Elwood Brehmer

State releases draft of amended Bristol Bay land use plan

Groups opposing Pebble Mine are not happy with an amended 2005 Bristol Bay Area Plan released Jan. 4 by the Department of Natural Resources. The amended land use plan is the result of a 2009 joint lawsuit filed in state court by Trout Unlimited, the Alaska Independent Fisherman’s Marketing Association and five Bristol Bay area village and tribal councils against the Department of Natural Resources, or DNR. The 2005 Bristol Bay Area Plan designated use for more than 19 million acres of land in the Bristol Bay region. Trout Unlimited Alaska Director Tim Bristol said an agreement was reached in August between the two parties to settle the dispute rather than continue in court. The settlement outlined proposed changes to the Bristol Bay plan that DNR agreed to consider. “We just thought that it was better to go out to the public again and gather as much information and disseminate as much information as possible and leave it up to DNR to do the right thing,” Bristol said. DNR Deputy Commissioner Ed Fogels said the lawsuit was an unnecessary avenue to attempt to make changes to the 2005 Plan because all area plan adjustments go through what he called “administrative channels” that give an opportunity for public input. A 90-day public comment period on the amended plan is now open until April 4. “We think the State has a lot more work to do to get this thing right,” Bristol said. Fogels said DNR takes public comments seriously. “I venture to say it’s very, very rare that we go through a public comment period and don’t make any changes (to a plan) as a result of the comments,” Fogels said. The petitioners will use take full advantage of the comment window, Bristol said, and assert their concerns “vigorously.” Pebble Limited Partnership joined DNR as a voluntary defendant intervenor against the suit. Officials at Pebble declined to comment on the amended BBAP. According to court documents, the original complaint included eight “causes of action.” It alleges the DNR did not follow its own regulations in defining wildlife habitat land and that the Area Plan or, BBAP, land classifications that include Pebble planning units “violate sustained yield and are arbitrary, capricious and abuse discretion.” DNR defines wildlife habitat as “land which is primarily valuable for fish and wildlife resource production.” The 2005 BBAP was a revision of a 1984 plan. The 1984 BBAP classified about 11.5 million upland acres as wildlife habitat land. In 2005, land classified as wildlife habitat was revised to 786,000 acres, a 93 percent reduction. All of Pebble’s planning units were reclassified from habitat to mineral land under the 2005 BBAP. The amended BBAP reclassifies 723,000 acres of land primarily in the upper Nushagak and Mulchatna river drainages to wildlife habitat. Plan changes turn land next to the mineral land in the Koktuli River valley, a Mulchatna tributary, to wildlife habitat. The changes do not alter any of the mineral land designations made in 2005 surrounding the Pebble area. The complaint states that 9.1 million acres co-classified as habitat and recreation land prior to 2005 were changed to resource management land. Habitat and recreation areas are required to be retained in public ownership; resource management lands are not. Land use designation was changed on such a large area in 2005 because the 1984 BBAP forced land managers to work with a “black map,” Fogels said. What resulted, he said, was the 2005 BBAP that focused on designating land for its greatest value. “It’s indentifying key resources on that land. If the Pebble area is staked with mining claims and there’s obviously high mineral values there, then (miner land) is an appropriate classification for that land,” Fogels said. He also noted that just because land is designated a certain way doesn’t mean it must be used for that purpose. Tom Tilden, chief of the Curyung Tribal Council in Dillingham said in a press release that DNR needs to reach out further than a comment period. “DNR must start listening to the people, and it should hold multiple public hearings in the region before the end of the public comment period. Salmon and wild game are the lifeblood of Bristol Bay communities,” Tilden said. A DNR press release announcing the amended BBAP stated that the request to “reclassify nearly all of the Bristol Bay planning area for wildlife habitat and reclassify much of the planning area to public recreation” was denied. Additionally, it stated the principle of and area plan is to offer “opportunities for multiple use of state land, not just one or two uses.” That portion of the press release was “highly inaccurate,” Bristol said. The goal of the reclassification request was to establish “even footing” between fish and wildlife and related activities and mining. According to Bristol, DNR had tilted the playing field in favor of mining with the 2005 BBAP and the petitioners wanted to return to the 1984 version. In the amended plan DNR notes that the 1984 BBAP used 22 management units to cover over 19 million acres of upland and tidelands, while the 2005 BBAP is broken into 276 management units. Accordingly, designated use classifications are more specific in the 2005 version.  Much of the land classified as wildlife habitat and public recreation areas in the 1984 plan was co-classified for other uses such as forestry, settlement, and transportation corridors, according to DNR. The petitioner’s third cause of action requested that the requirement for anadromous, or salmon, streams be navigable in order to qualify as wildlife habitat be removed from the 2005 BBAP. That request was denied in the amended version. It states: “DNR uses navigability and the presence of anadromous or high-value resident fish in determining those streams to classify as wildlife habitat, but the habitat values of all anadromous streams, navigable and non-navigable, are protected through other Plan provisions.” Bristol said the amended plan doesn’t properly explain the other protections. “I don’t think there’s enough protection in there for fish. Salmon end up going places that aren’t necessarily accessible by boat. The fact that you just stop protections where the boat would run aground doesn’t make any sense,” he said. Fogels said even though DNR may not list the small anadromous streams as habitat, any development done that might affect them requires permitting from Department of Fish and Game. DNR granted a request to add sport hunting and fishing to the definition of recreation activity. It also adjusted BBAP language to clarify that wildlife habitat includes an entire navigable water body, not just spawning and rearing grounds. Streams in Mineral Closing Order 393 are now classified as wildlife habitat if they weren’t already. This includes the Nushagak and Mulchatna river drainages and those flowing into Iliamna Lake. A Mineral Closing Order closes the designated area to mineral entry. Elwood Brehmer can be reached at [email protected]

State energy audit shows potential savings

An energy audit of Alaska public facilities uncovered some of the most, and least, energy efficient buildings in the state. The study, conducted by Alaska Housing Finance Corp., evaluated 327 investment grade audits performed on public facilities. The study estimates there are 5,000 public buildings in Alaska, spending more than $641 million on energy every year. If appropriate measures are taken, the study calculates a potential energy cost savings of  $125 million yearly to the State. An investment grade audit examines a building’s energy use history, design, location and includes a cost-benefit analysis of options to make the building more energy efficient, according to Nathan Wiltse, a project manager and building energy economist for the Cold Climate Housing Research Center. It found Anchorage School District buildings average an energy use index, or EUI, of 121,000 British thermal units per square-foot per year, while Fairbanks North Star Borough buildings average 70,000 EUI. This is despite Fairbanks being in a much colder climate. Factoring in climate differences increases the heating energy use gap. That is done with what is called a heating degree-day: the number of degrees a day’s average temperature is below 65 degrees Fahrenheit. Fairbanks has roughly 14,000 heating degree-days per year, and Anchorage about 10,000, Wiltse said. When climate is factored in, the gap widens. Fairbanks North Star, or FNSB, district buildings average 4.8 EUI per heating degree-day. Buildings in the Anchorage School District, or ASD, average a use of slightly more than 11 EUI per heating degree-day. The average for public buildings audited in the study is 9.7 EUI per heating degree-day. Mike Abbott, assistant superintendant of support services for ASD, agreed that the numbers show a clear gap in heating energy use between the two districts, but said they don’t tell the whole story. “The comparison with (FNSB) is useful, in that it definitely will help us identify opportunities for further improvement, but because of the way the analysis was conducted it might lead you to believe we use twice as much energy per square-foot as Fairbanks, and that’s not necessarily the case,” Abbott said. He noted that a disparity in the number of school buildings in Anchorage and FNSB could account for at least part of the energy-use difference. Abbott said about 30 schools were audited in each district, accounting for roughly 75 percent of schools in FNSB and only 25 percent in ASD, leading to a partially complete data set. Wiltse, who helped prepare the data, concurred. He also said FNSB schools had a “tight range” of EUIs providing a reliable average and Anchorage schools had a “very wide range,” possibly skewing the final average. Despite using less energy in the audited buildings, FNSB still pays more for it, at a cost of $2.38 per square-foot per year, than ASD at $1.92. This is due to much higher fuel prices in Interior Alaska. “There are boilers in some (ASD) schools that have not received maintenance in several years because they just don’t have the money for it,” Wiltse said. The report comes at a time when ASD is facing large budget shortfalls. The district recently announced plans to cut or leave vacant 100 administrative and support positions, saving approximately $4 million. Abbott said the district has an incentive-based program already in place in which schools can reduce energy bills over the prior year and receive a check for 25 percent of the savings. That money then goes directly into the school’s supply budget. “It gives the school a chance to buy textbooks or other instructional supplies,” he said. The program usually returns money to about 20 schools a year, Abbott said. Statewide, Arctic and Northwest region schools spend the most on energy per student with yearly costs approaching $3,000. Interior and Southeast schools spend slightly less than $2,000 and Southcentral and Kodiak schools pay about $1,500 per child. Climate, energy prices, building size and school enrollment all play a large part in those costs, according to the report. The real problem for ASD may be a lack of money to invest in energy, and subsequent cost-saving, upkeep, according to Wiltse Alaska Housing Finance Corp.’s Energy Program Information Manager Jimmy Ord said the audits were done with specific criteria in mind. “This is a biased, non-random sample of public buildings. We chose the higher energy users and the ones that had a higher square-footage to them,” Ord said. “The audits were focused on some of the high energy users to identify some of the problems and where we could make our buildings more efficient.” The report, funded by 2009 American Recovery and Reinvestment Act dollars, provides “benchmarking data” that had not been available before, Ord said. The study makes more than 50 recommendations for increasing energy efficiency. Above all else it pushes for education in proper energy-saving procedures. “Auditors found controls bypassed and operating in the ‘hand’ and manual mode to make them operational. This occurs simply because the technician has not been trained in building operations or the trained technician has moved on and (the) replacement does not know how to operate the systems,” the report states. It also encourages building managers to look for “low-hanging fruit,” or quick and inexpensive ways to reduce energy usage. This could include shutting down appliances seasonally when they are not needed or reducing ventilation when buildings are vacant to prevent unnecessary heat loss. Abbott says ASD is evaluating all of the findings and will move forward with proposals to the school board on how to improve its energy efficiency within a few weeks. Elwood Brehmer can be reached at [email protected]

