Elizabeth Earl

Board rewrites Kenai late-run king plan

After a day of heavy clashes and divided votes, the Board of Fisheries reformed late-run king salmon management on the Kenai River to loosen restrictions a little more for east side setnetters. The Board of Fisheries spent Tuesday afternoon painstakingly, paragraph by paragraph, going through the management plan for the Kenai River’s late-run king salmon. Under the current management regime, a lot rides on the escapement numbers of late-run kings, both in the sportfishery and the commercial setnet fishery. At the 2014 meeting, after a disastrously low king return in the 2012 season slammed the season closed on the setnet fishery and heavily restricted the inriver sport fishery, the board passed corresponding restrictions on the sport fishery and the setnet fishery based on king escapements. The restrictions, known as paired restrictions, were billed as sharing of the burden of conservation, though setnetters say they unfairly places the burden on them while the sportfishery still gets to operate while they are closed. With a full suite of proposals that tinkered with various aspects of the plan, three days packed with public comment and a full day behind schedule, the board tackled the issue with a bare-bones document with amendments composed by board member Israel Payton, drawing from suggestions from the public and Alaska Department of Fish and Game staff. On the chopping block were three major issues: the conversion of the current all-fish goal to Fish and Game’s big fish goal, the restrictions to the sport and commercial fisheries based on a run trigger point and the level of parity in the paired restrictions. “We set these management plans and we change them over years,” Payton said. “… Through committee of the whole, we heard various things from various users, and yes, this plan may need some tweaking.” The cry from the commercial fisheries has been “let the managers manage,” meaning for the board to take prescriptive management measures off. The sportfishing advocates have said the paired restrictions only kick into effect during years of low king salmon abundance, which aren’t every year, so they do provide for parity. The board spent its entire afternoon tinkering with aspects of the plan, primarily targeted at whether to relax some restrictions on the commercial fishery. One of the biggest struggles was over whether to make changes to the paired restrictions, which board member Sue Jeffrey proposed as a way to answer the complaints from the commercial setnetters. “I think we’ve heard so far throughout this meeting that paired restrictions are anything but parity,” she said. “… I think that we are in a new regime. This is a reason to change, because we are talking about counting large kings now, which has an effect on the sockeye fishery that is going on at the same time. This is reasonable because we have two runs, two different fisheries taking place at the same time.” Jimmying from the two user groups also played a role. During the midday break, two proposed amendments — one from a group of east side setnetters, the other from the sportfishing group Kenai River Sportfishing Association — were submitted, with the only significant difference coming in the restrictions to the setnet fishery. Early on in the discussion, the board decided to tackle a number of the issues in one go. They voted to drop the trigger number, which has been set at 22,500 and would have been adjusted to account for the new large fish goal, which is between 13,500 and 27,000 late-run kings. The trigger sets off restrictions to both the sportfishery and the commercial fishery, and removing it allows the board to make the call based on wehther it will make its escapement. Sportfish area management coordinator Tom Vania said removing the trigger would allow the department to react to a variety of different circumstances, depending on harvest and on the run size. More contentious was the debate over whether to remove or change the paired restrictions. Jeffrey proposed an amendment to introduce time allowances based on run size, similar to the Kenai River late-run sockeye salmon management plan, with tiers based on projected escapement. Director of the Division of Sport Fish Tom Brookover said the division was concerned that if more time were added, based on additional harvest of king salmon, staff would be more likely to restrict to no bait on the sportfishery, which would trigger additional restrictions on the setnet fishery. “I think the effect would be that we would be under these restrictions in more run size scenarios than we would be currently,” he said. With that in mind, and information that the setnet fishery harvests approximately 150 large kings per day, Jeffrey said she wouldn’t support adding the tiers. The motion failed, and the time allowances stayed in place there. However, the board did vote to change the hour allowances for setnets in three circumstances. When the sportfishery is at no bait, the board adjusted the hours available from 36 to 48, which is less than board members Robert Ruffner, Orville Huntington, Jeffrey and board chair John Jensen said they would like, but they were willing to compromise. The board also increased the number of setnet fishing hours available when the sportfishery is at catch-and-release from 12 to 24, essentially restoring two 12-hour fishing periods. Finally, they repealed hour restrictions to the setnet fishery in August, after the sportfishery was closed, while it previously was set by triggers based on projected escapements. The board passed the plan as amended 7-0. Reach Elizabeth Earl at [email protected]

Board loosens some season restrictions on setnetters

Upper Cook Inlet’s east side setnetters may get more fishing time next season. The Board of Fisheries passed two proposals Feb. 28 that relaxed some of the season restrictions on the east side set gillnet fishery, which operates in two sections between Ninilchik and Nikiski. The result is that fishermen may get an extra week in August and a subset of fishermen in North Kalifornsky Beach may get a few extra days in July. The first proposal, the more controversial of the two, moved back the effective date for the one percent rule. The rule, applied separately to the Kasilof section and the Kenai section, automatically closed the fisheries when less than one percent of the season’s total sockeye harvest is taken in two consecutive periods after Aug. 1. Commercial fishermen argued that the rule was not based on science and prevented them from harvesting leftover sockeye and pink salmon, contributing to overescapement. Sportfishing advocates argued that the rule protects coho salmon stocks, which overlap with the sockeye run and are managed primarily for sport use. In a 4-3 vote, the board moved back the rule’s effective date from Aug. 1 to Aug. 7. The Alaska Department of Fish and Game retains its emergency order authority to close the fishery before then. Board member Sue Jeffrey amended the original proposal, which eliminated the one percent rule entirely, to simply move back the effective date. She said it fit within allocation criteria and was a matter of opportunity. “What this would provide is opportunity for those who fish who are locals who want to harvest this amount of sockeye … it’s not going to be the whole fleet here,” she said. “It would just be a scaled down amount of people and it would benefit the processors and those who want to harvest the pinks and the sockeye.” Most of the concern surrounding the proposal was for coho stocks. Setnetters are allowed to harvest any type of Pacific salmon under their Commercial Fisheries Entry Commission permits, but coho are primarily harvested by sportfishermen in Cook Inlet. Fish and Game staff estimated at the Tuesday meeting that about 3 percent of the coho harvest is taken by commercial fishermen. There hasn’t been a definitive study about coho harvest and migration on the Kenai River since 2004, said area sportfish research biologist Robert Begich. Biologists estimate current total harvest and exploitation rate in the middle to high 50 percentile range. King salmon are also still moving into the Kenai River at the time settnetters stand to gain — the department typically stops counting kings around Aug. 19 or 20. About 16 percent of the run typically comes in after Aug. 1, Begich said. Board member Reed Morisky said due to the concern about kings and coho, he supported the status quo for the one percent rule. “I believe there’s fishing enough for everyone in the current one percent scenario,” he said. Board chairman John Jensen said additional openings at the end of a commercial fishing season can help fishermen break even on a season after paying their bills, and moving back the rule would effectively only give the fishermen two additional 12-hour fishing periods in the season. That still leaves a lot of hours for coho to escape into the river, he said. Jensen also said the balance between the fisheries is important to the economy of Upper Cook Inlet and that he supports the change. “Our job … is to keep the salmon populations healthy, and second, to provide opportunity, and then we divide allocation,” he said. “What we’re doing here is a small change but I think it’s a good change.” Changing the date of the one percent rule also has implications for the drift gillnet fleet. They operate under their own version of the one percent rule, but if both the Kenai and Kasilof sections are closed, drifters are pushed to only the western side of Cook Inlet. The board also passed a proposal allowing managers to open the setnet fishery on North Kalifornsky Beach on July 8 in accordance with openings from the Kasilof section, even when the Kenai and East Foreland sections are not open. The area is technically part of the Kenai section. Proposer Gary Hollier, who operates a setnet site in the North K-Beach area, said the area lost fishing time at the 1999 Board of Fisheries meeting and he has proposed the same change ever since. He also included a stipulation in his original proposal that would require all nets to be limited to 29 meshes deep. Although it’s not required by regulation, Hollier has long been a proponent of cutting net depth to allow king salmon to pass beneath, as it is commonly thought that kings swim deeper than sockeye. The goal was primarily to give North K-Beach setnet fishermen a chance to harvest more Kasilof sockeye, which circle north and pass along the beach back southward to enter the Kasilof River. However, the board removed the 29-mesh depth requirement, allowing for all gear lengths to be used, before passing the proposal. Fish and Game didn’t have enough data to quantify if reducing net depth would decrease king salmon harvest, according to the staff comments. Setnet fishermen who stack permits — the term for one person having and operating multiple limited entry permits under one name — are restricted to 29 mesh-deep nets on the second permit anyway, under regulations that were passed in 2014. Hollier said stacked permits may be common in the area, with nine families owning about 45 permits. One of the main reasons board members Robert Ruffner and Al Cain supported the proposal was because of concerns over the use of the Kasilof River Special Harvest Area. The one-mile square area near the mouth of the Kasilof River that is a last-ditch mechanism to help prevent overescapement of sockeye, puts a large number of commercial fishermen into a small area and can lead to gear and user conflicts. In answer to a question, commercial fisheries area management biologist Pat Shields said it was hard to quantify whether passing the proposal would help reduce the use of the special harvest area, but it could. The board passed the proposal 6-1, with Morisky voting against. Reach Elizabeth Earl at [email protected]

Board of Fisheries revises sockeye goals for Kenai River

Significantly behind schedule and deep into the mathematical weeds, the Board of Fisheries spent most of its first day of deliberations on one proposal to amend the escapement goals for Kenai River late-run sockeye. The proposal, submitted by the Alaska Department of Fish and Game, asked the board to review the optimum escapement goal and inriver goal on the river for the late run of sockeye salmon. After several hours of discussion and back-and-forth amendments, the board passed a proposal eliminating the optimum escapement goal and increasing the ceiling of two of the inriver goal tiers. The final language was intended as a compromise between sportfishing and commercial groups, from an amendment authored by board member Robert Ruffner. Commercial groups sought to eliminate the optimum escapement goal, saying it was redundant to the sustainable escapement goal, while sportfishing groups said it allowed managers flexibility during years of extremely large returns. “One of the things that was in (the original proposal) was trying to manage for multiple goals,” Ruffner said. “One of the first steps was removing the OEG … the second point that I thought was increasing the upper end of the inriver goal.” As adopted, the river will now be managed under a sustainable escapement goal of 700,000 to 1.2 million sockeye salmon and inriver goal with three tiers, based on the total projected run. The bottom tier, when total runs are projected less than 2.3 million fish, will remain the same. The middle tier, when the total run is projected between 2.3 million and 4.6 million, will now be managed for between 1 million and 1.3 million fish. The upper tier, when runs are projected to be greater than 4.6 million fish, will now be managed for 1.3 million to 1.5 million fish. Ruffner said his intent in eliminating the optimum escapement goal was to simplify the management. Many people, both on the board and in the public, expressed concern about the complexity of the Kenai River’s escapement management during public comment and committee discussions. In answer to a question from Ruffner, Fish and Game staff said it would be easier for them to manage within the now broader range. Commercial fisheries area management biologist Pat Shields said the effect could be that when the managers are within the middle tier, the sportfishery allocation could increase by 100,000 fish, and 150,000 when in the upper tier. Confusion over the mathematical and technical aspects of the escapement goals pervaded the day. The interlocking management of the Cook Inlet fisheries means that changes to the sockeye salmon management plan will lead to effects not only on the sportfishery but also on the drift gillnet and setnet fisheries and the personal-use dipnet fishery at the mouth of the Kenai River. During the long breaks Monday, multiple groups brought language to amend the original language. The Kenai River Professional Guides Association submitted a possible amendment asking for a regulation automatically increasing the bag limit when the run is projected to exceed 4.6 million fish, but the board did not address it. The Kenai River Sportfishing Association submitted a substitute to raise the inriver goal tier levels but leave the optimum escapement goal in place if runs were projected to exceed 6 million fish, increased from the 4.6 million fish trigger. Board member Reed Morisky moved to make an amendment similar to KRSA’s suggested amendment, leaving the optimum escapement goal in place, but later withdrew it. The only concern from the board was eliminating the optimum escapement goal. During initial discussion, board member Israel Payton said he was hesitant to eliminate it because of concerns for northern stocks like the Susitna River sockeye salmon, but later said it made him more comfortable and didn’t support Morisky’s amendment. “I think we’ve heard a common theme to simplify (management),” he said. Kenai River Sportfishing Association fisheries consultant Kevin Delaney said after the meeting that the inriver goal increase doesn’t technically increase the allocation — it only acknowledges that the sportfishery is bigger than it used to be, and allowing for the broader range is both easier to manage for and ensures that the managers will be able to meet their sustainable escapement goal after the inriver fishery harvest. With the potential for more fish allowed into the river with higher goals, Ruffner said the board will carefully watch the potential for increased habitat damage because sockeye are bank oriented and most people angle from riverbanks to target them. However, the commercial fishermen didn’t get their half of the compromise, which was the elimination of the mandatory Tuesday closure, known as a window. Ruffner attempted to amend a proposal that would eliminate both the Tuesday and Friday windows to only eliminate the Tuesday window, citing concerns from the public. Board member Sue Jeffrey supported it, saying it fit the allocation criteria. However, Payton and Morisky opposed it, saying the windows provided reliability for the sportfishery and personal-use fishery, allowing more sockeye to pass by the commercial nets to make into the river. Ruffner argued that it was fair, in light of the now-increased inriver goal. He also said it would help decrease the use of the Kasilof River Special Harvest Area, a one-mile square area at the mouth of the Kasilof River, to control sockeye escapement into the river. When used, the area can get extremely crowded and has risks for king salmon also headed for the river, he said. “We’re still going to manage for escapement goals, and in light of the fact that we just increased the inriver allocation by a fairly significant amount, that’s (my reasoning),” he said. East side setnetter Joseph Person said the intention was that the inriver fishery would get a slightly increased allocation in exchange for the elimination of one of the two windows. However, the proposal to eliminate the Tuesday window failed on a 3-4 vote, with chairman John Jensen, Ruffner and Jeffrey supporting it. The board concluded deliberations before taking on any additional setnet proposals. They were set to take up proposals related to the one percent rule in the setnet fishery Tuesday morning. Reach Elizabeth Earl at [email protected]

