Opinion

Express Program lends hand to veteran-owned businesses

Our nation’s veterans have served our country proudly and bravely. They are true American heroes, and we must make sure that we’re doing everything possible to support them, once they re-enter civilian life. That’s why starting Jan. 1, 2014 and for the rest of the fiscal year, the U.S. Small Business Administration has set the borrower upfront guaranty fee to zero, for all veteran loans approved during that timeframe under the SBA Express program, which supports loans of up to $350,000. That’s right, the guaranty fee is zero. This program, called SBA’s Veterans Advantage, is available to small businesses owned and controlled by veterans; active-duty military participating in the Transition Assistance Program; reservists; National Guard members; or their spouses or the widowed spouses of service members or veterans, who died during service or as a result of service-related disabilities. Our research shows that of all SBA loans that go to veteran-owned businesses, 73 percent are $350,000 and below. The SBA Express Loan Program, which supports loans up to $350,000, is SBA’s most popular loan delivery method, with nearly 60 percent of all 7(a) loans over the past decade being approved through the program. Since the program’s inception, it has also been one of the most popular delivery methods for getting capital into the hands of veteran-owned businesses. SBA is dedicated to helping veterans, providing them access to business counseling and training, business development opportunities through government contracts and capital. In FY 2013, SBA supported $1.86 billion in loans for 3,094 veteran-owned small businesses. And since 2009, the dollar amount of SBA lending support to veteran-owned firms has nearly doubled. We strive to support veterans and members of the military in as many ways as possible. That’s why SBA also supports a direct working capital loan program, for small businesses with an essential employee, who is a military reservist, called to active duty. The Military Reservist Economic Injury Disaster loans provide funds, to help cover operating expense, while the essential employee is away on active duty. This way, our brave men and women in uniform, don’t have to choose between serving their country or growing their communities. Our nation’s veterans are highly-skilled and highly-trained leaders in their communities, and so it makes sense that after serving their country, veterans would become entrepreneurs and small business owners. Our job at the SBA is to make sure that these veterans and their families have the tools and capital they need to start and grow a business. As Regional Administrator, I am proud that the SBA fully supports our veteran entrepreneurs. We look forward to continuing to reach out to them through our 68 field offices across the country, including the Alaska District Office. Contact them at (907) 271-4002 or the Veteran Business Outreach Center at (206) 324-4330. Calvin Goings is the Small Business Administration Regional Administrator for Alaska.

Having an honest discussion about Pebble

As Sen. Mark Begich and Rep. Andy Josephson have recently opined about Pebble, I offer some of my own thoughts in response to the rhetoric of politicians more interested in inciting fear and “us vs. them” thinking than facts. I flew my own plane to the Pebble deposit two summers ago and believe it is imperative that any elected officials who want to weigh in on this matter should at a minimum visit the property for themselves and visit with all groups expressing views on the matter. Let’s have an honest discussion about modern mining based on current technology, under current rules and regulations, not horror stories based on past projects in other places, with decades-old technologies and practices, and political exercises like the recent EPA “assessment.” Yet another example of federal over-reach, the EPA piece is a political document. A report in search of a conclusion. And let’s have a discussion that considers the role of pride in preserving the Native cultures in rural Alaska, and the role that economic opportunity and having a job play in strengthening that pride. Let’s have a discussion about the economic decline in parts of rural Alaska, how that leads to population decline as the most capable people move to urban Alaska, and the impact of that on rural culture. Let’s talk about a viable plan for improving the economy in rural Alaska. A plan based on creating wealth and moving people off of public assistance. A plan for reversing the school closures that come with outmigration. The Bristol Bay fishery is certainly an asset for the people of Alaska, any development of Pebble must be compatible with the fishery. That said, much of the value of that fishery is going outside of Alaska, with well over half of the drift permits fished by non-Alaskans and with well over 70 percent of the processing jobs going to non-residents. That must be why the EPA chose to have the first public hearing on the draft “assessment” in downtown Seattle. A preliminary economic study of development at Pebble estimated that it could create thousands of good paying year-round jobs, generate over one billion dollars of annual economic activity and contribute several billion dollars to the state’s general fund. At a time when oil throughput is in decline, we — as elected leaders — must thoroughly evaluate all potential economic opportunities. Sen. Begich’s recent change of heart on Pebble is a play for support of national environmental organizations in his re-election campaign. The Natural Resources Defense Council has made Pebble a central fundraising issue featuring aging movie actor Robert Redford and is a leading group in the anti-Pebble fight. The NRDC has fought many Alaska resource development projects and to my knowledge has not advocated for responsible mineral development anywhere in the U.S. Trout Unlimited, World Wildlife Fund, and Earthworks have also led national campaigns to stop the project including asking the EPA to pre-emptively stop Pebble — something the agency has not done since it was established. There is also the Moore Foundation, a San Francisco based foundation ironically established by the founders of Intel, that has sent millions to Alaska to fight Pebble. It is a shame for politicians to pander to these big outside groups.  The issues and passions generated by discussing Pebble are many and complex. This is why we have an established, science based process to evaluate projects and determine if they meet our high standards for development. The alternative is a politically driven process that would promote decisions based upon the whims of partisan politics, with a guaranteed outcome that investment money will go somewhere else and with it, so will the jobs and economic opportunity for Alaskans for generations to come. Alaskans are smart enough to do projects like this right. Let’s work together and find a way to make that happen. Eric Feige is a Republican from Chickaloon representing District 6.

Alaska LNG, Pebble and the Cook Inlet fish wars

With so much happening over the past couple weeks it’s time to clean out the editorial notebook. First up, there is welcome news on the Alaska LNG Project. State officials have signed a key deal with the big three North Slope producers and pipeline company TransCanada on the framework that can lead to the construction of a large diameter line from Prudhoe Bay to Nikiski. Apart from the prospect of $2 billion to $3 billion in new revenue to the state from LNG sales, primary among the positives is that the state will be an owner and a partner in this project, but is not obligated to finance its share of the pipeline or market its own gas. The chief state obligation is for the Legislature to enact durable fiscal terms and approve long-term contracts that will allow the producers and TransCanada to model the economics with certainty for a decades-long effort for construction and operations. Although there is a risk in any lengthy commitment, the willingness of the state to shoulder some of the risk on this project is essential to move it forward. Some may find this hard to accept, but the producers will not go out of business without Alaska, but Alaska will go out of business without the producers. That doesn’t give the state the strongest hand, but it appears Gov. Sean Parnell has played the cards we do have well. A true partnership is not about one party getting over on the other, but coming to an arrangement that is mutually beneficial. From this perspective, an agreement that gives the state a significant ownership stake, a seat at the table and no up-front costs for pipeline construction or marketing is a deal worth pursuing. The market for LNG around the globe is not going anywhere, but the longer Alaska dawdles the more opportunity slips away not only for new state revenues but to finally begin lowering energy costs for our residents. The sooner terms can be ironed out and the serious business of engineering and design can go forward, the better. Here’s hoping the Legislature does its part to keep the new momentum on this project going. EPA releases Pebble study Surprise, surprise, the Environmental Protection Agency declared its hypothetical mining scenario for the Bristol Bay watershed would pose risks to the world’s largest salmon run. To borrow (and clean up) a popular expression, “No kidding, Sherlock.” Were millions of dollars and years of work really necessary to figure out that a mine done wrong can damage the environment? Sen. Mark Begich went on the record shortly after the final assessment was released, saying Pebble is the wrong mine in the wrong place. Maybe he figures he won’t get the resource extraction industry support in the upcoming election anyway, but backing the EPA’s pseudo-science on Pebble makes his criticisms of this administration on a host of other issues ring hollow. The groups Begich is aligning with on Pebble are the same ones who say the road through Izembek Refuge is the wrong road in the wrong place. They say the coastal plain of ANWR is the wrong oil field in the wrong place. They say Aleutians Pacific cod is the wrong fishery in the wrong place. They kept Kensington from opening for 20 years until the case reached the Supreme Court. They tried to stop Red Dog mine from expanding in 2010. They are suing to stop ConocoPhillips from developing CD-5. They have sued and will no doubt sue again to challenge Shell’s efforts to drill in the Arctic.  Yes, Begich’s position of being in favor of resource development in general while being against Pebble is a common one and is held by many Alaskans, prominent and otherwise. The problem is his party keeps these BANANA types in power (Build Absolutely Nothing Anywhere Never Again) and gives them sway over a host of other issues that ultimately hurt Alaska. The problem is the EPA and other government agencies routinely use science influenced by politics to make decisions (see Keystone XL), and it’s pretty hard to criticize a bogus decision by Sally Jewell when it comes to the King Cove road while siding with equally bogus science from the EPA on Pebble. I searched the EPA final assessment looking for a citation to University of Alaska professor Bob Loeffler, who wrote a paper in 2012 for the Institute of Social and Economic Research analyzing whether pre-design risk assessments were valid. Loeffler compared post-design assessments conducted at Red Dog and Kensington with an assessment conducted by the Nature Conservancy regarding Pebble that, like the EPA, relied on preliminary design plans published by Northern Dynasty. After taking great pains to note that his paper was in no way intended to assess Pebble itself, Loeffler concluded: “Without data from individual mine design and site configurations, government agencies cannot determine whether mines meet permitting standards … This comparison of post- and pre-design risk assessment in this report shows that the detailed information, about a specific site and a specific mine design, and without knowing the specific prevention and mitigation strategies that will be applied, it is not possible to use ecological risk assessment methodology to evaluate the risks a proposed mine might pose to the environment. “Specifically, a pre-design ecological risk assessment is a failed methodology for evaluating ecological risks from hard-rock mines in Alaska.” Surprise, surprise, I did not find a citation to Loeffler’s paper anywhere in the EPA’s final assessment. Cook Inlet A more revealing juxtaposition of events Jan. 22 concerning the never-ending battles over salmon in Cook Inlet is hard to imagine. At noon, the Kenai Chamber of Commerce held a Cook Inlet Fisheries Forum attended by the groups representing processors, commercial drift fleet and setnet fishermen, private anglers and the Kenai River Sportfishing Association. In the announcement from the chamber, it stated that Joe Connors of the Alaska Fisheries Conservation Alliance was not able to attend. Connors was in Anchorage at 11 a.m. giving a press conference about his organization’s newly filed legal appeal to get a ban on Cook Inlet setnetters placed on the ballot after Lt. Gov. Mead Treadwell rejected the initiative on Jan. 6 as a prohibited allocation under the state Constitution. So while diverse and competing stakeholders got together in the city where many of them live and work, another skipped out to further its fish fight in court to eliminate one of those groups on the eve of the Board of Fisheries meeting that begins Jan. 31. When it comes to who is escalating the so-called fish wars, it doesn’t take recalling Sesame Street to realize one of these groups is not like the others. Andrew Jensen can be reached at [email protected]

