months, further in advance, which in turn would give potential passengers more time to plan travel and hopefully increase bookings. Nonresident passengers comprise up to 40 percent of ferry riders any given year, according to AMHS officials, who market the ferries as an alternative to the giant cruise ships that traverse the Inside Passage each summer. The fights in the Legislature over ferry funding while the state grappled with multibillion-dollar budget deficits led to a 28 percent cut in state support for the AMHS over the last five years, from $124 million to $89 million. The budget cuts directly led to cuts in service, according to DOT leaders, which have led to lower expenses but also lower revenues. Between fiscal years 2015 and 2017 AMHS operating revenues went from an all-time high of $53.9 million to $45.8 million, a 15 percent reduction, while overall service was cut about 13 percent over the period, according to AMHS financial reports. The system’s fleet has also gone from 11 to nine working vessels in recent years. Bell is also a principal for the Alaska economics research firm McDowell Group, which helped study options for revamping the model under which the system operates. McDowell Group primarily conducted a revenue analysis of the operations and looked for new revenue sources. Seattle-based naval architectural and marine engineering firm Elliott Bay Design Group led the two-phase reform evaluation, which started in the spring of 2016. The first round of studies looked at other ferry systems worldwide to determine what could be pulled from their operations to benefit Alaska. Phase two formed the long-term operating strategy and included McDowell’s revenue analysis. HB 412 is largely the end result of those studies. Transitioning to a public corporation model should provide the system with more continuity in senior leadership, Bell said, allowing for more institutional knowledge and long-term planning. The reform studies recommend a seven-member board of directors with a majority of members bringing business and maritime transportation expertise and at least one member to represent the system’s union employees. House Speaker Bryce Edgmon, D-Dillingham, suggested the board have an ex-officio member from the system’s Outside ports of call, either Prince Rupert, British Columbia, or Bellingham, Wash. Bellingham service generates an average of 44 percent of the system’s operating revenue as the long-haul service is a popular way for military service members and other Alaskans to move in and out of the state from the Lower 48. As a sub-agency of DOT, the highest levels of ferry system leadership usually change with each governor’s administration. In May, DOT Commissioner Marc Luiken appointed longtime former Unalaska Mayor and Marine Transportation Advisory Board member Shirley Marquardt as the first executive director of the Alaska Marine Highway, a move made to start the transformation of the ferry system. “Having the public corporation model set up so it is run by people that are passionate about its mission brings a whole different element to operations than the status quo,” Venables commented. Bell also urged during a presentation to the Transportation Committee that labor negotiations with the system’s employee unions currently handled by Department of Administration officials be negotiated directly by AMHS officials, which would improve labor-management communication and could help reduce labor costs by inserting more industry expertise into the labor talks. Venables said many of the changes should be made to make the system run more as a private-sector operation. “We really should be operating more like business. It’s always going to have a public mission; it’s always going to need some level of funding support from the state to achieve that public mission, but it’s a $150 million enterprise that needs to be run more like a business,” he said. Studies have shown that increasing fares to fully recover costs would likely reduce ridership and undermine the revenue generation effort, DOT officials have said. Full privatization has been dismissed because Alaskans would lose much of the essential services the system provides, according to reform strategy documents. However, Venables said the overhaul should not stop at the system’s management structure. He insisted the AMHS needs to continue to move toward a more standardized fleet with smaller ferries feeding mainline vessels that make the long distance sailings to Bellingham, across the Gulf of Alaska and out the Alaska Peninsula and Aleutian Islands. That will mean keeping politics out of fleet selection and vessel design and letting contracted marine architects handle that work, Venables said. “We’ve got kind of a troubled history in trying to design the right boat so we’re going to take a fresh look — even at the Alaska class vessels,” he said. The M/V Tazlina, the first of the two Alaska class “day boat” ferries was christened in Ketchikan Aug. 11. The twin, 280-foot ferries are planned for use in Lynn Canal between Juneau and the road-accessible towns of Haines and Skagway. Built at Vigor Industrial’s shipyard in Ketchikan, the Tazlina and the Hubbard are the first AMHS ferries built in Alaska. Elwood Brehmer can be reached at [email protected]

