EPA proposes to cut methane from oil, gas by nearly half

WASHINGTON (AP) — The Obama administration on Aug. 18 proposed cutting methane emissions from U.S. oil and gas production by nearly half over the next decade, part of on ongoing push by President Barack Obama to curb climate change. The administration’s target is to cut methane from oil and gas drilling by 40 to 45 percent by 2025, compared to 2012 levels. The move was not unexpected; officials had set the same goal in a preliminary blueprint in January. Still, by moving forward with the official proposal, Obama is adding to a list of energy regulations that have drawn applause from environmentalists and ire from energy advocates. To help meet the goal, the administration issued a rule cutting emissions from new and modified oil and natural gas wells, along with updated standards for drilling to reduce leakage from wells on public lands. The rule would require energy producers to find and repair leaks at oil and gas wells and capture gas that escapes from wells that use a common drilling technique known as hydraulic fracturing, or fracking. Officials estimate the rule would cost industry from $320 million to $420 million in 2025, with reduced health care costs and other benefits totaling about $460 million to $550 million. “Today, through our cost-effective proposed standards, we are underscoring our commitment to reducing the pollution fueling climate change and protecting public health while supporting responsible energy development, transparency and accountability,” EPA Administrator Gina McCarthy said in a statement. The administration is expected to finalize the rules next year shortly before Obama leaves office. Methane, the key component of natural gas, tends to leak during oil and gas production. Although it makes up just a sliver of greenhouse gas emissions in the United States, it is far more powerful than the more prevalent gas carbon dioxide at trapping heat in the atmosphere. That makes methane a top target for environmentalists concerned about global warming. With his presidency drawing to a close, Obama has been in a rush to propose and then finalize sweeping regulations targeting greenhouse gases blamed for global warming. The methane rule follows a landmark regulation Obama finalized earlier this month to cut carbon dioxide emissions from coal-fired power plants by 32 percent. The plan, the centerpiece of Obama’s climate change strategy, drew immediate legal challenges from power companies and Republican-led states. Obama also has proposed regulations targeting carbon pollution from airplanes and set new standards to improve fuel efficiency and reduce carbon dioxide pollution from trucks and vans. In total, Obama has set a goal to cut overall U.S. emissions by 26 percent to 28 percent over the next decade, as he seeks to leave a legacy of using the full range of his executive power to fight climate change and encourage other countries to do the same. Katie Brown, a spokeswoman for Energy In Depth, an oil industry group, said methane emissions from fracking are already declining because of improved drilling techniques. “Cheap natural gas has delivered substantial climate benefits that came largely from voluntary reductions by industry and technological innovation,” she said. “Federal regulations, especially if crafted poorly, could inflict more pain on the men and women who work in the oil and gas industry.” The administration said the rule would apply only to emissions from new or modified natural gas wells, meaning thousands of existing wells won’t have to comply. Environmentalists say that the ambitious goals announced under the proposed rule would be difficult to meet without targeting existing wells. David Doniger, climate policy director for the Natural Resources Defense Council, an environmental group, called the new rule “a good start.” But Doniger said, “EPA needs to follow up by setting methane leakage standards for existing oil and gas operations nationwide.” Janet McCabe, acting assistant EPA administrator for air and radiation, told reporters that the new rule could reduce emissions by as much as 25 to 30 percent by 2025. She did not specify how the remainder of the 45-percent goal would be met, but experts said the administration would likely rely on voluntary efforts, state regulations and an Interior Department rule covering drilling on public lands to meet that target. The methane rule comes one day after Obama approved a final permit allowing Shell to drill for oil in the Arctic Ocean off the Alaska coast. Environmental groups have criticized the move, saying the permit clashes with the message Obama will deliver when he visits Alaska this month to emphasize the dangers of climate change. The U.S. Geological Survey estimates that U.S. Arctic waters hold 26 billion barrels of recoverable oil. Shell is eager to explore in a basin that company officials say could be a “game changer” for domestic production. Democratic presidential candidate Hillary Rodham Clinton on Tuesday opposed Obama’s decision to allow drilling in the Arctic Ocean, writing in a Twitter post that “The Arctic is a unique treasure. Given what we know, it’s not worth the risk” of a major spill to allow drilling.

Movers & Shakers 8/23/15

Cary Deck, a professor of economics at the University of Arkansas and the director of its Behavioral Business Research Laboratory, will serve as the University of Alaska Anchorage’s Rasmuson Chair of Economics for the 2015-16 academic year. Within UAA’s College of Business and Public Policy, Deck will work with faculty to promote research and teaching excellence. He will engage students in the classroom and will advise them on undergraduate research projects. Deck’s research uses controlled laboratory experiments to investigate a wide array of topics from risk taking to choice overload. His work has been supported by grants from the National Science Foundation, the National Institutes of Health and the Federal Trade Commission, and has been published in leading journals, including the American Economic Review, Econometrica, and Review of Economic Studies, among others. Dan Nichols is the new WHPacific Facilities Director in the company’s Anchorage office. Nichols has more than 10 years licensed experience in civil and arctic engineering and project management. In this role, Nichols oversees the Anchorage offices’ architectural, electrical, and mechanical projects. Previous to WHPacific, Nichols worked as a civil engineer and project manager for Dowl Engineering in Anchorage. Nichols’ past project experience includes projects in Emmonak, Kotzebue, Gukana, Selawik, Bethel and Red Dog Mine. Nichols is a member of the American Society of Civil Engineers. Mitch Jackson, formerly a commercial banker with Wells Fargo, was hired as the commercial sales and leasing associate for Carlton Smith Company in Juneau. Jackson comes to the Carlton Smith Company with more than five years as a banker, including three years as a commercial relationship manager with Wells Fargo in Anchorage and, since 2012, in Juneau. Jackson is a member of the Juneau Economic Development Council board of directors, the Juneau Downtown Business Association, and the Gastineau Rotary Club. The Carlton Smith Company is in its 25th year as Southeast Alaska’s only real estate brokerage dedicated to commercial sales and leasing. Arctic IT announced the addition of Mary Gasperlin to their team as an account executive. In her new role, Gasperlin will work with Alaska companies to find solutions to their IT needs with a focus on TotalCare, Arctic IT’s managed service. With more than two decades of business development and sales experience in the Alaska market, Gasperlin’s career includes growing market share for a Fortune 500 company doing business in Alaska, executing a revenue growth plan for companies that provided multi-year, multi-million dollar service contracts, and a long career in the aviation industry. Gasperlin is a long-time Alaskan resident and supports many business and non-profit organizations. Mel “Hutch” Hutchison, a 35-year veteran of the electric utility industry, has joined ARECA Insurance Exchange as the insurance company’s new director of Loss Control effective Aug. 17. Originally from Reno, Nevada, Hutchison began his career in the electric industry as a high voltage lineman in the United States Air Force from 1980 to 2000. Following his retirement from the military, Hutchison took his skills to Chugach Electric Association, the state’s largest electric cooperative. While at Chugach, Hutchison worked as a safety specialist, manager of revenue metering, manager of maintenance and operations, and manager of safety and industrial hygiene. Hutchison most recently worked for Homer Electric Association as the systems operations supervisor. He also has numerous industry-related certifications that will assist him with his work at AIE.

Crews to seek 3 men believed killed in Sitka landslide

Crews plan to search through a debris area Wednesday for three men believed killed when a landslide described as a sea of logs and mud swept through part of an Alaska coastal town. Sitka fire department spokeswoman Sara Peterson told The Associated Press Tuesday night that operations were suspended until a geologist assesses the stability of the slide area Wednesday morning. She described the search as that of a body recovery effort — a determination based, in part, "from the force of the slide and that kind of impact." The Tuesday morning slide is believed to have trapped the three who were missing from a Sitka neighborhood. At one point officials said four people were missing, but revised the number to three. A city building official is among them. City officials identified him as William Stortz, 62, who also is the city fire marshal. The Daily Sitka Sentinel first reported the identity. Peterson said the others are brothers, 26-year-old Elmer Diaz and 25-year-old Ulises Diaz. The landslides occurred Tuesday morning after 2½ inches of rain fell in 24 hours. One sinkhole also was reported. Stortz's wife, Libby, was at the area of the slide, waiting for a search to begin, said a family friend, Peter Turner. "Most of us don't have a lot of hope," he said earlier in the day. Chris Harshey, who is a carpenter, was working on a nearby home when the slide occurred. "All of a sudden, I heard crackling and crumbling, and then the lights flickered," he told the Sentinel. Harshey went outside to investigate and saw "a sea of large logs, mud, more logs and a slurry of muddy debris." The slide destroyed a home about 200 yards above him and damaged another home closer to him. The entire landslide lasted about four minutes, he said. Gov. Bill Walker planned to tour Sitka on Wednesday. "Our thoughts and prayers are with those who are missing and all the people affected by the disasters in Sitka today," Walker said in a statement. One of the newly built homes was destroyed in the landslide, and another was damaged, Peterson said. Some other homes in the area were evacuated, but Peterson did not know how many residences or people were affected. Homes in town have been flooded, and there were reports of residents not being able to reach their homes or leave their neighborhood, said Jeremy Zidek, a spokesman for the state Department of Homeland Security and Emergency Management. Longtime Sitka resident Nolan Simpson said he toured parts of town and saw one home where the driveway was gone, replaced by a stream washing through it. He passed the Indian River and said it was roaring. The landslide at the construction site was especially heartbreaking, he said. "It's pretty devastating on how fast something like this can happen," Simpson, a retired commercial fisherman, said in a phone interview from a saloon. The city of more than 9,000 people declared a state of emergency. Sitka, almost 600 miles southeast of Anchorage, sees heavy rain throughout the year. More rain was expected. Heavy rain was blamed for a major landslide in September near the town that wiped out hundreds of thousands of dollars in watershed-restoration projects. The rain also damaged a footbridge and trails, including one that had been repaired after flooding in January 2014. A year earlier, two people at a U.S. Forest Service cabin near Sitka escaped moments before part of a mountain slid down.  