AJOC EDITORIAL: More math education needed ... for Democrats

For a party that spends as much time as it does carping about education funding, the least the state Democrats could do is open a math book. A pair of late October announcements had Democrats falling over themselves yet again with embarrassing attempts at arithmetic and basic accounting in their ongoing campaign against the oil tax reform passed as Senate Bill 21 this spring. Leading off was the chair of the state Democrat party issuing a press release Oct. 28 blasting Gov. Sean Parnell’s reaction to Pioneer Natural Resources selling its North Slope assets. Pioneer cashed out for $550 million to a relatively new startup company called Caelus headed by an industry veteran who has known the Pioneer CEO for 30 years. Parnell welcomed the announcement and touted the purchase as evidence of Alaska as an attractive investment climate after the passage of SB 21, noting Caelus’ declared intent to spend $1.5 billion in Alaska over the next six years. The company is retaining Pioneer’s 70 full-time Alaska employees, adding some of its own staff, and keeping another 300 contractors working. What a bum deal for Alaska. Naturally Parnell’s attempt at a little political hay could not go unanswered by the Democrats with a governor’s election and the referendum to repeal SB 21 in 2014, but the response was laughably incoherent. As someone who occasionally goes over the top, I had to chuckle at the Democrats’ opening description of Parnell’s statement as “Orwellian.” (I’ll let it slide, though, that the Democrats misspelled “Oooguruk” in their release.) “In fact, Caelus was taking advantage of a fire sale after Pioneer Natural Resources fled Alaska following passage of Parnell’s Oil Giveaway,” stated the Democrats, who went on to assert Pioneer was “moving its investments from Alaska to Texas and taking a $350 million loss.” Never mind the inherent contradiction in proclaiming an Oil Giveaway! as the reason an oil company would flee the state, Mike Wenstrup, chair of the Alaska Democratic Party, huffed thusly: “No amount of spin can conceal the fact that Pioneer’s departure is bad news for Alaska and the latest casualty of Parnell’s Oil Giveaway.” And no amount of huffy puffery can conceal that state Democrats and Wenstrup haven’t spent 10 minutes reading a Pioneer financial report. The loss the Democrats point to refers to the Pioneer announcement it would recognize a $350 million noncash loss in the fourth quarter after receiving $550 million cash for Slope assets that produced about 4,300 barrels per day so far this year. That means Pioneer had its Slope assets including the Oooguruk field valued on its books at $900 million, so selling for $550 million results in a $350 million “noncash” writedown for the quarter. At the end of the third quarter, Pioneer had $744 million in cash and cash equivalents on hand. Its total assets were valued at a bit more than $14 billion. The Slope transaction increased the Pioneer cash position by 74 percent, to nearly $1.3 billion, while taking an accounting writedown representing 2.4 percent of its assets. What a bum deal for Pioneer. Not to pile on, but Pioneer isn’t “moving” its investments to Texas, either. Texas is now its entire portfolio. Alaska production accounted for a fraction of Pioneer’s 173,000 barrels per day in production in the third quarter, and represented just $190 million of its $3 billion in capital expenditures this year. The tax credits Democrats so often point to about their beloved ACES were also running out for Pioneer after years spent developing the Oooguruk field, declining from $49 million in 2010 to $29 million in 2012. Some people might wonder if ACES is a great deal with the credits but a bad deal once the taxes kick in, and whether that might be a reason a company would flee the state. Not Democrats, apparently. At $100 per barrel, Pioneer’s North Slope daily production adds up to about $157 million in gross revenue per year. That revenue will be taxed less under SB 21 than it would be under ACES and will free up more money for investment by a company focused on the Slope. What a bum deal for Caelus. Speaking of the sacred ACES, I missed the press releases this summer after Alaska finished fiscal year 2013 with a deficit of nearly $400 million while operating under the Democrats’ preferred tax regime and their budget.  One of the chief ACES proponents and an equally prolific press releaser, Sen. Bill Wielechowski issued his quarterly congratulations to ConocoPhillips for making money in Alaska on Nov. 1. Hyping ConocoPhillips Alaska third quarter earnings as usual, Wielechowski helpfully divided the $494 million up into increments of days and hours. He got the daily rate right at about $5.3 million, and only missed on the hourly rate by a factor of 10 by headlining it as $22,731. When he wasn’t getting simple math wrong or perhaps as he debated whether it would be silly to divide into seconds (the answer is $62.15), Wielechowski for whatever reason ignored the bigger picture staring at him from the investor presentation he linked to in the press release. That shows ConocoPhillips Alaska earnings declined 7.6 percent year-over-year. Compare that to its Lower 48 and Latin America holdings, which increased 15 percent year-over-year and 18 percent from the second quarter. For Canada, ConocoPhillips earnings increased from $5 million in the second quarter to $181 million in the third; its European earnings grew nearly 9 percent in the same period. Overall, ConocoPhillips total earnings increased 7 percent year-over-year at the same time its Alaska income decreased 7.6 percent. The most profitable ConocoPhillips unit may be in Alaska, but its earnings in the state under ACES were actually a drag on its net income growth. Forgive the bookkeeping pun, but the bottom line is the Democrats should spend less time on the PR and more time on the three Rs.   Andrew Jensen can be reached at [email protected]  

FISH FACTOR: Dutch still No. 1; Sitka considers waterfront development

For the 16th year in a row, Dutch Harbor ranked as the nation’s top fishing port with 752 million pounds crossing those docks last year valued at $214 million. The No. 2 port for landings again was Empire-Venice, La. The Aleutian Islands jumped to third place with 456 million pounds led by deliveries to Akutan, and bumped Kodiak to No. 4 with 393 million pounds landed in 2012. In all, 13 Alaska ports made the Top 50 list for poundage, according to the annual Fisheries of the United States report by NOAA Fisheries.   For value of the catch, New Bedford, Mass., retained the lead for the 13th consecutive year at $411 million, thanks to pricey scallops; Dutch Harbor ranked second, followed by Kodiak at $170 million and the Aleutian Islands with a dockside value of $119 million. In all, U.S. seafood landings totaled 9.6 billion pounds last year valued at $5.1 billion, down 2.2 percent and 3.2 percent, respectively, from 2011. Other highlights: •                  Alaska topped all other states for total landings at 5.3 billion pounds and for overall value at $1.7 billion. •                  Alaska provided 55.5 percent of all seafood landed in the U.S. last year. •                  The top five fish species landed by volume were pollock, menhaden, cod, flatfish and salmon. •                  For value, the “crabs” category ranked first followed by scallops, shrimp, salmon and lobster. Pollock and cod were sixth and seventh for value.    •                  Shellfish prices dropped by 3 percent while prices for industrial products, such as oils and feeds increased by 14 percent. •                  Dockside prices increased for 18 out of 32 species groups being tracked and decreased for 14 species. The skipjack tuna price index had the largest gain, up 112 percent, while sockeye salmon showed the largest decrease at 17 percent. •                  The average dock price paid to fishermen in 2012 was 53 cents per pound compared to 54 cents the previous year. •                  U.S. consumers spent about $82.6 billion for fishery products in 2012. •                  The U.S. fishing industry contributed $42 billion to the GNP. •                  Americans ate less seafood last year at 14.4 pounds per person, compared to 15 pounds in 2011. The decrease resulted primarily from a drop in the domestic landings utilized for food, the report said. Other Alaska ports on the Top 50 list include the Alaska Peninsula at 9, Naknek at 14, Cordova at 15, Ketchikan at 18, Sitka at 20, Bristol Bay at 22, Seward at 23, Petersburg at 24, Kenai at 31 and Juneau at 42 for seafood landings in 2012. Sitka industrial effort looking for fishermen feedback Input by mariners is wanted on plans being considered for a bigger boat haul out and other waterfront development at Sitka’s Sawmill Cove Industrial Park. “We’ve been hearing from the community for years that they would like to see our haul out capabilities expanded and our marine services expanded bit,” said Garry White, executive director of the Sitka Economic Development Association.  “Currently, the largest haul out we have in town is an 88-ton lift, and we are hearing from a lot of the fleet, especially the tender boats and some of the larger vessels, that they can’t be hauled out here in town,” White added. “The fleet has to go elsewhere to get serviced, and they would like to stay here in town to get that done.” To get feedback from boat owners, the association has launched a Sitka Marine Industry Development Survey. “The first thing we’re interested in is what size haul out should we put in to meet the fleet’s needs, and what other services are needed, such as sand blasting, bottom painting and diesel work,” White explained. “A lot of those industries exist here in town, but we are trying to figure out how we can broaden things to meet all our needs at the same time.” Sitka’s commercial fishing fleet is the largest in Southeast Alaska at 631 registered vessels. The City and Borough of Sitka also operate the largest harbor system in Alaska with five moorage basins and more than 1,300 permanent slips, plus transient moorage space. “We’re on the outside of Southeast Alaska facing the Pacific Ocean,” White said. “There is a lot of traffic that comes through Sitka on the way to other fisheries, or they come here for the fisheries. So we want to hear from those boats in Puget Sound and other parts of Southeast Alaska that may want to pop in here and get some work done or if they have some emergency. We want to hear what they think should happen in Sitka.” Find the survey at www.sitka.net or www.sawmillcove.com. The deadline is Nov. 30. White said a report will follow early next year. Fish watch Alaska’s biggest fishery, Bering Sea pollock, closed for the year on Nov. 1. Roughly 3 billion pounds will come out of that fishery. The Gulf of Alaska pollock fishery also ended for trawlers the same day, as did Pacific cod. Fishing for cod continues for other gear types in both the Gulf and Bering Sea; pot and jig fishing could last all year. Crabbers at Bristol Bay had taken more than half of their 8.6 million pound red king crab catch with about 3.7 million pounds left to go. Halibut longliners had taken 93 percent of their nearly 22 million pound catch limit, with about 1.4 million pounds remaining. For sablefish, about three million pounds remain for harvest in the 28 million pound quota. Both of those fisheries close Nov. 7. Homer will regain the title of the No. 1 halibut port, topping Kodiak by about 1 million pounds in landings this year. Seward is the top port by far for sablefish landings. In Southeast Alaska the pot shrimp fisheries were wrapped up in most districts with a total catch of half a million pounds. Demersal shelf rockfish opens Nov. 8 with a 35 ton harvest region-wide. Divers continued combing the deep for sea cucumbers and giant geoduck clams. Hat tip to highliners Two Alaskans were selected as National Fisherman’s Highliners of the Year — Robert Heyano of Dillingham is president of the fishermen funded/directed Bristol Bay Regional Seafood Development Association and skipper of the 32-foot drift gillnetter Lady Mindy. Jerry McCune of Cordova is president of the United Fishermen of Alaska and the Cordova District Fishermen United, longtime industry lobbyist and skipper of the 33-foot drift gillnetter Wudahad. Robert Hezel of Clinton, Wash., also was selected. He is skipper of the Fishermen’s Finest 185-foot Bering Sea and Gulf of Alaska trawler, U.S. Intrepid. The Highliner Awards began in 1975 in partnership with Furuno to honor fishermen who uphold a standard of excellence in their fishing operations and in their advocacy on behalf of the industry. Laine Welch lives in Kodiak. Visit www.alaskafishradio.com or contact [email protected] for information.  