Gaps in Arctic strategy leave room for trouble

The shortcomings in U.S. Arctic policy only start with the country’s feeble icebreaking “fleet,” according to Mark Rosen, an Arctic expert with the Washington, D.C.-based policy think tank CNA. Rosen spoke Aug. 15 in Anchorage during a lunch presentation put on by the Alaska policy nonprofit Commonwealth North. He was also in Alaska to attend a U.S. military Northern Command, or Northcom, conference at Joint Base Elmendorf-Richardson. “Almost to a person, there seems to be unanimity among all the people at the conference — very senior officers and so forth — that we are really behind in terms of as a nation in recognizing the enormous resource potential of the Arctic as well as some of the challenges that are occurring today in other parts of the Arctic because the legal structure in many respects is not sufficiently robust,” Rosen said. A retired U.S. Navy captain, Rosen is a vice president and general counsel for CNA. He stressed that Arctic waters, though referred to as an ocean, are ostensibly a “closed sea,” making it much more likely for the happenings in one portion of the Arctic to impact the entire region. Rosen said he finds some of the environmental standards of other Arctic nations particularly worrisome as well as a lack of enforceable shipping standards for the icy region. The U.S., he noted, generally has stringent environmental standards for remote developments. He referenced a remote drilling platform, part of the Russian Prirazlinloye oil field in the country’s waters of the Barents Sea, and others like it, as being a potential source for an Arctic-wide ecological disaster. Oil produced from the field, which is about 35 miles offshore and roughly 1,000 miles from the nearest major port according to Rosen, is stored on the platform until it can be transferred to a tanker. “When you have those types of activities 1,000 miles to nowhere — I think there’s a song like that — you’ve got to wonder, well, what happens if something goes wrong? What happens if that caisson springs a leak?” Rosen wondered. (Dwight Yoakam’s country hit 1,000 Miles from Nowhere reached No. 2 on Billboard’s country chart in 1993. Yoakam also sports an amazing pair of painted-on orange leather pants while standing atop a moving train in the accompanying music video.) “Russia has the right to develop those resources but again, the Arctic is a closed sea and so there needs to be, in my judgment, some accounting for the fact that what happens in the Russian Arctic can affect the U.S. Arctic, can affect Alaskan waters,” he said further. As a result, Rosen advocates for Arctic-wide development standards based off of U.S. requirements to use current technologies and practices for oil drilling at least, that could be developed and implemented fairly simply by each of the five nations with Arctic coasts. The European countries surrounding the North Sea and its significant offshore oil and gas fields have such modern and reciprocal development standards, liability provisions and infrastructure inspection protocols through the 1998 OSPAR Commission, and could be used as a model in the Arctic, he suggested. While the Law of the Sea says individual nations are to regulate development activities and responsible parties are expected to compensate those impacted by an offshore incident, the procedures can be much more difficult to execute when something occurs, according to Rosen. “The duty to monitor and cooperate in the event of an incident does not equal the duty to pay damages,” he said. “At the end of the day, as a lawyer, if something goes wrong, I want to figure out who’s going to pay and are there enough resources to be able to satisfy the immediate claims for cleanup and the claims of those that might be adversely affected, such as fishermen.” On Arctic shipping, Rosen does not foresee Canada’s Northwest Passage or Russia’s Northern Sea Route becoming “maritime superhighways” for transit shipping. For one, he said containership operators that fill major U.S. ports such as Long Beach and SeaTac work on tight, space-available schedules and generally cannot afford to be delayed by any of the many variables added by shipping through the Arctic. Rather, he believes most of the long-term Arctic shipping growth will be destination-based and focused on serving a growing number of resource development and infrastructure projects. Rules of the road The requirements for large vessels operating in the Arctic are difficult to enforce in situations where they are prescribed and virtually nonexistent in other cases, Rosen said. That’s because the Law of the Sea with few exceptions delegates shipping requirements and subsequent enforcement to the “flag state” of a vessel, or its country of origin. The Polar Code has detailed vessel capability and equipment requirements for ships operating in the Arctic. However, it only applies to vessels built after the code was implemented and still relies on flag-state enforcement. Rosen said there have been talks about adding inspections in a vessels last port of call before embarking on an Arctic voyage, but such heightened scrutiny is not yet mandated. The Polar Code was ratified in 2014 and took effect in January 2017. “If you have a Liberian-flagged vessel that’s going through Arctic waters you have to rely on the government of Liberia in order to ensure this particular ship meets all the requirements of the Polar Code,” Rosen described. “The Polar Code is good but we need to layer cake it. We need to have insurance requirements and there needs to be a system to ensure that somebody’s inspecting the ships’ papers before they go into the Arctic to make sure they’re complying with the Polar Code.” Established in 1996 as a working body for the eight Arctic nations to collaborate on policy and social issues, the Arctic Council deliberately wasn’t formed to be a regulatory enforcer, according to Rosen, out of a collective fear for layering further international oversight on a given country’s activities. Sea ice and extremely harsh water and weather conditions necessitate additional requirements for Arctic-bound vessels, but so does the simple lack of information regarding the ever more popular area, he said. The luxury cruise liner Crystal Serenity’s Northwest Passage voyages in 2016 and 2017 underscore the need for oversight in a portion of the world that can take days for emergency responders to reach, depending on conditions, Rosen added. “If you look at a chart of the Northwest Passage it’s downright scary, because there’s an awful lot of white space (where nothing has been mapped) and there’s also places in the Northwest Passage that have a tendency to get blocked up because of ice,” he said. “What happens if one of those ships runs aground or loses propulsion because the screw hits a block of ice?” Foreign investment Finally, Rosen said there are also potential issues surrounding foreign direct investment in the Arctic, particularly in regards to areas currently lacking a strong economic foundation. Norway’s laws on foreign direct investment, or FDI, are similarly stringent to the U.S. and Canada has good requirements in that realm, he said, noting that Canadian researchers and press reports indicate China is interested in developing ports through the Northwest Passage. Rosen characterized the Chinese interest in Canada as “a little bit concerning.” He added that China is growing its investment presence in Iceland and has a 500 or-so person research team dubbed “Northern Lights” located there. Iceland and Greenland are particularly vulnerable to the side-effects of foreign investors who do not have a stake in assuring local people or environments are protected, he said, because they are focused on growing their small economies. Greenland is seeking FDI to indirectly help offset the growing costs of social programs, according to Rosen. “Are you going to allow foreign mining and foreign investment for a mine, for an offshore oil project — there are a couple on the books in Greenland that are being developed — and how heavily are you going to regulate that activity, and then on the other hand deprive yourself of the revenue? So, it’s sort of a classic case,” he said. Adhering to strict environmental standards can also push money to where the regulatory burden is the lowest, he added. “Everybody’s going to try to game the system so that they have an advantage over the other state in terms of attracting inbound investment,” Rosen said. He noted that current U.S. sanctions on Russia haven’t helped the Arctic investment scene either, as they have simply pushed Russia and China into “a marriage of convenience.” China National Petroleum Corp. and China’s Silk Road Fund provided 30 percent of the investment needed for Russia’s $27 billion Arctic Yamal LNG project, which started exports in 2017, according to French oil and gas giant Total, which also has a stake in Yamal LNG. According to a November 2017 CNA report co-authored by Rosen and titled, “Unconstrained Foreign Direct Investment: An Emerging Challenge to Arctic Security,” often nationalized Chinese companies and development banks have invested roughly $90 billion in Arctic infrastructure and resource projects since 2012. The report additionally estimates that China has invested upwards of $1.4 trillion in the economies of Arctic countries since 2005. He highlighted concerns about state-owned Chinese companies taking projects or properties over when finances fail, but also said some Chinese investors take the remove the potential to default when lending in order to be more attractive to borrowers. The move of eliminating default risk, along with investments in Arctic resource projects that seemingly don’t pencil out raise questions as to whether China is making its investments for strictly commercial reasons, Rosen said. He suggested the Arctic nations should look at forming an international Arctic development bank to give those in the region and looking for major chunks of capital another option that could also ensure the projects are built responsibly and with fair lending practices. “You can debate about who would be members but I see the charter members as being the five countries that have Arctic coastline,” Rosen elaborated. “They would form a bank and they would provide investment capital to enterprises that may want to develop a mine in Greenland, Iceland, and then the financing terms need to be sufficiently robust that they can compete with the Chinese.” He said such a bank could be started with private lending supported by loan guarantees to lessen the immediate need for direct appropriations by the founding countries. Elwood Brehmer can be reached at [email protected]