Born from community effort, Hilltop celebrates 30 years

Mountains and skiing go together like kids and snow. Hilltop Ski Area combines all four. Situated on the edge of Anchorage where the city meets the Chugach, Hilltop is a place for novice skiers to practice the downhill craft. “We do a lot of after school programs — Kinder Ski, Hotdoggers, that sort of thing. We’re a beginner area,” Hilltop CEO Steve Remme said. The Kinder Ski and Hotdoggers programs offer after school lessons for kids from ages 4 to 16 years old. A lifelong skier himself, Remme said he never envisioned running a ski area as his career, but he said it has its own built-in rewards. “There’s a certain amount of gratification standing out there and watching these little four and five year-olds coming down the hill for the first time just grinning ear to ear,” he said. “It’s such a pleasure to know that those kids probably are never going to stop doing that.” A nonprofit, Hilltop is owned by Youth Exploring Adventure Inc. This winter marks 30 years for the ski area, but its origin goes back to the late 1960s, Remme said. It was then that a group of parents from the Hillside neighborhood formed Hilltop Youth Inc. “Mostly, along the Hillside here, it was all homesteads and they were all pretty far apart and there wasn’t really any organized activities for all the kids,” he said. Hilltop Youth Inc. began with a donated milk truck that parents filled with books to make what Remme called a “roving library.” Shortly after, a neighborhood playground was constructed and a towrope was installed near the entrance to what is now the ski area. Remme said the 160-acre parcel that makes up Hilltop Ski Area was originally a military tract, donated to the Anchorage Municipality in the late 1970s. In 1982, with the state “flush with oil money,” Remme said Hilltop Youth Inc., the precursor to Youth Exploring Adventure Inc., received grant money to purchase the chair lift, which allowed Hilltop Ski Area to come into being. The following year another grant was awarded to complete construction and that’s when Remme joined the organization. Installing the chair lift left Hilltop Youth Inc. at a crossroads, Remme explained. What had been a towrope overseen by volunteer parents on weekends was about to become a seven day-a-week operation. “We wanted to have rentals so people could rent some gear, go out and get a lesson and learn a lifelong sport,” Remme said. “In addition to that, something unexpected, was we created all these jobs.” Hilltop Ski Area employs more than 100 people every winter. Most are high school and college-aged; some have never worked before. “For a lot of my employees — and I’ve been here 30 years — it’s their first job ever, but they love it. We try to create a pretty good atmosphere for people that have never worked before and instill good work habits from the very beginning,” he said. Hilltop operates on an annual budget of about $1.2 million. Remme said roughly half of that goes out in employee compensation. The remainder goes into updating rental inventory, and when conditions require, making snow to cover 33 acres of runs. Remme said years with little snow accumulation, such as this year so far, can be a challenge for Hilltop. “The poor snow years do affect us even though we make our own snow because it’s top of mind. When (people) don’t go out to their driveway and shovel their walk they don’t think about all the snow and going skiing,” he said. Hilltop’s youth oriented nature and its location on the edge of the city make it a perfect “babysitter,” Remme said. Parents often drop their kids off for a day of skiing and then head into Anchorage to run errands. Others stay and get some exercise themselves. The Nordic Ski Association of Anchorage maintains a network of cross-country trails that begin right alongside Hilltop’s driveway. “I see it all the time. Parents come in and drop off their kids, put them in a lesson, go back to the car and put on the cross country gear and take off and do like a 10K and come back and have hot chocolate with their kids and go,” Remme said. Hilltop offers 12 different programs for parents who want to get their kids involved in downhill skiing, or who want to learn themselves. The programs are broken down by age and ability level. Mark DeHertogh is the ski school director at Hilltop. He said the full-day ski camp, run on weekends and over the holidays, will usually include up to 100 kids learning how to ski. Hilltop also offers private lessons for children and adults every day of the week along with its after school programs. For him, Hilltop is a way to get active during a long winter, DeHertogh said. “The reason I like it is, living in Alaska, if you don’t get out and do something in the winter you’re going to go stir-crazy,” he said. DeHertogh began his tenure there when Special Olympics Alaska moved its training program from Alyeska to Hilltop seven seasons ago. He was coaching Special Olympics skiers at the time. “We do five days a week with Special Olympics,” he said. Special Olympics Alaska holds its annual ski and snowboard competitions at Hilltop and in 2001 it was the site for the ski and snowboard events in the winter Special Olympics World Games. Remme said hosting the World Games provided Hilltop an opportunity to update its facilities. The ski area received a $1.3 million grant from the U.S. Department of Housing and Urban Development through the efforts of Special Olympics to build its current pro shop. “We hosted the snowboard venue for the first time that it was ever in the games,” Remme said. “It was a real exciting thing for us. We got a new building, we upgraded our lift from a double to a triple, and we had people from all over the world come here.” Elwood Brehmer can be reached at [email protected]

Anchorage, Fairbanks recognized as top winter destinations

Alaska has long been an iconic tourist destination in summer. Now, the state’s largest cities are garnering attention for their winter attractions. Anchorage was ranked No. 1 on a list of “America’s Hottest Cold Cities” by Livability, an online travel magazine. According to its mission, Livability’s goal is to find “the good stuff in small to medium-sized communities all across America.” The Fairbanks area recently received similar honors from two travel information outlets. National Geographic magazine listed the Chena River State Recreation Area as a top 10 winter trip for 2013. The nearly 400 square-mile area of primarily wilderness begins about 30 miles east of Fairbanks near the end of Chena Hot Springs Road. Travel guide website Lonely Planet named Fairbanks its No. 2 domestic destination for 2013. “A lot of it is about the aurora, that’s what really captured their attention,” said Deb Hickok, president and CEO of the Fairbanks Convention and Visitors Bureau. Lonely Planet noted that this year ends an, “11-year (aurora) cycle, when sunspots are particularly feisty, making for a big show in the Fairbanks sky.” Hickok said preliminary numbers she’s seen from the State of Alaska estimate about 50,000 people traveled to the Interior last winter with roughly 17,000 of those being vacationers. That marks a 6 percent increase from the last survey done in the winter of 2006-07 she said. “I personally think that’s a little low, because we know on the Japan Airlines charters we got 7,800 (visitors) alone,” Hickok said. In addition to viewing the northern lights she said visitors head to Fairbanks for the Chena Hot Springs, dog mushing and the World Ice Art Championships beginning in late February and running through March. The ice sculpting competition features about 100 exhibits produced by artists from around the world every year. Fairbanks winter temperatures can be a deterrent to some prospective travelers, Hickok said, but for those who embrace the weather she calls it a “notch in their travel belt.” She said guided tours and mushing outfitters often provide gear for those who might not otherwise be prepared for a sub-Arctic winter excursion. “We advise people to dress in layers. If you’re out at the ice park and it’s minus-30 you go around for a half-hour, an hour, and then you go inside and have a cup of hot chocolate and you go back out again,” Hickok said. “It’s just getting over that perceived notion of what the cold is like.” Anchorage Convention and Visitors Bureau spokesman Jack Bonney said late winter offers visitors a number of unique winter attractions. The Fur Rendezvous Festival begins in mid-February and bills itself as a “10-day celebration of life in Alaska.” The festival was named as a top winter event by National Geographic Traveler in January 2012. Shortly after the Iditarod begins in Anchorage and the Tour of Anchorage cross-country ski marathon happens in early March. “We kind of package those as a tour when we talk about winter visitation,” Bonney said. “They’re right next to each other in that same couple of weeks, so it makes a really good time to visit Anchorage.” Bonney pointed to traditional summer activities such as hiking and sightseeing flights as options for winter activities when conditions allow. An Alaska Department of Commerce, Community and Economic Development economic impact study of the state’s tourism industry reported that in the fall and winter of 2008-09 visitors spent $197 million in Alaska. $128 million was spent in Southcentral and nearly $37 million was shelled out in the Interior. That compares with $1.3 billion spent by visitors to Alaska in the summer of 2009. Elwood Brehmer can be reached at [email protected]