The Bookworm Sez: Cross 'XX Factor' off your list

Your mother worked for as long as you can remember. Whether inside the house or out, for money or motherhood, she worked — hard. She might not have had prestige. Maybe she was a cog in a wheel in a factory in a corporation. Or she might’ve pulled 24-hour days without ever leaving home. Maybe she still works, and so do you. But who’s better off? Read the new book “The XX Factor” by Alison Wolf, and you might be surprised. For much of the last century, women’s lives were relatively the same: once they married, they quit work and focused on home and hearth because that was what society expected. Today’s women, though, have “become a class apart,” says Wolf. Their gender “does not define their fate…” But then again, some women — the “highly educated” ones, the “elite” — have surely defined the fates of their poorer sisters, in both work and family. One “key difference” between the two classes of women, Wolf says, is in childbearing.  Today’s elite women have fewer children than their less-educated counterparts, partly because they’re eager to (or must) return to work quicker. There’s also “overwhelming evidence that money affects the birth rate”: poorer families are larger, earlier, while highly-educated women statistically have babies later in life — or they’re “not having babies at all.” Money also rears its ugly head in the rearing of those children. Because elite women return to work sooner, they often rely on paid nannies to help with the kids. This, and the “outsourcing” of other domestic tasks like cooking and cleaning, Wolf indicates, has created a class of workers that she calls “servants.” Servants, as you’d expect, are not “elite.” And even with this new “class” of workers helping at home, women still assume the larger share of domestic chores. This inequality between men and women endures (though Wolf indicates that this gap is narrowing), but that’s not the bigger issue: the inequality between elite women and lower-income women continues to widen. This leaves us, in part, with a dearth of educated workers in certain essential (but un-flashy) careers, lingering inequality, and “not much sisterhood.” I really wanted to like this book. Alas, I didn’t much. “The XX Factor” is, first of all, not very engaging. No, it’s downright staid, and only occasionally interesting — perhaps because it felt repetitive to me. Author Alison Wolf drives her points home with a sledgehammer, which isn’t needed for the educated reader for whom she’s reaching. What’s worse is the controversy. Wolf makes too many overgeneralizations in this book. She claims that working women often “behave … like men,” and I’m afraid dedicated legions of teachers and nurses may feel insulted here. I also had to question if a chapter on sex, strippers, and prostitution was truly warranted in a book on today’s modern workplace. Overall, there are a few points well-made, but this book is a struggle. Unless you want to delve into statistics and controversy, I believe “The XX Factor” is a book you can cross off your reading list. Terri Schlichenmeyer is the author of The Bookworm Sez, which is published in more than 200 newspapers and 50 magazines throughout the U.S. and Canada. Schlichenmeyer may be reached at [email protected]  

Obama's era of incivility in America

The “new era of civility in politics” called for by President Obama after former Rep. Gabby Giffords, D-Ariz, was shot, lasted about five Washington minutes. Since then Obama has adopted a scorched earth public policy in an attempt to destroy his political enemies, but sacrificing the Constitution as collateral damage. Consider Obama’s Jan. 12, 2011 words in Tucson: “At a time when our discourse has become so sharply polarized — at a time when we are far too eager to lay the blame for all that ails the world at the feet of those who think differently than we do; it’s important for us to pause for a moment and make sure that we are talking with each other in a way that heals, not a way that wounds.” Fast forward to the Oct. 8, 2013 press conference, when an unhinged Obama used highly inflamed words describing those who think differently as “hostage takers” party to “extortion” and “insanity,” who created “catastrophe” and “chaos.” Rather uncivil discourse for one who seems to believe he is destined to be the fifth president chiseled out of rock at Mount Rushmore. So what happened between Tucson and Oct. 8? Nothing, really. Liberals by nature are bipolar, switching effortlessly from one issue to the next, depending upon the audience, time of day and what they had for dinner. In Tucson, liberals perceived a tragedy as a chance to promote gun control. At the press conference last week, liberals weren’t getting their way regarding the debt ceiling and seized the opportunity to change focus by demonizing opponents. Why make rational decisions to salvage the nation’s economy when one can sling mud? Think back to the 2012 election. The Obama re-election campaign vilified opponents by circulating a list of top Romney campaign donors they claimed had “less-than-reputable records.” Obama’s political lap dogs responded, and not long after, good people fell victim to IRS audits and intimidation. Similar tactics were used to push back conservative and Tea Party groups. According to Jonathan Alter, author of the book, “The Promise: President Obama, Year One,” Obama used an extremely vulgar term “tea-baggers” (My column is PG-13, so you look it up) to publicly disparage Tea Party activists. The vulgarity went viral and became part of the public discourse regarding the Tea Party, whose only crime so far is having an opinion contrary to the president’s. With tax-exempt status (and their reputations) in limbo, many would-be Romney campaign players were conveniently silenced, hence sending the chilling message: The IRS had Obama’s back and would stab yours if you dared to publicly oppose their guy. Scary stuff. It is reasonable to say that without these Chicago thug tactics, an inept empty suit sporting golf shoes might not be occupying the Oval Office. Wall Street Journal’s James Taranto concurs. Taranto wrote, “We now know that government corruption — namely IRS persecution of dissenters — was a factor in Obama’s re-election. During his second inaugural address, Obama called for an end to political name-calling, but he continues, out of control. His rancor is contagious and trickles down the ranks, spreading from Pelosi, Reid, Carney and the rest of the lemmings to senior White House adviser Dan Pfeiffer, who recently likened those who disagree to terrorists “with a bomb strapped to their chest.” Former Obama campaign manager and senior White House adviser David Plouffe was no more civil Oct. 10, suggesting opponents are “committing economic treason.” Insane…hostage takers…terrorists…the list goes on. Liberalism’s sewer politics may win a few battles or elections — but will eventually lose the war. Liberalism has failed the world over. And today, with the president’s approval numbers at 37 percent, liberalism is headed south in Obama’s uncivil America.   Susan Stamper Brown is an opinion page columnist who writes about politics, the economy and culture. Email Susan at [email protected] or her website at susanstamperbrown.com. Her column is distributed exclusively by: Cagle Cartoons Inc., newspaper syndicate.