Proposals would change dipnet fishery area, season

KENAI — Like most fisheries issues in Upper Cook Inlet, there’s a lot of disagreement about what to do with the Kenai River personal-use dipnet fishery. The fishery, which takes place every July 10–31, is the most popular of its kind in the state. Thousands of Alaskans jump into boats and flock to the Kenai River’s north and south beaches to get a shot at the sockeye salmon that return to the river every year, harvesting some 259,057 sockeye in 2016, according to the Alaska Department of Fish and Game. However, the push and pull of allocation battles, safety issues and habitat damage may herald some changes for the fishery in the upcoming Upper Cook Inlet Board of Fisheries meeting. Some proposals ask the board to set more limits on the fishery. Others ask for liberalization of time and space. The board will take up and discuss all the proposals at its meeting in Anchorage from Feb. 23-March 8. Two proposals ask for the dipnet fishery to be extended into August — one from a private citizen and the other from the sportfishing, trapping and hunting advocacy group the Alaska Outdoor Council. The citizen, Ronald Jordan, wrote that the dipnet fishery would be safer if it were extended to the second Sunday in August; the Alaska Outdoor Council wrote that extending the fishery through Aug. 10 when the sonar estimate is projected to pass 1.2 million sockeye would allow more opportunity for anglers and dipnetters. Rep. Les Gara, D-Anchorage, lent his support to extending the season with a letter to the Board of Fisheries, dated Feb. 2. He urged people to send comments to the Board of Fisheries about dipnet timing issues before the meeting in February. His comments make the argument that because sockeye salmon are arriving later and the commercial fleet is allowed by regulation to fish until Aug. 15, the dipnetters are unfairly shorted a shot at the sockeye. It should still be executed to protect silver salmon runs, though, which intersect with the tail end of the sockeye runs, he wrote. “The commercial fishery is important to Alaskan families, as is the personal-use fishery, and leaving the latter open does not materially impact commercial fishermen,” Gara wrote. “Rather, this policy change would reflect the reality of later fish runs, entering the river after the July 31 closure.” Extending the dipnet fishery would also impact the City of Kenai, as it is responsible for cleaning and patrolling the beaches and the section of the river between the Warren Ames Bridge and the mouth. In comments on the Alaska Outdoor Council’s proposal, City Manager Paul Ostrander wrote that the city opposes the proposal because reopening the fishery would require the city to re-establish some of the amenities and services supporting it, which would be expensive. “Additionally, it is likely that participation during the first 10 days of August would be lower, resulting in lower revenues to the City from participant fees without a commensurate reduction in costs,” he wrote. Gara wrote in his letter to the Board of Fisheries that should the proposal pass, it should include proper notification to the city. Four proposals ask for changes to the boundaries of the Kenai River dipnet fishery. Three would expand or change the boundaries, and one would cut back on shore access. Fish and Game submitted a proposal to close the banks of the river between No Name Creek and the Warren Ames Bridge to shore-based dipnetting because of habitat damage. If the board adopts the proposal as it’s written, dipnetters would only be able to fish from a boat unless they were on the north and south beaches of the Kenai River’s mouth, both of which have entry fees administered by the City of Kenai. Included in the closure would be a number of private homes along the riverbank just downstream of the bridge. Those property owners would no longer be able to fish from their own property under the closure, Ostrander wrote in the city’s comments. Instead, the city proposed the closure only stretch between the bridge and a line just upstream of the first property. “If the city’s proposed amendment is adopted, (the proposal) will still accomplish its primary objectives of protecting the sensitive vegetated tide land area on the north and south shores of the river in the area immediately below Warren Ames bridge and eliminating overcrowding issues at the Kenai Flats Day Use Area,” he wrote. The city was less amenable to a proposal from the Kenai River Sportfishing Association to extend the dipnet fishery from boats up to Cunningham Park, about another 1.5 miles up the river. Extending the fishery would help reduce crowding for dipnetting boats elsewhere, the proposal states. The City of Kenai “strongly opposes” the proposal, according to its comments. It would increase impacts to property owners in the area, including boat wake, noise and trespassing, and could create crowding and facility capacity issues at Cunningham Park, which is currently a popular bank angling spot. The city would be have to institute fees there to cover the additional costs, Ostrander wrote.

Setnetters seek looser restrictions from fish board

KENAI — Some east side Cook Inlet setnetters want the Board of Fisheries to loosen some of the regulations it has adopted over the years restricting the fishery. On the Kenai Peninsula, which is connected by road to the most populated areas of Alaska, user conflicts between commercial, sport and subsistence fisheries are common. The regulatory meetings before the Board of Fisheries are often contentious, with restrictions on one fishery resulting in additional allocation for another. In a set of proposals scheduled to go before the Board of Fisheries at its upcoming Upper Cook Inlet meeting in Anchorage Feb. 23-March 8, various groups and individuals have asked for broad changes to the setnetting restrictions in the Upper Subdistrict, which includes the Kenai and Kasilof sections. One percent rule One change requested in multiple proposals is the removal of the one-percent rule for setnets. The rule states that if less than one percent of the total harvest of sockeye is taken for two consecutive fishing periods after Aug. 1, the fishery must be closed for the season. Without the rule, the fishery would be managed with regular periods until Aug. 15. The rule was originally intended to allow coho salmon to move up the rivers for sport fishing harvests, as coho salmon begin migrating into the Kenai Peninsula’s rivers around August and continue through September and October. Some setnetters feel that it unfairly curtails the season without much benefit for coho salmon — three separate proposals were submitted for the Upper Cook Inlet meeting, all asking for essentially the same thing. The Central Peninsula Fish and Game Advisory Committee, a citizen board composed of multiple user groups from the Kenai Peninsula between Kasilof and Anchor Point, would like to see the rule repealed. “The adoption of the one percent rule has no scientific or biological support,” the group’s proposal states. “It is not used statewide and was strictly an arbitrarily and capriciously implemented allocation regulation.” The restriction on the fishing in August causes too many fish to escape into the rivers because fishermen cannot harvest them, resulting in both economic losses for the fishermen and potentially damage to the fish population, the proposal states. The Kenai Peninsula Fishermen’s Association, a nonprofit group representing Kenai Peninsula setnetters, also asked for the Board of Fisheries to repeal the rule for similar reasons. The fishing periods in August are important for catching sockeye, and coho still have months to move up into the river after the mandatory season closure on Aug. 15, the proposal states. KPFA President Andy Hall, an east side setnetter who lives in Chugiak during the winter, said the effect varies based on where setnetters are based — setnetters in the Ninilchik and Kasilof areas fish earlier in the season than those in the K-Beach area, so the effect isn’t even across the fishery. Those in the northern part of the fishery can take a significant portion of their catch in August, which gets cut short under the one percent rule, he said. “This rule, it can put the brake on people fishing when they’re actually making money and we’re trying to take that unharvested surplus,” he said. “We feel like it doesn’t do a lot for anybody other than put us on the beach.” Openings and closings “Paired restrictions” have been one of the least popular regulations among setnetters since they were enacted in a board-generated proposal at the 2014 Upper Cook Inlet meeting in Anchorage. The regulation sets up a stepped plan for openings based on king salmon escapement into the Kenai River — when more than 22,500 late-run king salmon are projected to enter the river, setnetters operate with regular openings. When the forecast is below that, the river opens with no bait and setnetters are restricted to no more than 36 hours per week. If the inriver fishery is restricted to catch-and-release, setnetters are restricted to one 12-hour period per week. Two proposals before the board would do away with paired restrictions. One, from the Central Peninsula AC, would modify the Kenai River Late-Run Sockeye Salmon Management Plan and the Kasilof River Salmon Management Plan to return setnetters to fishing regular periods, with additional openings or restrictions issued by emergency order. In its rationale, the advisory committee wrote that the proposal would allow the managers to manage for abundance better than they currently can. “This proposal will give the (biologists) the flexibility and proven tools to perform in-season real-time abundance based management and to be effective in achieving the escapement goals and to harvest the salmon surplus,” the group wrote. “This proposal also seeks to provide a reasonable opportunity for all harvesters and to provide adequate protection for northern bound and central district salmon stocks.” Joseph Person, who setnets near Kasilof and serves on the KPFA board, submitted a proposal to modify the paired restrictions to alter the pairings if they are not disposed of altogether. His proposal would change the pairings, allowing the setnetters to fish regular periods if the river starts with no bait and reducing the fishing periods to 36 hours per week if the inriver fishery goes to no bait, he said. The regular openings are important for efficiently fishing, he said. The 36 hours is manageable, but the 12-hour weekly opening paired restriction — which has not been implemented yet — would be a huge problem, he said.” “I personally value those regular openings,” he said. “… 36 hours is a reasonable amount of opportunity anyway. The big deal is the next step … that becomes a fishery that is not really manageable for anybody. It’s a big deal when you have 12 hours for everybody.” Tod Smith, a KPFA alternate board member and setnetter who worked on the proposal with Person, said the proposal would set no-bait as the normal opening restriction for the king salmon fishery on the river and for the setnetters. “Basically, our view is that no bait should be a normal setting, bait should be liberalization,” he said. “If there are paired restrictions, that’s how they should be done.” Person also submitted a proposal asking the Board of Fisheries to redefine the Upper Subdistrict into three areas — grouping Salamatof and East Forelands together, North and South Kalifornsky Beach together and Ninilchik and Coho together — with staggered opening dates. Creating three sections would allow for more flexible management based on the run timing of fish in those areas, he wrote. Setnetter Gary Hollier, whose sites are in the North K-Beach area, submitted a proposal asking the Board of Fisheries to open the North K-Beach section with shallow nets only when the Kasilof Section is open on or after July 8. The North K-Beach fishermen don’t have enough opportunity right now to harvest Kasilof sockeye salmon, although they traditionally have, he wrote. Opening the North K-Beach section up at the same time would allow the two sections a little more equity, he said. “We’re looking for a little bit of time and opportunity,” he said. Net depth Two proposals also address depth and length of nets for setnets. In recent years, research has shown that king salmon tend to swim deeper than sockeye salmon, so shallower nets would be less likely to catch as many king salmon as deeper nets. One proposal, submitted by the Kenai River Sportfishing Association, would require all setnets in the Upper Subdistrict to be limited to 29 meshes deep. The purpose is to limit setnet harvest of king salmon as much as possible, according to the proposal. “Research conducted at the request of the Alaska Department of Fish and Game and widespread experience of setnet fishermen both demonstrate that fishing with shallower setnet gear will more selectively harvest large numbers of sockeye with reduced harvest of king salmon,” the proposal states. Hollier has long been an advocate of cutting net length to reduce king salmon harvest. The reason is simple economics, he said. “I’m in the business to make money, not lose money,” he said. “Bottom line is, if we don’t make king salmon goals, then we don’t fish.” He submitted a proposal that would allow setnets no more than 29 meshes deep to be up to 45 fathoms long, adding back a little bit of the lost gear in depth to the length. It’s still about 17 percent less gear in the water than the current regulation, he wrote in the proposal. Some fishermen have chosen not to cut down their gear depth, but some have adapted. Allowing them to add back length may help incentivize them to switch to shallower gear, he said. “I’d say if it works, and people have the option to do that, let them do that,” he said. “… I don’t think it should be mandatory for everybody.” Reach Elizabeth Earl at [email protected]