Lawmakers vote to sue Gov. Walker over Medicaid expansion

A legislative panel has voted to sue over Gov. Bill Walker's effort to expand Medicaid in Alaska. The Legislative Council voted to pursue a legal challenge after emerging from a closed-door executive session. Democratic Rep. Sam Kito was the lone dissenter. Questions have centered on whether the expansion population is a mandatory group for coverage or an optional group. The federal health care law expanded eligibility for Medicaid, but the U.S. Supreme Court in 2012 said states could not be penalized for not participating in expansion. Some read the court's decision as meaning the expansion population is optional and that legislative approval therefore would be needed to add the expansion group. But Attorney General Craig Richards has said the court didn't strike down the new required category but the penalty for not complying with it.

Shell gets go-ahead to drill for oil

Shell was granted a permit modification Aug. 17 for its Chukchi Sea exploration program that will now allow the company to drill to oil-bearing depths at its “Burger J” prospect. The drill rig Polar Pioneer has been at work at Burger J since July 30, when it began drilling what's called a mud-line cellar, a 20-by-40-foot hole at the top of the well that will hold a blowout preventer. The company was prohibited from drilling to oil-bearing depths until the Fennica, a vessel carrying a capping stack to contain any potential spill, was on site. The Fennica was en route to the Chukchi on July 3 when it hit an uncharted shoal leaving Dutch Harbor; the accident forced the Fennica back to Portland, Ore., for repairs, and it arrived at Burger J on Aug. 12. A second drillship, the Noble Discoverer, is stationed nearby at the Burger V prospect, but it cannot drill while the Polar Pioneer is drilling under federal rules dictating simultaneous drilling must occur at sites 15 miles apart. Burger J and Burger V are about nine miles apart. “With modifications to our Application for Permit to Drill (APD) approved, we are now authorized to explore hydrocarbon bearing zones at our Burger J well site. Drilling began at Burger J on July 30 and crews aboard the Transocean Polar Pioneer continue to make progress,” wrote Shell spokesperson Meg Baldino in an email. “We remain committed to operating in a safe, environmentally responsible manner and look forward to evaluating what could potentially become a national energy resource base.” The announcement from the U.S. Bureau of Safety and Environmental Enforcement, or BSEE, stated that Shell was still permitted only to do “top-hole” work at Burger V, as were the conditions of its original permit when the Fennica was unavailable. Baldino wrote that Shell has also applied to modify its permit for Burger V to drill to oil-bearing depths. "It's possible we will complete a well this summer but we're not attaching a timeline to the number of feet drilled," Shell spokesperson Curtis Smith told the Associated Press. According to the press release from BSEE, federal safety inspectors have been present on the drilling units Noble Discoverer and Transocean Polar Pioneer 24 hours a day, seven days a week to provide continuous oversight and monitoring of all approved activities. “The inspectors are authorized to take immediate action to ensure compliance and safety, including cessation of all drilling activities, if necessary,” according to the release. “BSEE experts have been engaged in thorough inspections of both drilling units and Shell’s response equipment.”

Walker wants 51% stake in AK LNG

Gov. Bill Walker is still pushing North Slope producers for a larger share of the Alaska LNG Project, and may promote a state gas reserve tax as leverage against the companies, state legislative leaders briefed recently on the governor’s plans said in interviews. The governor’s office would not comment on the briefings. “This is all very deliberative, so it’s too soon for us to comment,” press secretary Katie Marquette wrote in an email. Legislators were willing to share what they’ve heard so far. “We were told the governor desires a majority ownership in the project, at least 51 percent, and that the administration is considering the use of a gas reserves tax if one or more of the companies don’t want to play,” said Rep. Mike Hawker, an Anchorage Republican who was one of the leaders briefed. Hawker is chairman of the Legislative Budget and Audit Committee. He and House Speaker Mike Chenault, R-Nikiski, were briefed by administration officials. A reserves tax is a property tax on the value of natural gas reserves in the reservoir. Hawker said his overall concern is that the governor is veering away from a partnership concept in the plan now agreed to by the producers where each owner of gas resources on the North Slope, including the state, finances and owns a share of the project equal to the gas ownership. Under this arrangement “alignment” on commercial terms among the parties is achieved, Hawker said. “The governor’s idea (of a larger state ownership) goes another direction, possibly dividing the parties rather than seeking alignment,” he said. Chenault said, “I know the governor wants a bigger piece of the pie but this project is working now as it was designed,” as a partnership with the state on an equal footing with each of the three major producers. “For years the three producers tried to figure out a way to make this work having to pay 100 percent of the costs but getting only 75 percent of the revenues,” because of the state royalty and tax share, the Speaker said. In making the state a partner, the costs and shares of revenues were aligned, “and it made sense,” Chenault said. On the reserves tax, Chenault said people have talked about it for years and the option for the state is always there, but now is not the time. “We shouldn’t be threatening them now. We should be working with them,” he said. State Sen. Anna MacKinnon, R-Eagle River, another legislative leader who was briefed, voiced similar sentiments: “If you want to be partners who work your disagreements out, you don’t hammer people,” with things like a reserves tax. MacKinnon is co-chair of the Senate Finance Committee. MacKinnon also said her impression is that Walker may be looking to enlarge the state share, or be ready to do it, as a hedge against one of the three producers balking at the last minute on the big project, which is now estimated to cost $45 billion to $65 billion. MacKinnon and State Sen. Cathy Giessel, R-Anchorage, who was briefed along with MacKinnon, said they are primarily concerned with how Alaska will be able to pay for an enlarged share of the project given the state’s diminished finances and large budget deficits due to a sharp drop in oil revenues. “For the state, the financing issues with this are mind-boggling,” Giessel said, who is chair of the Senate Resources Committee. The lawmakers were told that the governor’s plan is to finance the state share — currently 25 percent but up to 51 percent if the state achieves a majority share — with debt through project revenue bonds and with no cash equity invested by the state. If the project cost is $50 billion, the state’s financing share would range from $12.5 billion to $25 billion. “That is certainly possible, but it could be expensive in the long run,” Hawker said. “I’d also have to be convinced that it could be done without pledging the state’s general credit as a guarantee, particularly our Permanent Fund.” Alaska’s Permanent Fund is a state savings fund of oil revenues, and now exceeds $55 billion in value. Tapping the fund to backstop a state gas project financing would likely require a constitutional amendment. “I don’t have a great deal of confidence in this approach,” MacKinnon said, but she is still willing to listen to ideas for creative financing, she said.  Giessel said mentions were made in the briefings of possible state partnering with just one or two companies, including Japanese firms. Walker and senior state officials recently met privately with a senior Japanese government and industry delegation in Seattle and a follow-up meeting is planned in Tokyo in mid-September when the governor is to be there for a major LNG conference. Total debt financing would leave the state with no equity and no profits earned on an equity share, which would reduce the revenues the project might bring the state over the long term, the legislators also said in the interviews. Walker also appears intent on not having TransCanada Corp. as its partner in the project. “This is what we’re hearing,” Giessel said. MacKinnon said, “The governor has been fairly clear in his public statements that he would prefer that TransCanada not be part of the project.” Currently, TransCanada would finance and own the state’s 25 percent share of the 800-mile, 42-inch pipeline and the large Gas Treatment Plant at Prudhoe Bay, with the state signing a long-term shipping contract to transport state-owned gas through TransCanda’s capacity in the treatment plant and pipeline. The state would directly own, and finance, its 25 percent share of the large LNG plant planned at the southern terminus of the pipeline at Nikiski, south of Anchorage. However, the state’s agreement with TransCanada ends in December unless it is extended. If the state does not extend it, TransCanada will be reimbursed for its investments to date, which are expected to exceed $100 million. Another change the state is seeking is to enlarge the pipe diameter from 42 inches, in the current plan, to 48 inches, the legislators were told. In their briefing, Giessel and MacKinnon said administration officials told them producing companies might go along with this if the state were willing to pay for it. Giessel expressed concern, however, about the effect such a change could have in delaying the Federal Energy Regulatory Commission permitting now underway. Hawker said he has been told there are no U.S. steel mills capable of rolling 48-inch high-pressure steel and only three mills with that capability worldwide. The lack of manufacturing options could raise the price, he said. MacKinnon said if the state pays for enlarging the pipe it would own the extra capacity and would have to manage it. “We would be responsible for finding more molecules to ship. What experience do we have in this?” she said. Chenault said he has told the governor that legislators want a regular flow of information, “so we can see where the administration is heading. We’ve got to get our members up to speed. They (the administration) can’t just dump all this on us a few days before a special session.” Meanwhile, a reserves tax as a lever on the producing companies would face practical obstacles and would also likely spark lawsuits. The tax is essentially a property tax and while some government jurisdictions, mostly municipalities, levy property taxes on oil and gas reserves in the ground, there are complications. One complication on the North Slope is that a reserves tax would have to uniformly be applied to all natural gas in a field without distinguishing among lease-owners or companies. To penalize one lease-owner and not another will be complex, although it is possible that a credit against the property tax might be granted for any gas produced. More fundamentally, because the oil and gas fluids are comingled in the reservoir it would be tricky to have only the gas taxed without also taxing the crude oil. Also, what is being taxed is the value of the unproduced hydrocarbons, and if there are honest disagreements over a economic viability of commercial production there will be big legal fights over the in-place value of the hydrocarbons. Finally, having one company producing gas from a reservoir and not another will be complicated under the current operating rules for the fields.