FISH FACTOR: Salmon harvest valued at $691M; crabbers pay, can't play

As expected, Alaska’s 2013 salmon catch is one for the record books. Early tallies by state fishery managers show that fishermen caught 272 million salmon this summer, smashing the previous record of 221 salmon in 2005. The fishery was powered by a whopping catch of 219 million pinks. In terms of money, the preliminary harvest value of $691 million ranks second to the $724 million of 1988, called an “outlier” season by salmon managers. They also predict that once all postseason bonuses and price adjustments are determined by salmon processors, the 2013 season could be the most valuable salmon harvest in Alaska’s history. Some highlights: For the second year running. Southeast again claims the title for the Alaska region with the highest salmon volumes and overall value. Fishermen caught more than 100 million salmon for the first time ever, valued at nearly $220 million at the Panhandle docks. Prince William Sound fishermen ranked second with a catch of 98 million salmon, valued at $162 million. Both Southeast and PWS had their largest pink salmon harvests at just over 91 million and 89.2 million, respectively. Kodiak was third in terms of salmon catches at nearly 32 million fish, and fourth for value at $62 million. Bristol Bay is still home to Alaska’s most valuable salmon fishery, with Bay sockeyes totaling $138 million at the docks this summer.    Here are the average 2013 statewide salmon prices with comparisons to last year: Chinook: $5.31 ($4.01 in 2012); Sockeye: $1.60 ($1.31); Coho: $1.08 ($1.27); Pink: $0.40 ($.48);             Chum: $0.52 ($.76). Crabbers pay, can’t play  The Bristol Bay red king crab fishery begins Oct. 15 but the fleet is likely to miss out on the opener. The government shutdown means no one is on the job to issue the permits for the crabbers to go fishing. “It’s a situation where you not only have harm to the crab fishermen, but also to the processors in the area. Think of the economic impact because you don’t have somebody in an agency who is there to pick up the phone, and sign the piece of paper to issue the harvest limits. Nothing can happen,” fumed Senator Lisa Murkowski in a phone call from her Washington, D.C. office. Speaking of fuming — the bureaucratic delay could cause crabbers to miss critical sales deadlines to Japanese buyers. “Even if they come on line on Friday (Oct. 18), we are going to be cutting it close to getting everything done by the November beginning of the season,” said Jake Jacobsen of the Inter-cooperative Exchange, which represents crabbers who hold over 70 percent of the Bering Sea crab shares. “If it drags on another few days we’ll start chewing our fingernails down to nothing.” Jacobsen said the delay could cost the crab fleet $5 million or more. What is most galling is that the harvesters and processors have already covered the costs for management and enforcement of the Bering Sea crab fisheries. “We paid a three percent user fee, split with the processors, to cover all of this,” said Mike Woodley, skipper of the F/V Atlantico. That is the message Murkowski and Rep. Don Young brought to the Commerce Secretary in a letter last week.  “We reminded her that the Bering Sea crab fisheries are funded by a tax on the users’ landings, not by the government. It’s a situation where it pays for itself, so you don’t need to wait around for a budget,” Murkowski said. The crab user fees added up to $3.2 million last year based on a total harvest value of $262 million, according to NOAA data. Murkowski and Young have asked the Secretary to intervene and added, “We are aware that other federal agencies have used available balances from prior years to continue essential operations, and we believe such flexibility should be applied to the crab fishery, and in a timely manner.” Meanwhile, the crabbers’ Jacobsen offered this quick solution: “We would be happy to pay NMFS employees 10 times what they would normally make to come in and work for a few days and issue the IFQs.” Murkowski off the cuff The Senator admitted D.C. is a tough place to be during these days of budget shutdowns and showdowns.   “There’s a heck of a lot more talking going on, so that’s positive,” Murkowski said.  “It is Republicans who are taking the biggest hit in the polls for the government shutdown across the nation,” I said. Murkowski agreed, but countered with the unpopularity of Congress as a whole, which Gallup has at 8 percent, the lowest rating in its polling history.  “A PPP poll showed we as a Congress have a lower approval rating than dog poop, toenail fungus, cockroaches and the IRS,” the Senator quipped. “We do have a higher rating than Putin and hemorrhoids, and we beat out the Ebola virus and also Charles Manson by a long shot. We also have higher ratings than Honey Boo Boo, but lower ratings than pot holes.”  “It’s all so ridiculous,” she sighed. “You have to be able to laugh a little bit. It’s sort of like laughing through your tears.” Fishermen get healthier Enrollment began this month for the Affordable Care Act, which lets people sign up for health care coverage that fits their budgets and needs. Individuals and families can choose from many options through a Marketplace, regardless of pre-existing conditions or non-coverage. The Act requires Americans to have coverage by Jan. 1 and provides tax credits for some individuals to help pay for it. Fishermen, who are usually regarded as self-employed or independent contractors, have long fallen through the health care cracks due to the high costs and high risks associated with their profession. Fishing organizations and support businesses also are likely eligible for tax credits under the. ACA, said Mark Vinsel, executive administrator for United Fishermen of Alaska. “I think some of our own UFA member groups are likely to be eligible for tax credits even as nonprofits, as well as other small industry-related businesses, like boat repair, marine services, and many others,” he said.     Laine Welch lives in Kodiak. Visit www.alaskafishradio.com or contact [email protected] for information.  

GUEST COMMENTARY: Alaska's strong economy impacts 'Alaska-hire' zones of underemployment

While much of the Lower 48 is still recovering from a devastating recession, Alaska’s economy remains stable, and our employment numbers are strong. Alaska’s unemployment rate for 2012 was 1.1 percent below the national average. In fact, Alaska’s unemployment rate has been below the national rate for more than four years. This has never before happened in Alaska’s history. Alaska’s unemployment rate for 2009 was 7.7 percent vs. 9.3 percent in the Lower 48; in 2010 it was 8 percent vs. 9.6 percent; in 2011 it was 7.6 percent vs. 8.9 percent; and in 2012 it was 7 percent vs. 8.1 percent. These numbers, reflecting our stronger economic foundation, made the determination under Alaska Statute 36.10.150 that the entire state can no longer be considered a single “zone of underemployment.” Keep in mind that this Employment Preference Determination applies only to public works and construction projects in Alaska that have no federal funds attached to the project, which affects about 10 percent of all public construction jobs in Alaska. Unfortunately, there are still areas of Alaska that have crippling double-digit levels of unemployment. My determination means that, for certain occupations in the 15 areas deemed “zones of underemployment,” residents will continue to be given a hiring preference on eligible public works and construction projects. The building of the Trans Alaska Pipeline System made a lasting mark on Alaska and the U.S., providing needed energy after the 1973 oil crisis. And while the pipeline has been an economic lifeline to the state, it has also been a rallying point for many Alaskans who recall the demand, virtually overnight, for a skilled workforce. Alaska simply couldn’t fill the need for workers; thousands flowed in from the Lower 48 and beyond. While many workers stayed and continue to call Alaska home, the lingering memory is that many jobs went to “outsiders.” After several attempts to mandate local hire were ruled unconstitutional in both the Alaska Supreme Court and U.S. Supreme Court, the result was AS 36.10.150, which states that areas of the state with unemployment rates substantially higher than the national rate will be designated zones of underemployment, if they also meet other requirements for having available workers. Two major considerations in the biennial determination are whether there are a substantial number of zone residents with experience or training in occupations that would be used on a public works project, and whether the lack of employment opportunities in the zone has substantially contributed to economic problems in the zone. The critical takeaway from my Aug. 16 determination is that Alaska’s economy is healthy. The Parnell Administration strongly continues to support and encourage Alaska hire and well understands that we must help support job seekers and employers throughout the state. The Alaska Department of Labor and Workforce Development is focused on training that supports Alaska industry – to help close the gap between Alaskans who need jobs and the employers who are hiring. One example is the $7.5 million in workforce development grants that the Alaska Department of Labor recently awarded. The grants are part of Alaska Youth First, Career and Technical Education, State Training Employment Program and Workforce Investment Act-Youth program. The grants include projects across the state that focus on career guidance and work-readiness skills to training for unemployed or underemployed Alaskans. These grant programs, which include industry-specific training, are helping prepare Alaskans for future careers and are supporting Alaska’s employers as they create jobs and help keep our economy healthy. According to state law, the Employment Preference Determination is in effect through June 30, 2015. The department will make a determination again in two years based on new unemployment data. My hope is that Alaska’s economy will be even stronger and there will not be a need for any zones of underemployment. Making the determination to remove employment preferences on some publicly funded projects was not done lightly. State law is clear: Any zone of underemployment must have unemployment rates substantially higher than the national rate, and that hasn’t been the case for much of Alaska over the last several years.   Dianne Blumer is commissioner of the Alaska Department of Labor and Workforce Development.        

EDITORIAL: First Amendment is the only 'shield law' we need

Advocates of a shield law for journalists sound an awful lot like the gun-control activists who have been pushing for tougher laws in recent months. Both were energized by specific incidents. And both readily concede the incidents that stoked their fury wouldn’t have been prevented by the laws they propose. In the case of the shield law, the probing of Associated Press reporters’ phone records by the U.S. Department of Justice and the seizure of emails from Fox News reporter James Rosen by the same agency are being cited by advocates of a federal shield law. But even the most ardent supporters view the legislation as flawed. “Because some of the details of the AP case aren’t known, it isn’t entirely clear that this legislation would have entirely prevented the AP scandal,” said the Milwaukee Journal Sentinel in a May 24 editorial. Connecticut gun-control advocates sounded much the same theme when they admitted the law adopted in April would not have stopped Adam Lanza from killing 20 children and six educators in Newtown on Dec. 14. That is, it would not have deprived Lanza of the firepower to go on his murderous rampage or resulted in his being locked up in a mental institution beforehand. It is often said that generals have a tendency to fight the last war. But that deficiency is the least of the problems with the shield law as proposed. To begin with, reporters already have a shield law. It’s called the First Amendment, and the Justice Department may have violated it in the AP and Rosen cases. Moreover, in the legislative equivalent of “the last war,” journalists were fairly easily identifiable. They worked for newspapers, magazines, and TV and radio stations or networks. Today, it’s harder to define a journalist. Certainly, beat reporters for The Washington Post or Wall Street Journal qualify. But what about people who work for prominent websites, create their own news blogs, or post news and opinion on social media? Anyone with a computer can gather information via the Internet, public records or personal interviews, and disseminate conclusions to a wide audience. With the definition of “journalist” so murky, the government would have little choice but to create its own. And that inevitably would lead to licensing — meaning journalists would enjoy the privilege of gathering and disseminating news. Not only would this be a far weaker protection than the one provided by the rights articulated in the Constitution, but it’s one the government could proffer and withdraw at its whim. It also would empower the government to silence voices officials consider problematical — something they cannot legally do under the First Amendment, even though they try. Nor does the government need a shield law to protect itself from leaks. It simply needs to have strong cases against leakers and the journalists they use to fulfill their objectives, and a willingness to argue such cases with as much transparency as possible. The public will be able to discern between legitimate national security concerns and partisan witch hunts. The First Amendment provides all the protection journalists need. Any attempt to supplement — or supplant — this right is certain to lead to unintended consequences at best, and purposefully sinister outcomes at worst.  