Siemens pitches alternative plan for gas to Interior

Interior residents got their first detailed look at an ambitious alternative plan to get more natural gas to a region with poor winter air quality and high home heating costs. Representatives from Siemens Government Technologies Inc. made their pitch to the Interior Gas Utility board of directors Aug. 21 by contending they could supply the Fairbanks area with more natural gas without requiring IGU to invest in additional LNG facilities in Southcentral. IGU recently purchased Fairbanks Natural Gas and the Titan LNG plant that supplies it from the Alaska Industrial Development and Export Authority for about $60 million. That purchase, largely enabled by $42 million of Interior Energy Project grant money AIDEA awarded IGU, is part of a larger, $330 million financing package approved by the Legislature in 2013 that also includes plans for a $46 million LNG plant expansion and another $233 million in ultra low-interest loans and bonds to finance gas storage distribution infrastructure in North Pole and Fairbanks. Siemens Energy and Infrastructure Director Kelly Laurel told the IGU board that the company’s plan, which she noted was not solicited by the utility, is to partner with the Knik Tribe to get added natural gas to the region by January 2020 on a 20-year turnkey contract. “We’re not asking you to make an investment or do any bonding, but just to sign a liquefaction agreement,” Laurel said. The Siemens plan hinges on the company’s modular “LNGo” 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 near Alaska Railroad Corp. tracks in Houston. The fuel would travel by rail to Fairbanks Natural Gas’ 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. Laurel and other Siemens officials acknowledged— as they did last October when they pitched the idea to the AIDEA board of directors — that the company hopes to parlay involvement in the Interior Energy Project into more gas supply projects in the state. She said the company mostly does work for Department of Defense installations and would like to grow into supplying the Interior military bases and possibly other developments with natural gas. “This particular project to the Interior, we see this as just one step in the infrastructure build out of Alaska,” she said. Under the plan, IGU would sign a 20-year liquefaction services agreement, or LSA, with the Knik Tribe but the responsibility for executing the contract would flow to Siemens through a separate contract with the tribe. IGU would also sign a transportation contract with the Alaska Railroad, but that cost would be rolled into the LSA terms. The company is partnering with the Knik Tribe because the federally recognized Tribe has access to federal loan and grant programs that could provide lower-cost financing to the project, according to Siemens officials. It would be located on land owned by Knikatnu Inc., a Native village corporation. Laurel said Siemens believes it can secure a gas supply for far less than the price of $7.72 per thousand cubic feet, or mcf, that IGU agreed to in its three-year contract with Hilcorp Alaska. Siemens is in talks with multiple Cook Inlet gas producers, she said, and believes it can secure feedstock gas for $5 per mcf, which would be significantly cheaper than the gas price Southcentral gas and electric utilities have been able to secure on much larger volume contracts. 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. “We believe we have a firm (gas) supply to be able to contract to rail your LNG to you,” Laurel told the IGU board. She said partnering with Siemens and the Tribe on a performance-based contract would shift LNG supply and operational risks from the utility to the company. “You won’t get these sort of ‘whoops’ bills or overrun bills. That’s our problem to deal with,” she said. On cost, Siemens believes it can deliver LNG to FNG’s storage tank for $15.02 per mcf, based on a $5 per mcf gas feedstock price. Members of the IGU board had questions for the Siemens representatives but largely withheld judgment on the proposal. New IGU board member and Fairbanks-area resident Gary Wilken, who recently resigned from the AIDEA board to take the local position, noted that even with $5 feedstock gas, another $5 per mcf would need to be added to the final customer price to cover regasification and distribution costs, bringing the “burner tip” cost into the $20 per mcf range. AIDEA and FNG 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. Siemens representatives said they can have the operation up and running 12 months after contracts are signed, which would mean IGU would have to agree to the plan by the end of the year to get gas flowing by January 2020. Laurel acknowledged there is a lot to negotiate. “We recognize that this is a great opportunity to advance Alaska and its infrastructure,” she said. ^ Elwood Brehmer can be reached at [email protected]