Port MacKenzie project back on track

Marc Van Dongen is a big man with bigger plans. As director of Port MacKenzie he oversees all operations across Knik Arm from Anchorage, including the largest project at the port since it was built in 1999: the rail extension from Houston to Port MacKenzie. Work on the rail line had been suspended due to an Oct. 1 stay issued by the U.S. 9th Circuit Court of Appeals. On Nov. 28 the three-judge panel reversed the stay, allowing work to resume and denying a petition for review filed jointly by the Sierra Club and Cook Inletkeeper. The groups questioned the Surface Transportation Board’s 2011 finding that the rail extension project met all National Environmental Policy Act, or NEPA, guidelines. The court’s written opinion states that “the (Surface Transportation Board’s) ‘purpose and need’ statement complied with NEPA and that the Petitioners no longer raise ‘serious questions’ on this point.” The ruling also cited an estimate — provided by Alaska Railroad Corp. and the Matanuska-Susitna Borough — of $10 million to $12 million added to the cost of the publicly funded project if the work stoppage continued as a reason to lift the stay. “There’s a lot of false claims out there about how we’re hurting wetlands and the fish, and by what they’ve got planned it’s anything but that,” Mat-Su Borough Public Affairs Director Patty Sullivan said. With the ruling, Sullivan said the borough can resume advertising contracts for the project and 200 construction workers will be able to return to work at winter’s end. The quicker-than-expected ruling allowed the project to stay on track. “By the end of 2016, that’s what our goal is, to have the rail line completed,” Van Dongen said. “So far, we’ve received 54 percent of the funding for the project. We’re asking for the full amount in the next legislative cycle. If we get it, we can get the project done faster.” The borough needs $126 million to fully fund the 32-mile, $272.5 million undertaking. Over a 50-year period, the rail line is expected to provide a 23-fold return on invested state dollars if it’s fully utilized, according to a University of Fairbanks study. Van Dongen said that filling the rails won’t be an issue and he believes adding a new export route will spur mine development along the rail corridor. Talk of limestone and gold expansion near Livengood and Fairbanks is well under way, he said. “It’s going to impact the Interior more than it impacts the (Mat-Su) Borough. These mines, as they’re developed, there’ll be a lot more jobs created in the Interior from that,” Van Dongen said. “That’s where the jobs are going to be, and on the railroad. It’s a positive thing what we’re doing here. It’s a makes-sense sort of thing.” A 2011 University of Alaska Fairbanks study of the rail line looked at revenue generated by shipping 3 million tons of materials yearly to Port MacKenzie. Estimating 3 million tons of exports yearly is based on port operating capacity with current infrastructure, one deep-draft dock. Van Dongen said the next project in line is adding a second deep water landing. The study estimates State of Alaska revenue at $70 million per year in royalties and fees, with another $72 million being generated by the Alaska Railroad. For the railroad, that represents a nearly 40 percent increase total revenue over 2011. Port income is projected at roughly $5 million per year. Van Dongen said he has briefed the legislature and the governor as to the benefit the rail line will provide Alaska. “They understand the benefits, the jobs, revenue and economic development available to the state by having a rail line come down to our port.” When finished, Van Dongen said the rail line will terminate with a mile-long loop at the port where companies “can stockpile commodities on both sides of the rail.” Port MacKenzie offers 14 square-miles of land available for development and material storage. Van Dongen noted that large quantities of material could be accumulated to wait for large ships or optimal shipping times. Vitus Marine, the company that coordinated the emergency fuel shipment to Nome last winter, is set to construct tanks for storing 5 million gallons of fuel at the head of the Port MacKenzie rail loop. Initial exports shipped down the rail will be coal from the Usibelli coal mine near Healy, Van Dongen said. Lorali Simon, spokeswoman for Usibelli, said the company currently ships about 1 million tons of coal out of Seward every year, and is excited about the chance for expansion. “We would love to be able to use Port MacKenzie as a supplemental port for Healy coal. We don’t have any intention of dropping the Seward facility and only using Port Mackenzie, but we would like to use both. That certainly gives us the opportunity to increase our export,” she said. Though large ships have delivered to Port MacKenzie, the current dock and conveyor system is designed primarily for exporting raw materials. Adding to the existing infrastructure would ease the importing of goods and make future port operations nearly limitless, Van Dongen said. Plans for the expansion add 1,450 feet to the current 1,200-foot deep-draft dock. A 20-acre gravel pad and second conveyer will make additional exporting or roll-on roll-off importing simple exercises, he said. “It’s eight to 10 years down the road before I’d expect to have that project completed,” Van Dongen said. “I intend to be retired, sipping mai tais somewhere, but I intend to get the permit for it.” Despite the long-range timeline for completing a second deep-draft dock, Van Dongen said the need for it is obvious when one looks at the potential it holds for Alaska with goods both coming and going. The need magnifies if the Alaska Stand Alone Pipeline is built. If built, the pipeline would terminate at a site roughly 20 miles from Port MacKenzie. The line would carry twice as much LNG as Southcentral initially needs, providing export opportunities. “There’d be a long-term export of natural gas liquids, that’s a reason I’m trying to get a permit to expand our dock because we could bring in LNG ships to export,” Van Dongen said. The port commission sees the space at Port MacKenzie as a prime location to build a gas processing plant if the pipeline comes down from the North Slope, he said. Van Dongen pointed to a partnership with Klondike Concrete to import cement as a glimpse of what expanded port operations could mean for Alaska. “Three years ago we started importing cement. With the first ship we brought in, guess what happened to the price of cement. It went from $176 a ton down to $125 a ton,” he said. In early November the port proved it could move scrap steel, a commodity spread throughout Alaska. When the Thai ship Billesborg left Port MacKenzie with 8,000 tons of steel for South Korea, it was the first time a deep-draft vessel had carried scrap steel from Southcentral and the first time the steel went directly to its destination. Previous exports of steel left Anchorage and barged to Seattle, where they were consolidated before being sent to the West, Van Dongen said. “They proved that we could do it. I expect future shipments — you’ll see bigger ships,” he said. “You save over a quarter to a half-million dollars (shipping direct) versus bringing it down to Seattle.” NPI LLC is one of several companies currently leasing property at Port MacKenzie. NPI spent $7 million to build the half-mile long, multi-use conveyor system at the port prior to exporting wood chips to South Korea in 2005. In 2010, the company coordinated a test-run coal shipment from the port, as well. Van Dongen said the partnership with NPI to build the conveyor benefits everyone involved. NPI has exclusive rights to move materials on its conveyor and leases it out to other companies with materials to export. Usage fees are set by a group of five Mat-Su Borough and NPI individuals, with the borough holding the majority. It’s an example of the efficiency of the port and how to best utilize your assets, he said. NPI Manager Dane Crowley said his company invested in the port because operations there look promising. “(Van Dongen) has done a fantastic job in developing the infrastructure of the port. His future plans that he’s got laid out are all very well thought-out and certainly the rail extension to Port MacKenzie is going to be a huge driver,” Crowley said. “I really expect that we’ll see Port MacKenzie grow significantly in the next few years.” Elwood Brehmer can be reached at [email protected]

Anchorage unemployment at five-year low

Unemployment in Anchorage fell to 4.7 percent and a five-year low in October, according to a report from the Anchorage Economic Development Corp. It’s the lowest monthly unemployment figure since November 2007. “4.7 percent is crazy-low unemployment – that compared to the rest of the country is pretty amazing,” said Bill Popp, president and CEO of the Anchorage Economic Development Corp. Popp said Anchorage’s unemployment rate compares to that of oil-boom North Dakota and government-influenced Washington, D.C. The yearly unemployment average for Anchorage stands at 5.7 percent. Statewide seasonally adjusted unemployment was 7.1 percent for October and has averaged 7.2 percent in 2012, according to the Department of Labor and Workforce Development. For the year Anchorage has gained 1,680 jobs, a 1.1 percent increase over 2011, according to the AEDC report. Of those, nearly 1,400 were in service industries. A year-over-year increase of 2,100 jobs equates to 1.3 percent growth in the Anchorage workforce. The year-to-date gain already surpasses AEDC’s 1,500 job gain projection for the year. Popp said this could mean closing in on 2,000 jobs added to Anchorage in 2012. Health care remains a strong growth-sector for Anchorage, accounting for nearly a third of the city’s jobs added since the beginning of the year. “In the last decade health care has accounted for almost 45 percent of job growth in Anchorage. We’re up about 500 jobs from last year,” Popp said. Business and professional service industries have added 480 so far. Popp said that growth is three-times what AEDC had expected and could be a sign of continued growth in the future. “That’s your architects, permitters, lawyers, engineers. These kinds of jobs can sometimes be interpreted as a leading indicator of where things may be headed in the next 12 to 18 months,” he said. “They tend to be the ones who get first-dibs on large projects – construction, design projects, civil engineering work.” Along with the possible forecast of an increase in development projects, Popp said construction was up 500 jobs in October alone, making construction employment flat for the year. While those numbers are not particularly encouraging by themselves, he noted that the industry had been in near constant decline since 2006. Commercial development, such as the Tikhatnu Commons project, is the biggest reason for the construction job spike, Popp said. The AEDC report shows modest retail growth of nearly 200 jobs, or 1.1 percent for the year, which Popp expects to continue as new to Anchorage such as Verizon and Bass Pro Shops add to recent retail expansion in the city. At 4.7 percent unemployment, Anchorage’s October workforce was approximately 158,000 strong, leaving less than 8,000 unemployed individuals in the city. In Anchorage’s uniquely isolated situation, this makes for a much shallower labor pool. Popp said he’s starting to refer to it as a “labor puddle.” As qualified professional help becomes harder to find, some companies are being forced to offer steep incentives to draw in employees from Outside. “We’re now return to where we were before the national recession, in terms of companies spending as much as $10,000 to $15,000, sometimes $20,000 in costs associated with acquiring one employee for some of these skilled jobs,” Popp said. Uncertainties regarding the federal budget, oil taxes and Anchorage’s energy supply could slow economic growth, but are also near impossible to predict. With that in mind, Popp said AEDC feels good about the future of the city’s economy. “Right now we’re still optimistic for the next two-to-three years,” he said. “We’re on the street right now with our business confidence index survey. We’re polling local businesses to see what their perspective is on the coming year.” The business confidence numbers will be released in late January. Elwood Brehmer can be reached at [email protected]