Marijuana board amends regs, sets $5K fee

The cannabis industry’s growing pains are causing unease for some stakeholders, even as the newly minted Alaska Marijuana Control Board was able to favorably change certain draft regulations. The Alaska Marijuana Control Board decided on several changes to the draft regulations for the budding cannabis industry during its second meeting Aug. 10-11. The board set a license fee of $5,000, left an open window for Outside investment dollars, liberalized key cannabis business zoning requirements, removed a requirement for license holders to list their family members’ information on license applications, and estimated the number of licenses for cannabis businesses. While cannabis is legal to consume and possess, its sale is prohibited until the Marijuana Control Board issues business licenses in May 2016. Until then, the board has three sets of draft regulations to review and amend after public comment, and  before recommending to the state Legislature in November. Some changes, like the family information clause and the zoning rewrite, were a relief. Decisions about cannabis capital, however, only deepened concerns about the industry being skinned by the State of Alaska before it’s even had a chance to be sheared for tax dollars. The Marijuana Control Board has five members, two of whom — chairman Bruce Schulte and Brandon Emmett — were appointed as industry representatives. Schulte and Emmett are president and vice president, respectively, of the Alaska Marijuana Industry Association. Both the Alcoholic Beverage Control Board and the Marijuana Control Board share division director Cynthia Franklin. Some cannabis industry leaders felt that the marijuana board lacked experience enough to make needed changes to regulations that constrict, rather than enable, industry growth.   “The Marijuana Control Board was exposed to a facet of the Alcoholic Beverage Control Board that they have no control over,” said Lee Haywood, a local cannabis industry consultant. “They have to interpret the language that’s already been written by another entity rather than being able to create their own drafts. I know that’s the way it was written (by the Legislature), but I don’t know that the people who are writing these drafts are necessarily the people who voted for these drafts.” Jessica Jansen, executive director of the Alaska Cannabis Growers Association and co-founder of Cannafarm Co-op, said, “There was a lot of compromise on the industry seats’ side.” The Alaska Alcoholic Beverage Control Board wrote each set of draft regulations. The alcohol board staff, led by Franklin, drafted the proposed marijuana regulations to closely resemble alcoholic beverage statutes. During the two days, the board skipped between the first and second sets released earlier this year making either approvals or amendments, and weighing public opinion provided to them in summarized form. The summaries were not made available to the public, though the consolidated comments were. Cost of entry: $5,000 Among the most impactful decisions was finalizing the licensing fee for cannabis business operations. The board settled on $5,000, as written in the draft regulations. Emmett made a motion to lower the fee to $2,500, which failed by a 1-4 vote. Public comment was heavily weighted against the $5,000 licensing fee, which some felt is prohibitive for smaller cannabis grow operations. Grow operations are divided into two categories: those less than 500 square feet and those greater than 500 square feet of grow space. Without a tiered system of licensing with an corresponding fee structure, growers worry that the $5,000 fee will drive potential legal industry players further into the black market. From the state’s view, the fee is large by necessity. The Marijuana Control Board is funded by unrestricted general funds, which are on the chopping block in a state with a severe budget shortfall. Franklin said cannabis business fees are high because they need to get the industry on its feet quickly before it becomes a burden for the state. “We’ve got to get our agency to a place where work on marijuana is funded by licensing fees,” said Franklin. “That’s the only way we can insulate ourselves from the Legislature legislating marijuana by starving it to death.” Franklin also said the $5,000 licensing fee is “chump change” compared to that of other states where cannabis sales are legal. “Pretty much every state we saw had higher fees,” she said. “You’re funding a new industry. You’ve got to get it up and running.” The fee structure for retail marijuana in Colorado varies by local authority. In Denver, new applicants pay a $5,000 fee, according the Denver Business Licensing Center. In Aspen, marijuana businesses have a $2,000 operating fee, according to the City of Aspen’s business licensing website. In Washington, the annual issuance or renewal of a retail license costs $1,000 after a $250 non-refundable fee, according to the Washington State Liquor and Cannabis Board website. Using the $5,000 licensing fee, the board came to a rough estimate of the number of cannabis licenses that will be available. According to staff, the ACB has a $1.6 million annual budget. At $5,000 apiece, staff estimates 320 total statewide marijuana licenses, including grow operations, manufacturing, and retail. In comparison, there are roughly 1,800 alcohol licenses in the state. Outside cash and zoning During the board meeting, the need for investment capital clashed with the fiercely local-first Alaska mindset. Neither side won definitively, leaving the matter open, as Emmett puts it, to “interesting ways to find capital.”  The board kept a system of residency requirements for cannabis business license holders that satisfied neither the desires for Outside dollars nor the desire of current cannabis business advocates to keep business opportunities local to the 49th state. Due to the federal classification of cannabis as a Schedule I controlled substance, Alaska banks and credit unions refuse to handle cannabis-related accounts or loans. Cannabis businesses without their own startup capital have few options for funding. Outside investment, however, is a possibility, though an unpopular one among the cannabis advocates who lobbied for legalization and feel protective of the newly opened business opportunities. Others, like Emmett and Midnight Greenery CEO Sara Williams, acknowledge an Alaska-first preference but said allowing Outside investment will be the only way for businesses to get funding in Alaska without securing loans from the already wealthy in the state. Under the draft regulations, which mirror alcohol licensing regulations, the board will not issue a license to an individual, partnership, limited liability corporation, or corporation unless the shareholders and partners are residents of the state. Emmett argued in favor of changing the language to allow greater Outside investment, but withdrew his amendment. In industry’s favor, the board modified several unpopular regulations involving zoning and licensing procedure. In the draft regulations, an applicant for a cannabis business license would have had to provide the Social Security information for each of his or her family members. The board deleted the requirement. “It’s preposterous to think you’d have to provide sensitive information for every member of your family because you want to run a business,” said Emmett. The board voted in favor of removing a restriction that prohibited a cannabis business from operating adjacent to a liquor license holding business. Local governments provided public comment largely against making such prohibitions, citing the desire for cannabis tourism that they would likely thwart. The board also changed zoning to allow cannabis businesses within 500 feet of schools, recreation, and youth centers. This is closer than the federal Drug Free Zone standard of 1,000 feet, but farther than the 200 feet demarcation the board originally proposed. Colorado and Washington follow a 1,000-foot rule.