Governor's budget would cut DOT jobs

The proposed cuts in Gov. Bill Walker’s fiscal year 2018 budget would fall heavily across the state, including broad reductions to the Alaska Department of Transportation and Public Facilities’ design department. The $4.2 billion draft budget released Dec. 15 would cut 76 positions from the department, primarily engineers, interns and other staff from the internal design division. The cuts are part of an “aggressive plan” to transition the design of more DOT construction projects to private contractors, according to the budget detail. Shifting to private contractors would help leverage more federal dollars for transportation projects, according to the budget detail. “The department will increase work to the private sector while shrinking internal design staff,” the budget detail states. “This has the added advantage of bolstering the private sector economy. By operating with more contract staff and fewer in-house engineering staff, the department will balance public and private sector specialized expertise and be able to quickly scale up and scale down based on available funding.” The plan comes in response to a directive from the administration, said Jeremy Woodrow, a spokesman for the DOT commissioner’s office. It’s also not the last reduction — part of the plan calls for the reduction of up to 300 additional positions in the fiscal year 2019 budget, he said. Not all the cuts are strictly related to design — they include the work on right-of-ways and other pre-construction work, Woodrow said. It isn’t clear at present how many positions could be cut, which is why the language included “up to” 300, he said. “There are some things the department is going to be working on with the Legislature and the administration over this session and over the coming months,” he said. Private contractors already do about 55 percent of all the department’s design work. The goal is to get 100 percent of it to be done by private contractors by fiscal year 2019, according to the budget detail. “Department of Transportation positions that remain after this initiative will be responsible for project management and contractor oversight as opposed to hands-on engineering work,” the budget detail states. The savings are still uncertain because the funds that would be saved by eliminating employees would be transferred to use for private contractors, said Pat Pitney, director of the governor’s Office of Management and Budget. The goal is to see if savings may come from using private contractors rather than in-house work, she said. “The savings is efficiencies,” she said. “Can we get more dollars for the products that we have? The funding is the same. Can we get more projects if we get more federal matching?” Going out to contractors for design work also offers a wider range of expertise and viewpoints, Pitney said. There are two unions represented in the positions that would be eliminated, so the state will have to complete a feasibility study to look at the effects, Woodrow said. Pitney said there will be “an expectation” that the state complete one, but said it would not have to be done beforehand. She said she isn’t sure if the state had gotten to the point where it had to do a similar feasibility study before, though if the state decides to privatize the Alaska Pioneer Homes — a debate currently going on — that will also require a feasibility study. Most of the jobs proposed for elimination are in Anchorage, Juneau and Fairbanks, the headquarters for DOT’s three regions, though a few are in outlying areas like Sitka and Kodiak. Woodrow said the department would work on finding answers for some of the uncertainties. “Bottom line is, this is an aggressive policy, we have the directive from the administration to work forward toward it,” he said. “But there’s a lot of unanswered questions that will be worked out in the coming months.” DOT, the third largest employer in the state, has already gone through significant budget cuts. Budget reductions have led to the closures of maintenance stations, the staggering of road maintenance and rounds of layoffs. Reach Elizabeth Earl at [email protected]  

Board of Fish denies most winter kings proposals

Despite a number of proposals and public comments in favor, the Board of Fisheries made few changes to the Lower Cook Inlet’s winter saltwater king salmon fishery. During its final Lower Cook Inlet cycle meeting Saturday in Homer, the board took up a variety of proposals related to the fishery, which typically takes place between Oct. 1 and March 31 in the saltwater south of Bluff Point. One group, Cook Inlet Recreational Fishermen, submitted a set of proposals asking the board to liberalize the fishery in light of new genetic research showing that most of the king salmon in the area during the winter are not Cook Inlet stocks. The only proposals the board approved were by the Alaska Department of Fish and Game. One expanded the winter king salmon management plan to apply for an extra month, now including September, expanded the fishery to include all of Cook Inlet and raised the guideline harvest limit from 3,000 fish to 4,500 fish. Part of the reason for the increase in the harvest limit is to account for the number of fish harvested in September. During the winter king fishery, fishermen do not have to record their harvests and the kings caught during the winter fishery do not apply to the Cook Inlet five-king annual limit. Because the winter management plan will now apply in September, fishermen won’t have to record their harvests that month for kings greater than 20 inches long. The harvest limit is only calculated after the season and is used as a gauge for Fish and Game managers to determine what to do with the fishery from year to year rather than as an inseason tool. The fishery exceeded the 3,000-fish limit in 2013, 2014 and 2015, possibly because of high participation in the past few years, said Carol Kerkvliet, the area management biologist for the Division of Sportfish in Homer. “It could be a combination of just the weather makes it appear that way, and the word’s getting out of something fun to do in the winter, to go fishing,” she said. Because most Alaska’s king salmon stocks have declined significantly over the past decade, including Cook Inlet stocks, several board members noted that they had concerns for the potential interception of mature king salmon, which migrate back to their spawning streams between April and August. Board member Sue Jeffrey noted concern for the king salmon stocks in the area, especially because run timing can vary for any anadromous fish. Fish and Game biologists have been gathering genetic data on kings harvested in the fishery, though, and excluding the early summer, the kings harvested in the marine fishery south of the Bluff Point are almost all non-local stocks. Stocks of king salmon elsewhere have been experiencing high production, showing up in Cook Inlet to feed in vast numbers. Even if there are mature kings in the area, the much larger numbers of nonlocal feeder kings would contribute to a type of swamping effect, making it unlikely for the larger kings to be caught, Kerkvliet said. The only one of the group’s proposals that got traction was one that would have eliminated the annual limit on the king salmon harvested in the winter fishery south of the Anchor Point Light. There’s currently no annual limit for winter kings less than 20 inches long, so the proposal would have eliminated the limit on larger ones. Other areas of the state have similar policies. Board member Israel Payton said he felt the proposal would only allow the fishermen to keep slightly bigger salmon, which wouldn’t create too much of a problem. However, the board voted it down 1-6, with Payton voting for it. The commenters during both the public comment day Wednesday and the committee process on Thursday were divided between some wanting to harvest more of the kings because they are nonlocal stocks and are relatively plentiful and others who cautioned on the side of conservation because the kings in the bay are still someone’s kings, even if they aren’t Cook Inlet kings. During the committee discussions Thursday, Fish and Game Deputy Commissioner Charlie Swanton said it was clear the guideline harvest limit was meant to apply to nonlocal stocks harvested in the area as well. Even if the fish originate in Washington or Oregon, the fisheries managers there are releasing hatchery fish to rebuild the stocks in some of the rivers there that have declined over time or as mitigation for habitat damage like hydroelectric plants. “To say that these are somebody else’s fish so why should we care — we should care,” he said Thursday. “That’s ... not to say that there needs to be a numerical limit, but there needs to be some controls on this fishery relative to recognizing the fact that they are somebody else’s fish.” The proponents said Cook Inlet’s harvest of winter kings is so minimal that managers in the kings’ origin areas do not account for it. Pete Zimmerman, the spokesman for Cook Inlet Recreational Fishermen who submitted all of the group’s proposals, said he was disappointed the board did not pass any of them. The group hailed the genetic study from Fish and Game and presented its own data from coded wire tags recovered from fish harvested by salmon trollers, both of which showed that most of the fish harvested in the winter saltwater king salmon fishery hail from elsewhere. Zimmerman said he thought this would have held more sway. “We were pleading with them all along to pay attention to the science,” he said. He said the group will likely bring the proposals back again but may not wait the full three years until the next Lower Cook Inlet cycle. Elizabeth Earl can be reached at [email protected]

Real time data on the Russian River

Cook Inletkeeper is gathering more data on one of the most-loved rivers on the Kenai Peninsula, the Russian River. The Homer-based conservation organization recently installed its first temperature monitoring station on the river, a snow-fed tributary of the Kenai River that flows through the Chugach National Forest and joins the river just west of Cooper Landing. Every year, thousands of anglers flock to the confluence of the Kenai and Russian rivers to fish for the sockeye salmon that return to spawn there. The station feeds real-time temperature data to Cook Inletkeeper. The public can access it on the organization’s website and track it day-by-day, along with data from two other stream temperature monitoring stations on the Anchor River on the southern Kenai Peninsula and the Deshka River in the Mat-Su Valley. The Russian River will provide data on a stream system that has lakes in it, which behaves differently than the Deshka and the Anchor, said Sue Mauger, science director for Cook Inletkeeper. The influence of Upper and Lower Russian lakes likely keeps the stream warmer later because larger water bodies take a longer time to shed their heat from earlier in the year, she said. The Russian is also a higher system that doesn’t feed directly into Cook Inlet and may stay colder in the summertime than the other two systems, depending on the snowpack levels in the mountains. Snow levels vary and affect both the levels and temperatures of the rivers that depend on them. Last year, there was little snow in the lowlands but above-average snowpack in the mountains, which led to elevated stream levels throughout the season, which anglers noticed because of the additional difficulty in fishing. Cook Inletkeeper has been running the temperature project since 2008 and tried to pick streams that anglers visit frequently, Mauger said. “We know that snow levels are variable from year to year, and it will help us sort of understand what that changing snowpack is doing to our river temperature,” she said. “Especially for a loved and well-fished river.” The monitoring station is stationed below Lower Russian Lake but above the Russian River Falls, where many visitors go to watch the salmon jump in the summer. The U.S. Forest Service and the Kenai Watershed Forum helped out picking a spot for the sensor, making sure there was enough sunlight to power the station, Mauger said. The Kenai Watershed Forum helped sponsor the project through the Kenai Peninsula Fish Habitat Partnership, a part of the National Fish Habitat Partnership, which provides grants for fish habitat restoration and improvement projects. The Kenai Watershed Forum coordinates it, but the steering committee includes members from the Alaska Department of Fish and Game, Trout Unlimited, the Kachemak Heritage Land Trust, the U.S. Fish and Wildlife Service, the National Oceanic and Atmospheric Administration, the Kenai Peninsula Borough and the U.S Forest Service. Mauger is also a member of the committee. The Russian River project will provide additional numbers for the ongoing data project Cook Inletkeeper has been working on, showing the impact of changing stream temperatures on the fish living in those streams. In spring 2017, the Canadian Journal of Fisheries and Aquatic Sciences will publish a paper that Mauger and several colleagues wrote compiling the data on stream temperatures of 48 non-glacial salmon stream systems across the Cook Inlet basin. Stream systems between 2008 and 2012 were consistently warmer than their historical temperatures, exceeding 13 degrees Celsius. When their habitats exceed that temperature, salmon begin to experience thermal stress, according to the report, which has already been published on the journal’s website. Projections of the maximum weekly maximum temperature on the streams project that the trend is likely to continue, according to the report. Mauger said the report was meant to link what the researchers are observing now with warmer water temperatures to the outlook for salmon in southcentral Alaska in the next half-century. She said real-time data can be helpful and provide immediate perspectives, rather than having to wait months to crunch data after the fact. “I really think it’s important to have real-time data to look at,” she said. “We learn a lot when we have pieces of information at the same time.” The Russian River’s temperature readings, as well as those from the Anchor and the Deshka rivers, can be viewed on Cook Inletkeeper’s website. Elizabeth Earl can be reached at [email protected]