Biomass saves big bucks to heat and power rural schools

Rural entities across Alaska are looking for alternative sources of energy as a solution to unsustainable fuel and power bills. The Gateway School District, headquartered in Tok, appears to have found its answer to both in the woods. In October 2010, the district installed a wood biomass-fired heating boiler system in Tok School. Before installing the boiler, district Superintendant Todd Poage said the school burned an average of 55,000 gallons of heating oil every year. Heating oil currently goes for about $4 a gallon in Tok. “When we just had the boiler section running in 2010 we were saving between $6,000 and $7,000 per month as compared to utilizing heating oil,” he said. Those savings go right back into everyday operations. “We started a lot of programs with stimulus funds we got four years ago and with the savings from this biomass project we put in preschools at every school in the district,” Poage said. “We hired a music teacher and were able to keep our music and counseling programs.” Last fall, the district looked to further its energy savings by adding a low-speed electric steam turbine system to the steam boiler. The school uses about 530,000 kilowatts of electricity per year. The current rate for power in Tok is 52 cents per kilowatt. Poage said the school’s utility bill without the combined heat and power system, or CHP, is roughly $350,000 per year. Assistant superintendant turned CHP project manager Scott MacManus said the addition of the steam generator to the boiler has been a challenge but he hopes to have the entire system fully operational by the end of November. Currently, CHP system is not running. “The generator requires more wood so we’ve had problems with chip feeder, and integrating three power sources to all work together is difficult,” MacManus said. “It requires a lot of switches to work in unison.” The second and third power sources are the school’s backup diesel generator and the traditional power grid. According to MacManus, plans are for the school to generate an average of 70 kilowatts per hour to cover its consumption. That will allow for power to be sent into the grid when the system is generating more than the school needs and to draw from it at peak demand, such as when the gym lights are turned on. MacManus estimated the CHP system will save the district more than $300,000 per year when it’s full up and running. MacManus and Poage both stressed they’re not in the power business and that Alaska Power and Telephone, who supplies the area with power, understands the need for the system. “This is not a pie-in-the-sky project. It’s about finding a long-term solution to an economic problem,” MacManus said. Generating electricity will produce far more heat than the school can use and initial excess heat will be let-off to the outdoors. Hopefully, that be the case won’t be for long. Gateway School District received $140,000 in legislative grants earlier this year to build a greenhouse alongside the Tok School. The greenhouse will be heated with surplus heat from the CHP system and provide fresh produce to the entire district. “We have the design done and we just have to build it this spring,” Poage said. The district spends $18,500 on produce every year. It estimates the 2,400 square-foot greenhouse could provide up to 20,000 pounds of produce and nearly eliminate its fresh grocery bill over a nine-month growing season. A $2.8 million grant is also under review by the Alaska Energy Authority, or AEA, to extend a heat loop from the school to the Tok fire department, senior center, low-income housing and two state buildings, Poage said. The loop will use the remaining heat generated that the school cannot use. “We can provide them with heat for half the cost they’re currently paying,” Poage said. AEA has funded construction of biomass heating projects in Delta and Thorne Bay, along with Tok. In partnership with the U.S. Forest Service AEA has funded more than 30 pre-feasibility studies for similar projects since 2011, with another 16 scheduled for next year, according to AEA spokesman Karsten Rodvik. In Tanana, the city shop, teacher housing and water treatment facilities have already received biomass upgrades thanks to AEA dollars. City Manager Bear Ketzler Jr. said the city’s school project is expected to be up and running before the new year. “We have a number of properties already operating with biomass, but the is by far going to be the biggest biomass system in the community. For that matter, on the Yukon River,” Ketzler said. The furnace is designed to cover 80 percent of the school’s heat at peak draw. That equates to a savings of roughly 80 gallons of heating oil on Tanana’s coldest days. “The school normally burns about 15,000 gallons a year and that’s down from about 25,000 before we did the weatherization project a couple years ago,” Ketzler said. “By burning wood we’ll be saving 10,000 gallons a year, that’s $50,000 to $60,000.” Most of the wood the city burns in its other buildings is driftwood pulled from the Yukon River. Ketzler estimates buying the extra 80 cords of chipped wood to supply the school’s needs will cost the city around $20,000 per year. Even with the additional cost, the boiler should pay for itself within 6 years at today’s price of $5.50 for a gallon of heating fuel in Tanana. Promise of a road to Tanana as a part of the governor’s Roads to Resources initiative could provide the city with a long-term supply of biomass fuel. Ketzler said he has been in discussion with the Alaska Department of Transportation and Public Facilities about saving material cleared from the 39-mile long corridor. “(DOT&PF has) been receptive to the idea – instead of the old traditional way of digging holes and burying all the organics – of looking at how we can save the material that’s three-to-four inches in diameter and stockpile it along the way,” he said. Officials with the department said they expect construction to begin on the road in early summer 2013. Possible charges to the city for using the wood haven’t been resolved. Elwood Brehmer can be reached at [email protected]

$33M upgrade expands training and adds housing

Construction of more than $33 million worth of new facilities at Kenai Peninsula College in Soldotna is moving ahead as scheduled, College Director Gary Turner said. Kenai Peninsula College, or KPC, is adding a $17.8 million student housing building along with a $15.25 million Career and Tech Center to its Kenai River Campus. The projects are expected to be finished in August 2013, just time for fall classes. “It’s a significant amount of money that’s being injected into our local economy and that’s aside from the fact that it’s going to allow the college to expand some of its most popular programs,” KPC Advancement Program Manager Suzie Kendrick said. The 19,000 square-foot Career and Tech Center will allow the college to expand its training for Alaska’s high-demand fields of oil, gas and electricity production, Kendrick said. KPC expects opening the building to have long-term workforce development implications for the state. Turner said the center will further what is already a strong process technology program at KPC. “We conduct the best training in the process tech field in the country and the major producers have told us that time after time,” he said. The interest oil companies show in the school’s students prior to their graduation is a testament to KPC’s reputation and why providing opportunities for more students with new facilities will pay off, Kendrick noted. She said the school currently has waiting lists for students hoping to get into its process technology programs. “We just had ExxonMobil here giving tests to our students hoping to hire them before BP and Conoco can,” she said. The Career and Tech Center will free up a significant amount of space in existing buildings, Kendrick said, giving the school more room to expand health services education. She said KPC is adding a firefighter-training program for the upcoming spring semester as well. The Kenai Peninsula College campus in Soldotna is situated along the scenic Kenai River and is adding student housing set to open in fall 2013. The site of the $17.8 million housing project, seen at bottom left, will have space for 96 students and six resident assistants. (Photo/Courtesy/KPC) Situated just 300 feet from the Kenai River, KPC’s student housing facility under construction at its Kenai River Campus will be the first of its kind for the college. The school also operates a campus in Homer and extensions in Seward and Anchorage. “KPC, historically, has not had residential on-campus housing available,” Kendrick said. “It will allow students who otherwise wouldn’t have been able to attend the college to attend, that’s what’s so exciting for us.” The housing will give prospective students from rural Alaska an opportunity to continue their education without having to move immediately to a large city or worry about a place to live, she said. “KPC is a great fit for students from small places. Here, they can get their feet wet and see if college is right for them,” Kendrick said. The two-story dormitory will be broken into 24, 1,030 square-foot apartments. Each apartment will have 4 bedrooms, a bathroom, full kitchen and a common area. It will be home for 96 students and 6 resident assistants. The building site is part of a wooded, 309-acre tract of land owned by the college and is within walking distance to the rest of the campus, according to KPC publications. Housing will cost each student $3,200 per semester and applications will be taken in April on a first-come first-serve basis, Turner said.  Students must first register for classes in order to be eligible for on-campus housing, he said. While initial funding for the new buildings at KPC was approved through legislative grants, Turner said all housing in the university system is self-funded and KPC housing will be no different. Plans are for the dorms and other university buildings to be rented out for training events and conferences in summer when students are gone. “There isn’t a conference center on the central peninsula and it’s been a need for many years and folks are talking about it a lot,” Turner said. “I think we can fill some of that niche through our facility.” The school has the support of the Soldotna Chamber of Commerce, he said. Turner recently announced an agreement between KPC and Alaska Christian College for the school to offer meal plan options to some of KPC’s new on-campus residents. Under the agreement, Alaska Christian College will offer breakfast, lunch and dinner to the first 30 students who apply. Meal plans will range in cost from $1,200 for 100 meals up to $1,725 for 200 meals, Turner said. The agreement is part of a long working relationship KPC has had with the school, he said, and gives students at the two colleges the “opportunity to break bread together in Alaska Christian College’s inviting dining hall.” Turner said he’s excited about the prospect of opening the new facilities and what the mean for the future of the Kenai Peninsula as a whole. “It’s a win-win-win,” he said. “That’s such a darn cliché but it’s true for our campus, for our community and for business and industry.” Elwood Brehmer can be reached at [email protected]  

Gas line projected to generate thousands of in-state jobs

Alaska Gasline Development Corp. CEO Dan Fauske provided figures estimating a major impact to Alaska if the proposed in-state gas pipeline is built. “It will be the largest project in North America. It will supply 8,000 direct and 15,000 indirect jobs,” Fauske said Nov. 9 in a presentation to the Associated General Contractors of Alaska annual conference. The numbers expand on those in the final environmental impact statement released Oct. 26. The estimated $7.52 billion construction cost will involve moving 10 million cubic yards of soil, assembling 335,000 tons of pipe and 4 million miles of truck travel to transport equipment and supplies, according to ADGC statistics. As previously reported, the 24-inch diameter pipeline will stretch 737 miles from Prudhoe Bay to an extraction plant on the northern edge of Cook Inlet. In his presentation, Fauske added that state regulation requires an additional facility to be built at mile 458 of the pipeline. That’s where a 12-inch lateral line is planned to supply Fairbanks. “We must build what’s called a straddle plant to pull impurities, or those rich natural gas liquids out and you must ship utility grade gas down the line.” Fauske said. A straddle plant will cost $250 million and be paid in a tariff charged to gas customers in Fairbanks. While some in the city aren’t happy with the expenditure, Fauske said the status quo will not hold. “Fairbanks is in an absolutely chaotic economic situation in terms of energy cost,” he said. “You have people paying more for their monthly heating bill in the dead of winter than for their mortgage payment.” AGDC projects the Fairbanks tariff to be $10.45 per million Btu worth of gas. Current tariffs for gas trucked to Fairbanks are in the $23 range, Fauske noted. An Anchorage tariff is expected to be slightly lower simply because of dispersal over a larger population. “You’re going to pay $9.63 (in Anchorage) after you built a $7.5 billion pipeline, put thousands of people to work, and secured energy for the next hundred years and your energy prices are going up less than a buck. That’s pretty impressive,” Fauske said. The tariff for gas from Cook Inlet, he said, is in the $8 range right now. A project timeline provided by ADGC forecasts engineering, financing and permitting to continue for several years. Construction is expected to begin in early 2016, with the first gas reaching Fairbanks in late 2018 and a full flow of 500 million cubic feet of gas per day to Cook Inlet beginning in 2019. The state of Alaska will be expected to cover the first $400 million in design and permitting costs. Fauske said the costs up front will be recovered through gas taxes and royalty fees. With gas supplies from Cook Inlet dwindling and shortages expected as soon as 2014, Fauske made his feelings about the importance of the gas line clear. “I joke in speeches we’re going to be in our basements burning our Permanent Fund checks to stay warm,” he said. “I don’t care what project we do, I just want a project.” He added that the in-state line is not meant to compete against the idea of a much larger commercial export pipeline. It is meant to supply Alaska with its gas needs. If a second gas pipeline is built in the future, Fauske said, it will be done by large oil and gas companies, not by the state. Costs for a 48-inch export line are estimated to be $45 billion to $60 billion. “If in their work they determine that someday, tomorrow or maybe 50 years from now, it makes sense for them to spend that kind of money to ship gas to either the west coast of the United States or the Far East, they’ll do it,” he said. Elwood Brehmer can be reached at [email protected]