MARAD fights turning over study on failed port project

The Municipality of Anchorage settled its lawsuits against contractors in the failed port expansion project last year for $19.3 million, but city attorneys are still aiming to recover much more money in a lawsuit against the federal government. Attorneys for Anchorage and the U.S. Maritime Administration, or MARAD, argued Aug. 21 over whether the federal agency should be forced to hand over an allegedly incomplete engineering report on the problems of the port construction and what documents among roughly 20,000 should be withheld from the court record. Senior Federal Claims Court Judge Edward Damich adjudicated the proceeding telephonically from Washington, D.C. The facility, renamed the Port of Alaska by a vote of the Assembly on Oct. 24, 2017, is owned by the municipality. Anchorage attorney Jason Smith contended MARAD is improperly claiming attorney-client privilege in order to withhold a root cause analysis study done in 2012 by the international engineering and project management firm AECOM . The municipality commissioned MARAD to oversee the expansion project, which began in 2003, as a way to direct federal funding to the Anchorage port, which is designated as a national strategic defense port. MARAD, in turn, hired Integrated Concepts and Research Corp. to manage the project. ICRC settled with Anchorage in January 2017 for $3.75 million, one of seven settlements with design and construction contractors in the project. Municipal attorneys have said they are looking to recoup upwards of $340 million between the two lawsuits against MARAD and the project contractors. About $300 million was spent between state and federal funds on the project that yielded little. Most of the sheet pile dock structure, which was not finished when work stopped in 2010, has been removed. The municipality sued MARAD in February 2014 in federal contract court, a lawsuit that has progressed slowly as the private-party suit was ongoing. MARAD was also blasted for its alleged inattention to managing the Anchorage project as well as other Pacific port projects in an August 2014 Inspector General report. MARAD attorney Jeffrey Regner said the AECOM study was done roughly at the same time that CH2M (formerly CH2M Hill) was conducting a suitability study to determine whether or not the patented Open Cell Sheet Pile dock design was appropriate for the port with great seismic risk. The AECOM study was expected to be “short, sweet and to the point,” Regner told Judge Damich, adding it was left in draft form and was never intended to be shared outside the MARAD counsel office. He said AECOM was paid by the federal government, not with project funds, and the firm was hired to be a litigation consultant, adding the CH2M Hill and AECOM studies “overlap quite a bit.” “I think the good news is we have CH2M Hill doing parallel work at the same time,” Regner said. The conclusions in CH2M’s study that the design and construction in the project were both problematic led in large part to the municipality suing the contractors in 2013. Smith argued a root cause analysis is a specific type of engineering study to determine, as the name implies, the fundamental reason a project failed and had a different purpose than CH2M’s suitability study. The relationship between the city and MARAD really began to fall apart in September 2012 when MARAD settled with ICRC, allegedly without notifying the city of the deal. Regner said “it was at most days,” after MARAD officials decided to settle with ICRC before municipal officials were notified. Damich noted there is nothing in the record to indicate MARAD told the muncipality that it was going to settle with ICRC. Smith also said the log of roughly 20,000 documents MARAD attorney’s contend are privileged is unreasonable, noting that 8,000 or so don’t have sufficient descriptions and more are labeled with attorney-client privilege. “We shouldn’t be burdened to go through a privilege log with 20,000 entries to determine which ones are privileged and which ones aren’t,” Smith said, adding the agency’s factual position has changed several times during the suit that has yet to go to trial. “When you’re dealing with 20,000 documents you’re going to make some mistakes it seems to me,” Damich commented. Regner said MARAD’s attorney’s started with upwards of 15 terrabytes worth of documents and whittled those down to the 20,000. Discovery in the case is scheduled to be finished by March 2019. ^ Elwood Brehmer can be reached at [email protected]