When it comes to Alaska LNG project, the big elephant in the room is cost

The Alaska LNG Project is still moving toward a final filing with the Federal Energy Regulatory Commission, but some details remain murky. The Alaska Gasline Development Corporation is finishing up its negotiations to take over the leadership role on the gasline megaproject, negotiating the transition of project assets from the three producer partners, ExxonMobil, ConocoPhillips and BP. The state-owned corporation is now examining different options for project structure before filing its final application to FERC and is trying to market North Slope gas to worldwide markets, most aggressively in Asia. A report from consulting firm Wood MacKenzie in August identified the Alaska LNG Project as one of the least competitive liquefied natural gas projects in the world, and there is already a global oversupply of LNG. The three producer partners announced their intention to pull back from further investment after the Wood MacKenzie report was released, though they still plan to be involved. Still, it means the leadership and financing falls to AGDC as the project moves into the expensive FERC filing and front-end engineering and design, or FEED, stage. In a presentation to the Kenai and Soldotna Chambers of Commerce on Wednesday in Kenai, Alaska LNG Project Vice President Fritz Krusen said project managers are looking ahead to the time when the global LNG oversupply wanes — currently projected to fall sometime in the early 2020s. To make sure the Alaska LNG Project is online in time to start producing in that window to meet global need, it needs to get going now, he said. “There are a lot of other projects chasing that gap, so we’ve got to be competitive,” Krusen said. “Second of all ... it takes years and years to get there. We have to make a decision to move, to catch that window, fairly soon.” To reduce the high production costs and make the project more competitive, the state has suggested looking at other financing models, such as soliciting third-party investment or seeking tax-exempt status for the project’s income and tax-exempt financing for bonds to fund the project. Gov. Bill Walker has said he is “confident” the state can secure the exemption. A period of sustained low oil prices have led to pressure on oil producers, and that contributes to decisions to re-evaluate the project financing, Krusen said in an interview. “Low oil prices have caused everybody to think differently,” he said. One consequence of that tax exemption, though, may fall on local governments. Through property taxes or payment in lieu of taxes, known as PILT, local governments like the Kenai Peninsula Borough stand to gain significantly from the presence of the LNG Project. However, if it becomes tax-exempt, that income may be at risk. Kenai Peninsula Borough Mayor Mike Navarre voiced his concerns to Krusen at the luncheon. “There’s been no communication at all at this point to the local government about what that means,” he said. Krusen replied that he wasn’t sure how that would play out yet, but the AGDC hasn’t settled on it — it’s just an option being considered at the moment. “(The tax exemption) is something we need to investigate,” he said. “It’s just one of these things that it might be a lever. It might not, and how it would play out on the federal, state and local scene, I don’t know.” The same goes for land purchases. Since the Alaska LNG Project began snapping up acreage in the central part of Nikiski in 2014, there has been much hand-wringing in the community about the future of the project and how and when lands will be acquired. Until the transition of assets from the producer partners to AGDC is complete, that won’t be certain, Krusen said. “That is a great LNG plant site,” he said. “So if we do get the transition behind us, then yes, at some point … we will get back in the saddle and attempt to resume getting property to build the LNG plant.” Project managers are still working on the plans for the relocation of the Kenai Spur Highway, the ideas for which were originally presented to the public more than a year ago. At this point, no preferred route has been identified for the highway, though the managers are working on the regulatory path forward for the road, said Josselyn O’Connor, community stakeholder advisor to the project. Borough administration asked that the project managers identify a preferred route as soon as possible in a set of comments to FERC submitted Oct. 5. “Though the Alaska LNG has, in the past, done a good job of briefing and updating the Kenai Borough government and area residents of the highway relocation planning effort, those discussions have essentially ceased in recent months, and the silence is building to frustration among area residents,” the borough comments state. “The borough urges whichever entity(ies) emerges as project sponsors to actively resume those discussions with detailed mapping, detailed selection criteria and a commitment to narrowing down the options next year.” The AGDC and Walker are busy marketing the project overseas to potential customers in Asia. Krusen said the Alaska LNG Project has some advantages for Asian markets over others because of its relative proximity to them and its cold environment, making it easier to transport LNG, which is supercooled and condensed. The case would be different if this project were being developed by a producer with LNG in its portfolio — because this is the state’s one chance to market the North Slope gas, marketing is necessary, Krusen said. “We have to go out and make contact with the banks, the investment groups, that sort of thing, and we’re developing a strategy to do that,” he said. Elizabeth Earl can be reached at [email protected]

Tourism industry is booming in Alaska

Alaska likely saw another record-breaking tourism year in 2016, according to preliminary numbers from the industry. More than 1 million cruise ship passengers came through the state for the first time since 2009, according to the Alaska chapter of the Cruse Lines International Association. Border crossings from Canada were up 13 percent and numbers of outbound air traffic passengers between May and August were up 6 percent, both figures climbing for the second year in a row, according to figures from the Juneau-based research firm the McDowell Group. The sales tax figures aren’t finalized yet, but it looks like another record-breaking year on the Kenai Peninsula s as well, said Shannon Davis, the executive director of the Kenai Peninsula Tourism Marketing Council, in a presentation Tuesday to the Kenai Peninsula Borough Assembly. Kenai Fjords National Park saw 14 percent more visitors this year than last, lining up with the McDowell Group numbers, she said. The Kenai Peninsula is home to a booming tourism industry. Gross sales in visitor-industry related businesses reached $271 million in 2015, employing up to 4,217 people at a peak in July, according to the 2016 Situations and Prospects report prepared by the Kenai Peninsula Economic Development District. That includes accommodations, food service, local attractions like Seward’s SeaLife Center, guided land and water services and other revenue sources like the state’s commercial passenger vessel tax, according to the report. The Kenai Peninsula Tourism Marketing Council receives funds from the borough assembly annually — about $50,000 in fiscal year 2017. Though the organization has always turned in quarterly reports, Davis said she plans to make regular reports in person to the assembly. Marketing Efforts However, not all the news was good. In the course of the budget cuts across the state this year, the governor vetoed funding for tourism marketing, reducing the state’s support to approximately $1.5 million from a budgeted $4.5 million. That number was already significantly reduced from $9.6 million in fiscal year 2016 and about $17.9 million in fiscal year 2015. “Industry leaders have decided that this number is just completely unacceptable for the tourism industry to be able to remain competitive with … our competitors,” Davis said. “They are looking at different ways that they can turn things around for the industry.” The Legislature’s intent is for the industry to find ways to sustain itself to rely less on general fund dollars, according to the appropriation bill. The Alaska Travel Industry Association is working through details of how to create a system that will allow the industry to fund its own marketing efforts. One idea being debated is to create a Tourism Improvement District in which tourism-related businesses would be assessed a fee that would go to statewide marketing efforts, said Sarah Leonard, the president and executive director of the Alaska Travel Industry Association. “We feel like we’re following through with what the Legislature has asked us to do and work with (stakeholders) to get it fleshed out,” Leonard said. A Tourism Improvement District would have to be created by state statute. Other cities and state have enacted them on a variety of levels and have shown success at generating marketing funds, according to the Destination Marketing Association International. If it were created, businesses would be asked to self-assess what portion of their revenue comes from tourism through a formula. Businesses would be identified by their Internal Revenue Service tax codes, Leonard said. The fees would then go into a fund to develop statewide marketing efforts, she said. Right now, the association is gathering feedback from its businesses as to whether they would support such an effort. If something came forward, it likely wouldn’t be for another two or three years, she said. The Alaska Travel Industry Association works to complement local tourism marketing organizations like KPTMC. However, there are efforts that may be beyond the financial or logistical reach for local organizations that would be better for a statewide association to handle, like national and international TV ad placement, she said. “The whole conversation has been around statewide tourism marketing so that as a state we can continue to compete as a state,” she said. “…there are things that can be more targeted at the local level for different types of visitors too. But this (Tourism Improvement District) model has been focused on implementing this at a state level.” Recently, Alaska hosted the Adventure Travel Trade Association conference in Anchorage, the association’s first meeting in North America. The meeting brough international attention to Alaska as a visitor industry destination, something businesses in the state are interested in pursuing further, Leonard said. Locally, KPTMC is boosting its efforts with a new website, which is attracting more traffic and advertisements, and through its annual Discovery Guide, a print magazine with information about activities on the peninsula. The organization also recently raised membership dues for its approximately 286 members to $225 annually from $150. The new fee better reflects services the members receive through the new website, Davis told the assembly. KPTMC’s year runs from October to October, and membership is only down by four members from last year so far, she said. The increased fees don’t seem to have discouraged many businesses from becoming members, she said. “We are anticipating that we’ll make that up easily before the end of the year with the new website,” she said. Elizabeth Earl can be reached at [email protected]

What's killing Susitna sockeye salmon?