Partnerships working to reduce moose collisions in Alaska

The Alaska Moose Federation, or AMF, is partnering with state agencies and private industry to implement new strategies to reduce the number of vehicle versus moose collisions. AMF Executive Director Gary Olson said heavy snowfall last winter pushed more moose into urban environments and onto plowed roadways. That led to more than 1,000 confirmed moose collisions last winter totaling more than $35 million in damage. In one 24-hour period in early February, the federation’s moose salvage program picked up 17 dead moose. “Those are just quantifiable numbers with X amount on vehicle damage, personal injury and loss of work to about $35,000 per collision. So, it costs a lot not doing a program,” Olson said. As a testament to cost of moose accidents, Olson said, Allstate Insurance donated $25,000 to the federation in 2011 to support the nonprofit’s work. The programs AMF is focused on are designed to encourage the animals to stay in their natural habitat by reducing the benefit for them of traveling in road corridors. Moose are drawn to roadways because they provide easy walking and access to young trees, a primary food source, along their edges. “The moose are there because we’re compelling them to be there. It’s an easy place to walk; some of the best habitat, sad to say, in Mat-Su and the Kenai (Peninsula) is within 75 feet of the asphalt,” Olson said. “If you took that mentality and moved it away from the roads, but you always put it on a rotation — 15 or 20 years before it’s cut again — it’s a never ending resource.” Last winter AMF cut 157 miles of diversionary trails near the Parks Highway in the lower Susitna valley. The cut trees and brush were then formed into 11 feeding stations. Early returns on the work indicate a 50 percent drop in moose collisions in the final two months of the winter, according to the AMF website. At the same time Alaska Department of Transportation and Public Facilities also widened the visible right of way to 200 feet on a 12- mile stretch of the Parks Highway near Willow, giving drivers a wider field of view and pushing the browse line farther away from traffic. If everything works out, Olson said he hopes the federation can cut up to 400 miles of trails statewide this winter. While most work has been done around Alaska’s population centers, AMF is working all over the state to reduce moose collisions. “We’re working in Tok right now. This is a statewide deal. We’re pretty much going where the blizzards tell us to go,” Olson said. “If you have a really deep snow year, you’ll be doing more with cutting trees and snow machines. If you have a light snow winter, we’re doing more with dozers and heavier iron. There’s really no down time.” Doug Vincent-Lang, director of wildlife conservation for the Alaska Department of Fish and Game said AMF is issued permits before doing any work and that the federation has a working relationship with Fish and Game. “I see the Moose Federation being a key partner in helping us increase moose production on state lands, at least, because in many areas we haven’t had fires in many years because of public safety concerns,” Vincent-Lang said. A big reason moose are heading to road corridors to feed is the lack of forest fires in their natural habitat, Vincent-Lang said. Fires initiate the new growth moose need for food and cover. ADFG and AMF are trying to determine effective alternatives to the historical widespread blaze. “Is there a way we can develop fire barriers and let some of those fires burn, or short of that, are there ways we can go in and physically manipulate habitat and make it more productive for moose?” he said. The type of partnership AMF has formed with Fish and Game is critical to the success of its goals, Olson said. What the Moose Federation needs is for the agencies to determine what needs to be implemented and when and then put the wish list out to us to go out and get it done, he said. Last winter AMF teamed up with local snow machine clubs on the Kenai Peninsula to cut birch trees which, when down, provided moose with otherwise inaccessible food and kept them in the woods. Olson said 200 trees were cut by a small group of volunteers with snow machines and chainsaws in one day. “There are so many people that have their own testimonial as to why it’s important to them. Our primary strength is our grassroots support,” Olson said. AMF currently has approximately 1,200 members paying its $20 yearly membership. Olson said he hopes to have 2,000 members “by next calving season.” Recently AMF has been cutting brush inside the fence on the New Seward Highway corridor near the Dimond Boulevard interchange with the help of volunteers. Olson said 48 cadets from the Alaska Military Youth Academy donated time to assist in removing moose food. “Some day there’ll be zero reason for the moose to live inside that corridor,” he said. The federation is also reaching out to private industry for help providing equipment to facilitate roadway cuts and diversionary trail clearing. Olson said AMF has purchased wood chippers and auxiliary equipment to be coupled with bulldozers and other large equipment through state grants. Olson wants the moose federation to become specialists with attachments used on donated equipment, he said. “If we can get that public private partnership kick-started with equipment from industry that’s going to be a win-win for everybody involved. There’s a lot of dozers that sit all winter long with snow on them,” he said. “If they were out working with Fish and Game or the (Department of Natural Resources) or the Moose Federation, for enhancing critical wintering habitat out there, there’d be less moose here on the roads and rails.” Dave Cruz, president of Cruz Construction in Palmer, said his company is happy to provide anything AMF asks for. Cruz Construction has donated trucks, bulldozers and specialized Sno-Cat vehicles for federation work, he said. Over the past five years Cruz Construction has donated roughly $35,000 to AMF. “We’ve been involve with Gary since the Moose Federation got going. We’ve hauled equipment, we’ve donated money, we’ve done multiple things and it’s a good business partnership because it’s a good cause,” Cruz said. “I just don’t want to see a nonprofit that’s actually doing something lose steam.” Olson has headed AMF since it’s formation in 2002. While AMF relies heavily on donations, Olson said the work it does pays for itself every time a moose collision is avoided. Numbers he’s seen report up to 11 emergency response personnel are called to every moose collision with injuries. Olson calls the costs “just staggering” and says that’s why AMF’s work is so important. Olson said the moose salvage program the federation implemented has been successful in shortening accident disruption time but hopefully won’t be needed nearly as much in the future. “We don’t want to be the best at just picking up dead moose off broken cars and hurt people,” he said. “We want to try to put ourselves out of a job when it comes to the salvage program.” Elwood Brehmer can be reached at [email protected]

Wood biomass project to power Tok appears promising

Alaska Power & Telephone’s feasibility study for a wood biomass plant in Tok should be finalized by the end of November, Thomas Deerfield, project coordinator, said, and the initial findings for the proposal look promising. Deerfield owns Dalson Energy, an Anchorage-based energy consulting firm that specializes in the use of wood biomass energy systems. Wood biomass systems traditionally burn wood harvested as a renewable fuel to power a boiler system, which transfers heat through steam to warm individual buildings, Deerfield explained. The proposed project will use a combined heat and power, or CHP, plant to generate electricity for Tok and the surrounding area. Alaska Power & Telephone, or AP&T, now operates a diesel-fired power plant in Tok. “The bottom line is that technically, operationally and financially, it’s positive. Everything is going to look good. It’s going to be a viable project,” Deerfield said. The current cost of power in Tok is unsustainable, he said. “Fifty cents a kilowatt-hour is slowly strangling the life out of Tok, Tetlin, Tanacross and Dot Lake,” Deerfield said. “The status quo is not viable. We’ve established that in our feasibility study.” Some residents are paying in excess of $400 every month for electricity, he said. The high price of power in the area has caused what Deerfield called “demand destruction.” AT&P’s Tok facility presently burns roughly 750,000 gallons of diesel per year to produce up to two megawatts of electricity at peak production, Deerfield said. In the past the plant burned upwards of a million gallons fuel to meet power demands. “If your product is so expensive it doesn’t matter if people need it or not, they will cut back, and that’s exactly what’s happened,” Deerfield said. Bill Arpin owns Burnt Paw Cabins & Outback in Tok. To power the seven one-room cabins and 1,400 square-foot gift shop costs Arpin about $2,000 a month despite taking measures to reduce electricity usage, he said. “That’s watching it really close. I mean, we don’t just leave lights on arbitrarily, or all the time. There’s timers on some lights and photo sensors on others,” Arpin said. “We had halogens in and we switched to compact fluorescents and we cut our electric bill in half.” Arpin said all one has to do is take a tour of the town to see the impact of high energy costs on Tok. “If you drive around here, right now is a good time to do it. We just got a little snow, and you’ll see driveway after driveway and there’s no tracks going in or out,” he said. “Those houses are boarded up. They’re not for sale or trying to rent them or anything; they just can’t afford the electricity or heating oil.” Deerfield said AT&P operates extremely efficiently, garnering “more kilowatt-hours per gallon of diesel than anyone in Alaska,” and is not to blame for electric cost problems. It comes down to the cost of diesel, he said. After fuel is trucked in from Fairbanks, Ben Beste, internal project manager for AP&T, said the company is paying a total cost of about $4 per gallon for diesel. AP&T is an employee-owned company with fixed profits, Beste said, and it doesn’t benefit from high power costs. Rather, the power company wants to lower rates for its customers and do what’s best for the communities it serves and looking into a wood biomass plant is one way to do that, he said. Deerfield and Beste concurred that a biomass plant to replace the current operation would require roughly a $15 million initial investment. Deerfield said that specifics haven’t been worked out, but he sees at least partial state or federal funding as a distinct possibility. “We looked at many options, hydro, wind, (natural gas), but in the Tok area biomass seems to be much more viable just because of the local nature of the fuel,” Beste said. Dalson Energy has been working with AP&T for several years to determine which of Alaska’s cities and villages are good candidates for wood biomass power, Deerfield said. “It quickly became apparent that of all the options, Tok is the place to do biomass energy,” he said. “In fact, in terms of biomass CHP, Tok is the best place in Alaska.” Not only are the mature forests in the Tok area a prime fuel source for power, but according to Deerfield, they’re also a prime fuel source for a forest fire. “The foresters (in the Tok area) say the forest is going to burn. It’s just a matter of whether it burns on its own or whether it’s going to be harvested and burned in a biomass boiler,” he said. Rick Jandreau, a resource forester for the Alaska Department of Natural Resources Division of Forestry, said the forest surrounding Tok is comprised mainly of highly flammable black spruce. While cutting the spruce creates an initial fire barrier, he said, encouraging certain re-growth could provide long-term benefits. “What we’re proposing to do in those areas is getting rid of the spruce and promote the regeneration of the aspen at the expense of the spruce so you’ve got more of a hardwood forest there which would make the area around Tok much more fire retardant,” Jandreau said. He added that encouraging the fast growing aspen to replace spruce in a cut area is often as simple as cutting what aspen are already there. “That’s what’s cool about aspen. If you cut it will shoot up from multiple root sprouts and it’s very good at that,” Jandreau said. Both Deerfield and Jandreau said the current proposal calls for a harvest of 35,000 tons of green wood per year. Data from forestry surveys indicates a necessary harvest of 700 to 800 acres of forestland every year to provide for a biomass power plant in Tok. Jandreau said the annual allowable harvest for the area is roughly 1,200 acres per year, providing for other interests to use the remaining harvest allotment. The plan is to harvest from 181,000 available acres around Tok. Forestry studies put re-growth to maturity times at 70 years for aspen in the nearby Tanana Valley State Forest, making for a sustainable biomass harvest, essential to any forest management, Jandreau stated. “The harvest that’s planned is on state land designated for settlement. That settlement land happens to be the parcels closest to town,” Jandreau said. “We’ve talked with our sister agencies, they don’t have a problem with the plan so we’ll be concentrating our efforts — at least the first five years — within that area because that’s the most critical area for developing a good fire buffer.” Deerfield said any cutting would be done in a manner to preserve the attractiveness of the area surrounding Tok. “It’ll be designed to where you’ll have to get up in a helicopter or airplane to see where we’re harvesting,” he said. With the promise of a positive feasibility study on the horizon, the biggest immediate challenge is working out a harvest contract with the state, Deerfield said. AP&T needs a 25-year contract to assure a reliable fuel source, he said. The typical harvest contract awarded by the state is for a relatively short time, with few reaching five years, Jim Eleazer, forester for DOF said. “Our contracts are good for two or three years. We haven’t really looked at it as, ‘is this contract good for a 25-year period?’” Eleazer said. “Nobody’s really done a project of this magnitude (in Alaska) to have anything to measure it against.” Deerfield said he thinks a contract will be worked out because he believes “the future of forestry in Alaska is biomass energy.” Elwood Brehmer can be reached at [email protected]