Millett, Micciche, LeDoux face upset losses in primary

Incumbent and House Minority Leader Rep. Charisse Millett, R-Anchorage, was upset by a first-time political candidate in preliminary returns in the state’s primary election, while two other incumbents, Sen. Peter Micciche and Rep. Gabrielle LeDoux, were fighting to keep their seats. In contested state House races, Rep. Lora Reinbold had a big lead over fellow state Rep. Dan Saddler in a heated Alaska Senate race in Chugiak-Eagle River. In the Mat-Su, incumbent Rep. George Rauscher was on track to score the Republican nomination over former state Rep. Jim Colver and another candidate, Pamela Goode, in a contentious primary for state House. With all precincts reporting late Aug. 21, Josh Revak, a military veteran and political newcomer, was beating Millett by more than a 10-point margin. Revak had 57 percent of the vote to Millett’s 43 percent. Millett has represented the district since 2008. Speaking in downtown Anchorage on election night, Revak, who had critiqued Millett’s record on the criminal justice reform law Senate Bill 91 and other issues, called his lead “surreal.” “I just hope I can live up to the standards my neighbors in Abbott Loop have set out for me as voters,” Revak said. Millett could not immediately be reached for comment. In a Republican primary for state Senate on the Kenai Peninsula, Micciche, who was elected to the Senate in 2013, was in a very tight race with Ron Gillham of Soldotna. The winner of that race will also win the seat, with no challengers in the general election. With all of the district’s precincts reporting, Gillham was leading Micciche by just 12 votes — meaning the outcome will come down to absentee ballots in the coming days. An even tighter margin was at play for LeDoux in her East Anchorage House race. With all precincts reporting, LeDoux was neck-and-neck with challenger Aaron Weaver. Weaver had 50.3 percent of the vote to LeDoux’s 49.7 percent — a difference of three votes. LeDoux has represented East Anchorage since 2015. The winner of LeDoux’s race will most likely face Democrat Lyn Franks, who had a comfortable lead in a three-way Democratic primary in the district late Tuesday night. Other incumbents scored dominant victories. In the closely watched Republican primary for House District 9, Rauscher, who was first elected in 2016, had 50 percent of the vote. Goode had about 22 percent of the vote and Colver had 28 percent. Rauscher will now face Democrat Bill Johnson in November. In what had been an acrimonious Senate race in Chugiak-Eagle River, Reinbold jumped to a huge lead over Saddler. With all precincts reporting, Reinbold had 58 percent of the vote to Saddler’s 42 percent. At a Republican election night event in downtown Anchorage, Reinbold told supporters that her stance as an early voice against Senate Bill 91 helped sway voters. “Public safety is government’s No. 1 mandate,” she said. Reinbold will face Democrat Oliver Schiess of Eagle River in the November election. Apart from the Reinbold-Saddler race, it was a busy night in Chugiak-Eagle River, with two contested races for the state House seats vacated by Reinbold and Saddler. In Saddler’s district, Kelly Merrick secured the Republican nomination. With all precincts reporting, Merrick had 43 percent of the vote, Jamie Allard had 36 percent of the vote and Eugene Harnett had 21 percent of the vote. Merrick will face nonpartisan Joe Hackenmueller in November. In the race for Reinbold’s seat, Nancy Dahlstrom had a commanding lead over opponents Craig Christenson and Bill Cook. With all precincts reporting, Dahlstrom had 41.4 percent of the vote; Christenson had 29.4 percent; and Cook had 29.2 percent. The winner will go against Democrat Danyelle Kimp in the general election. Two other three-way Anchorage primaries had lopsided margins in early returns. In downtown Anchorage, Zack Fields handily won a three-way Democratic race against Cliff Groh and Elias Rojas. With all precincts reporting, Fields had nearly 50 percent of the vote, Groh had 32 percent and Rojas had 17 percent. Fields will face Republican Ceezar Martinson in the general election. In a contested Republican primary for House District 26 in South Anchorage, Laddie Shaw also had a big edge over his two challengers. With all precincts reporting, Shaw had 45 percent of the vote, compared to Joe Riggs with 29 percent and Albert Fogle with 26 percent. Shaw will next face Democrat Hunter Dunn in the general election. Also in South Anchorage, Rep. Chris Birch, who currently has the seat sought by Riggs, Shaw and Fogle and decided to run for Senate, had a crushing lead Tuesday night over challenger Bekah Halat, a newcomer who was recently charged with felony welfare fraud. Birch had 78 percent of the vote to Halat’s 22 percent with all precincts reporting. Birch goes on to compete against Democrat Janice Park in the November election. In West Anchorage’s District 22, a political newcomer, Sara Rasmussen, soundly beat former state Rep. Liz Vazquez in the Republican primary. With all precincts reporting, Rasmussen had 54 percent of the vote and Vazquez had 46 percent of the vote. Vazquez was hoping for a rematch against incumbent state Rep. Jason Grenn, an independent who ousted her in 2016 after her first term. Instead, it will be Rasmussen facing Green in November, along with Democrat Dustin Darden. Chugiak-Eagle River Star Editor Matt Tunseth contributed reporting.