If any fish population in Upper Cook Inlet could be considered in trouble, Shell Lake’s sockeye could. The lake in the Matanuska-Susitna region, located northwest of the village of Skwentna between the Skwentna and Yentna rivers, has long supported a population of sockeye salmon. When the Cook Inlet Aquaculture Association first studied the sockeye returns there in the 1980s, the lake seemed to sustain a reasonable smolt outmigration and adult return each year. A 1989 Alaska Department of Fish and Game study indicated that the Shell Lake produced about 10 percent of the total sockeye population returning to the Susitna River. That’s not the case any more. In 2015, only three sockeye returned to the lake, according to CIAA’s counts. The total is an estimate, though, because of partial video loss from the video weir the association uses, according to its 2015 report on Shell Lake. A total of 59 smolts left the lake the same year. Compared to the lake’s historical data, the decrease is drastic. In 2006, approximately 69,800 adults returned to the lake and about 80,600 smolts outmigrated in 2007. CIAA studied the lake again around 2006 and has watched the population decline since, said Gary Fandrei, the organization’s executive director. “After a few years (of declining returns), we said if this goes on one more year, it would be doomsday for the fish population,” he said. The dwindling population has the Mat-Su Borough Fish and Wildlife Commission alarmed enough to ask the state to step in. The commission, which represents the Mat-Su Borough on fish and wildlife issues, submitted a non-regulatory proposal to the Board of Fisheries to designate Shell Lake sockeye a stock of conservation concern, the most severe designation in the Alaska Sustainable Salmon Fisheries Policy. The concern is that without intervention, Shell Lake’s sockeye will die out completely, said Terry Nininger, a member of the Mat-Su Borough Fish and Wildlife Commission who also testified at the Board of Fisheries’ work session in Soldotna Oct. 18. “There’s not a lot of local angler effort except for the locals that live around the lake,” he said. “… It’s more of a concern about the fish, not about the angler effort.” There are likely a number of factors in the decline, chief of which is invasive northern pike predation. The infestation of pike in the northern Cook Inlet area is fairly well documented and pike populations have been identified in more than 100 lakes in the broader Susitna and Matanuska drainages. Though the freshwater fish are native to Alaska north and west of the Alaska Range, they are invasive in Southcentral and Southeast Alaska and can devastate salmon populations because they are voracious predators on juvenile salmonids. Individual pike have been discovered with dozens of juvenile salmon in their stomachs. CIAA, which collects eggs from returning Shell Lake sockeye, rears them to smolt in its Moose Pass-based Trail Lakes Hatchery and returns them to be released in the lake, also nets the pike for population control. However, because of the nature of netting, they catch mostly the larger pike while the younger, smaller pike are still a problem, Fandrei said. There have also been problems with two diseases that affect salmon and beaver dams blocking passage. Though the diseases, both caused by parasites, seemed to have abated for a little while, they were detected again this summer, he said. CIAA regularly surveys the area and creates notches in beaver dams that could be blocking fish passage, he said. More fish returned this summer — approximately 215 according to a record copy Nininger submitted to the Board of Fisheries — and CIAA was able to collect eggs again, Fandrei said. However, when fish populations dwindle down to a certain point, they can’t sustain themselves, he said. “(The egg-take and stocking effort was) an effort to save the gene pool, to keep the gene pool alive in that stock of fish,” Fandrei said. “We had seen a very small number of fish coming back. Less than 10 fish might just be strays that wander up there from somewhere.” The Mat-Su Fish and Wildlife Commission wants to see the state switch the designation to a stock of conservation concern and restrict harvest on the sockeye stock across the board for all user groups: commercial, sportfishing and personal-use, as well as a more aggressive program to deal with the pike infestation, Nininger said. “If the department decided to take a step of making it a conservation concern, they could restrict the fish harvest both commercially and the fish going up that stream both for sport fishing and personal use,” he said. “They could restrict the catch … and that would certainly help.” Through the Alaska Sustainable Salmon Fisheries Policy, Fish and Game designates stocks of concern if a particular fish population fails to meet its management goals. There are three categories: yield concern, management concern and conservation concern. There are currently 13 stocks of concern statewide, according to Fish and Game’s website, and eight are in Cook Inlet. The Shell Lake stock would be the only one of conservation concern in the state. The challenge would be for Fish and Game to determine how to reduce harvest on those sockeye specifically, especially in the marine fishery, where set gillnet and drift gillnet fishermen can harvest sockeye of mixed stocks. Fish and Game has conducted genetic studies on the mixed stocks of sockeye salmon in Cook Inlet, but a conservation concern designation would come with additional restrictions. The Mat-Su Borough Fish and Wildlife Commission also asked the Board of Fisheries to consider upping the stock of concern designations on the Susitna River sockeye salmon stock from yield concern to management concern, though the Central Peninsula Fish and Game Advisory Committee asked for the Board of Fisheries to repeal the stock of yield concern designation on the Susitna River sockeye stock, saying the designation was based on a faulty sonar estimate and repealing the designation would open up more commercial fishing. The Matanuska Valley Fish and Game Advisory Committee also asked for upgrades on multiple king salmon stocks of concern. A recent court ruling has thrown a wrench into state management of Cook Inlet’s marine fisheries as well. A three-judge panel of the U.S. Ninth Circuit Court ruled in favor of the United Cook Inlet Drift Association in a lawsuit over the 2011 removal of several Alaska salmon fisheries from the federal fishery management plan. No decision has yet been made on how the fishery will proceed next season. Both Nininger and Fandrei said the stock of conservation concern on Shell Lake’s sockeye salmon could help bring needed attention to the issue, and both said the conditions should be better studied. “We feel the state needs to raise awareness across the board,” Nininger said. “There’s a variety of different ways that could be approached. We are concerned that the management concern level isn’t getting the attention it needs.” Elizabeth Earl can be reached at [email protected]

Many professionals across Alaska will have to pay more to work

Juniper Lanmon-Freeman cried the first time she attended the birth of a child. A licensed midwife, Lanmon-Freeman now delivers two to three babies per month for mothers at their homes. But the job goes far beyond that — by the time she delivers the child, she’s spent weeks with the mother. “(On) my last birth, I visited her 13 times before she had her baby,” she said. “When they’re in labor, you’ve built this relationship with them. It’s more like a sister relationship or a good female friend.” Lanmon-Freeman is one of just 63 licensed midwives in Alaska, and one of two on the central Kenai Peninsula. Three more are licensed in Homer, and the majority practice in Anchorage. Sometimes, when she’s attending a birth and another one of her clients goes into labor, the peninsula’s midwives will step in for each other, Lanmon-Freeman said. “We have an agreement that if (a mother goes into labor) and you’re at another birth and you can’t go, (we’ll cover each other),” she said. “We’ve got some grey hairs out of it.” However, next year, the picture will likely change. The cost to obtain a direct-entry midwife license — a license to practice as a midwife primarily in out-of-hospital settings — in Alaska will more than double, rising from $1,750 to $3,800 for a biennial certification. That doesn’t include the initial application fee and the fees for certifications for apprenticeships, which midwives have to complete before becoming eligible for full certification. For morticians, the fee is increasing from $100 to $150 every two years. For naturopaths, license applications fees are increasing by a factor of 10 from $50 to $500, and a biennial license will cost $1,200 instead of the former $470. It doesn’t include all the licenses. For some, fees are actually going down. For example, behavioral analysts will only have to pay $500 for their licenses next year instead of $1,000. The state of Alaska requires occupational licenses for a variety of professions, from doctors to underground storage tank workers to pawnbrokers. Each of those licenses has to be renewed with the state every two years for the professional to legally work. It’s not a set list — the Legislature can add a licensing requirement for occupations at any time, as in the case of massage therapists, who were not required to be licensed until 2015. The Alaska Department of Commerce, Community and Economic Development administers licenses through its Division of Corporations, Business and Professional Licensing. Boards such as the Medical Board or the Board of Direct-Entry Midwives manage many of the programs, but those that aren’t are administered directly by the division. Alaska statute requires every occupational licensing program to balance its operating fees with the revenue from professional licenses. The division staff evaluates the fees every year to determine if they have to increase or if they can decrease them to stay solvent, said Sara Chambers, division operations manager. “That sounds like a pretty straightforward business practice,” Chambers said. “… Fee programs may or may not be changed. We will often change fees before renewal. It makes a lot more sense to put a new fee in place in advance (of renewals).” The licensing programs don’t rely on the state general fund to operate, so it isn’t the state budget deficit that’s pushing the fees up — it’s increasing investigation and legal fees and imbalances between the operating and licensing costs. “Part of our cost is hearing costs,” said Angela Birt, who oversees the investigations in the division. “We’re represented by the Department of Law … a lot of the cost you see about investigations are typically related to legal proceedings.” Last year, the division conducted 600 investigations, according to a July 2016 report to the Legislature. Investigations can range in complexity, taking years in some cases. The complexity pushes up the cost. But the person being investigated doesn’t pay for the investigation — that’s borne by the program. Fines paid as the result of investigations go back to the state’s general fund, Chambers said. As a result, the staff that works on the investigations keeps tight timesheets. “Generally, they’re trying to count down to the quarter of the hour,” Birt said. Chambers said there had been some concerns raised over the years about the way the licensees bear the cost while the fines go to the general fund. “That’s been a concern that the good apples are essentially paying for the bad apples,” Chambers said. “We’ve worked on it different ways, different times throughout the years.” Rep. Kurt Olson (R-Soldotna), the outgoing representative for the central Kenai Peninsula, proposed a bill in April 2013 at the request of the Department of Commerce, Community and Economic Development “to levelize the dramatic changes in professional licensing fees,” according to the minutes from the House Finance Committee in April 2014. The bill would have changed that law to fund the personnel costs for investigations out of the general fund instead of licensing fees. The Alaska Nurses Association testified in opposition to the move, expressing concerns about additional pressure on the general fund in a time of declining revenues. Patricia Senner, who testified to the House Finance Committee on behalf of the association, said the association instead suggested the Legislature set up a fund to deal with the most expensive investigations rather than all of them. “From a historical perspective, the decision to have licensee fees pay for the cost of the Boards was made during a time of diminishing state revenues,” Senner said in her testimony. “We do not think over the next several years the Division is going to want to be reliant on a diminishing source of general fund revenues when they could have had a more steady income source with licensee fees. If the Division can’t get enough general funds to pay for their investigators, how are they going to prioritize investigations?” The bill was last heard and held in the House Finance Committee in April 2014, according to the Alaska State Legislature’s website. Lanmon-Freeman said she runs her business on a fairly tight margin. She accepts Medicaid and Denali KidCare, both of which pay lower reimbursement rates than private insurers. She also charges between $6,000 and $10,000 for a birth, which includes the prenatal and post-natal visits, she said. A study published July 2015 in the trade journal Health Affairs found that hospital costs for low-risk childbirth varied widely among facilities in 2011. According to the Centers for Medicare and Medicaid Services, the national average covered cost in 2013 was about $13,118 for a delivery without complications. In Alaska, that same procedure cost about $15,477 in 2013, according to CMS. However, that doesn’t include the cost of pre- and post-natal care, medications, travel or the additional costs incurred by complications. CMS did not publish data for Alaska on costs for a C-section without complications, but nationally the average is $20,179, according to the CMS data. Alaska tends to be more expensive than the national average for health care procedures. Midwives are able to offer more personal care without the risk of hospital-acquired infections or travel, Lanmon-Freeman said. In the end, for many mothers on Medicaid or Denali KidCare who use midwives, the relatively controlled costs and low risk of complication save the state money in the long run, but the increase in licensing fees threatens their ability to keep prices low, she said. “It’s pushing a lot of midwives into a predicament: do you continue practicing something that you love, that your clients love, but can you afford it?” Lanmon-Freeman said. “…You just do it for the love of it.” She said she was concerned that as the fees continue to increase, it may drive more midwives to not reapply, increasing the pressure on the remaining midwives in the program to bear the cost of licensing and regulation, pushing fees even higher. Division of Corporations, Business and Professional Licensing Director Janey Hovenden said in testimony to the Legislature in January 2016 that one of the challenges of setting fees is to set up a path to get programs out of an operating deficit while not pricing people out of the occupation. Auditors have suggested some fixes for such a problem, such as combining the midwife licensing program with the nursing licensing program, which has approximately 16,000 licensees, Birt said. To anticipate costs, the division developed a cost prediction tool that is essentially a spreadsheet that allows managers to test different license costs and project the effect on the program’s bottom line in the future. The future is hard to predict because the number of licensees is always uncertain, Chambers said. Program fees pitch up and down over the years as the division corrects deficits and works to reduce surpluses. “If there’s a spike in investigations, that may cost (a particular) program a little more money in the next cycle,” she said. “The tool gives us a consistent and transparent way to estimate those. At the end of the day, it is an estimate.” Elizabeth Earl can be reached at [email protected]