Roads to Resources effort emerging from planning stages

The Roads to Resources proposal set forth by Gov. Sean Parnell as a funding mechanism to jump start work on four surface transportation projects in Alaska is slowly gaining steam, according to officials close to the work. In late 2011, the governor announced a $28.5 million budget proposal aimed at increasing access to resources currently outside the state’s road system. “Better transportation corridors will open up petroleum and mining opportunities,” Gov. Parnell said at the time. “Mineral exploration expenditures are up, and with our efforts to streamline the permitting process, we are working to secure Alaska’s resources for Alaskans’ benefit.” Under the Roads to Resources initiative, $4 million was allotted to Ambler road exploration. Ryan Anderson, an engineer with the Alaska Department of Transportation and Public Facilities has been involved with both the Ambler and Tanana road projects. Anderson said a feasibility study done two years ago on the Ambler road looked at both eastern and western routes connecting to the Ambler Mining District on the southwestern edge of the Brooks Range. The western routes aimed towards the Chukcki Sea presented problems because of the abundance of wetlands and lack of available road material, he said. Finding ways around federal park and preservation land posed other issues as well. Current work is focused on a route connecting with the Dalton Highway at mile 135. Initial cost estimates for the road on this route come in at $430 million. “The route that comes in from the Dalton Highway at Prospect Creek and traverses along the southern flank of the Brooks Range looks like the best option from both engineering and feasibility as well as land status,” Anderson said. The 220-mile route stays primarily in state-owned, NANA Regional Corp. and Doyon Ltd. lands, he said. A small stretch passing through Gates of the Arctic National Park can be adjusted around parkland or continued in the park because of language in the Alaska National Interest Lands and Conservation Act, Anderson noted. Optimally, the Transportation Department strives for one gravel site per 10 miles of road to provide ample base material for a project, and preliminary testing shows the Brooks Range corridor can provide that. “From a gravel standpoint, that’s one of the reasons we chose the route along the mountains. Generally you have more gravel and so that was a big advantage of the route,” Anderson said. Current work on the project includes environmental field studies, fish surveys, establishing icing patterns on streams and wetlands the road will intersect and determining necessary bridges and criteria over streams with sensitive fish populations, he said. The department is also working with the University of Alaska Fairbanks, Anderson said, to utilize the school’s large network of meteorological equipment and climate data for the region. Anderson said the study team is also talking to those who live in the area affected by the road while collecting technical data. “We’ve tried to tie all these environmental and engineering studies together and we’ve also tried to do a good job making sure we have local folks — we work with the tribes and the local communities,” he said. “We tie that traditional knowledge part into (the project) as well.” The project timeline puts construction three years away if the environmental permitting process goes as planned.   Tanana The Tanana road project is a much closer reality, Anderson said. “Our focus right now is the permit applications and then there will be some right-of-way acquisitions so we’re putting together the right-of-way documents. Our goal on Tanana’s road is to be building something next summer,” he said. Being a predominantly upland corridor should allow for a quick environmental permitting process, Anderson said, as opposed to the complications wetlands can cause. At present, the unimproved Tofty road extends off the end of the Elliot Highway from Manley Hot Springs for 15 miles in the direction of Tanana. Plans are to continue off the end of the Tofty road, making total construction of new road 39 miles. It will be a 16-foot wide, one-lane road costing $69 million to complete, according to a planning study finalized in December 2011. Anderson called it a “pioneer road type access” and said widening could happen in the future, but for now the main focus is maximizing the $10 million Roads to Resources apportionment for the project. While much has been made of the road to Tanana being the first leg of a road to Nome, Anderson pointed out that it is well beyond the scope of this undertaking. A 548-mile, one-lane to Nome is estimated at more than $1.1 billion dollars. “When it comes down to it we aren’t funded for a road to Nome. We’re funded for this first stretch to Tanana. We’ve heard a lot from Tanana about the cost of living and how this road can benefit the community and provide some economic development,” he said. Bear Ketzler Jr., city manager in Tanana, said the city is excited about the prospect of the road and the impact it will have on goods in the community. As it stands, nearly all perishable grocery products are flown in via the bypass mail system. “We’re expecting some products, such as milk, which right now is almost $12 a gallon – we could conceivably see it go down to $6 a gallon,” Ketlzer said. To get a vehicle to Tanana costs roughly $1,300 one way, he said. It must be barged to or from Nenana. That cost will be virtually eliminated. Ketzler said mining companies have expressed interest in the area surrounding Tanana and the access the road will provide may spur further development. Building the road itself will provide Tanana with employment opportunities along with fuel for the wood biomass heating systems the city is installing in several of its buildings, he said. “We’re working on potentially hiring a couple crews out to start brushing out the 150-foot right-of-way for the road with the efforts of saving as much biomass resource as possible,” Ketzler said. The road will end on the south side of the Yukon River, requiring a ferry barge and ice road system to be employed, but Ketzler said the city is already holding planning meetings so it is properly equipped when the road is finished. A final route for a road from the Dalton Highway to the village of Umiat on the North Slope is still up for debate, Pat Richardson, spokeswoman for the Army Corps of Engineers said. The Corps is working in conjunction with the transportation department on the project. Umiat Roads to Resources allocated $10 million to the Umiat road project. The original six corridor options were narrowed to three over the summer, Richardson said. The longest, a 116-mile route, would begin near Galbraith Lake at Dalton Highway milepost 278. A 100-mile road from Pump Station 2 at milepost 360 would end at the Umiat airport and the third option is a 95-mile road would utilize the current industrial use Spine Road near the Meltwater oil production site. Richardson said the Corps hopes to have an environmental impact statement drafted in early 2014, to determine the best route. Cost estimates have not been made on any of the proposals. The Klondike industrial use highway was awarded $2.5 million and is the only project in the Roads to Resources initiative already in use. The intent of the project is to “refurbish and strengthen the pavement and bridge structures to accommodate an anticipated large increase in the transport of ore from Canadian mines to the Port of Skagway,” according to DOT documents. The general fund money is being used for design purposes only. Future construction funding has not been secured. Provided a funding mechanism is secured, the project is scheduled to be completed in summer, 2017. The remaining $2 million of Parnell’s proposal was divided among smaller mining projects throughout the state. Elwood Brehmer can be reached at [email protected]

TSA plans for expedited security in Anchorage

The Transportation Safety Administration recently announced an expansion of its PreCheck screening system to Ted Stevens Anchorage International Airport for eligible travelers. Lorie Dankers, TSA public affairs manager said the program should be implemented in Anchorage by early December. “People who are in PreCheck have a different screening experience. You don’t have to remove your shoes. You can leave your liquids, gels and aerosols still in the smaller quantity in your bag,” she said. “You can leave your laptop in your bag and you can leave a light jacket or sweater on.” The program is part of the administrations effort to expedite the airport security screening process. It’s also a way for TSA to move towards a risk-based, intelligence-driven security method, according to the agency’s website. Dankers said PreCheck allows TSA to focus, “on the population that we know less about.” Though the PreCheck system may look different, Dankers reminded travelers that TSA utilizes many security methods. “There’s things that are both seen and unseen that we employ, but one of them that’s most visible is the security checkpoint,” Dankers said. PreCheck launched at four airports in October 2011, she said, and will be expanded to 35 throughout the U.S. by the end of the 2012. Dankers said 3.5 million passengers used the program in its first year and TSA hopes to move more than a million passengers a month through PreCheck once it is launched at all 35 airports. Travelers have two ways to get into the PreCheck program. International travelers who are already enrolled in one of the U.S. Customs and Border Patrol Trusted Traveler programs can opt-in by using their PASS ID when booking a flight reservation. According to TSA’s website, frequent flyer passengers who meet eligibility requirements set by the agency will be notified by their respective airlines that they can opt-in to PreCheck. Alaska Airlines, United, Delta and U.S. Airways are the participating airlines at Anchorage Airport. “Passengers of those airlines who have been invited by the airlines should take the step now of opting in so that when the PreCheck lane opens (in Anchorage) they’ll be able to take advantage of it, and right ahead of the holidays that’s going to be really helpful for them,” Dankers said. Once the program launches, a designated PreCheck security lane will be open for participating travelers. Individuals will have their boarding pass scanned for an embedded chip at a TSA checkpoint to determine if they can use the PreCheck lane. Dankers said it’s important to note that not all eligible passengers will always be allowed to use the service. “There’s a random and unpredictable element built into PreCheck for those who would like to harm the system,” she said. “Obviously we need to have that in place so you don’t know when you come to the checkpoint whether you’re going to have the TSA PreCheck screening experience. You’re eligible, but you’re never guaranteed that experience.” In the event an eligible traveler is denied PreCheck at the checkpoint will be directed to the traditional security-check lanes, according to TSA. Travelers not invited by an airline and not currently enrolled in a Trusted Traveler program can apply for a security screening through Border Patrol. However, they will have to go elsewhere for the screening process, which includes an interview, photo, and finger printing, Dankers said, as the closest airport with an enrollment center is Seattle-Tacoma International Airport. The system is for domestic travelers only; international travelers will have to use the traditional screening lanes regardless of their PreCheck eligibility, she noted. Travelers she has talked to who have used PreCheck have been pleased with the experience, Dankers said. “Passengers who are in it like it very much. It speeds there time through security, especially those who are really frequent flyers who are happy to provide this information up front – for them it can be a game-changer both in terms of time and convenience,” she said. “What I hear passengers say is this is exactly like it used to be.” Elwood Brehmer can be reached at [email protected]