Begich on calls to drop out: “I’m in the race”

The race for Alaska governor looks to be a three-man contest, though some are still seeking to pressure the Democratic challenger to bow out. That Democrat, Mark Begich, said he’s not going anywhere: “I’m in the race,” he said. During the Aug. 21 primary, Republican former state Sen. Mike Dunleavy advanced to the general election, where he is expected to face Begich, who was unopposed in the Democratic race, and Gov. Bill Walker, an independent who skipped a head-to-head primary fight with Begich and instead gathered signatures to appear on the November ballot. Walker’s move was intended to ensure that he could run as a team with his Democratic lieutenant governor, Byron Mallott. Walker in 2014 changed his party affiliation from Republican to undeclared in forming a so-called unity ticket with Mallott that was backed by Democrats. Some Democrats and independents worry that Begich and Walker will split the vote and hand the race to Republicans. But Begich has said he wouldn’t have gotten into the race if he didn’t think he could win, and he and Walker have each been full-steam ahead with their campaigns. A former chairman of the state Democratic party, Don Gray, has circulated a petition, asking Begich to withdraw. Those who have signed include members of Walker’s administration and others who support Walker. Jay Parmley, executive director of the Democratic party, called the petition a campaign stunt. He said Begich was willing to get in a three-way race “because he knew where this was going.” “I still spend a fair amount of time telling people, take a deep breath. This is doable,” Parmley said, adding later: “I don’t know where anyone thinks this is easy. I don’t think it’s easy if it were a two-way race. I think we’re going to have to fight for every vote we get but we know what we’re doing.” Libertarian William “Billy” Toien is also running. Dunleavy on Tuesday topped a crowded field in the GOP gubernatorial primary that included former Lt. Gov. Mead Treadwell, who had fashioned himself as the more experienced candidate. Dunleavy in January left the state Senate after five years to focus on his campaign. While a senator, he clashed with GOP leaders over cuts to the annual check Alaskans receive from the state’s oil-wealth fund and over what he saw as insufficient cuts to the state budget. Dunleavy said he likes his chances against Walker and Begich. “I feel we’re on the right side of the issues,” Dunleavy said Tuesday night. “I feel that Alaskans want to send somebody down to Juneau that they feel is going to fight for them.” Juneau is the state capital. Begich said he plans to outwork his opponents and continue to travel the state to share his message with Alaskans. He said a majority of Alaskans are looking for a change. “The majority is not with the current governor. The majority of Alaskans are looking for something different,” Begich said. In the Democratic U.S. House primary, independent Alyse Galvin advanced to challenge GOP incumbent Rep. Don Young, 85. Young is the longest-serving member of the U.S. House and easily won his primary. The Alaska Democratic party changed its rules to let independents run in its primaries if they want the party’s backing. Galvin, an education advocate who has a reputation for being persistent, planned to greet supporters Tuesday night and get them ready for the challenge ahead. The time between now and the general election “is not that long when you want to make a big change. I do intend to keep people charged. … We are going to be hitting the ground running tomorrow.” Party primaries for governor and lieutenant governor determine who runs as a ticket in November. Candidates who bypass the primaries and instead gather signatures to appear on the general election ballot — as Walker opted to do — have a say in their running mates. The next governor will face big issues, including crime and the economy, and decisions on the annual check that Alaskans receive from the state’s oil-wealth fund, the Alaska Permanent Fund. Dunleavy and Treadwell had positioned themselves as conservatives critical of a 2016 criminal justice overhaul and the state’s approach to budgeting. Both supported the formula in state law for calculating the oil-wealth check, which has been ignored, first by the governor and then by legislators, for the past three years amid a budget deficit. Mary Bolin, an Anchorage Republican, voted for Dunleavy. She said he was “most in line with the values I hold and the way I would like to see things run.” Bolin said she supported Walker in 2014 and could possibly do so again in the general election, saying they share personal values. She said she wanted to hear more from the candidates before deciding who she thinks could best get the state out of its financial difficulties. In east Anchorage, Bill Cody voted for Treadwell, whom he said made the most sense to him. Cody voted for Walker four years ago but didn’t like the governor’s handling of the Permanent Fund dividend. “I don’t think he listened to the people at all,” Cody said, adding he hopes it hurts Walker at the polls. “I didn’t even consider voting for him this time.” Cody’s wife, Holly Cody, also is an undeclared voter, but she voted on the Democratic ballot. In the U.S. House race, she supported Democrat Dimitri Shein. She said she met Shein and he left a good impression. “He’s a family man,” she said. But she’s not holding out hope that anyone will defeat Young. “Don Young’s been around forever. I think he’s got a lot of support in Alaska.” The primaries also include a contested GOP race for lieutenant governor and state legislative races. Of the candidates in the Democratic U.S. House race, Galvin and Shein, a Russian immigrant who became involved in politics after President Donald Trump’s election, most actively campaigned. Young faced a primary challenge from Thomas “John” Nelson and Jed Whittaker, who had limited resources and little name recognition.