EDITORIAL: Common interests: Religion shouldn't trump state salmon fishing rules

Norman Maclean famously began his novel, “A River Runs Through It,” with this line: “In our family, there was no clear line between religion and fly fishing.” Maclean’s little book carried ideas and emotions powerful enough to make it an enduring national best seller. In Alaska during the past year, we’ve watched as people employ powerful ideas and emotions that also equate fishing and religion. In Alaska’s case, though, those who blur the line do so not to entertain readers but to immunize the fisherman against prosecution for violating rules. A judge last week said he couldn’t grant such immunity, and he made the right decision. Last summer, dozens of Yup’ik fishermen set their standard nets for king salmon in the Kuskokwim River during periods when the state had closed fishing and reduced net mesh sizes to protect the scarce fish. About 60 were charged. In court this winter, attorneys for some of the fishermen argued that they had a religious right to ignore the state rules. Fishing for food is not just an economic activity but also a religious one, the fishermen said, and therefore the government had no authority to stop them. They cited not only the First Amendment of the U.S. Constitution but also Article 1, Section 4 of the Alaska Constitution, which states that “No law shall be made respecting an establishment of religion, or prohibiting the free exercise thereof.” This argument has some well-established legal footing in Alaska. In 1975, the state charged Carlos Frank, who lived in Minto, 40 miles west of Fairbanks, for shooting a moose out of season to supply a funeral potlatch. Frank was prosecuted and convicted, but the Alaska Supreme Court reversed that conviction in 1979 after deciding the potlatch was a religious ceremony. “No value has a higher place in our constitutional system of government than that of religious freedom. The freedom to believe is protected absolutely,” the court said. However, the court firmly asserted that belief is different from action. “The freedom to act on one’s religious beliefs is also protected, but such protection may be overcome by compelling state interests,” it said. In the Frank case, the court said, the state’s worries about unregulated moose hunting were not compelling enough to justify a blanket prohibition on shooting an occasional moose to supply a funeral potlatch. It suggested the state set up a system to allow the practice, which since has been done. In contrast, Magistrate Bruce Ward, ruling in the Kuskokwim fishing case, decided the state does have a compelling interest in limiting king salmon fishing with nets. For reasons that are not well understood, king salmon runs have been extremely poor in the Kuskokwim and elsewhere. The state must limit the harvest so enough fish escape to spawn in the streams far upriver. If it doesn’t, the problem will just get worse. One might ask whether the state should set up some sort of mechanism to allow a few king salmon to be taken for religious purposes. Like the potlatch moose exemption, it could be workable; however, it probably wouldn’t satisfy the fishermen. They assert that the religious act threatened by the state’s regulation is not, as in the Frank case, an occasional ceremony but rather is the regular catch of king salmon. Perhaps so — after all, if a fly fisherman can find religion in pestering trout, surely the experience of sustaining one’s family by netting king salmon from Alaska’s rivers drips with spirituality. Nevertheless, the supremacy of the “compelling state interest” is not the enemy of this religion. In the end, it’s the very thing that protects the fishermen — because to ignore it would endanger the fish upon which their religious experience depends.  

The Bookworm Sez: You can start over after 50

Retirement is too far away. You can see it from your work desk. It’s tantalizingly close, filled with sun and sand, golf and travel, but it’s oh-so-unreachable. Yes, you have a job you’re happy to have. No, you don’t want it forever. So how would you feel being your own boss? Making good money, doing something you love, having flexibility to travel, learning new things? If you think you’re too old for that, you’re not – and “Start Your Own Home Business After 50” by Robert W. Bly explains why. One of these days, you’d love to be able to throw the alarm clock away and forget work. You hope to retire sooner, rather than later — which means, of course, that money (and lack thereof) is a definite concern. And you’re not alone. Robert Bly says that the number of workers age 55 and older is projected to grow by nearly 50 percent in the next three years. Stretching retirement dollars has never been more important — which is where this book comes in. The first step, Bly says, is to decide which of your former jobs you enjoyed and were good at. If nothing in particular sticks out, what hobbies would you like to develop into “an expert-level gig”? Can you freelance, or do consulting? Would a former employer make a good client? Use your experience (an advantage you’ve got over younger workers) to winnow through the possibilities. Next, decide if the business is for you. Do your strengths mesh with what’s needed to run things properly? Do you have stick-to-itiveness enough to stay focused and work solo? Are you prepared to do your billing, tech support, and other necessary tasks, or would you hire someone to do them? Can you market yourself and promote your new business? Do you need financing (the availability of which is another advantage)? Once you’ve figured out the details, then it’s time for launch, but Bly says there’s one thing to remember first: “Make yourself happy. When you do,” he says, “those who care about you will eventually be happy for you.” Someday, you’ll retire and you’ll get to do the things you love. So why not make money doing them, with the help of “Start Your Own Home Business After 50.” Beginning with a handful of home business opportunity ideas, author Robert W. Bly offers plenty of sound advice here, including food for thought to determine if the endeavor is viable. His words are encouraging, but cautious, and he doesn’t forget to warn his readers of the pitfalls in becoming an entrepreneur. That kind of balance is great to see, particularly if you’re on the fence about business-ownership or are just starting to think about self-employment. There’s a little bit of annoying repetition in this book but, overall, it’s a valuable tool for anyone who needs to plan for the future or just wants a good change of pace. If that’s you, then “Start Your Own Home Business After 50” is a book you won’t want too far away. Terri Schlichenmeyer is the author of The Bookworm Sez, which is published in more than 200 newspapers and 50 magazines throughout the U.S. and Canada. Schlichenmeyer may be reached at [email protected]  

Bookworm Sez: How to succeed with social media

Business is a little off. It’s been that way for awhile, despite a “recovery,” despite that you’ve hired a first-class sales team and rolled out new product in the past year, despite an expensive new ad budget. It’s very discouraging. You know you need a new direction. Maybe a better way to connect with customers would work, something inexpensive yet effective. And in the new book “Going Social” by Jeremy Goldman, you’ll find it. From birth to death, we have a “propensity toward social action” that drives us. Babies instinctively look for faces. Adults seek out human contact, once basic survival needs are met. We need to connect with other people. The good news for your business is that it’s cheaper than ever to utilize innate human cravings for social contact: the cost of conversing with customers “has gone down dramatically.” Still, old-school advertising isn’t always memorable enough to spur sales. That’s why many corporations use social media: online recommendations are “up to 50 times more likely to trigger a purchase compared to another kind of recommendation.”  But how do you make it work for you? The first thing to do, says Goldman, is to change your thinking. The question isn’t whether your business should have a social media presence. It’s what kind of presence you need. Knowing the answer will save you from wasting time on sites not frequented by your target market. Second, set your strategy. Like everything else in business, you must have a plan because social marketing “can’t transform businesses simply by existing.” You should also know your audience, what they like, and where they are. Don’t just throw something online; have a point and be clear. Also, be unique and creative, but don’t “pander” to anyone. Learn to target customers on different sites, but don’t go hog-wild; chances are, you don’t need to be everywhere (but sign up for an account anyhow, so you “own” that real estate). Finally, learn how (and when) to deal with negative comments, and understand that giving better-than-stellar customer service online is absolutely essential.  When it comes to business, you’ve seen fads come and you’ve seen them go, but you know that social media is here to stay. Isn’t it time to grab “Going Social” and learn about how to harness it? I won’t promise you it’s easy, even with the help of this book, but author Jeremy Goldman does offer plenty of advice to help take away some of the frustration in using Facebook, Twitter, Pinterest, and the like. It helps that he’s included plenty of first-hand accounts from other businesses, large and small, and that he starts with the basics. I was also happy to see him tackle pitfalls and cautions, since being quick on your feet seems to be necessary in nearly everything online. I think that if you’re looking to hire or train a social media director (one of Goldman’s advisements), then this book offers a good walking knowledge toward that end. With “Going Social” on your desk, your business is game on. Terri Schlichenmeyer is the author of The Bookworm Sez, which is published in more than 200 newspapers and 50 magazines throughout the U.S. and Canada. Schlichenmeyer may be reached at [email protected]  