Interior Dept. says it will release emergency funds to pay pilots

Sen. Lisa Murkowski announced in a Nov. 1 press release that Alaska pilots waiting on payment for work done with the U.S. Department of Interior can expect to see cash arriving soon. “Alaskans have a very low threshold for red tape and bureaucracy out of Washington, D.C., and it is inexcusable that a number-crunching maze at the Interior Department has left our air carriers and pilots waiting for months to get paid what they are owed,” Murkowski said. “I’ve been urging the Interior Department for months to pay our small air carriers immediately and adjust their accounting procedures on their own time.” The ranking Republican on the Senate Interior Appropriations Subcommittee, Murkowski said she was informed by department officials that emergency funds will be used to cover debts to the pilots and it will review accounting practices. On Oct. 26, Sen. Mark Begich wrote a letter to Interior Secretary Ken Salazar in an effort to get Alaska pilots paid. The letter states: “Some aviation companies report being owed between $50,000 and $250,000. While that may not seem large by federal standards, it is enough to place a severe strain on hardworking small business owners who have provided exemplary service. Several also expressed no further interest in federal contracts due to the uncertainly and financial damage DOI has caused them. These are small businesses, not big corporations. They cannot carry debt for months until they get paid. Additionally, the number of aviation providers in rural Alaska is limited, and DOI does not have a multitude of options among carriers in many areas.” Troy Cambier is owner and operator of Chena River Aviation in Fairbanks, specializing in “wildlife work,” which entails flying scientists or other technicians into the bush to conduct field research from radio tracking to herd surveys, he said. While DOI contracts used to make up half of his business, Cambier said he can’t afford to work for the department any longer without being paid. “Not having gotten paid for the work I do — I’ve drained all my savings just keeping my business going. I can’t afford to fly for them anymore,” he said. Cambier was owed nearly $65,000 by DOI earlier this year. He recently received a payment in early October, bringing the total he is owed into the $50,000 range, he said. An email he received, also on Oct. 26, from the department stated that pilots owed money would be sent invoices for the late payments so the process of resolving the issue could begin, Cambier said. After waiting roughly a week without further response, Cambier began making calls to multiple contacts throughout the department, with little success. “It’s like beating your head against a wall,” he said. When informed about the efforts in Washington to solve the delinquencies, Cambier said he was glad to hear something is being done, but he holds reserved optimism. “At this point, I’m curious to see what constitutes an emergency. I guess maybe I’ll keep pushing (DOI) and just keep pestering them. I hate to do that but it’s to the point where I need to get paid,” he said. “It sounds like the implement is there to get it done if I can just find the right person to talk to.” Elwood Brehmer can be reached at [email protected]

AEDC forecast sees strong growth for Anchorage, state

The Anchorage economy showing promise can be used as an indicator for the rest of Alaska, Bill Popp, president and CEO of the Anchorage Economic Development Corp., told the Society for Marketing Professional Services at an Oct. 23 luncheon. Job growth, or lack thereof, is one of the first indicators he looks at when determining the health of an economy, Popp said. Figures were flat in 2009 and 2010 because employers were wary of faltering economies elsewhere. Companies refrained from hiring, he said, to see whether “the global catastrophe was going to come washing over us.” Anchorage lost roughly 900 jobs over that time, Popp reported. When employers determined the global recession was not going to impact the city as hard as it did other places, they flipped the hiring switch almost immediately in 2011. “We saw the biggest year of employment growth in a decade,” Popp said. Nearly 3,300 new positions were opened, equating to a 2.2 percent increase in total job numbers in one year, he said. Over 2012, hiring will slow some, but Popp said indicators his organization looks at point to 1,600 additional jobs this year, or just more than 1 percent growth, a strong yearly outcome, he said. Further projections show continued growth in Anchorage’s job market with the city adding about 6,000 jobs in the next three years, Popp said. Recent numbers released by the Bureau of Labor Statistics puts the nationwide unemployment rate at 7.8 percent. Currently, the rate for Anchorage is 5.5 percent, Popp said. Another very important economic gauge for Anchorage is the city’s population, Popp said, particularly because of Alaska’s location. “In our situation, all the way up in the upper left-hand corner of the continent, pretty much removed from other population centers, population is a big economic indicator,” he said. “If people are leaving Anchorage, we got trouble. If people are coming to Anchorage, or if all of you are getting fruitful and having kids, then we’re doing good.” Population is a better tell of Anchorage’s economic status than it is of cities in the contiguous states because of the commitment it takes to move to or from Alaska, and to do that requires the promise of a good job for most people, Popp said. To that point, if economic health is tied to population, recent growth forecasts paint a solid picture for the Anchorage economy. “In 2012, we’re pretty confident we’re going to break the 300,000 mark in population for the first time in the history of Anchorage,” Popp said. Further predictions show Anchorage growing to 310,000 people by 2015. Proposed oil, gas and mining projects hold a lot of promise for the whole of Alaska, he said. The largest projects, those by Pebble Partnership, Shell and ConocoPhillips, among others, could provide the state with over 23,000 jobs in the next 6 to 8 years, Popp predicted. He urged for tempered enthusiasm, however, because many factors play into whether or not those projects will go off as planned. “If we get a significant drop in the price of a barrel of oil, any of the oil-base projects will fall behind on the current timelines,” Popp said. He also noted that the Arctic offshore drilling projects are dependant upon oil actually being found in the amounts forecasted. If everything falls together, Popp said, Alaska could be looking at $24 billion in commercial investment along with the job growth over the next decade. Popp sees North Slope oil production remaining fairly steady until a few decisions are made, he said. “I think we’re kind of in flux until the legislature decides what it’s going to do one way or the another definitively,” Popp said. “You’re going to continue to see a holding pattern and maintenance-level work being done on the North Slope, with the exception of Shell.” Elwood Brehmer can be reached at [email protected]

Nome and Kotzebue projects await bond vote

Proposed port development and improvement projects in northwest Alaska are moving forward with environmental and planning surveys, officials in Kotzebue and Nome said. A $10 million grant for the city of Kotzebue to fund study and initial construction work on the proposed Cape Blossom access road, which would link the future port site to Kotzebue, is a part of the $453.5 million in transportation projects on the proposed state bond package up for a vote Nov. 6. If approved, the money would be appropriated to the city of Kotzebue through the Department of Commerce, Community and Economic Development. In total, Kotzebue requested $28 million, with the other $18 million still awaiting approval. Chris Johnston, project manager for the Alaska Department of Transportation and Public Facilities, said initial work has been done using $4.6 million provided by the Federal Highway Administration. “This summer we went out and did environmental and engineering fieldwork. We did break-up studies along the project corridor at Sadie Creek,” Johnston said. “We went and did some bird surveys, wetland surveys, things like that.” When asked about possible port construction, Johnston clarified that all the money currently awarded is for road development only and that it must be completed before the port project is fully undertaken. The Cape Blossom site is approximately 12 miles south of Kotzebue. A 1983 state DOT study determined it to be the closest viable spot for a deepwater port relative to the city. Overall road development cost will largely depend on the route chosen, labor costs, and, most importantly, where road-base material comes from, according to a 2011 state DOT reconnaissance study on the project. Study estimates range from about $35 million for the shortest route supplied with locally sourced materials, to more than $258 million for the longest route if material must be transported in by barge. While a route final route has not been finalized, Johnston said the more direct southerly paths appear most feasible to avoid Air Force property and trim cost. “We’re looking at the southwest option,” he said. “We may go west to the upstream part of Sadie creek to save money on culverts and bridges and environmental impact.” Using local fill material is of utmost importance for the project, Jessup said, and noted that gravel resources have been located seven miles east of Kotzebue. While it’s not yet clear as to how much usable material may be available at the site, Jessop called the find “significant.” He also said the military assisted in project survey work through the Department of Defense’s Innovate Readiness Training, or IRT, program. IRT is a way to “improve military readiness while simultaneously providing quality services to communities throughout America,” according to the program’s website. The site lists the Cape Blossom project as one that the Marine Corps Reserve and Army National Guard have both already participated in. “Once a (route) recommendation is made the city is hoping the we can continue to utilize the IRT program to lower our labor costs down the road,” Jessup said. Cost estimates from the 2011 DOT study, contingent on local material sourcing, drop as much as 60 percent when IRT labor is employed for construction versus a hiring a private firm. If the project continues on its current timeline and funding is secured, Johnston said the start of construction could be on the horizon. “There’s a lot of variables, but if we’re able to award a contract in the fall of 2014 then the contractor may be able to start work that winter, assuming we get the rest of the funding we need,” Johnston said. “Or we might just build part of the road with the funding we have available.” The timetable for the Nome port and harbor expansion project is not as clear, Joy Baker, Nome’s harbormaster said. “We’re still moving forward with the studies and concept design and looking for funding and all of those steps. When you’re talking about a big project like this it’s a slow process,” Baker said. Nome applied for an appropriation similar to Kotzebue, but for more than $181 million, encompassing the entire project cost. Early port and small-boat harbor designs submitted with the grant application call for increasing the depth of the port from 22 feet to 35 feet at average low tide, along with construction of a third large dock and several smaller maintenance projects. Estimates for the large port project come it at $150 million, according to the design summary. An expansion of moorage for small boats is needed to accommodate the growing fleet of gold-dredging vessels working offshore from Nome. The design summary states three dredging craft launched from Nome in 1996, and that number had grown to 39 in 2011. The fleet doubled in just the past year, Baker said. Small-boat harbor expansion is projected to cost roughly $13 million. The Nome project would receive $10 million through the bond package, the same as Kotzebue. “It’s not approved yet, but we’re hoping,” Baker said. Elwood Brehmer can be reached at [email protected]