AJOC EDITORIAL: Unserious country deserves unserious candidates

With recently-turned-Republican Donald Trump and still-not-a-Democrat Socialist Bernie Sanders leading the latest primary polls from New Hampshire, America is not only getting what it wants, but what it deserves. Trump and Sanders represent the full-on caricaturization of politics that seems like something straight out of a Hollywood comedy starring Will Ferrell and Zach Galifinakis. Unfortunately, they are all too real — the inevitable product of our shallow, reality-show society that currently favors boorish behavior and snake oil salesmen of a Socialist utopia that can be achieved if we just tax those evil rich people and corporations a little more. What Trump and Sanders are proving is that you can get a lot of people to show up to see you say something stupid, or to promise you a bunch of free stuff. The anger at the system of crony capitalism is something both Trump and Sanders are tapping into — an anger that is more than justified — but neither is actually qualified to fix the problem. Trump, a self-identified crony capitalist, is part of the problem. He explained his donations to the likes of Hillary Clinton and other Democrats as something all business people do: spread the money around to all the politicians and cash in favors no matter who is in power. Nobody may be able to buy him with campaign donations, but that certainly doesn’t mean Trump won’t be sympathetic to his business partners and wealthy friends when they come calling. Sanders is a self-identified Socialist who does not make the connection between the size of government and its relationship to crony capitalism. The bigger the government, the worse the crony capitalism. Growing government and bloating the regulatory state is the reason big corporations can wield so much influence: they are the only ones who can afford to play the game. In other news, the leading Democrat candidate, Hillary the Inevitable Part II, has finally been forced to turn over her private email server and her attorney has likewise handed the FBI a couple thumb drives full of State Department emails that probably contain hundreds if not thousands holding classified information. It’s worth noting that several former government employees in recent years, including former CIA Director David Petraeus, have been charged and convicted for either holding classified material at home, or failing to ensure its secure storage. She has also filed a sworn affidavit with a federal judge stating she has turned over all work-related emails. Should that turn out to be false, she and her husband could hold the ignoble distinction of each possessing a perjury conviction. At least the media has finally come around to covering the email story now that the FBI is investigating, but you can forgive them for that as they’ve been too busy ignoring Planned Parenthood in favor of more sympathetic stories about the tragic demise of Cecil the Lion and Hitchbot. These are truly bizarro times we are living in, when the Environmental Protection Agency causes a massive mine waste disaster, the Pentagon cannot secure the emails of its Joint Chiefs from Russian hacks, and the President and Secretary of State are twisting arms in Congress on behalf of Iranian theocrats. Speaking of our Iran deal “partners,” the Russians, it turns out they have been violating the 1987 Intermediate Range Nuclear Forces Treaty for at least five years, and we’ve known about it yet done nothing. This is the same Russia that hosted Qasem Soleimani — the head of Iran’s vicious Quds Force responsible for hundreds of American deaths — barely a week after the deal was announced. Soleimani is barred from traveling outside Iran under the U.N. sanctions Russia is party to, but hey, what are ya gonna do? Any opposition to the Iran deal is only coming from “warmongers” Sen. Charles Schumer, D-NY, (according to moveon.org) or those who make common cause with the chanters of “Death to America” (according to Obama). We learned in the last week that China — another Iran deal “partner” that is also responsible for pilfering the sensitive personnel files of some 22 million Americans who applied for government jobs — has been reading Cabinet officials’ private account emails since at least 2010. In the case of the Cabinet officials — and in particular Hillary Clinton — it is tragic that in their quest to keep their records away from the U.S. Congress and Freedom of Information Act requests they have instead shared them with any foreign-state actor that can execute a simple phishing scheme. Meanwhile, ISIS just slaughtered another 2,000 Christians in Iraq, riots and unrest are spreading around the nation in protest of the police state, the budget deficit swelled in July by 58 percent from a year ago, and the stock market is sinking on China’s latest currency war and the looming interest rate hikes that threaten to pop yet another equities bubble. And the media is obsessed with what Trump may or may not have said about Megyn Kelly’s time of the month. Andrew Jensen can be reached at [email protected]

Dental costs drive seniors to Mexico

LOS ALGODONES, Mexico (AP) — Mark Bolzern traveled 3,700 miles to go to the dentist. The 56-year-old Anchorage native left home this spring, made a pit stop in Las Vegas to pick up a friend, and kept heading south, all the way to Los Algodones, Mexico, a small border town teeming with dental offices. About 60 percent of Americans have dental insurance coverage, the highest it has been in decades. But even so, the nation’s older population has been largely left behind. Nearly 70 percent of seniors are not insured, according to a study compiled by Oral Health America. A major reason is because dental care is not covered by Medicare and many employers no longer offer post-retirement health benefits. What’s more, the Affordable Care Act allows enrollees to get dental coverage only if they purchase general health coverage first, which many seniors don’t need. At the same time, seniors often require the most costly dental work, like crowns, implants and false teeth. As a result, many are seeking cheaper care in places like Los Algodones, where Mexican dentists who speak English and sometimes accept U.S. insurance offer rock-bottom prices for everything from a cleaning to implants. Dentists in Los Algodones say a large portion of their clients are seniors. In the desert outpost near the border of California and Arizona, men in white shirts stand outside of offices with signs advertising root canals and teeth cleanings. Other signs advertise prescription drugs like muscle relaxers at low rates — no prescription needed. For Bolzern, seeing a dentist in Los Algodones meant a savings of up to $62,000. He was told the extensive dental work he needed — his teeth needed to be raised and he needed a crown on every molar — would cost $65,000 at a private dentist. He looked for lower rates, finding a dental school where the work was less expensive because it was performed by students. But it still cost $35,000. He paid $3,000 in Mexico and has been back several times. The cost of dental care has surged in the last two decades and continues to increase at a rate of 5 percent annually. Many dental plans have high deductibles and don’t offer extensive coverage. Many people opt out. Mexico has lower costs because of cheaper labor and fewer regulatory requirements. Residents in border towns like El Paso, Texas, and Nogales, Sonora, often make the short drive to the Mexican side for basic medical needs and prescription medications that are much costlier in the U.S. Some businesses even offer shuttle services from the Phoenix area to Los Algodones, a nearly 200-mile ride. Going abroad for cheaper health care is nothing new. Americans have been doing it for years, for everything from elective, cosmetic procedures to major, life-saving surgery. Matthew Messina, a practicing dentist and consumer adviser on behalf of the American Dental Association, said Americans who visit dentists in foreign countries should do a lot of research before they go. Different countries use different types of equipment, and some items, such as implants, may not have warranties. Malpractice lawsuits may not be an option. Dentists in Los Algodones say they attend less school than their counterparts in U.S. but spend more time practicing clinical work. They say they practice the same safety standards as American dentists and have offices that are just as clean. José Obed Zuñiga has been a dentist in Los Algodones for a decade and found business was so good he opened his own shop about two years ago. “Everything, the quality, is very similar to the United States,” Zuñiga said. “We see the work from the United States, and it’s very competitive.”

AP exclusive: Controllers chronically fatigued

WASHINGTON (AP) — Air traffic controllers’ work schedules often lead to chronic fatigue, making them less alert and endangering the safety of the national air traffic system, according to a study the government has kept secret for nearly four years. Federal Aviation Administration officials have declined to furnish a copy of the report despite repeated requests and a Freedom of Information Act request by The Associated Press. However, the AP was able to obtain a draft of the final report dated Dec. 1, 2011. The impetus for the study was a recommendation by the National Transportation Safety Board to the FAA and the National Air Traffic Controllers Association to revise controller schedules to provide rest periods that are long enough “to obtain sufficient restorative sleep.” The study found that nearly 2 in 10 controllers had committed significant errors in the previous year — such as bringing planes too close together — and over half attributed the errors to fatigue. A third of controllers said they perceived fatigue to be a “high” or “extreme” safety risk. Greater than 6 in 10 controllers indicated that in the previous year they had fallen asleep or experienced a lapse of attention while driving to or from midnight shifts, which typically begin about 10 p.m. and end around 6 a.m. Overall, controllers whose activity was closely monitored by scientists averaged 5.8 hours of sleep per day over the course of a workweek. They averaged only 3.1 hours before midnight shifts and 5.4 hours before early morning shifts. The most tiring schedules required controllers to work five straight midnight shifts, or to work six days a week several weeks in a row, often with at least one midnight shift per week. The human body’s circadian rhythms make sleeping during daylight hours before a midnight shift especially difficult. The study is composed of a survey of 3,268 controllers about their work schedules and sleep habits, and a field study that monitored the sleep and the mental alertness of more than 200 controllers at 30 air traffic facilities. NASA produced the study at the FAA’s request. J.D. Harrington, a NASA spokesman, also declined to release the study, saying in an email that since the FAA requested it, “they own the rights to decide its release.” NASA gave the scientists who conducted the study an award for the project’s excellence in 2013. In the field study, researchers concentrated on controllers who worked a schedule known as the “rattler” in which controllers squeeze five eight-hour shifts into four 24-hour periods by cutting the turnaround time between shifts to as little as eight hours. Some controllers like the schedule because it gives them a three-day weekend. Controllers participating in the study wore a wrist device that recorded when they were asleep. They also kept logs of their sleep, and were administered alertness tests several times per work shift. Schedules worked by 76 percent of controllers in the field study led to chronic fatigue, creating pressure to fall asleep. “Even with 8 to 10 hours of recovery sleep, alertness may not recover to the full rested baseline level, but may be reset at a lower level of function,” the report said. “Chronic fatigue may be considered to pose a significant risk to controller alertness, and hence to the safety of the ATC (air traffic control) system,” the study concluded, especially when combined with little stimulation during periods of low air traffic and the human body’s natural pressure to sleep during certain times of the day. The 270-page study makes 17 recommendations to the FAA, including that the agency discontinue mandatory six-day schedules “as soon as possible.” At the time, about 4 percent of controllers were being assigned “a six-day constant schedule,” the study said, but the share of controllers who had actually worked a six-day schedule in their previous work week was 15 percent. More than 30 percent of controllers who worked the six-day schedules said they had committed a significant error in the previous year. Three years later, controllers at several air traffic facilities told the AP that six-day work weeks are still common. FAA officials didn’t reply to questions from the AP about steps the agency has taken to reduce controller fatigue and the prevalence of six-day work weeks. FAA officials also refused to share the report with researchers from the National Academies, which advises Congress on science issues. The study was completed several months after a series of incidents involving controllers falling asleep on the job embarrassed FAA officials and led to the resignation of the head of the agency’s air traffic organization. In one incident in 2011, two airliners landed at Washington’s Reagan National Airport late at night without assistance from the airport’s control tower where the lone controller on duty had fallen asleep. After the incidents, the FAA and the controllers’ union announced several changes to address fatigue, including requirements that there be at least two controllers on duty after midnight and that controllers be provided at least nine hours between shifts to rest. But the transportation safety board told the FAA in 2013: “We are concerned that, given the realities of the time required for an employee to commute home and back to work, and to attend to personal and family needs, a nine-hour break may not allow enough time for an employee to obtain eight continuous hours of sleep.” The board’s recommendations were prompted by a 2006 accident in which a regional airliner crashed while taking off from a runway that was too short in Lexington, Kentucky. Forty-nine of the 50 people on board were killed. The air traffic controller who cleared the plane for takeoff didn’t notice it turn onto the wrong runway. The controller had worked all night and had had only two hours sleep in the previous 24 hours.