Dunleavy cruises to GOP pick for governor

Former Wasilla state Sen. Mike Dunleavy built a big early lead and held it over former Lt. Gov. Mead Treadwell on Aug. 21, winning the Republican primary race for Alaska governor. His victory sets up a three-way race in November’s general election, with Dunleavy facing incumbent Gov. Bill Walker, who is running as an independent, and former Anchorage mayor and U.S. Sen. Mark Begich, a Democrat. With 98 percent of the precincts counted statewide by Aug. 22, Dunleavy had 62 percent of the vote compared with 32 percent for Treadwell. Dunleavy claimed victory shortly after 11 p.m. Aug. 21 at a Downtown Anchorage hotel, where the Alaska Republican Party held its watch party and where he had watched the results come in most of the night. Dunleavy thanked his supporters, his campaign staff, the other GOP candidates and his wife. He said he would work to build trust among those who didn’t vote for him. “This is a Republican state and we need to take back this governorship,” he said as the crowd cheered. “By working together, we can make it happen.” Meanwhile, state Sen. Kevin Meyer of Anchorage appeared on his way to winning the Republican primary race for lieutenant governor. In an interview, Dunleavy said he planned to celebrate his primary win by going home to Wasilla with his wife, Rose, and feeding their three dogs, Mr. Tito, Blue and Olive. On Aug. 22, he said, the next race begins. Tuckerman Babcock, chairman of the Alaska Republican Party, said Tuesday’s results signal that the party is behind Dunleavy. “This is a remarkable margin,” he said. Treadwell, in congratulating Dunleavy, also expressed disappointment in the lack of attention on the primary campaigns. “We have to bring the Republican Party together because right now the ideas that we brought forward on trying to save jobs, build jobs in this economy, having experienced people run this thing, we did not get very much attention,” he said. “The biggest issue was who was tallest.” During their campaigns, Dunleavy and Treadwell agreed on a range of issues. Both are pro-life conservatives. Both have said they want to protect Alaskans’ annual Permanent Fund dividend checks. With political experience and significant campaign funding, the two had emerged as front-runners in a Republican primary alongside five other candidates. Dunleavy got into the race much earlier than Treadwell, who filed to run at the last moment in June. Since Aug. 11, Dunleavy has raised $8,000 in donations to his campaign, bringing his fundraising total to about $320,000. Treadwell received $9,000 in donations after Aug. 11 for a total of $145,000. While Dunleavy was the top money-raiser among Republican candidates, donations to his campaign are just part of the picture. He also has benefited from $760,000 — including $16,500 in the past week — pouring into an independent expenditure group fueled largely by Dunleavy’s brother and sportfishing advocate and developer Bob Penney. Campaign season spending pales in comparison to the last governor’s race in 2014, when a three-person fight for the Republican nod for U.S. Senate and a controversial ballot measure on oil taxes fueled a flurry of advertising. That year, primary election turnout was about 39 percent. This year, that number figures to be far lower — if only because the number of registered voters has grown to include people who applied for Permanent Fund dividends but who do not normally cast ballots. Third-party groups can spend an unlimited amount in Alaska campaigns. A group formed to support Treadwell has raised about $60,000, including $7,500 in the past week. In an interview Tuesday night, Treadwell mentioned the money Dunleavy supporters raised. “I ran against essentially a self-funded candidate and our campaign finance laws basically make it very, very hard. This was checkbook deterrence,” he said. “I want to congratulate Mike on his apparent victory.” Asked if he was conceding, Treadwell did not say yes. “What does a concession mean?” he said. “I would like to congratulate whoever won this election, and if it’s Mike, congratulations.” The general election is Nov. 6.