Board of Fisheries to consider Tanner strategy and Kenai dipnet boats

SOLDOTNA — The Board of Fisheries wrapped up its Soldotna worksession with the discussion of a board-generated proposal to limit the size of boats in the Kenai River personal-use dipnet fishery. The board members heard several public comments Tuesday asking them to regulate the Kenai River dipnet fishery to make it safer. One agenda change request which was denied Wednesday, asked the board to limit boats to 50 horsepower or less and ban specifically Thunderjet boats from operating in the area. The Kenai River dipnet fishery is the most popular personal-use fishery in the state, attracting thousands of participants over the three weeks of the fishery between July 10 and July 31. Most boaters launch from the Kenai City Dock, which is located next to several commercial fishing processors and often has commercial boats moored close by. During the 2016 season, law enforcement received at least five reports of small boats being swamped by larger boats near the dock. The board denied the agenda change request because the members said they did not feel it met the requirements to be considered out of cycle, but was simply a proposal submitted past the deadline. However, several expressed concerns about public safety in that fishery, and Board of Fisheries Vice-Chair Sue Jeffrey brought forward a board-generated proposal Thursday to address it. The proposal would have limited boats to less than 50 horsepower, less than 21 feet in overall length and less than 106 inches in overall width. Jeffrey said though the group rejected the ACR, the board-generated proposal would be timely because the Upper Cook Inlet meeting is coming in February and the public would have adequate time to look at it and weigh in. “We are not in the policy habit of accepting ACRs that are late, but based on a lot of public comment that we heard and anecdotally throughout the last few days, we have heard about this disorderly, unsafe fishery,” Jeffrey said. However, other Board of Fisheries members disagreed. Board-generated proposals have generated controversy because they can be presented, debated and passed in one day during a board meeting without public comment. Board member Israel Payton said he opposed it because the issue is a controversial one, and a board-generated proposal could dislodge the public’s trust. Overall, he said he did not think the fishery is out of control. People can choose where to fish if they want to get away from the boat congestion near the Kenai City Dock, he said. “I have participated in the fishery and observed it, and I would disagree with that,” Payton said. “I think it’s a pretty safe and fairly orderly fishery.” Board member Reed Morisky agreed with Payton, saying he thought taking action would bring criticism to the board because the proposal didn’t come from the public. Board member Robert Ruffner said he would support the proposal so the board could have the discussion at the full Upper Cook Inlet meeting in Anchorage. Accepting the proposal now would give the public adequate time to review it and comment on it before the meeting at the end of February, he said. “I’m not necessarily in support of this idea, I’m just in support of generating the discussion,” he said. Board member Alan Cain suggested possibly amending a proposal already into the book related to placing horsepower restrictions on boats in the Kasilof River personal use dipnet fishery to include the Kenai River. The board voted against the proposal 5-2, with Jeffrey and Ruffner supporting it. The board chose to take up two other board generated proposals — one clarifying when 4-inch mesh set gillnets can be used during the early season king salmon subsistence fishery on the Kuskokwim River and the other to eliminate the mature female bairdi, or Tanner, crab biomass threshold to open the fishery. The latter is a source of contention because the fishery was closed for the season Oct. 5 because the Alaska Department of Fish and Game’s survey of the crabs population in the Bering Sea District did not meet the minimum threshold for mature females. Fishermen and industry representatives have appealed to the board to reopen the fishery this year because they felt there was plenty of crab in the part of the fishery west of the middle line at 166 degrees west longitude. The Kuskokwim proposal is scheduled to be heard at the Upper Cook Inlet meeting in Anchorage in February and the bairdi crab proposal is scheduled for the Kodiak meeting in January. Elizabeth Earl can be reached at [email protected]

ACLU asks Kenai assembly to stop praying

The American Civil Liberties Union of Alaska has asked the Kenai Peninsula Borough to back down from its newly passed invocation policy. The organization, which advocates for individual constitutional liberties, frequently through litigation, sent a letter to Kenai Peninsula Borough Assembly President Blaine Gilman claiming the policy violates religious liberty because those seeking to give an invocation must pass a religious test. “On its face, this test prohibits people who belong to no religious association or whose religious associations fail to pass the Assembly’s test from participating in the Borough’s civic life by giving a legislative invocation,” wrote ACLU Alaska Executive Director Joshua Decker in the letter. “This violates the constitutional guarantees of equal protection and religious freedom.” After a protracted controversy about who may give the invocation before the assembly’s regularly scheduled meetings over the summer, the assembly debated and passed a formal policy at its Oct. 11 meeting that outlines rules for giving an invocation. Under the policy, the person giving the invocation must be a chaplain serving fire departments, law enforcement agencies, hospitals or other similar organizations or a member of a religious association that meets regularly in the borough, as long as the leader of the association submits a written request to the borough clerk’s office. Before that, the assembly scheduled invocations on a first-come, first-serve basis from anyone who wanted to give one. Decker said the ACLU of Alaska has been following the issue throughout the summer and thought the assembly made the right call when the members decided in July not to restrict who can give the invocation. However, when the assembly passed the policy last week, the ACLU became concerned because the policy seems discriminatory, he said. “We’re hoping the assembly is going to do the right thing and go back to the way things were before (Oct. 11),” Decker said. The policy is shaped after the 2014 U.S. Supreme Court ruling Town of Greece v. Galloway, in which the court ruled that the city council of Greece, New York could have prayers before its meetings as long as the prayers do not show a pattern of “denigrating nonbelievers or religious minorities, threaten damnation, or preach conversion,” according to the borough resolution containing the new policy. The Supreme Court decision also stated that the prayers are permissible because no one is required to participate, and even if some say the prayers offend them, “offense does not equate to coercion.” The resolution also references other court decisions ruling that governmental bodies can have public invocations before their meetings in a variety of states. Decker referenced the Town of Greece v. Galloway decision in his letter to the borough, saying the court had ruled that once a governmental body invites prayer into the public sphere, it must be open to everyone. He said there are two solutions: either to return to the previous policy, in which anyone could give an invocation, or to do away with invocation entirely. At the end of the letter, he urged the assembly to make a decision by Nov. 28, 2016. While the letter does not explicitly threaten litigation, the organization wouldn’t rule it out “if that’s what it took to uphold the Constitution,” Decker said. “We sent this letter today to the borough assembly and hope they’re going to do the right thing,” he said. Gilman said he had just received the letter Thursday afternoon and couldn’t comment on it because the borough assembly will have to discuss it. Borough attorney Colette Thompson said the borough would not comment on the letter either. The legal department asked assembly members not to comment on the matter on behalf of the assembly because the group has not had time to discuss it yet. As an individual, assembly member Willy Dunne said he thought the letter made some valid points. Dunne opposed the new policy and said he doesn’t like the concept of the religious test which people would have to pass to qualify to give an invocation. “I think we will be discussing this more, and I’m looking forward to hearing how the assembly decides on this,” Dunne said. Brandii Holmdahl, who represents Seward on the assembly, said she could not comment as an assembly member but as an individual said she thinks that the assembly should either not have an invocation or should let it be open to everyone. Holmdahl proposed twice this summer to remove the invocation from the assembly’s agenda, but the proposals both failed to pass introduction. Assembly member Gary Knopp said he was not surprised that the decision was challenged and that it will have to be dealt with by the borough legal department and the assembly president. When reached, assembly member Kelly Cooper said she had not seen the letter yet. Other assembly members could not be reached for comment as of press time Thursday. Elizabeth Earl can be reached at [email protected]

Board of Fisheries addresses Agenda Change Requests

SOLDOTNA — On the second day of its worksession in Soldotna on Wednesday, the Board of Fisheries discussed a number of agenda change requests, or ACRs — requests for fisheries regulations submitted outside the regular cycles — to take up at its upcoming meetings this winter. The ACRs addressed issues around the state, not just the fisheries that have their regular cycles this winter. The Board of Fisheries chose not to take up an agenda change request related to limiting the size of boats in the Kenai River personal-use dipnet fishery in this cycle. Three of the 12 ACRs submitted would affect Cook Inlet fisheries, and only one was accepted. ACR 1, which would align regulations for sportfishing services and sportfishing guide services in saltwater with those in statute and update freshwater guide registration and reporting regulations, was accepted and applies statewide. The proposal came up because of a bill passed by the Legislature in 2015, HB 41, which re-establishes the licensing and logbook program for guides around the state and updates the logbook reporting requirements and fees. For the 2017 season, the Alaska Department of Fish and Game’s registration requirements are out of alignment with the law. “Current regulations require sport fishing businesses and guides operating in fresh and salt water to registered with the department but do not include provisions to implement licensing as required in HB41,” the proposal states. “As a result, current sport fishing business and guide regulations are in conflict with statute.” The Board of Fisheries moved to accept the request because it meets the criteria for an unforeseen consequence of regulation, in this case, from the state. The Legislature has made efforts to update these laws over the years, and this law is a first step, said Reed Morisky, a member of the Board of Fisheries. “It’s got a long, long history, and the Legislature has done various fixes over the years, but there’s still effort in the Legislature to have a longer term solution with this, and I believe that by passing this ACR, we will be headed in that direction,” Morisky said. Accepting the ACR doesn’t mean the regulations will change — it only means the board will discuss it as a formal proposal at a meeting. Newly elected board chairman John Jensen suggested taking it up at the Lower Cook Inlet meeting in Homer, scheduled for the end of November, in order to get the regulations in place by January. Since HB 41 has a sunset date built into it, anything the board passes should also have a sunset date built in, Morisky said. The board declined to take up two Cook Inlet-specific ACRs, one that would have limited the types of boats to be used in the Kenai River personal-use dipnet fishery and the other to remove the net depth restriction for drift gillnet commercial fishing vessels in the Central District of Cook Inlet. The first was proposed because of the number of boats that get swamped near the Kenai City Dock, where many boats of different sizes interact. At least five private boats were swamped this summer, with some needing assistance from the Kenai Fire Department boat that patrols those waters. Several board members said the public safety concerns about the personal-use fishery were legitimate, but the ACR did not meet the criteria to be accepted past the deadline for regular proposals. Board member Sue Jeffrey said she would like to see it discussed and said she might consider a board-generated proposal to address the public safety concerns arising in that fishery. “I think the issue brought up here is important enough,” she said. “It sounds like the (Kenai River dipnet fishery) ... has increased in disorderliness. I’m saying disorderly because it sounds like a mess of a lot of boats going in and out and I think that this is worth discussing more.” Morisky said he understood the public safety risk in the fishery but that a board-generated proposal would likely generate controversy. Board-generated proposals can come up during the regular Upper Cook Inlet meeting, which will be held in Anchorage at the end of February 2017, and do not require public comment before passing. Jeffrey said if the board does come up with its own proposal, the public will have a chance to weigh in on it. The board also denied the agenda change request to lengthen commercial fishing driftnets beyond 45 meshes. The board denied it unanimously, with several members saying it was essentially a late proposal and that the net-depth issue would come up in the regular meeting in February. Board member Orville Huntington said he was also concerned that lengthening nets could interfere with the migration of king salmon, which have been shown to swim deeper than other salmon species. The board did choose to take up one other ACR related to a subsistence harvest limit for sockeye salmon near Unalaska. The Unalaska/Dutch Harbor Fish and Game Advisory Committee asked the board to reduce the limit because of concerns for the fish stocks in a portion of the beach known as Front Beach. Fish and Game does not monitor the sockeye salmon escapement in that system, but the fact that the proposal came from the local advisory committee carried weight, several board members said. Board member Israel Payton said he would give it more credence because the local advisory committee was petitioning to reduce their own limits. “For a community to ask for a reduction of their own subsistence harvest is pretty substantial,” he said. “I take that seriously.” The board recessed for the evening with two ACRs left to consider and will continue its work in Soldotna Thursday, discussing miscellaneous business and non-regulatory proposals. Elizabeth Earl can be reached at [email protected]