CFEC responds to scrutiny of scallop limited entry program

In the March 17 article in the Journal of Commerce titled “Shell game,” under the heading “Seaton questions constitutionality,” the article states: “The scallop fishery is the only vessel-based limited entry program in the state, and it was made vessel-based because assigning permits to individuals with fishing history would have resulted in 10 or 11 permits. That number was greater than the nine determined to be the most vessels the fishery could support.” This statement does not convey the magnitude of the problem faced by the commission. Based on the same period used to establish vessel eligibility, some 43 individual captains had participated in the fishery and would have been eligible to apply for permits (and hold interim-use permits) under traditional limited entry. Even under a shorter, hypothetical four-year period, 27 captains would have been eligible to apply. If the commission had implemented traditional limited entry, each of those captains could have brought a vessel into the fishery during the period of time required to adjudicate their claims to permits (with judicial appeals, at least 6 years). In good conscience, the commission could not have risked visiting that much fishing power on (in the words of ADFG Commissioner Cora Campbell) “a hard bottom dredging” fishery, which could potentially do terrible damage if not very carefully controlled. The possibility of 43 vessels (or even 27) compared to 9 participating vessels presented a stark choice to the commission. The article attributes the following statements to Rep. Paul Seaton: “Time does go on and things change, and there wasn’t consolidation to a very few select people at the time [in 2008 when the legislature extended termination of this limitation], which may run afoul of other parts of the constitution and a special right of fishery ... “For several years there seems to have been a philosophy at the CFEC that they are the chief supporters of a position of policy instead of implementing the policy that is set by the legislature. Although they were implementing the policy, to oppose a change in policy by the legislature is, I believe, beyond their real mission.” Some years ago during the course of a hearing, Rep. Bill Hudson made a somewhat parallel comment to the commission, but in the form of praise for being “proactive.” The comments attributed to Rep. Seaton fail to acknowledge (1) that the state waters fishery looks very much the same today as it did when the legislature extended the limitation in 2008, and (2) that the commission’s actions are solidly grounded in specific direction from the legislature and the Alaska Constitution. As it did in 2008, the state waters scallop fishery includes 7 permits, and, in full compliance with state law, no individual or entity holds more than one state permit. The article correctly cites Johns v. Commercial Fisheries Entry Commission, 758 P.2d 1256, 1266 (Alaska 1988), for the proposition that the Limited Entry Act directed CFEC to determine an optimum number to ensure that a limited fishery was not too exclusive. CFEC is prepared to examine an optimum number for the state scallop limitation. That opportunity will be destroyed if the limited fishery terminates at the end of 2013. Preserving CFEC’s statutory authority to perform an optimum number determination is a principal reason the commission supports extending the termination date for the fishery. The procedure would also be fair to Mr. Bill Harrington, Mr. Max Hulse, and the other permit holders. Extending termination would avoid a risk that the resulting open-to-entry scallop fishery may have to be closed to protect the stocks. Creating the risk of closure would breach the duty of the legislature and managers alike under Article VIII, Section 4, of the Alaska Constitution, to ensure that “Fish ... and all other replenishable resources belonging to the State shall be utilized, developed, and maintained on the sustained yield principle ... “ Current management of the fishery under limited entry has earned high marks. The Monterey Bay Aquarium Seafood Watch has bestowed upon Alaska Weathervane Scallops their “Best Choice” award based on a showing that the Alaska scallop resource is abundant, well-managed and caught in an environmentally friendly way. Bruce Twomley is the Chair of the Alaska Commercial Fisheries Entry Commission. Benjamin Brown is a CFEC Commissioner. Editor’s response: The Journal stands by its reporting. The CFEC writes that we understated the potential number of permits (and therefore the possible number of scallop vessels) that could have fished under traditional limited entry with interim-use permits. We believe CFEC is overstating the magnitude of the risk. Under open access from 1980 to 2002, the peak number of vessels that ever fished in state waters was 12 (in 1981 and 1994), with a typical range of about six to 10 vessels annually. There is no realistic possibility that 27 or 43 vessels would have entered the state water scallop fishery through operator-based interim-use permits. The range of possible permits we reported was based on the CFEC’s official position in 2004 regarding the number of traditional, operator-based permits that could have ultimately been issued for scallops. In any case, however, the only intent of the sentence referenced by CFEC was to describe why a vessel-based system was chosen over traditional operator-based limited entry. We agree — and reported — that would have resulted in more permits than the number of vessels the state wanted to participate in the fishery. We disagree with the CFEC assertion that the state waters fishery “looks very much the same” as it did in 2008 when the program was last authorized. The Washington-based partnership described in our March 17 issue purchased three federal licenses in 2008 soon after the legislature extended the state waters limited entry program, bringing their total holdings to five federal licenses. One of those federal licenses was held by individuals that relinquished their state permit eligibility in 2003 as a move to consolidate effort; another federal license was associated with a state permit that was relinquished in 2007; and the third state permit previously associated with the federal license is now in suspension because it has not been assigned to a vessel. Because many of the scallop beds straddle the three-mile boundary between state and federal waters, it is difficult to prosecute the fishery only in state waters. By controlling five federal licenses, we believe it is accurate to report that the partnership effectively controls the corresponding portion of the state waters harvest as well, and to a larger extent now than it did in 2008.   — Andrew Jensen Managing editor  

GUEST COMMENTARY: Balance must be restored to Alaska's oil tax system

  Oil production is the cornerstone of Alaska’s economic foundation and an engine of opportunity for Alaskans. As Commissioners of the Departments of Natural Resources and Revenue, we are charged with managing Alaska’s resources, finances and oil wealth for the maximum benefit of current and future Alaskans. When it comes to reforming Alaska’s oil tax system, we are guided by Alaska’s Constitution and directed by Gov. Sean Parnell’s guiding principles, which he has recently underscored: Oil taxes must be fair to Alaskans, must encourage new production, must be simple so they restore balance to the system, and must be durable for the long term. With these core principles in mind, our departments have extensively reviewed the current oil and gas tax system — taking into account the analysis we received from a broad range of experts. Alaska is blessed with world-class resources on the North Slope. We have billions of barrels of conventional resources that remain undiscovered, and billions more in unconventional resources that can sustain our economy for generations. Unfortunately, we are not the only resource opportunity available. There is great competition for investment dollars to develop resources around the globe, and while oil provinces are booming in North America and elsewhere, Alaska has been needlessly losing out. As we look toward new oil development in Alaska, we see that the current system creates a dilemma for the State. Since the State receives oil tax revenue from production, but awards tax credits based on a company’s spending, we incur significant costs to the treasury as projects are developed. Basically, the more companies spend, the more taxpayers must foot the bill. It seems counterintuitive, but in the near-term, significant new developments could lead to budget deficits depending on the price of oil. Under current law, in the next fiscal year, the state will pay out more than $1 billion in credits to either reduce a tax liability or to directly pay companies that are not producing oil. These payments negate two-thirds of the $1.54 billion the state will receive through the current oil and gas production tax’s “progressivity” rate. Meanwhile, companies that commit to producing new oil reserves in Alaska can expect to make a little more than $4 per barrel. At the same time, they can go to our competitors and make $7 to $9 per barrel. This is a key reason Alaska is considered to be in extreme harvest mode. We are not seeing the investment and development activity that we need to produce greater volumes of oil and greater economic opportunity. The International Energy Administration recently predicted the United States will be the world’s largest oil producer by 2020. Alaska should be leading this domestic energy production boom, given its world-class hydrocarbon basin, but instead we are falling behind North Dakota, Texas, and soon, California. Clearly, our complex tax system and uncompetitive tax rate is a major disincentive. The portion of the tax rate called “progressivity” is calculated monthly and varies significantly, making it difficult for any company to plan around or predict. Progressivity is primarily based on the price of oil. If oil prices drop, the revenue from progressivity declines but the taxpayer bill for credits remains the same. We can foresee a potential scenario, under our current fiscal system, where we seriously deplete the State treasury in the near term, while maintaining our downward production spiral. These elements of our current tax system create an imbalance that exposes the State to excessive financial risks. Our current system rewards private spending rather than new production. Does that mean that we should give up on exploration tax incentives? No. But we must restore balance — reducing the risks to our treasury and refocusing on effective incentives that secure new production. We also must enact tax reform that focuses on growing oil production, economic activity and jobs. With targeted reforms to the current system based on identified problems, we are confident that Alaska can increase its revenue stream and revitalize our oil and gas industry to create lasting opportunity for generations to come.