The Bookworm Sez: Marching toward a higher standard

You’d like to think of your business as a well-oiled machine. Your team members march together to get their work done. They execute tasks efficiently and every product your clients get is made with military-like precision. You’d like to think of your business like that, but there’s room for improvement — and it starts with you. In the new book “A Higher Standard” by General Ann Dunwoody, U.S. Army, Ret. (with Tomago Collins), you’ll learn leadership tips from on the battlefield, and off. When Second Lt. Ann Dunwoody reported for duty at Fort Sill in June 1976, she’d decided that her stint in the military would be a two-year thing on the way to a career in teaching or coaching. As a “sports omnivore,” she was physically fit for the job and, because she was an Army brat, she understood what her immediate future would be like. First, the Army, she thought. Then she’d continue with the rest of her life. Thirty-two years later, after she’d enjoyed success in the long military career she didn’t initially foresee, President George W. Bush recommended Dunwoody as the country’s first female four-star general. In the beginning as a 2LT, Dunwoody learned lessons of leadership: from her first platoon sergeant, she learned the benefits of inclusion and that one should “never walk by a mistake.” If something — anything — is wrong in a product or method, leaving it only sets “a new, lower standard.” A high standard, she says, is “the difference between the leaders who excel and the leaders who fail.” The Army teaches soldiers to “meet the standard… but that’s simply a starting point.” To get the best from people, “train them to succeed.” Know your weaknesses, and be willing to ask for help. Pay attention to who advocates for you, who detracts from you, and who runs behind your back. Use diversity to your advantage, but encourage “female-only sessions.” And finally, although it’s sometimes difficult, learn to “recognize when it is time to step aside.” If you picked up “A Higher Standard” and paged through it quickly, you could certainly be forgiven for thinking that it’s a biography — and you’d be close. Author and retired Gen. Ann Dunwoody (with Tomago Collins) shares her life and her accomplishments with readers but if you look closer, you’ll find a wealth of advice perfectly fit for business. That’s a unique method with which to impart leadership lessons, and I rather liked it: Dunwoody’s story is empowering and entertaining, and instructive to civilians unfamiliar with Army life, on one hand; on the other, we become privy to the challenges of military leadership, which puts into perspective much of her subtle advice. I also appreciated her balance, in which issues and problems are not glossed-over. There’s enough biography here to satisfy readers of the genre, and anyone aspiring for leadership will find that as well, in quiet abundance. If those are important things to you, or if you’re curious about the life of a history-maker, then put “A Higher Standard” at your service. 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]

Movers & Shakers 8/16/15

Marleanna Hall is the new executive director of Resource Development Council for Alaska Inc. Prior to this appointment, Hall was a projects coordinator for RDC, and formerly the Development Director for the Alaska Mineral and Energy Resource Education Fund (now Alaska Resource Education). She previously worked at Tesoro Alaska Company and the Arc of Anchorage. Hall has a bachelor’s degree in business management–administration from the University of Alaska Anchorage. In 2010 she completed the Leadership Anchorage program through the Alaska Humanities Forum, as well as the Anchorage Chamber of Commerce’s Leadership and Executive Advancement Program in 2012. In addition to the new executive director, the RDC executive committee appointed the 2015-16 board of directors. New members to the board are Monica James (Calista Corp.), Joey Merrick (Laborers Local 341), Christy Resler (Schlumberger), Rick Rogers and Doug Vincent-Lang. Mathew Hurbi joined Ukpeagvik iñupiat Corp. as the as the new assistant controller in the Anchorage office. Hurbi is experienced in public accounting, serving businesses and entities with revenues ranging into the billions. He has performed extensive audit work with Alaska Native corporations throughout the state, including three Native village corporations within the Arctic region. He also has experience in telecommunications, financial services, and local/state governments; providing auditing services for financial statements, grant compliance, ANCSA 7(i) revenues, and employee benefit plans. Hurbi was born and raised in Fairbanks, and graduated magna cum laude from the University of Alaska Fairbanks with a bachelor’s degree in accounting. He previously worked for KPMG an international audit, tax and professional advisory firm that has offices worldwide and in Anchorage. While at KPMG he earned his Certified Public Accountant license. Kristina Baiborodova joins Ukpeagvik iñupiat Corp. as the new director of Arctic business relations in the Anchorage office. Baiborodova was born and raised in the northernmost town in Russia: Pevek, Chukotka Autonomous Okrug. She attended high school in the small Anadyr airport village, Shakhterskiy, administrative center of the region, which is across the Bering Strait from Nome. After graduating high school with honors Baiborodova was accepted to Moscow State University but attended for only three weeks before an opportunity presented itself to continue her education at the University of Alaska Anchorage. In 2005, Kristina graduated with a bachelor’s degree in management and aviation technology. She went on to earn a Master’s of Business Administration degree in 2008. For the past 10 years, Baiborodova has been working at the Institute of the North as an Arctic projects manager and Russian Federation liaison. During that time she managed and developed international education programs and projects and provided support for many Arctic organizations. Emily Cross is returning to Ukpeagvik iñupiat Corp. as the executive secretary to the president and UIC board of directors. Cross was recently appointed to the Koahnic Broadcast Corp. board of directors, whose mission is to be the leader in bringing Native voices to Alaska and the nation.  She is also in her fourth year on the executive committee of the American Cancer Society. Gloria Chythlook joins Ukpeagvik iñupiat Corp. as the as the new senior proposal and grant writer in the Anchorage office. A life-long Alaskan and Bristol Bay commercial fisherman, Chythlook was raised in the village of Aleknagik, she attended the University of Alaska and studied natural sciences and the Minority Medical Education Program at the University of Washington. Chythlook has more than 15 years of experience in grant writing, program delivery, and non-profit administration. She served on the board of directors of Alaska Seafood Marketing Institute, Western Alaska Salmon Alliance and Turnagain Arm Health Center, and is a Sequoyah Fellow in the American Indian Science and Engineering Society. Thompson & Co. Public Relations has hired former NBC-affiliate reporter Abby Cooper as account executive and Sydney Brusewitz as account coordinator, and promoted Nikkie Viotto and Emily McLaughlin to junior account executives. In their new roles, each will work for a variety of the agency’s clients including managing social media, writing press releases and pitching media. A former NBC-affiliate news reporter, Cooper spent more than six years with KTUU Channel 2 News in Anchorage, serving in various roles during that time, including weekend anchor, producer and multi-media journalist. Brusewitz graduated from Western Washington University with a bachelor’s degree in journalism and public relations in 2012 and Hawaii Pacific University with a master’s in communications in 2014. After moving to Anchorage in May 2015 for an internship with Thompson & Co., she was hired as an account coordinator at the agency. Viotto started at the agency in spring 2014 as an account coordinator. In her new role as junior account executive, she will continue to manage social media, write and pitch media for clients such as Alaska Native Science and Engineering Program, GCI and the Alaska Railroad. McLaughlin came to the agency as an intern in the fall of 2013, quickly working her way to account coordinator before her promotion to junior account executive. She writes, researches and pitches media and implements social media strategies for clients such as Shell, Bristol Bay Area Health Corp., Alaska Nurses Association and Anchorage Police Department Employees Association. The Alaska Heart & Vascular Institute has added Dr. Scott Ebenhoeh, D.O., to its team of cardiovascular physicians. Ebenhoeh comes to AHVI with nearly six years of experience in the medical field and will be based at AHVI’s main Anchorage clinic. He received a bachelor’s degree in 2002 from Michigan State University, where he then continued his studies and earned his Doctor of Osteopathic Medicine degree. Since graduating in 2009, Ebenhoeh did his postgraduate fellowship training in internal medicine and cardiology at Michigan State University’s Garden City Hospital campus outside of Detroit. Since 2012, Ebenhoeh has also been providing full-patient care in the telemetry and intensive care units at Garden City Hospital and at Detroit Medical Center hospital during his Cardiology fellowship training. Ebenhoeh joins a team of 23 specialty cardiologists at AHVI. With six locations in the state, AHVI is currently expanding its team to meet an increased demand for its services. Jessica Koloski of R&M Consultants Inc. has earned her Certified Administrative Professional designation. The CAP certification is administered by the International Association of Administrative Professionals, and is the only recognized professional certification in the administrative profession that encompasses all areas of the office. Koloski is an administrative assistant at R&M. She has been with the firm for seven years and is responsible for front desk operation, including publication and advanced word processing, report production, maintaining business equipment and supplies, boosting morale, welfare and recreation. Safeco Insurance has awarded three Alaska USA Insurance Brokers agents with Awards of Excellence for 2015. Alaska-based recipients include Anchorage’s Cathy Hoaks, corporate manager of personal insurance, who received her ninth straight award, and Juneau’s Robin Faulk, senior personal insurance sales agent, who received her fourth straight award. Safeco’s Award of Excellence celebrates and rewards individuals with superior underwriting skills. Agents must meet strict criteria, including membership in Safeco’s Premier Partner Program, appointment tenure, and loss ratio requirements. Anchorage Mayor Ethan Berkowitz announced today he is bringing on a new team to lead the municipality’s finance and IT team. Robert Harris will be the chief fiscal officer and Alden Thern will be the Deputy CFO. Thern brings 15 years of experience at the Anchorage School District, most recently as the executive director of contract administration and the director of student nutrition. He has also served on multiple IT system implementations, focusing on process improvement and cost efficiencies. He is a graduate of Purdue University with a degree in business and an emphasis in finance and international management. As deputy CFO for the Municipality, Thern will assume primary responsibility for the SAP/Kronos software update within the municipality.