Public gets open mic at first day of fish board meeting

SOLDOTNA — Fishermen and the fisheries-inclined turned out by the dozens Tuesday for an open hearing before the Board of Fisheries to air their concerns on a host of issues. The Board of Fisheries, preparing to enter its 2016-2017 cycle, is holding a work session in Soldotna this week to discuss Agenda Change Requests and non-regulatory proposals and to take public comments. When the session was scheduled in October 2014, the board set aside an entire day for fishermen to make public comments on any issue they wanted to address. Title 16 Commenters spoke on a variety of issues, but several recurred throughout the day. The issue that received the most comments, both for and against, was a non-regulatory proposal requesting the Board of Fisheries to lobby the Legislature to update the state fish habitat permitting process to include specific criteria from the Alaska Sustainable Salmon Fisheries Policy. The proposal, authored by a collection of commercial, subsistence and sport fishermen from all around the Cook Inlet region, asks that the Legislature update Title 16 — the Alaska Department of Fish and Game’s fish habitat permit regulations — to more specifically define what constitutes the protection of fish and game. Currently, the law states that the ADFG commissioner should issue permits unless the activity is deemed insufficient for the protection of fish, but the law doesn’t clearly define what sufficient protection is. Willow King, one of the proposal’s 12 authors and a setnetter from Kasilof, urged the board to send the Legislature a letter supporting the proposal. “I find that the references to protecting fish and game in water are vague,” King said. “... What is beneficial to finances isn’t always beneficial to fish. And salmon have enough trials to go through.” The parameters for Title 16 do not require a public notice and comment period for fish habitat permits. Several people testified Tuesday that they want the public to have a chance to weigh in on fish habitat permits as well, like Mike Wood, another of the proposal authors and a setnetter near the mouth of the Susitna River. He said one of the reasons he supports the proposal is the proposed Susitna-Watana Hydroelectric Project, which would have dammed the Susitna River above Devil’s Canyon to produce hydroelectricity. The project received wide criticism from residents and fishing advocates, and Gov. Bill Walker announced in June that the project would go on hiatus. “I think that a closer look at our state’s sustainable salmon proposal could help provide better guidelines to keep large projects such as Susitna Hydro from even going to the point that they did,” Wood said. Other supporters wanted the state to take an “anadromous until proven otherwise” attitude toward the state waters. Sam Snyder, engagement director for the Alaska chapter of Trout Unlimited, testified to the board that because only a portion of the state’s waters are catalogued, ADFG should assume that streams are anadromous when issuing fish habitat permits if not catalogued. The law also has too much ambiguity for how the commissioner could define the proper protection of fish and game, he said. “Luckily, so far, we’re not a part of the story that faces the Lower 48, where they’re spending billions of dollars to restore trout and salmon habitat degraded by bad habitat management, overpopulation, large disruptive dams and other impactful projects,” Snyder said. “In Alaska, while there are habitat issues in the more populated areas of the state, we again largely avoided those issues. If we can keep habitat intact, we can really work to maintain healthy fisheries.” A few testified in opposition to the proposal as well. Andrew Couch represented the Mat-Su Valley Fish and Game Advisory Committee, a citizen group that provides feedback on fish and game issues to the state, and said the group opposes the proposal because members feel they do not have enough information on it and it could potentially make some activities, like gold mining, more arduous. “Several members expressed they had inadequate time to review this proposal — it was not included in the public proposal book,” Couch said. Mat-Su stocks Several people also brought up the issue of declining sockeye stocks in the Susitna River drainage. The Mat-Su Borough Fish and Wildlife Commission submitted three proposals asking for the stock of concern levels for certain stocks of sockeye salmon to be elevated, and for six stocks of king salmon to be designated as stocks of yield concern. Within the Alaska Sustainable Salmon Fisheries Policy, ADFG has several levels of stock concern for declining salmon populations — stocks of yield concern, stocks of management concern and stocks of conservation concern, with conservation concern being the most restrictive on harvest. One of the stocks the Mat-Su Borough Fish and Wildlife Commission is most concerned about is the Shell Lake sockeye salmon stock. Terry Nininger of Wasilla, a member of the commission, urged the board to support the stock designation. Cook Inlet Aquaculture Association, which monitors escapement in the lake, reported that only three adult salmon passed the weir at Shell Lake in 2015, as compared to 69,800 in 2006, according to a March 2016 report. ADFG has rarely used the stock of conservation concern designation, but “the Shell Lake issue is unique,” Nininger wrote in his public comments to the board. Pike predation, disease and beaver dams are primary reasons for the decline, but harvest should still be reduced to help aid the stock’s recovery, he said. “In the short term, this may compromise the interest of sport and personal use fishermen and commercial fishermen, but in the long run, it’s the only action that will return this fishery to its original, natural state,” Nininger said in his testimony to the board Tuesday. Couch, testifying on behalf of the Mat-Su Valley Fish and Game Advisory Committee, said the members also support the stock of concern designations. Bairdi crabs Another issue that several participants commented on was the closure of the bairdi Tanner crab fishery for the 2016–2017 season, which ADFG announced Oct. 5 because of concerns about the biomass of female crabs. A 2016 survey showed that mature female biomass fell below the acceptable threshold, closing the fisheries both east and west of the designated middle line, denoted at the 166 degree longitude line. The board can decide to take up the issue at this work session. The Unalaska/Dutch Harbor Fish and Game Advisory Committee submitted a record copy to the Board of Fisheries asking it to reconsider the harvest policy so the fishery can remain open, criticizing ADFG’s harvest strategy methods and saying the method should be re-evaluated before closing the fishery. Leonard Herzog of Homer asked for the board to generate a proposal to reopen the Tanner fishery. Though the fishery on the eastern side of the line has declined “precipitously,” the stock on the west side is still relatively abundant, he said. The fishery targets mostly old-shell males, he said. “It’s really unclear whether or not they’re a help to the future of the resource or not because the females are all clutched and they’re not affecting the female population,” Herzog said. Josiah Johnson, a commercial fisherman, also urged the board to reopen the crab fishery this year and to re-evaluate the abundance in the fishery. “There was a lot of crab last year, and I was really surprised to see that all of a sudden there was going to be no fishery this year,” Johnson said. “... I just know that when we fished the western Pribilof section last year, they looked really good. There was a lot of crab out there.” The board will discuss the non-regulatory proposals and agenda change requests during its Wednesday and Thursday sessions. Elizabeth Earl can be reached at [email protected]

Alaska Gasline Development Corporation takes the lead on LNG Project

The board of directors for the Alaska Gasline Development Corporation, which represents the state’s interests in a gasline project, met at Kenai’s Cannery Lodge Thursday to discuss work on the Alaska LNG Project and recent gas marketing efforts in Asia. “We want to reach an agreement, and then we have a number of transition activities that are going right now that will wrap up by the end of the year," said AGDC President Keith Meyer. He presented updates to the board, saying the negotiations around the transfer of the project’s assets “are continuing in a cooperative manner.” Since an analysis from consulting firm Wood MacKenzie was presented to the Legislature in August showing the Alaska LNG Project as one of the least competitive LNG projects in the world at present, and the three producer partners on the project — BP, ConocoPhillips and ExxonMobil — announced they would step back from making further investments, the state has been working out how to transition the completed assets from the project so the state can press on. The target date for the agreement is in October, and Meyer said he expected the transition to be complete by the end of the year. He said AGDC hoped to have access to the project assets by then to completed the filings to the Federal Energy Regulatory Commission for a “seamless continuation of the project.” Up until now, the project has been in the pre-front end engineering and design phase, or pre-FEED. The producer partners opened the FERC docket with all their names on it, applied for an LNG export permit and filed the draft resource reports with FERC, and now that the state has taken over leadership, all of that will need to be transferred. The state was not originally on the export permit, nor did it hold ownership in the Alaska LNG Project, LLC, which owned the land purchased in Nikiski for the proposed plant and all the geotechnical and geophysical work conducted there. Right now, the project is paused before the decision to enter the front-end engineering and design phase, or FEED. Once the FERC application is filed, the agency will return comments to the project managers on its concerns and the concerns of the public commenters. Meyer said AGDC staff is currently meeting often with the licensing team, participating in community meetings, contracting with the existing contractors to complete resource reports and prepare the application and contracting with legal counsel to help with the FERC application, among other preparatory tasks. Because the state is taking over, AGDC is also evaluating alternative structures for the project, including a potential tax exemption for the income of the project. Gov. Bill Walker has said in previous Clarion interviews he is confident the state can secure that tax exemption, which will bring down the cost of production and make the project more competitive. Both Walker and Meyer have been making visits in Asia to gauge interest from potential buyers for Alaska’s LNG there. “Nobody needs LNG right now, we know that, but people know they want it by that early 2020s timeframe,” Meyer said. “It was good to hear that. … I think the market folks we met with, both government and industry people, were happy to hear that Alaska is still alive and well in the LNG space and also are looking forward to the kind of offering I think we can make given the geographic proximity and the ability to price this project with quite a bit less volatility than what their other suppliers may offer.” Meyer restated that the producer partners stepping back does not constitute their withdrawal from the project. ConocoPhillips signed a memorandum of understanding with AGDC to negotiate the formation of a joint venture marketing firm, to market North Slope LNG. He said while the MOU is only with ConocoPhillips at the moment, it is open to other producers in the future if they want to join in. “We did want to make that available to the other producers and to other third parties,” Meyer said. “That doesn’t have to be just the former joint venture participants. We see it as a good way to communicate to the market that in fact we’ve got gas supply.” Next year will likely be a hard-hitting year for marketing the project, Meyer said. The Final Investment Decision will likely not come until late 2018 or 2019, but in the meantime, AGDC executives will be raising awareness for the project among potential buyers and working out the licensing and project structure, he said. Since the announcement of the producer partners’ backing down from investment, many Alaskans have expressed doubts about the future of the project, especially in the face of a still-looming state budget shortfall. The global LNG market is currently oversupplied and prices have stayed low as a number of LNG facilities worldwide have come online, and because Alaska’s project is expensive to develop and market, it is less competitive. Board member Hugh Short asked Meyer what he would say to Alaskans who say AGDC should walk away from the project. “These are the things that I hear in the community about this project. I think the biggest challenge … was that if the majority of Alaskans, whether that’s the Legislature or the business community or voters, constituents, if they don’t support this project, it presents even that much more of a headwind as you go out to market Alaska’s gas,” Short said. Meyer said the state would be missing an opportunity for decades if it failed to move forward on the project now. The state is not going it alone, but will be looking for investors elsewhere rather than from the producers, he said. “I think it’s something the state really owes its people, to look at what does it really look like if you just stop? What if you don’t do this project? What if you don’t ever have a gas pipeline? What if you just let the oil run dry?” Meyer said. “…If you really look at the two paths, the two choices, either do it or not, I believe having a project will be much more beneficial to the state than not having a project.” Elizabeth Earl can be reached at [email protected]