EPA study is shoddy, sloppy, biased

Roy Stein is no fan of the Pebble mine. Stein, a fisheries scientist from pretentiously prefixed “The” Ohio State University, penned a recent report describing arguments of mine developers and responsible resource development advocates as “specious,” “disingenuous” and “indefensible,” in addition to calling the prospect of other mines around Pebble “insidious.” Such rhetoric from the opponents of Pebble is hardly uncommon, and anything but newsworthy on its own. Stein, however, isn’t a typical Pebble opponent. Stein was not only a member of the peer review panel that examined the Environmental Protection Agency assessment of potential impacts from mining in the Bristol Bay watershed, he was also the chairman. While Stein was tasked with reviewing the quality of the EPA assessment, he instead used much of his peer review as an emotional diatribe against the Pebble developers and permitting process advocates, and pronounced himself more of a cynic than a skeptic when it comes to the regulatory system. To be sure, many of the reviewers stated that the EPA underestimated risks from mining to wildlife, flora, fauna, fish species other than salmon and human users other than Alaska Natives. But equally sure is that this was hardly a ringing endorsement of the agency’s work. Among the 12 peer reviews, Stein’s stood out not only for its lack of objectivity or attention to the assigned task, but for his eagerness to spout off on subjects for which he himself repeatedly wrote he had no expertise. Rather than critique the EPA work, as he was paid by our tax dollars to do, Stein actually offered advice to the government on how to counter mining company arguments. Referencing the position of mining proponents that failures at old mines cannot be applied directly to risks at Pebble because new technology and best practices will be applied, Stein wrote: “In my view, this is a specious argument and one that should be roundly put to bed by the authors.” At one point in his review, Stein showed he was not aware of reclamation bonding, and at another point suggested that Alaska Natives have “surely” been negatively affected by development, writing “perhaps the Fraser River?” It is a serious enough problem that someone came to chair a peer review panel on mining impacts in Alaska without knowing what a reclamation bond is or even that the Fraser River is in Canada, but what is more troubling than Stein’s lack of basic knowledge and professionalism is how the EPA is incorporating his review into its continuing work on the Bristol Bay assessment that it now says will be used to inform the agency’s options under the Clean Water Act. In its “Summary of Key Recommendations from Peer Reviewers,” the EPA placed heavy emphasis on Stein’s comments (without attributing them to him) to the exclusion of far more substantive and insightful statements from other peer reviewers. This was most obvious under the section for technical content revisions to the hypothetical mine scenario used in the assessment. The hypothetical mine was criticized on several fronts by multiple reviewers, yet four of the six bullet pointed “recommendations” highlighted by the EPA came straight from Stein’s review despite his admitted lack of experience in mine engineering, management or reclamation. The EPA grudgingly included the recommendation that it needs a more thorough discussion of what are best mining practices — this after asserting in the Executive Summary that its hypothetical mine reflected “best” practices but in the actual assessment described them as “good, but not necessarily best” practices. Not content to simply take its medicine from the reviewers and move on, the EPA then incorporated Stein’s assertion that “without a track record of ‘best’ practices, we cannot assume that technology, by itself without appropriate operational management controls, can always mitigate risk.” Nowhere did the EPA highlight the problems with the mine scenario raised by Dirk van Zyl, a mining engineering professor at the University of British Columbia. Van Zyl noted the scenarios for waste rock management were entirely inconsistent (at one point saying waste rock would be stored in open pit, at anther saying waste rock would be milled and placed in the tailings storage facility); its water balance calculations were incorrect; and that EPA stated non-acid generating rock will require wastewater treatment in perpetuity. “If all the (possible acid generating) material will be removed from the surface, as stated in the scenario in Chapter 4, and all the (non-acid generating) will not generate acid drainage, then it is difficult to understand why the waste rock piles and waste rock used for construction would be the major source of ‘routinely generated wastewater,’” van Zyl wrote. Van Zyl, as a mining expert, could be expected to be more critical of the EPA mining scenario, but he wasn’t alone among his peer reviewers. William Stubblefield, Oregon State University, toxicology expert: “Although interesting, the potential reality of the assessment is somewhat questionable. It is also unclear why the EPA undertook this evaluation, given that a more realistic assessment could probably have been conducted once an actual mine was proposed and greater detail about operational parameters available.” Phyllis Weber Scannell, Scannell Scientific Services, fish biology: “Some of the assumptions appear to be somewhat inconsistent with mines in Alaska. In particular, the descriptions of effects on stream flows from dewatering and water use do not account for recycling process water, bypassing clean water around the project, or treating and discharging collected water.” John Stednick, Colorado State University, watersheds: “A large tailings storage facility failure compared to a blocked road drainage culvert. The level of detail in the assessment of the potential system failures varies considerably and baits the question — why? Does this demonstrate lack of understanding of failure prediction, lack of failure prediction, or writing team expertise?” Stubblefield also noted the elementary findings of the risk assessment for multiple mines: “Short of concluding that ‘failures at one mine could be bad, and failures at multiple mines could be worse,’ little else could be concluded.” A number of reviewers observed that the EPA was using logging road impact studies from the 1970s to characterize risks from a mine transportation corridor, that it was using oil and diesel pipelines as a substitute for risk assessment of a slurry concentrate pipeline (while not, strangely, evaluating risks posed by actual diesel transport pipelines that could be in place) and there was unanimous sentiment to not use the Mt. St. Helens eruption as an analogy to a tailings dam failure. Even Stein, the unabashed cheerleader for the EPA effort, said the agency was on “tenuous” ground in assessing risk based on the high level of uncertainty throughout the report. I’d hope the EPA was at least somewhat embarrassed to include among its recommendations — based on consensus among its reviewers — that it must clarify the purpose of the document and rewrite the Executive Summary so that it matches the content of the report. Let’s face it: something is wrong when two main recommendations from a peer review are to define the purpose and make the Executive Summary reflect the actual results of the study. Two Stein comments that were showcased by the EPA, though, are so far short of the scientific rigor the agency claims it adheres to that they must be exposed. Under the technical content revision peer reviewer recommendations for risk to salmonids, the EPA writes under the first bullet point to “reflect on the non-linear nature of the relationship between habitat at salmon production; 5% of the habitat could be critical and thus responsible for 20% or more of salmon recruitment.” Here is what Stein wrote: “This exercise also will serve to counter the argument by the mining company that they are only destroying some small percentage of salmon habitat and hence … only some very small percentage of salmon. Because losing 2% of critical headwaters may translate to huge losses of salmon (say 20%), one cannot simply assume a linear relationship between habitat and salmon.” So, Stein pulls the 20 percent number out of his, um, hat, and the EPA blithely places it into the highlighted recommendations of peer reviewers as if that number is based on actual data. The second bullet point under risks to salmonids states: “Include a section on the impact of Global Climate Change with explicit reference to a monitoring program that will allow scientists, if the mine is built, to distinguish between effects of climate change and mining effects on the physical and biological components of the ecosystem.” Here is what Stein wrote: “My concern is that if the mine is built, all negative impacts of the mine on salmonids, etc., could be attributed to Global Climate Change rather than the true culprit which would be the mining activities.” It was natural that Stein’s climate change preoccupation and anti-Pebble attitude found a receptive audience and prominent inclusion in the peer review summary from the EPA assessment lead manager Richard Parkin of Region 10 in Seattle. Parkin also leads environmental justice efforts for EPA Region 10 and has had addressing Pebble on his to-do list since at least 2008. Back in 2000, Parkin wrote a letter to the Department of Transportation finding fault with a draft environmental impact statement for a highway bypass in Issaquah, Wash.,, because the EIS didn’t include “the proposed project’s contribution to the serious problem of global warming.” “As a transportation solution, the bypass offers no means to lessen or curtail the use of POVs (privately owned vehicles), consequently any emissions of greenhouse gases anticipated from easing congestion on Front Street will be more than offset by increasing vehicle miles traveled” resulting from increased vehicle capacity and “no incentives” to change travel behavior, Parkin wrote. If Parkin doesn’t believe that something as simple as a highway bypass can be built without destroying the planet, it is not an unreasonable conclusion that he is looking far from objectively at the Pebble prospect. Parkin and Stein would certainly have that in common, and based on the presentation of peer review recommendations it is clear the only thing “insidious” going on here is the EPA attempt to convince us that it is engaging in a fair process. Andrew Jensen can be reached at [email protected]

Use credit strategically as the recovery gains strength

The significant tightening of business credit brought by the recession has begun to lift. A recent analysis of FDIC data by the Investigative Reporting Workshop found banks have been increasing overall commercial and industrial lending for five straight quarters. However, lenders remain cautious in their underwriting, even with improving economic conditions and even as interest rates remain at near-record lows. Consequently companies seeking to ride the recovery, as uncertain and erratic as it may admittedly seem at times in the short term, must be strategic in their use of credit. External financing Managing your company effectively and growing strategically as you shift from defense to offense may depend on the quality of credit you can access more than on any other factor. And this often comes down to a question of how you manage your creditworthiness before reaching out to potential lenders to finance an expansion of facilities, capabilities, intellectual property, equipment, inventory or staff. Once you have actualized an expansion plan to achieve any of these growth measures, take a practical and honest inventory of internal resources needed to take on the additional debt you seek. • Review your staff resources to administer and pay back a lender, including the expertise to fulfill covenants consistently and reliably. • Realistically assess the cash flow your company has available to serve both existing debt and the new debt you seek. • Analyze your leverage ratio, before and after borrowing, as preparation for possible additional borrowing should contingencies or unexpected opportunities arise. This last consideration deserves underscoring, and some perspective. When business credit tightened initially, many companies found they were overleveraged and had no financial cushion to ride out deteriorating conditions. When sales and cash flow faltered, their debt service became unsustainable. Ensure that your company has sufficient, and sufficiently liquid, reserves to bridge temporary short-falls. Also, before borrowing, plan out your exit strategy, which means more than just the simple injunction to borrow only what your company can pay back. Be clear about how your company will pay back the new debt, taking into account possibilities such as appreciation in your collateral value or in cash flow, or the possible availability of a strategic take-out loan at better terms than currently apply. If your company has multiple credit facilities in place, be strategic about allocating resources to pay them down. Paying early may deprive your company of needed strategic reserves. Finally, strategically match new credit to new needs. Review the initial purposes for which you obtained term loans or lines of credit and reassess how suitable your existing credit exposure remains in light of current needs and plans. Then choose the form of credit that best fits current conditions, your exposure and your business objectives. Work with an experienced business banker to engineer the most appropriate financing for your company’s current cash position and future plans. When current conditions define new challenges, it is beneficial to have a partner help you think through those needs. One Key Bank client in Anchorage, a minority-owned business that fulfills a variety of contracted activities from janitorial services to telecommunications, needed to look for ways to increase its contracts even as economic conditions were uncertain. The business saw an opportunity to grow and improve its government contract prospects by moving its headquarters to a Historically Underutilized Business Zone (HUBZone). The HUBZone program helps small businesses in certain urban and rural communities gain preferential access to federal procurement opportunities. The client sought a commercial real estate mortgage to purchase a building in the HUBZone to house its key operations, and it also obtained a line of credit to manage cash flow fluctuations. The move not only helped improve the business’s competitiveness for federal contracts, and it infused new commercial activity in an area that needed it most – a win-win for the business and the community. Using credit strategically means looking at the long term benefit – for example, to create conditions that generate more revenue and save more money in the long run. Another Key Bank client, an Alaska Native Village Corporation in western Alaska, realized it needed to upgrade its village store to better serve its community. Although it could have paid for the construction on its own with cash, that approach would have depleted their funds, leaving them no financial cushion for other emerging needs. Working with a banker, they structured a construction loan and a long term mortgage that helped build a larger, more modern village store that provided greater amenities to the community, and at the same time, saved on operating costs thanks to more energy-efficient construction features. This preserved cash on hand for other immediate and emerging needs. Even refinancing an existing loan can be an effective long-term strategic use of credit. A marine transport company based in Anchorage recently refinanced a loan which not only saved money on the lower interest rate, it also gave the company access to new funds to replace older landing craft diesel engines with new, more environmentally-friendly and more fuel-efficient engines which had a direct impact on lowering expenses. Another good example of using credit to improve the bottom line. Work with your banker to determine whether debt or equity is most advisable, given your ownership structure, management and business type. Internal financing Your company may have internal financial resources available for powering growth. Identifying and using those resources can extend the effectiveness of such external financing as debt. Strategically use profits. Allocate them to those product lines, services and investments that bring the greatest return. This may sound overly conservative, and to some it may seem to preclude taking prudent risks in new product development and other initiatives. But these are times when careful resource allocation pays off. Enhance cash flow. Accelerate income by tightening your payment policy with customers, demanding deposits or cash up front, or offering discounts for prompt payments. Consider raising prices or increasing fees⎯but carefully, to preserve customer loyalty. Decelerate outgoing payments through negotiations or requesting discounts for paying promptly. Calculate and balance the value of the float against the need to preserve the good will of your suppliers and vendors. Craft strategic alliances. Similar companies can form marketing alliances to highlight the value of their products and services, and companies can cross-sell one another’s products, enhancing the attractiveness of both to new customers. Explore non-debt and non-equity financing. You can use accounts receivable funding/factoring, equipment leasing or purchase-order funding to raise capital; retailers can obtain cash advances against future credit card purchases. Expand products or services. Choose expansions that make strategic sense with your company’s existing offerings. Buy efficiency. Concentrate on your core business and outsource non−income-producing activities from your back office. Rely on professionals. Financial and business advisors can supply the expertise your company may lack, providing guidance on expansion as the economy recovers, and how to finance it. About the author: Phillip Reid is the Business Banking Sales Leader for KeyBank N.A. His office is located at 101 West Benson Blvd. in Anchorage, and he may be reached at (907) 564-0446 or [email protected] This document is designed to provide general information only and is not legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. KeyBank does not make any warranties regarding the results obtained from the use of this information.

Commentary: Back to the Capitol — what awaits?