Miller Energy Resources execs, accountant face SEC charges

KENAI — Miller Energy Resources Inc., two of its executives and an accountant have been charged by the U.S. Securities and Exchange Commission with inflating the values of company’s Alaska oil and gas properties by more than $400 million. The SEC, on Thursday announced charges alleging that the company’s former Chief Financial Officer Paul W. Boyd and its previous Chief Executive Officer David Hall inflated the values to the point that the former penny-stock company was eventually listed on the New York Stock Exchange. The Houston-based company manages its operations from Anchorage with some staff in the Lower 48. The SEC additionally charged Carlton Vogt, a certified public accountant from New York, for his role in auditing the company and failing to notice irregularities or comply with accounting standards, according to the SEC order. Miller Energy acquired its Alaska properties for $2.25 million in 2009, according to the SEC’s Division of Enforcement; it later reported them at a value of $480 million. According to the release, Boyd relied on a reserve report that did not reflect the fair value of the company assets. He is also alleged to have double-counted $110 million in assets already included in the reserve report. Hall, who has been the CEO of Miller Energy’s Alaska subsidiary Cook Inlet Energy since 2009 and more recently Miller Energy’s Chief Operating Officer since 2013, is alleged to have knowingly understated the company’s expenses. He denied the charges, however. “I think the SEC got the facts wrong on this one,” he said. “We’ll continue to work with them and to ultimately prove that point. I’m confident and can say that I never falsified anything. We strive to be honest and full of integrity.” Hall said he is no longer the company’s CEO but did not explain why or how he departed from the position. “I’m not at liberty to talk about my position with the company,” he said. Boyd was Miller Energy’s Chief Financial Officer and Treasurer until 2011 before becoming the director of risk management. As of 2014 he is no longer employed by the company, according to the SEC filing. Vogt was a partner at the now-defunct Sherb & Co., LLP which performed a 2010 audit of Miller Energy’s financial statements that the SEC labeled as deficient. It alleges that the firm falsely stated that the audit was performed in accordance with generally accepted accounting principals, according to the SEC filing. Miller Energy Resources, founded in 1967 went public via a merger in 1996, according to SEC documents, but it consistently traded below one dollar per share before it acquired its Alaska assets in 2009. The SEC investigators called Miller’s Alaska acquisitions, the single most important event in the company’s nearly 40-year history as it then raised millions in equity and listed its stock on the New York Stock Exchange. The company’s shares reached a price high of nearly $9 in 2013, but it was delisted from the New York Stock Exchange on July 30 for failing to maintain an average market capitalization of $15 million. The company owns Cook Inlet Energy, LLC and has assets and oil and gas operations in Cook Inlet in the North Fork and West MacArthur fields, and on the North Slope of Alaska through a 67.5 percent stake in the Badami field acquired this past December. According to the SEC charges, the company and Hall requested, and then improperly used, a reserve report prepared by an independent petroleum engineer firm. While those reports are generally used to estimate future oil and gas productions, the numbers used in those reports are not considered accurate estimates of fair market value, according to the SEC filing. Hall said the accusation that he or anyone else at the company overvalued its Alaska assets was not accurate. “Not only did we think that the values are correct, but we did have another third party company validate those estimates,” he said. SEC investigators alleged that Vogt failed to perform his audit of the company with any of the rigor required by generally accepted accounting principals, despite knowing that there were significant flaws in the way that Miller Energy had been reporting its earnings. “Vogt knew at the time of the accounting for the acquisition that Miller Energy had insufficient accounting staff and that any accounting was suspect,” investigators wrote in the SEC filing. Investigators cited emails from Vogt to Miller Energy’s management indicating that the company’s accounting staff was deficient and that Boyd cut corners on the accounting documentation. “Furthermore, Vogt stated that Hall’s modeling of cash flows and expenses was ‘concerning’ because there was no one taking a detailed look at his estimated,” investigators wrote in the SEC filing. Investigators allege that Vogt filed an audit report that contained an unqualified opinion. Boyd and Hall are alleged to have violated anti-fraud provisions in both U.S. securities laws and the SEC’s anti-fraud rule while the company is alleged to have violated books, record-keeping and internal control requirements. The SEC is seeking cease-and-desist orders and civil monetary penalties in addition to the return of ill-gotten gains from the company, Boyd, and Hall. It is also seeking to bar the two from serving as public company officers, directors or in public company accounting, according to the release. The investigation will be scheduled for a public hearing before an administrative law judge, each of those charged in the case are required to respond to the allegations within 20 days.

Toxic algae bloom stretches from California to Alaska

SEATTLE (AP) — A vast bloom of toxic algae off the West Coast is denser, more widespread and deeper than scientists feared even weeks ago, according to surveyors aboard a National Oceanic and Atmospheric Administration research vessel. This coastal ribbon of microscopic algae, up to 40 miles wide and 650 feet deep in places, is flourishing amid unusually warm Pacific Ocean temperatures. It now stretches from at least California to Alaska and has shut down lucrative fisheries. Shellfish managers on Aug. 4 doubled the area off Washington’s coast that is closed to Dungeness crab fishing, after finding elevated levels of marine toxins in tested crab meat. So-called “red tides” are cyclical and have happened many times before, but ocean researchers say this one is much larger and persisting much longer, with higher levels of neurotoxins bringing severe consequences for the Pacific seafood industry, coastal tourism and marine ecosystems. Dan Ayres, coastal shellfish manager for the Washington Department of Fish and Wildlife, said the area now closed to crab fishing includes more than half the state’s 157-mile-long coast, and likely will bring a premature end to this year’s coastal crab season. “We think it’s just sitting and lingering out there,” said Anthony Odell, a University of Washington research analyst who is part of a NOAA-led team surveying the harmful algae bloom, which was first detected in May. “It’s farther offshore, but it’s still there.” The survey data should provide a clearer picture of what is causing the bloom which is brownish in color, unlike the blue and green algae found in polluted freshwater lakes. Marine detectives already have a suspect: a large patch of water running as much as 3 degrees centigrade warmer than normal in the northeast Pacific Ocean, nicknamed “the blob.” “The question on everyone’s mind is whether this is related to global climate change. The simple answer is that it could be, but at this point it’s hard to separate the variations in these cycles,” said Donald Boesch, professor of marine science at the University of Maryland who is not involved in the survey. “Maybe the cycles are more extreme in the changing climate.” “There’s no question that we’re seeing more algal blooms more often, in more places, when they do occur, they’re lasting longer and often over greater geographical areas. We’re seeing more events than documented decades ago,” said Pat Glibert, professor at Horn Point Laboratory, University of Maryland Center for Environmental Science. Odell recently completed the first leg of the survey, mostly in California waters. On Aug. 5, researchers planned to continue monitoring the sea between Newport, Ore., and Seattle. The vessel will then go to Vancouver Island, wrapping up in early September. Another research ship is taking samples off Alaska. The brownish bloom was particularly thick off the coast of Santa Barbara, California, and Odell said it was unusually dominated by one type of algae called Pseudo-nitzschia, which can produce the neurotoxin domoic acid. “It’s an indication of an imbalance,” said Vera Trainer, a research oceanographer with the Northwest Fisheries Science Center in Seattle. “Too much of any one thing is not healthy for anybody to eat.” Trainer said this bloom is the worst she’s seen in 20 years of studying them. Harmful algal blooms have usually been limited to one area of the ocean or another, and have disappeared after a few weeks. This one has grown for months, waxing and waning but never going away. “It’s been incredibly thick, almost all the same organism. Looks like a layer of hay,” said Raphael Kudela, a professor of ocean sciences at University of California, Santa Cruz. The current bloom also involves some of the highest concentrations of domoic acid yet observed in Monterey Bay and other areas of the West Coast. “It’s really working its way into the food web and we’re definitely seeing the impacts of that,” Kudela said, noting that sea lions are getting sick and pelicans are being exposed. And now that the Pacific is experiencing its periodic ocean warming known as El Nino, it may come back even stronger next year, he said. Domoic acid is harmful to people, fish and marine life. It accumulates in anchovies, sardines and other small fish as well as shellfish that eat the algae. Marine mammals and fish-eating birds in turn can get sick from eating the contaminated fish. In people, it can trigger amnesic shellfish poisoning, which can cause permanent loss of short-term memory in severe cases. State health officials stress that seafood bought in stores is still safe to eat because it is regularly tested. While there have been no reports of human illnesses linked to this year’s bloom, authorities aren’t taking chances in fisheries with dangerous toxin levels. California public health officials have warned against eating recreationally harvested mussels and claims, or any anchovy, sardines or crabs caught in waters off Monterey, Santa Cruz and Santa Barbara counties. Other shellfish harvests are shut down along Oregon’s coast. The most recent samples showed the highest-ever recorded concentrations of domoic acid in the internal organs of Dungeness crab, Ayres said. “This is really unprecedented territory for us,” said Ayres.