FISH FACTOR: Mariculture industry has vast potential

As Gov. Bill Walker prepares to sign a bill this week enacting the Alaska Mariculture Development Plan, 16 new applicants hope to soon begin growing shellfish and seaweed businesses in just more than 417 acres of tideland areas in Alaska. The new growers will add to the 35 farms and six hatchery/nurseries that already are producing a mix of oysters, clams, mussels and various seaweeds. Eventually, sea cucumbers, scallops, giant geoduck clams and algae for biofuels will be added into the mix. Most of the mariculture requests in Alaska are located in Southeast and Southcentral regions and range in size from 0.02 acres at Halibut Cove to 292 acres for two sites at Craig. Data from the state Department of Natural Resources show that two farms have applied at Kodiak totaling nearly 37 acres, and one Sitka applicant has plans for a 15-acre plot. Other communities getting into the mariculture act include Seldovia, Port Chatham, Juneau, Naukati, Cordova, Ketchikan and Gustavus. In 2017, Alaskan farms produced 11,456 pounds of clams, 1,678 pounds of mussels, 16,570 pounds of seaweeds and 1.8 million oysters. Oysters always have been the dominant mariculture crop, and several farmers have added kelp to their acreage. The seaweed takes just three months to grow to harvestable size and can provide a ready cash flow to farmers while they wait for up to three years for their bivalves to ripen. Kelp is poised to be one of Alaska’s biggest crops with one of the biggest payouts. The first Alaska crop of 15,000 pounds was harvested last year at Kodiak, which yielded a payday of about $10,000 for grower Nick Mangini. This year he tripled his take with 42,000 pounds of two products: brown kelp (alaria) and sugar kelp. Mangini said 75 percent of the crop was alaria, for which he received 90 cents per pound, and 45 cents per pound for the sugar kelp, adding up to more than $33,000. The kelp is marketed under the name Kodiak Island Sustainable Seaweed, or KISS, and sold to a California company called Blue Evolution. “We are making it into products that are familiar to North American consumers, so our first items were pastas and macaroni and cheese,” said founder Beau Perry. “It actually deepens the flavor profile. Everyone from moms and dads who are feeding it to their kids to gourmet chefs are responding very positively.” It’s all a drop in the bucket compared to the real potential for the new industry in Alaska. “If only three-tenths of a percent of Alaska’s 35,000 miles of coastline was developed for oysters, for example, it could produce 1.3 billion oysters at 50 cents (each) adding up to $650 million a year,” said Julie Decker, director of the Alaska Fisheries Development Foundation and head of an 11-member mariculture task force established in 2016 by Walker through administrative order. The task force concluded that mariculture crops could yield $1 billion for the state within 30 years. The governor plans to sign the bill at grower Trevor Sande’s farm near Ketchikan. Treadwell talks fish Politics aside, one thing that can be said about Republican candidate for governor Mead Treadwell is that he knows fish. “One thing I know is that fishing is Alaska’s largest employer and you can’t have good fishing unless you have good science and transparent management,” he said in a phone interview. Treadwell touts research as the cornerstone for fisheries sustainability. “I believe we could double or triple the endowed science available for North Pacific, Bering Sea and Arctic marine research and I think it’s very important to do,” he said. Treadwell was a past chairman of the U.S. Arctic Research Commission, involved with the North Pacific Research Board and one of the earliest advocates for the Alaska Seafood Marketing Institute and Alaska’s Community Development Quota program. As a student of international fisheries policy law, Treadwell said his first job was as a “foot soldier” working with then Department of Interior Secretary Wally Hickel in the fight for the 200-mile limit that removed foreign fishing fleets from U.S. waters. Treadwell pointed to other protein industries and said he believes Alaska’s seafood industry could add jobs and revenues by using more of every fish. “Other industries sell everything but the squeal,” he said. “I think we have to do much more with all of the fish and add the value here so we are not exporting jobs. Let’s look at our incentives for keeping more processing plants open year round — it might be a fix in power costs or something to do with tax policy.” Treadwell said he is a big supporter of growing the state’s mariculture industry, including biofuels. “As governor you control the tidelands. We can back that up with a process that helps financing and helps grow a new industry. I’m excited about that,” he said. “And this opportunity with energy is also significant. I’ve visited some of the labs that are working on algal energy and we have to look at these kinds of opportunities to diversify our economy.” As governor, Treadwell said he also would fight to get more chinook salmon for Southeast Alaskans who have lost over 60 percent of their catch quotas in the treaty with Canada. “We have lost too much of that allocation and it’s just not fair,” he said. Numerous attempts to interview Mead Treadwell’s Republican opponent, Mike Dunleavy, were unsuccessful. Fish smell Fish scientists proved years ago that the tiniest traces of copper in water can affect a salmon’s sense of smell. Now, new research shows that increasing levels of acidity in the oceans does the same thing. The damage is caused by the ocean’s absorption of carbon dioxide, which is generated primarily by the burning of fossil fuels, like oil and coal. The CO2 combines with seawater to produce carbonic acid, which makes the water more acidic. Fish use their sense of smell to find food, elude predators, locate spawning areas, even to recognize one another. Losing it could mean big trouble for the fishing industry, tourism and global nutrition. “In the marine environment it has some serious implications. If there are predators around and the fish are not able to respond to these danger signals in the water, they would be the next snack for these larger predators,” said Jason Sandahl at Oregon State University, who was one of the first to show how contaminants can disrupt the chemical balance of sea creatures. His studies showed that copper levels at just two parts per billion impaired small salmon’s sense of smell. Last month, scientists at England’s University of Exeter compared the behavior of juvenile sea bass at carbon dioxide levels typical of today’s ocean conditions with those predicted for the end of the century. The results showed that the sense of smell in the fish was reduced by half. They also found that sea bass exposed to the more acidic conditions swam less and were less likely to react when encountering the smell of a predator. The longer the fish were in high CO2 levels, the worse they fared. The scientists concluded that future levels of carbon dioxide can affect fish population numbers and entire ecosystems. While their study was on sea bass, the researchers said they believe all species important to commercial and sport fisheries are likely to be affected in a similar way, and possibly crabs and lobsters as well. Pollock is tops Alaska pollock is the largest fish catch in the world for four years running, toppling anchovies from Chile and Peru. More than 40 million commercial fishermen were out at work on global waters on nearly five million boats, of which 90 percent are less than 40 feet long. Those numbers have held steady over several years, said the latest State of World Fisheries and Aquaculture report compiled every other year by the U.N.’s Food and Agriculture Organization. It is the only publication of its kind that oversees fisheries track records and trends around the globe. Highlights from 2016 show that the world’s total marine catch was nearly 80 million tons, a slight decrease due to that drop in anchovies. Aquaculture represented 53 percent of all seafood eaten and it is the fastest growing food production sector on the planet. Nearly 600 different species items are farmed around the world; No. 1 is carp. Growing aquatic plants, especially seaweeds, has more than doubled in 20 years to top 30 million tons. In per capita terms, global fish consumption has grown about 1.5 percent per year from less than 20 pounds in 1961 to 45 pounds. Americans eat far less fish, averaging about 15 pounds a year. So how are the world’s fish stocks doing? Sixty percent were called “maximally sustained” and 33 percent were classified as being fished at unsustainable levels. Problem regions were the Mediterranean, Southeast Pacific and the Southwest Atlantic, with 60 percent of their stocks called overfished. By contrast, the Northeast, Northwest Pacific and Central and Southwest Pacific had the lowest levels of overfishing ranging from 13 percent to 17 percent. The World Fisheries Report said that impacts from climate change are likely to push down global ocean production by six percent by the year 2100, and 11 percent in tropical zones. Laine Welch lives in Kodiak. Visit or contact [email protected] for information.


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