The Legislature begins its return to the Capitol soon — and although the landscape has changed many of the key players have only changed committee positions. The clear result of the election, however, is that backers of Gov. Sean Parnell’s policies are in the driver’s seat. Republicans are inviting some Democrats to caucus with the majority — we can only hope this is a small break in the ice dam of partisan gridlock that has marked the last two years in Juneau’s halls of power. It’s time for Alaska’s Legislature to settle some important questions so we can move forward with securing Alaska’s future as a player in the oil business, as well as being a state that funds education and helps to meet the needs of rural areas with soaring fuel costs that cripple local economies. Our nation has been through a grinding election season, one that surprised some not only by the intensity of feelings on both sides of the traditional two-party system, but by the intensity with which Ron Paul supporters made incursions into the state Republican Party. While Mitt Romney took 51 percent of Alaska’s vote, 41 percent of voters with almost all the votes counted voted to re-elect Barack Obama. This state has changed a bit in four years, and the political polarization that has emerged across the nation has its impacts here as well. All is not well. The status quo in many cases has been upset. While our Legislature can’t save the world, it can get to work on Alaska. The Legislature faces some big decisions, decisions the public cares a great deal about. Gov. Sean Parnell’s plan to reduce taxes on oil companies needs some serious consideration, and this time around we expect the governor to bring to the table some hard facts and hopefully some promises for oil companies that they will indeed ramp-up operations here is the tax climate is made more favorable. Sen. Hollis French, a member of last session’s bipartisan coalition and a leading opponent of the governor’s plan, has held onto his Anchorage District J seat, according to preliminary results, by just 56 votes as of the most recent count. His challenger backed the tax reform package. We hope that French and others who have opposed the plan will take a look at the facts and do what is best for Alaskans, not what is best for a partisan agenda. And we hope this issue is not all the Legislature talks about and acts upon. There are other key issues that need attention: • Alaska needs a proper Coastal Management Plan that gives our state a seat at the table where decisions about our natural resources are being made. We need a plan that makes sense and serves as a one-stop shop for permitting so our interests are protected and business still gets done. • The Legislature has a chance to have a say in development of the Pebble Mine. We hope for statewide leadership on this issue, and we elect legislators to lead. A bill to give the Legislature say over that went nowhere last session. This is not the kind of question that should be settled by a ballot initiative where serious policy is decided in a popularity contest oiled with special interest money from all sides. • Cities and villages need access to natural gas, and the Legislature should provide incentives to get natural gas flowing as an alternative means of fuel for cold Southcentral winters. • Power supply is a crucial issue for Southcentral’s economic future. The hydroelectric project on the Susitna River must keep moving forward as long as it is proven the dam will not hamper salmon spawning. • Juneau needs permanent state offices for many departments housed in a patchwork of offices across Juneau. Build a new state office building here, and continue funding the new State Library and Archives project in Juneau as well. It’s time to centralize scattered state offices, in Downtown or in the valley. We look forward with optimism that, now that the silly season has passed and power has peacefully begun the process of transferring on national, state and local levels across our nation, that a new urgency to get down to business will strike the Legislature, and the bickering and posturing that led to very little will vanish like a faded campaign sign caught up in a Taku gust.

Interior voters dismantle Senate majority

Fairbanks voters saw to it that the Senate Bipartisan Working Group would not survive the 2012 election. As Anchorage voters cast ballots to preserve the status quo by reelecting oil tax reform opponents Sens. Hollis French and Bill Wielechowski, Interior residents sent two Democrat incumbents packing and elected Republican Click Bishop to an open seat. Eagle River voters flipped another Democratic seat to the GOP by electing Rep. Anna Fairclough against incumbent Bettye Davis, who was redistricted into former senator status. Of course it’s far too early to know how the structure and leadership of the Senate will shake out, but change is certain after the previous 10-10 party split with only seven Democrats remaining, five new Republican senators heading for Juneau and the four-member GOP minority fully intact after its leader John Coghill took out Democrat Joe Thomas in Fairbanks by a wide margin. Surviving GOP members of the previous majority include Senate President Gary Stevens of Kodiak and Majority Leader Kevin Meyer of Anchorage. Of the five new GOP senators, all but Bishop campaigned expressly against the 16-member majority controlled by Democrats. In fact, during his primary, Bishop declined to sign a pledge to caucus only with a GOP majority. However, all he needs to do is look around the Interior at the fates of Joe Paskvan and Thomas to understand the consequences of failing to deliver for his constituents. It’s not surprising that Interior voters, who are far more in touch with the resource industry and their electric bills, would vote to blow up the do-nothing Senate while voters in the service-based economy of Anchorage would have no problem sending a couple unproductive legislators like French and Wielechowski back to the capitol. French is holding on to a 249-vote lead over Bob Bell with absentee ballots still to be counted while Wielechowski crushed Bob Roses in a fine example of how adopting your opponent’s positions is a bad way to win an election. Thankfully, in their new minority status, this pair should have a hard time finding committee chairmanships or anything resembling the sway they had in the last legislative session. Even as it controlled the Senate by a huge margin against a four-member minority, the majority was unwieldy, incoherent and unable to produce any legislation to address the issues of oil taxes, coastal management, declining North Slope production or the unsustainable cost of energy throughout the state. Clearly, the Alaska voters spoke out against the gridlock in Juneau, preserving the GOP House majority and rejecting nearly half the Senate coalition between the primary and general elections. With President Barack Obama winning a second term, it is even clearer that Alaskans must take over their own destiny on our lands as we face four more years of this administration’s ideological and anti-resource EPA and Department of the Interior. We’ve never endorsed the oil tax proposal offered by Gov. Sean Parnell, but here’s hoping that new faces and the diminished role of his most vociferous opponents will finally allow something productive to be accomplished on a host of issues that are long past due for addressing.   The presidential race There’s not a lot to be said about an outcome that will undoubtedly hurt Alaska over the next four years, so I’ll just leave you with the words of the candidates and one wise Iron Lady: “If you’re looking for free stuff you don’t have to pay for, vote for the other guy.” — Mitt Romney to a heckler, March 20, 2012 “If you have a business, you didn’t build that.” — Obama, July 13, 2012 “I mean, I do think at a certain point you’ve made enough money.” — Obama, April 29, 2010 “Socialist governments traditionally do make a financial mess. They always run out of other people’s money.” — Margaret Thatcher, Feb. 5, 1976   Andrew Jensen can be reached at [email protected]

Commentary: Time for the U.S. to address mineral dependence problem

Access to critical minerals and metals is vital to America’s military strength and economic health. As we move further forward into the technology age, we need a range of non-fuel minerals - from antimony to zinc - for defense technologies that protect the homeland and project American power abroad. These same minerals and metals underpin our manufacturing sector too, and the cost of raw materials impacts everything from productivity and innovation to economic growth and job creation. Without smarter policies that increase access to resources under our own soil, America will continue to depend heavily on China, Russia, Kazakhstan, and other countries that don’t have our interests at heart. Based on reports by the Department of Defense and others, American Resources Policy Network, my organization, has found that the U.S. is at least 50 percent dependent on foreign supplies for 43 vital minerals and metals that feed our defense and manufacturing sectors. That’s a greater dependence than we have on foreign oil. For 19 critical minerals, we’re 100 percent dependent. The problem is crystal clear when we zero in on the Rare Earth elements, a group of 17 magnetic metals. Although the U.S. is once again producing Rare Earths, China still controls 95 percent of the global supply. According to the Congressional Research Service, 10 of these metals are essential to our modern military technologies - including guidance and control systems, electronic warfare, targeting, electric motors, and battlefield communications. We also use them for smartphones, LED televisions, automobiles, hybrid batteries, and other products that fuel the U.S. economy and sustain manufacturing jobs. The irony of U.S. dependence on China for Rare Earths is that 15 percent of available global resources can be found right here under American soil. Yet, right now we contribute to little more than one percent of global supply. Why? Because blessed as we are geologically with scores of metals and minerals, America is one of the toughest places in the world to bring a new mine online. Mining companies have to navigate a bureaucratic obstacle course to gain access to American mineral resources. According to the annual Behre Dolbear report on the top-25 mining nations, it takes up to ten years on average to obtain all the necessary permits to develop an American mine. By that measure, America ranks dead last year after year. Under the current administration, federal agencies have continued to delay or impede the development of major American mineral deposits. In Arizona, one mining company has been trying for over 15 years to obtain approval from the U.S. Forestry Service to mine a Copper deposit just south of Tucson that would create an estimated 2,900 jobs and $19 billion worth of investment in the state. The U.S. Environmental Protection Agency has even expanded its authority under the Clean Water Act to thwart mining projects — including before they’ve applied for a permit. In Alaska, another mining company has discovered what could be the largest ever U.S. copper deposit, and the EPA has preemptively drafted an environmental assessment of the nearby Bristol Bay watershed, which it seems bent on using to preemptively deny a permit to develop this resource. From a national security perspective, these policies make no sense. Copper is used extensively not only in construction, industrial machinery, transport vehicles, electronics, and power generation, but in next-gen energy alternatives like wind and solar power. It is also the second-most used material by the Department of Defense, and a key source of other strategic minerals through the refining process. And while U.S. Federal agencies have blocked efforts to develop domestic copper resources, China continues to stockpile more Copper in its warehouses than the U.S. consumes in an entire year. When it comes to our mineral dependence, President Obama has talked about Rare Earths, talked about strengthening manufacturing, and talked about the need for a modern military with state-of-the-art weaponry - all of which depend on a strong U.S. minerals access policy. But without taking more concrete steps, President Obama can only be judged by the obstructionist actions his Federal agencies have taken. Gov. Mitt Romney has directly addressed the permitting process on the campaign trail, promising to streamline it and move more authority from the Federal government to states. Yet his focus has been exclusively on energy independence. He should expand his agenda to include resource independence. Ready access to reliable supplies of metals and minerals is every bit as critical to America’s national security, manufacturing competitiveness, and job creation.   McGroarty, president of American Resources Policy Network, a non-partisan education and public policy research organization headquartered in Washington, D.C., served as special assistant in the White House and as a presidential appointee at the Department of Defense.

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