Movers and Shakers 08/09/15

Reed Mike Reed has joined ASRC Energy Services LLC as senior vice president, chief financial officer, effective June 16. Reed comes to AES with global management experience, most recently as the vice president of finance at National Oilwell Varco, a worldwide provider of equipment and components used in oil and gas drilling and production operations, oil field services, and supply chain integration services to the upstream oil and gas industry across six continents. In this position, Reed was responsible for financial oversight of the Africa, the Middle East and India geographic regions including but not limited to cost controls, corporate governance, internal controls, process re-engineering, and other change management initiatives. Reed has 26 years of finance and accounting experience with 20 years in the energy sector. Reed has an MBA from Rice University and a bachelor’s degree in accounting from the University of Akron. Beckham Jim Beckham has been appointed as deputy director of the Alaska Department of Natural Resources Division of Oil and Gas, effective July 21. Beckham has a bachelor’s degree in marine science from the U.S. Coast Guard Academy and more than 30 years of professional leadership, management, and operational experience in the public and private sectors. Beckham has a background in the technical aspects of Alaska oil and gas issues in the downstream products and transportation sectors, as well as extensive commercial negotiation experience. Additionally, Beckham has more than 10 years of advanced level professional experience in environmental damage recovery. Dahl Erik Dahl has joined AECOM’s Anchorage office as a senior environmental engineer. Dahl has more than six years of worldwide experience in environmental fieldwork management, field sample collection, laboratory and field analytical testing, air emissions modeling, report writing, data qualification, remediation system design and construction and risk assessments. His primary area of expertise includes soil and groundwater remediation at remote federal sites. In this role at AECOM, he will be responsible for developing remedial alternatives in remedial investigations/feasibility studies documents, overseeing environmental fieldwork at remote sites, and performing risk assessments. He will also support proposal development and ensure that client satisfaction is maintained. Webb Nathaniel Webb has joined AECOM’s Anchorage office as a senior chemist. Webb has more than 17 years of experience with remedial investigations and actions throughout Alaska and the Pacific region. His efforts have aided in the successful closure of many polychlorinated, biphenyl and petroleum contaminated sites. In this role, he will be responsible for developing a chemistry program to support federal, oil and gas, and mining clients. Cogger Corinne Cogger has joined AECOM’s Anchorage office as an environmental scientist. Her responsibilities at AECOM include contributing to project documents, fieldwork support and coordination, as well as the collection, analysis and documentation of field data. Cogger has approximately two years of experience in contaminated sites fieldwork and document production. During her career, Cogger has held the position of field lead for groundwater sampling and supply well sampling, for which she coordinated site logistics and field personnel. She also has experience with the coordination of a military munitions response program. Prior to her position at AECOM, Cogger also wrote and edited a range of deliverable documents, including site assessments, work plans and site characterization reports. Along with writing and formatting documents, Cogger’s contributions to deliverables regularly involved creating and editing geographic information system figures. Cogger has assisted in the update of a client’s health, safety and environment program by performing a worksite analysis, conducting a chemical inventory, implementing an online safety data sheet database, and working towards a stronger “safety culture.” She has a bachelor’s degree in geography from Humboldt State University.   Jody Karcz is the new Public Transit director for the Municipality of Anchorage.  During her 30-year tenure with Anchorage’s Public Transportation Department, she has held many positions, including: Rideshare coordinator, senior planner, superintendent of Operations and Maintenance, and director. Ortiz Lymari Ortiz has joined AECOM’s Anchorage office as a contracts and procurement lead for the Alaska LNG Project. Ortiz has more than 20 years of experience and specialized qualifications in project management, auditing and supply management. Most recently, she performed contract compliance audits for a major oil company in Alaska. In this role, she will be responsible for working on the Alaska LNG Project, responsible for ensuring compliance with the Alaska LNG subcontracting and procurement plan. Cory Quarles has been appointed Alaska Production Manager for ExxonMobil Production Co., a subsidiary of Exxon Mobil Corp. Quarles joined ExxonMobil in 1998 and has since held various technical and supervisory positions in the U.S. In 2010, he was named asset manager for the Beryl offshore platforms in the U.K. In 2012, he was assigned operations technical engineering manager for ExxonMobil’s subsidiary in eastern Canada to oversee a multi-disciplined technical organization. Quarles was appointed global facilities engineering manager of ExxonMobil Production Company in 2014, with responsibility for providing specialized engineering support to producing oil and gas facilities worldwide. Quarles is a native of Houston, Texas, and holds a chemical engineering degree from Texas A&M University.  

Alaska exempted from new federal emission-cutting rule

JUNEAU (AP) — State political leaders welcomed the announcement Monday that Alaska was not included in a new federal rule aimed at reducing greenhouse gas emissions from power plants. The U.S. Environmental Protection Agency said it didn't have the information needed to determine the best system of emission reduction in Alaska, which has isolated infrastructures like Hawaii, Puerto Rico and Guam. The federal agency said it would determine how best to address emission standards for existing fossil fuel-fired power plants in those states and territories at an unspecified later date. "Because we recognize that these areas face some of the most urgent climate change challenges and some of the highest electricity rates in the U.S., we are committed to obtaining the right information to quantify the emission reductions that are achievable in these states and territories and putting goals in place soon," the agency said in an emailed statement. U.S. Sen. Lisa Murkowski, R-Alaska, and chairwoman of the Senate energy committee, called the EPA decision a significant victory for Alaska. "I appreciate the EPA's recognition of the facts — that Alaska has unique needs, limited options for cost-effective compliance and is not interconnected. We simply should not be bound by this sweeping regulation," she said in a release. However, Murkowski said she was concerned about the impacts of the rule nationally, including how it might affect electricity prices and reliability of the nation's electric grid. Gov. Bill Walker said requiring Alaska to abide by one-size-fits-all standards could increase already steep energy costs. In a release, he said he looks forward to working with the agency to establish appropriate goals for Alaska.