Lower oil prices may be here to stay

The lower oil prices that Alaskans have been anxiously hoping will go back up may be the trend for the next several years. With Alaska North Slope oil hovering around $50 per barrel, less than half the price it traded for in early 2014, producers are trying to make ends meet and the state is puzzling over how to recover from the loss of the production tax and royalty income from oil production. Gov. Bill Walker has estimated that the state’s budget would need oil to trade at $103 per barrel to balance it on oil revenue alone, but that doesn’t seem likely in the face of global oversupply and toughening competition, said Marianne Kah, chief economist for ConocoPhillips In a speech at the annual Alaska State Chamber of Commerce’s Fall Forum on Wednesday in Kenai, Kah outlined some of the challenges in the oil and gas market and what the future may hold for producers in Alaska. Chief among the causes in the toughening market is the sharp spike in the production of tight oil, the name for oil extracted from low-permeability rock layers such as shale, in the Lower 48, she said. “(The boom in tight oil production) has really changed our outlook for not only the short term, but maybe for the long term,” Kah said. ConocoPhillips operates oil and gas production units around the state, including production rigs on the North Slope and the oldest liquefied natural gas export facility in North America, located in Nikiski. Since the beginning of the decline in oil prices, the company has curtailed its capital expenditures by about 68 percent, reducing the expenditures in 2016 from $6.4 billion to $5.7 billion, according to the company’s most recent quarterly filing with the Securities and Exchanges Commission. The company also plans withdraw from deepwater exploration, which is much more expensive than other types of exploration, according to the filing. Kah said Alaska has been relatively buffered from most of the major layoffs and cuts so far compared to Houston, where the company is headquartered. However, oil production is Alaska is being challenged because of the high cost of entry compared to the faster and cheaper setups of tight oil production in the Lower 48. Production of tight oil has climbed quickly in the last five years as methods of extraction become more efficient, as has the resource potential. Some of the oil patches in the Lower 48 have the potential to be Prudhoe Bay-sized fields, she said. “This is truly a game changer in our world,” she said. The U.S. Energy Information Administration projects tight oil production to double between 2015 and 2040, reaching about 10.36 million barrels per day in its International Energy Outlook 2016 and Annual Energy Outlook 2016. Most of that production will come from the U.S. Tight oil production is also more resilient to low prices, according to the EIA. Most of the production is coming from new wells, with about half of the Lower 48’s oil production coming from wells drilled since the beginning of 2014, according to a March 22 analysis from the EIA. That’s partly because horizontal wells drilled into tight formations have high initial production rates but it quickly declines over time. The number of rigs in the U.S. has dropped from a high of nearly 1,600 rigs in the fall of 2014 to 524 as of Oct. 7, according to Baker Hughes. The glut in the market has dislodged the high prices of recent years, but a historical analysis shows the current lower price is not an anomaly from the historical trend of oil, Kah said. In general, except for particular periods of history — the formation of OPEC and the rapid industrialization of China in the mid-2000s, for example — oil prices have been relatively low and declining since the 1860s as new resources rapidly came online, she said. “Those probably are the exceptions, and … the question is what does oil return to when it does return to a normal rate?” Kah said. “I would say in a … system like oil, I’m beginning to believe there is no such thing as an equilibrium price.” Drivers for future demand on oil may include growth in the global GDP, large geopolitical events such as the United Kingdom’s recent vote to leave the European Union, known as Brexit, the future demand for oil in China and India and global investment uncertainty. Governments around the world are also beginning to look to alternative energy with subsidies, adding further competition to the market, she said. Natural gas prices are also on a downhill slide worldwide. A global oversupply of liquefied natural gas has pushed prices down and two new facilities in the U.S. have recently come online, with more planned in the U.S. and worldwide. Renewable energy sources are taking a cut out of the natural gas market as well, Kah said. That, in combination with the lower cost of shale and Permian oil production, should drive Alaska to find ways to lower its cost of production, she said. “Alaska has to find a way to make its production more competitive,” she said. “Other countries around the world are doing the same because they’re very much threatened by this environment where U.S. tight oil and OPEC are taking most of the production.” ConocoPhillips recently stepped back from its investment in the Alaska LNG Project, which is transitioning to state leadership through the Alaska Gasline Development Corporation, and Kah said she saw advantages in the state-led structure because of the possibility for tax exemptions. To encourage further resource development, the state needs to balance its budget and provide stability in the tax credit program and both the state and federal government should also simplify the permitting process and opening up access to federal lands in Alaska, she said. “The state should do everything it possibly can to make investment in Alaska more competitive. Further unlocking resources in Alaska I think would require greater access to federal acreage,” Kah said. Elizabeth Earl can be reached at [email protected]

Voters to decide on Kenai sales tax

More goods and services may be subject to sales tax in the Kenai Peninsula Borough if voters pass Proposition 3 in the October municipal general election. Borough voters will be asked to approve an ordinance to raise the cap for amounts subject to sales tax from $500 to $1,000 per transaction. Currently, if someone purchases a $501 item, the tax will not increase any more for the additional dollar. Borough Mayor Mike Navarre’s administration began reviewing the tax code about a year ago and produced four proposed changes. Two were ordinances considered and passed by the borough assembly updating and adding language to the general tax code. The other two will appear on the October ballot. The question of whether to raise the sales tax cap will appear as Ballot Proposition 3, while the question of whether to reduce the borough’s optional senior property tax exemption, will appear as Ballot Proposition 4. Because the state has no broad-base sales tax, borough and city governments administer individual sales taxes. In the Kenai Peninsula Borough, the peninsula-wide rate is 3 percent, with some exemptions for items like groceries in the winter. Incorporated cities — Homer, Kenai, Seldovia, Seward and Soldotna — can collect their own sales taxes in addition to the borough’s sales tax. Borough voters established the $500 sales tax cap in 1965 and have not raised it since. The borough assembly considered changes in May 2011 but voted not to send it to the ballot. Currently, sales tax is collected on the first $500 of a transaction. If the ballot proposition passes, businesses will pay taxes on sales up to $1,000, doubling the amount of the transaction that can be taxed. As part of the proposition, residential rentals would be exempt from sales tax. “The concern is that renters would be disproportionately impacted by the increase in the maximum taxable transaction on a recurring basis each month,” wrote Larry Persily, special assistant to the mayor, in a May 5 memo to the Kenai Peninsula Borough Assembly. “Affordable rental housing is important for the borough and its residents and, as such, exempting residential rent from sales tax would be consistent with that public policy goal.” The borough administration estimates the change will generate an additional approximately $2.8 million in revenues annually after the loss from the rent exemption is calculated in. The cities that administer their own sales taxes would gain as well: after the rental exemption is subtracted, Soldotna would gain $114,497, Kenai would gain $266,605, Homer would gain $126,130, Seward would gain $208,275 and Seldovia would gain $4,730, according to the borough administration’s financial projections. Part of the consideration for the increase in taxes is because of the strong likelihood of decreasing state financial support in the future. The assembly also passed a set of changes to the general sales tax code and added a number of revenue sources, including sales tax on flightseeing tours and on food items sold at locations that don’t sell enough food to accept food stamps, like hardware stores. Persily said when the borough assembly reviews the budget next year, if no additional sales taxes are raised, the members will be again faced with the question of whether to pursue additional revenue or cut services. “(The assembly members) are going to have to decide … if (they) want to provide the same level of services and increase property taxes, or they can cut services,” he said. Some have expressed concern that changing the sales tax cap would send Kenai Peninsula residents to buy their more expensive goods elsewhere, like Anchorage, which has no municipal sales tax. Scott Shelden of Dan’s TV and Appliance in Kenai said he wasn’t sure whether he thought people would make the drive to all the way to Anchorage to save the additional tax, but the change would affect the business. “It seems like it’s not quite fair to local businesses,” he said. Others are concerned about what goods and services are exempt. Legal services, which can often stretch for months and cost hundreds of dollars, are not exempt from sales tax. Kenai attorney Kristine Schmidt wrote in a public comment to the assembly in June that increasing the sales tax cap while applying it to legal services harms consumers and small legal firms. “(The sales tax cap increase) will substantially increase the amount of sales taxes most legal services consumers must pay,” Schmidt wrote in her comments. “Most flat fee legal services are over $500, so sales taxes could double for clients of those services. Clients with monthly bills could see as much as $360.00 per year sales tax increase. These sales tax increases could make legal services no longer affordable for some consumers.” Other municipalities in Alaska have recently raise or considered raising their sales tax caps as well. The City and Borough of Juneau recently raised its cap from $7,500 to $12,000, and the City and Borough of Sitka raised its cap from $1,500 to $3,000. The Ketchikan Gateway Borough Assembly postponed a decision on raising its sales tax cap from $1,000 to $1,500 at its Aug. 1 meeting. Voters can cast their ballot on the sales tax cap increase on the Oct. 4 ballot in the municipal election. Absentee ballots became available Monday, either by mail or in person at the Kenai Peninsula Borough building in Soldotna, the Borough Annex Building in Homer or the City Clerk’s office in all the cities of the peninsula except Soldotna. Elizabeth Earl can be reached at [email protected]

Summer AK LNG fieldwork winds down

KENAI — Fieldwork in Nikiski is winding down and future plans are uncertain for the Alaska LNG Project as the summer slides into autumn. An evaluation from consulting firm Wood McKenzie presented Aug. 24 to the Legislature’s Joint Resources Committee ranked the project as one of the least economically competitive liquefied natural gas projects in the world at this time. Natural gas prices worldwide have fallen due to a flooded market, and the project as presently planned is too expensive to balance out, the report concluded. The three producer partners, BP, ExxonMobil and ConocoPhillips, responded by saying they did not want to spend any more on the Alaska LNG Project in the next phase. With the pre-front end engineering and design ongoing, the four project partners are spending approximately $30 million per month, according to figures presented to the Joint Resources Committee Aug. 24 from Project Manager Steve Butt. Costs will increase throughout the remainder of the process. The state of Alaska is now planning to take the lead role, though the technicalities of that may present challenges. Gov. Bill Walker said in an Aug. 25 press release the state plans to move forward with the project toward a January 2017 application to the Federal Energy Regulatory Commission. “The project team, which includes our industry partners, have spent several years and completed over $500 million in engineering, permitting and necessary work to complete pre-FEED,” Walker said in the press release, referring to an acronym for pre-front end engineering and design used by the project’ managers. “Now is not the time to shelve that excellent work and start again at a future date.” While the governor and state administration are addressing potential strategies for transitioning to state leadership — including whether the state can work out cost-reducing tax exemptions for the project and whether it can solicit third-party investors to help underwrite it — residents of the Kenai Peninsula are carefully watching what administrative and timeline changes would mean on the ground. Nikiski residents have lived with geotechnical and geophysical work in their area for three summers as well as more than 600 acres of land being purchased for the proposed liquefaction plant near the bluff. They have watched plans for the Kenai Spur Highway to be moved and waited for a final decision to be selected from a number of options the project managers presented to them in fall 2015 and many have weighed in on thousands of pages of documents of data compiled on the project and the environment of its proposed location, called Resource Reports, submitted to FERC. However, contractors completing the fieldwork and land purchases were coordinated through the Alaska LNG Project, LLC, a holding company that does not include the state’s Alaska Gasline Development Corporation. In the future, the state will apply for FERC approval alone, so some details remain to be worked out, said Larry Persily, special assistant to Kenai Peninsula Borough Mayor Mike Navarre, who consults on the Alaska LNG Project. Among these are getting the state included in the LNG export authorization, making North Slope gas available to the state to sell, designating the state as the sole applicant and transferring the completed technical work and purchased land in Nikiski to the state because FERC approval requires site control. “The state is either going to have to buy the land, get an auction on the land, get a consignment on the land, something so they can go to FERC and say, ‘Here’s our application, and here’s the paper that proves we have the right to use that land,’” Persily said at a public meeting held Sept. 1 at the North Peninsula Recreation Center in Nikiski. “… If the state needs to pay for it, they will probably need an appropriation from the Legislature next year because (the Alaska Gasline Development Corporation) does not have enough money to buy the land from the companies.” Although the state will take over the lead and put its name on the application, the producer partners still plan to stay involved. ExxonMobil, the partner with the most significant stake in the project, will not withdraw its support in the remainder of the pre-FEED process, said Aaron Stryk, a spokesman for the company. “We’re going to complete our pre-FEED activities — we’re committed to those deliverables,” Stryk said. “Beyond that, the future role in the development of the North Slope gas is going to be development of Prudhoe Bay and Point Thomson.” Once the pre-FEED process is complete, the company will focus on the development of the natural gas on the North Slope rather than the participation in the pipeline and liquefaction plant. The partners and the state will work on scheduling handover sessions in the fourth quarter of 2016, said Bill McMahon, senior commercial advisor for ExxonMobil, in an Aug. 25 presentation to the Joint Resources Committee. The fieldwork is nearly finished for the year, and a planned aquifer pump test will not take place. Project managers had initially planned a test in August that would draw millions of gallons of water out of the aquifers beneath Nikiski to test the area’s ability to provide water to a proposed plant during construction and in case of fires. After permitting delays, the test was pushed back to September, and with winter closing in and a lack of information about existing groundwater conditions, the test has been cancelled for this year. Some work is still going on, said Josselyn O’Connor, the community stakeholder liaison for the project. “We plan to finish installing wells and wrap-up our water quality sampling program this fall as planned,” O’Connor said in an email. The relocation of the Kenai Spur Highway remains a loose end. Persily said at the meeting the borough administration intends to ask the project managers to pick a highway route in its comments on the resource reports. “Our comment is going to be … there’s no need to stall on selecting a preferred route,” he said. The project managers have now submitted Resource Reports 1–11 and Resource Report 13, which are available for public review through the FERC website at www.ferc.gov. Elizabeth Earl can be reached at [email protected]  


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