William Morris IV named CEO of Morris Communications

AUGUSTA, Ga. –William S. “Will” Morris IV has been named chief executive officer of Augusta-based Morris Communications Co. The appointment was announced today by his father, William S. “Billy” Morris III, 80, and is effective immediately. Will succeeds his father as CEO, while his father continues as chairman of the board. His father also will continue as publisher of the Augusta Chronicle until April 12, 2016, when he will complete 50 years in that role. In his new role as CEO, Will Morris, 55, will have direct operational oversight of the company’s corporate operations and its business divisions. Morris Communications is a diverse, privately held company headquartered in Augusta, with divisions in media, hospitality and agriculture and holdings throughout the United States and abroad. “I’m very pleased to be able to pass the daily hands-on leadership of our company to Will,” the chairman said. “He’s been preparing most of his life for this opportunity. “I feel very good about continuing the tradition of Morris family business leadership into the third generation. I’m also very thankful to have worked so many years in a business that provides essential information to help individuals, businesses and communities function and succeed. It’s a privilege to be involved in this necessary and important work for a free people.” The chairman’s media career began 60 years ago in 1956, when he joined his father, William S. “Bill” Morris Jr., in the business after graduating from the University of Georgia. He became publisher of the Chronicle and president of the company 10 years later, on April 11, 1966. Starting from that base in Augusta, he led the company through numerous acquisitions and startups spanning several decades. “I’m very grateful to my dad and my grandfather for everything they did in building this company,” Will Morris said. “I’m honored to follow in their footsteps.  “I, along with my brother, Tyler, and my sister, Susie Morris Baker, remain committed to continuing our family values of providing great service to the people and the businesses in the communities we serve. “These are challenging times for traditional media companies, but also exciting times, because the digital revolution is opening up so many new opportunities to serve local consumers and businesses. I’m determined to continue our company’s tradition of innovation and creativity as we go forward.” After receiving a Bachelor of Arts in economics from Emory University, Will worked as an account executive for United Telephone Directories in San Diego, then spent five years with Gannett Outdoor Co. in San Diego and Phoenix. He joined the family business in 1990 as assistant to the publisher of the Athens Banner-Herald/Daily News and general manager of Athens magazine. He then served as general manager of The St. Augustine (Fla.) Record before returning to Athens in 1992 as publisher. He moved to corporate headquarters in Augusta in 1995 and became president of Morris Communications Co. in 1996. In 2013, he was named CEO of Morris Venture Capital, a new division of Morris Communications. He has served on the boards of several media industry organizations and a number of Augusta community organizations. He is a member of World President’s Organization and serves on the board of directors of Heritage Academy in Augusta.   About Morris Communications Morris Communications Company, LLC is part of a privately held media company with diversified holdings that include newspaper, magazine, and book publishing, and cable television. Morris' holdings include 11 daily newspapers, numerous nondaily and free community papers, 36 radio stations, numerous magazines and specialized publications, visitor (travel and tourism) publications, including Where® Magazine, Wheretraveler.com, and Where® Guestbooks and provides cable television, internet, broadband, and telephone services. For more information, visit our website http://morris.com.  

Shell drills in the Chukchi Sea

Shell is finally drilling in the Chukchi Sea. The semi-submersible Polar Pioneer “spudded” the Burger J well at 5 p.m. Wednesday, company spokeswoman Meg Baldino said. Meanwhile, an ice-management vessel sent to Oregon for repairs is now en route after police cleared protesters that were blocking the vessel.  “The Fennica is now safely on its way to Alaska and will join Shell’s exploration fleet in the Chukchi Sea — where the Transocean Polar Pioneer commenced initial drilling operations,” Baldino said in a statement. “We remain committed to operating safely and responsibly and adding to Shell’s long history of exploration offshore Alaska. As the Polar Pioneer drills, Shell’s second drillship on the scene, the Noble Discoverer, is moored at the Burger V well location in the same area. Until the Fennica arrives with a critical “capping stack” used to control an undersea blowout, The Bureau of Safety and Environmental Enforcement has given Shell permission to drill “top holes,” or the upper parts of wells that do not penetrate potential oil-bearing formations. Shell may drill just one well at a time, although the second drillship can be kept nearby and ready to drill when the first vessel finishes a well. Federal rules prohibit simultaneous drilling by drill vessels within 15 miles, and Shell’s planned well locations, for this year, are nine miles apart.  

Senate panel passes bill lifting crude oil export ban

WASHINGTON (AP) — A Senate panel approved energy legislation Thursday that would lift the 40-year-old ban on crude oil exports and open more areas of the Arctic, Gulf of Mexico and the Atlantic Ocean to oil and gas exploration. Republican Lisa Murkowski of Alaska, chairman of the panel, championed the bill, which passed by a party-line vote of 12-10. She said lifting the ban would turn the U.S. into an energy superpower. Democrat Maria Cantwell of Washington said after the vote that she has questions about what lifting the ban would mean for gasoline prices in her state, which she said are among the highest in the nation. The committee also passed a comprehensive energy bill, but with bipartisan support. The legislation includes measures designed to make energy cheaper, such as streamlining the permitting process for some hydroelectric and geothermal companies, and sets up a grant program that will fund apprenticeship programs for people seeking to work in the energy sector. It also would make the Energy Department the agency responsible for coordinating the response if the energy grid is hacked. Lawmakers saved many of the more contentious amendments for debate on the Senate floor. Cantwell described Thursday's votes as an important first step. "We need to remind people of the good in the broader picture," Murkowski said. The legislation to end the oil export ban faces a tougher path. No Democrats on the committee voted for the bill, which has been criticized by environmental groups. The group Oceana called it "a massive give-away to Big Oil and a slap in the face to coastal communities that have vocally opposed offshore drilling." A trade group representing the oil and gas industry said it's ironic that the U.S. would strike a deal to allow Iranian crude onto the global market while refusing to give the same opportunity to American producers. "Together, these two bills include vital components of any truly comprehensive energy strategy," said Louis Finkel, the executive vice president at the American Petroleum Institute. "We urge the House and Senate to quickly send this important legislation to the president's desk." OCS revenue sharing approved The legislation approved by the committee also includes revenue sharing from Outer Continental Shelf oil and gas production for states and coastal communities. Murkowski’s legislation would provide for revenue sharing in the Alaska OCS region for the state and coastal communities. Alaska currently receives 27 percent of revenues from oil and gas leasing and production in the 8(g) zone, the area between three and six miles from shore, but does not receive revenue sharing beyond the six-mile limit. Murkowski’s bill would provide additional long-term benefits to Alaskans by directing 12.5 percent of the revenues from offshore development to a newly established Tribal Resilience Program. “In the near term, providing energy and revenues to Alaskans will require us to increase access in the areas where we already receive revenue sharing, most notably within the six-mile limit,” Murkowski said. “But in the longer term, my legislation will ensure that the State of Alaska and coastal communities supporting development will receive a substantial share of the revenues from production to compensate for the impacts of development. My bill will also provide a source of funds for tribes to build resilient communities by investing in energy systems and critical infrastructure. — Journal staff

Federal grant connects rural hospitals through telecoms

In rural Alaska, primary medical care can be as inaccessible as fast food. Partnerships between federal government, telecommunications providers, and medical organizations, however, can ease the isolation and bring primary and even psychiatric care to the most far-flung Alaska communities. Alaska Communications Systems Inc., has partnered with the Juneau Alliance for Mental Health, Inc., or JAMHI, and Sitka Community Hospital to provide the equipment and necessary bandwidth to give rural patients behavioral and primary healthcare access. ACS has a program specifically geared toward coordinating such partnerships in tandem with its telecommunications services. It also has an existing partnership with Chugachmiut, a medical and social care tribal consortium that provides care to Southcentral locations. The partnership is made possible by a grant from the Department of Health and Human Services, which receives funds for its Rural Veterans Health Access Program from the U.S. Health Resources and Services Administration, or HRSA. Within HRSA is the Office for the Advancement of Telehealth, which subsidizes telemedicine developments for rural areas. While the grant focuses on veterans, the expansion of services is community wide. “The rationale for this project for rural veterans is that rural veterans don’t have access to behavioral forms of health care,” said Susan Maley, who coordinates the Rural Veterans Health Access Program. “But the system stays in place. By providing primary care for veterans, it makes it an accessible system for the entire community.” Telehealth, or telemedicine, administers medical care remotely through internet or traditional telephone connections. Through video and digitally-enabled biomedical readings, physicians and nurses in one area are able to provide primary, urgent, psychiatric, and even intensive care to rural patients without needing expensive transit for themselves or the patient. Carts are equipped with hodoscopes and stethoscopes that can instantly send patient vital signs from remote villages to more fully equipped medical facilities with expert staff. “A physician in Miami can listen to your heartbeat in real time,” said Alaska Communications vice president Bill Bishop. The speedier ACS connection also decreases the lag time for services that medical facilities already use. According to Bishop, Sitka Community Hospital used to wait 50 minutes to transmit x-rays to Seattle hospitals for consultation. With the new connection, the transmission now takes five minutes. “At the highest level, our telehealth boils down to using technology to improve medical care to remote villages of Alaska,” said Bishop. “Because of the ruralness of Alaska and its vast size, something like this had to happen.” Maley said most isolated areas simply have no choice but to link patients through telecoms. Attracting primary care physicians to places like Tanakee Springs, where JAHMI has installed a medical cart to link veterans with behavioral care specialists, can be a daunting and expensive task. “It is the only option,” said Maley. “When you have low population rural areas, there’s not the base that would support a higher level of medical practice. Establishing and maintaining connectivity is a huge issue.” Aside from being less equipped for primary care due to the difficulty of attracting medical professionals, merely getting patients is cost prohibitive. In Southeast Alaska, 10 percent of the population is veterans, according to the most recent U.S. Census data, but only 32 percent of the area is accessible by roads. Air charter from Prince of Wales to the nearest primary care facility in Wrangell costs $600. JAMHI and Sitka Community Hospital, through Alaska Communications-procured medical carts and connectivity boosts, can cancel out some of the necessary travel. Apart from the altruism of expanding care, Bishop said hospitals have a monetary incentive to allow for telehealth operations not only because of the federal grants money attached, but also because of the opportunities to cut those costs. “There’s two sides of the price coin,” said Bishop. “Where we have a lot of play is what the federal government will subsidize these rural providers when they use technology. The second area is not only how it saves them money from federal subsidy, but how do they practice when they don’t have to fly primary care physicians out to these remote areas. It eliminates most of that travel and gives that level of care.”


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