Pier 1 Imports opens store in Fairbanks

Pier 1 Imports opened its northernmost store in Fairbanks on Oct. 29, with a new look for one of the home furnishings retailer’s newest outlets, said Executive Vice President Sharon Leite. “Pier 1 Imports offers merchandise that fits all decorating styles, as well as a broad array of affordable holiday décor, furniture and gifts and we look forward to sharing Pier 1 Imports shopping experience with the residents of this one-of-a-kind community,” said Leite, who was in attendance for the event. Fairbanks’ central location in the Interior was a major factor as to why the city was chosen for a store. Leite said it will allow Pier 1 to reach potential customers “in the heart of Alaska and it’s a great opportunity for us.” As a part of the opening, Leite presented the Resource Center for Parents and Children with a $5,000 donation on behalf of Pier 1. Pier 1 launched an updated store look last fall and has been using it in its new stores since, Leite said. The new appearance is designed to make the stores more inviting to customers than the company’s old interior design. “The new stores have a very neutral palette and they’re incredibly well-lit which makes it better for the product to really pop — for the product to be the star of the show if you will,” she said. “They’re beautiful, beautiful stores and we’re really proud that we can bring this new concept to Fairbanks.” Leite said the red tile floor in the Anchorage Pier 1 store is an example of the traditional décor. The Fairbanks outlet, located on Merhar Avenue, is one of about 20 the company will eventually open during this fiscal year, which ends in February, she said. “The corridor where the store was built is one of the pretty vibrant shopping areas in Fairbanks, and we’re excited to be a part of that part of the community,” Leite said. It has been several years since the retailer opened as many new outlet locations, Leite noted. Pier 1 operates 1,058 stores throughout North America, making it the largest U.S.-based home furnishings chain, according to the company’s website. Fairbanks residents anticipating the store’s opening have expressed their interest on Pier 1’s social media pages, she said. “We’ve had a few Facebook posts from potential customers in Fairbanks. It’s been fun to watch some of those posts come through about how excited they are that we’re coming to Fairbanks,” Leite said. “They’ve been people that may have lived in the contiguous 48 and they know Pier 1 from us being in the rest of the United States.” The store was built with a larger receiving area than most other Pier 1 locations because of the need to keep merchandise out of Fairbanks’ harsh winter elements. Otherwise, the stores roughly 12,000 square-foot sales floor is proportional to most stores in the chain, Leite said. Three full-time employees along with 25 part-timers will initially staff the Fairbanks location, with additional help hired each holiday season. Other than the store manager, all the hires have been from the local population. The seasonal positions are currently being filled for the upcoming shopping season, according to the company. Elwood Brehmer can be reached at [email protected]

Alaska Air Group reports record profits in 3Q

Alaska Air Group, Inc. announced record profits when its third quarter earnings were released Oct. 25. The airline company reported $150.3 million in net earnings for the quarter, compared with $131.1 million in the third quarter of 2011. Total revenue for the quarter was $1.3 billion. “This is the highest quarterly profit in our history and it’s the 14th consecutive quarterly profit that we’ve reported,” Brad Tilden, president and CEO, said. Alaska Air Group manages Alaska Airlines and the smaller Horizon Air. Gross year-to-date earnings stand at $3.5 billion, close to an 8 percent increase versus 2011. Net earnings show a more drastic improvement over last year for the same period, however. The company reported its net income at $271.1 million for the first nine months this year, nearly a 50 percent jump over the $180.5 million through the same period in 2011, according to the quarterly report. Tilden attributed the record returns to the company’s steady and prolonged success, allowing it to reduce debt, reward its shareholders and reinvest its profits. He also credited Alaska Air’s employees, adding that “our people are working together better than ever.” During a conference call on the earnings, company officials reported an eight-point reduction in debt-to-capital ratio since the start of 2012, bringing it to 54 percent. In 2004, Alaska Air’s debt-to-capital ratio stood at 78 percent. The group has also seen its equity grow from $665 million to $1.4 billion over that time. Alaska Air Group Inc. Vice President of Finance Brandon Peterson said the company’s focus on reducing debt has played a key role in reducing costs. “Net non-operating expenses were $4 million this quarter compared with $17 million in the third quarter of 2009, with much of that coming from lower interest expenses because we have much less debt than we did three years ago,” Peterson said. Peterson also noted that Alaska Air has seen more than a 12 percent return on invested capital over the past year and expects 2012 to be the group’s third straight year with a return on its investments exceeding 10 percent. In conjunction with its strong financial reports, Alaska Air Group has recently received several industry accolades. For the 12-month period ending in August 2012, the company was No. 1 in on-time performance among the 10 largest U.S. airlines, according to the U.S. Department of Transportation. Travel + Leisure magazine also awarded Alaska Airlines with its Global Vision Award for 2012 for sustainability. The magazine accredited the award to the airline’s efforts to increase fuel-efficiency and its implementation of an in-flight recycling program. In early October, Alaska Airlines announced an order for 50 new Boeing 737 aircraft that includes 37 of Boeing’s new 737 Max planes, which will be 13 percent more fuel-efficient than any similar-sized aircraft currently on the market, airline officials claim. “Over the last several years we’ve seen the advantage of having modern, fuel-efficient aircraft that are bought at the right prices,” Tilden said. “ We’re extremely pleased that we secured aircraft to continue this pattern well into the future.” Alaska Airlines opened new routes between Seattle and San Antonio and Fort Lauderdale, Fla.; Portland, Ore., and Washington, D.C., and San Diego and Orlando Fla., over the past year. In the summer of 2013 the airline will also begin non-stop service between Anchorage and Los Angeles. The expanded service represents Alaska’s continued plan for responsible growth, company officials said. Despite being in a naturally volatile industry, Tilden is confident in the future of Alaska Air Group because of its proven strategy and workforce, he said. “This sort long-term success and balanced, consistent execution has evaded most airlines,” Tilden said. “But we believe we have a solid plan and employees who know what’s at stake and are committed to our success.” Elwood Brehmer can be reached at [email protected]

Steady growth forecast for major Alaska airports

The Alaska Department of Transportation & Public Facilities recently released its forecast summaries for both Ted Stevens Anchorage International and Fairbanks International airports. The reports were prepared to provide the Alaska International Airport System, or AIAS, with data regarding trends in both passenger and cargo traffic through both airports, which will be used to aid in long-term planning strategies for both airports, according to an internal AIAS letter available on its website. Numbers in each summary “represent current economic uncertainties and trends and are a reasonable estimate of long term future activity levels,” the letter states. According to both summaries, led by HNTB Corp. of Arlington, Va., they do not take in to account capacity constraints of either location, rather they assume changes in traffic levels will be accounted for by recent or future airport upgrades. The summaries use 2010 statistics for baseline numbers and project out to the year 2030 for all airport traffic predictions. The Stevens Airport Forecast Summary estimates a 700,000-passenger increase in total enplaned passenger traffic through the facility over the 20-year period. That equates to just over a 22 percent increase from the roughly 2.4 million travelers who went through Stevens Airport in 2010. Enplaned passengers are those making their initial departure or final stop on a trip, as opposed to transit passengers using the airport to connect flights without passing through a security checkpoint. While the sheer bulk of the projected increased activity at Anchorage Airport will be due to domestic passengers, enplaned international traffic is expected to climb from 31,700 passengers to nearly 58,000, an 82 percent rise, according to the summary. During a presentation at the World Trade Center Alaska: Trade is Transportation Conference on Oct. 10, Stevens Airport Manager John Parrott said Russian carrier Yakutia Airlines and Icelandair have announced plans to start regular summer service to Anchorage starting in spring 2013. Parrott also said airport officials expect an overall increase in traffic from European tourists in the future. In contrast, transit passenger levels, particularly international transit passengers, are expected to virtually disappear almost immediately, according to the summary. In 2010, more than 165,000 international transit passengers passed through Stevens Airport. That number is anticipated to drop by nearly 89 percent to 18,000 passengers by 2015. Domestic transit service is projected to decrease 55 percent from its 2010 level of 22,000 passengers over the same period. The biggest reason for the decline is the use of newer, larger aircraft by international carriers, Parrott said. “The (Boeing) 777 makes it unnecessary and not as efficient for carriers to stop in Alaska,” he said. The Anchorage forecast summary furthers Parrott’s statement, predicting “that the introduction of additional long-haul aircraft such as the Boeing 787, coupled with security requirements and competitive pressures from other Asian and U.S. carriers, will force remaining transit carriers to operate non-stop.” Any future transit activity will be from charters flying smaller and older aircraft and from a small number of passengers flying on cargo carriers. Total traffic passing through Anchorage Airport is predicted to rise from nearly 2.6 million passengers to about 3.1 million in 2030, a 21 percent increase. These numbers include air taxi passengers, considered a separate category from domestic and international passengers. Their 1.2 percent annual growth over the 20-year period helps offset the loss of transit passengers in terms of the overall numbers. The Fairbanks summary predicts an increase similar to that of Stevens Airport in total passenger traffic, enplaned and transit passengers. The Fairbanks airport serviced 519,000 passengers in 2010 and that number is expected to increase by 26 percent to just over 654,000. Stevens Airport is the fifth-largest cargo hub in the world, Parrott said, and he expects that cargo to continue to pass through the airport at a very high rate. However, new planes with larger capacities and longer ranges combined with expansion of new world markets will impact how that cargo is delivered and where it comes from, at both Anchorage and Fairbanks airports in the coming years, according to the summaries. Boeing’s 747-200F, which has long been the standard aircraft for long haul freighters, has a range of 3,800 miles at full payload. The McDonnell Douglas MD-11F, and the larger 747-400F and 800, push range limits to more than 5,000 miles, as does the Boeing 777. Currently, Stevens Airport and Fairbanks International Airport handle about 77 percent of non-transfer cargo flights from Asia en route to North America. That number is expected to fall to 55 percent by 2030, largely due to freight carriers evolving their fleets to be comprised of long-range aircraft that don’t need to make stops in Alaska to refuel, the summary explains. Still, carriers must trade-off between flying at maximum payload and carrying less fuel or flying less-than-full planes with more fuel, and thus longer flight ranges. For Alaska’s largest airports this means fewer landings, but larger cargo loads. According to the summary “total eastbound cargo flowing through AIAS airports is expected to increase from about 1.7 million tons to 3.1 million tons,” over the same time. A similar situation exists with westbound cargo. While traffic will fall from 63 percent to 39 percent of all non-transfer North America to Asia-bound cargo flights, total cargo should see an increase from 0.7 million tons to 1.3 million tons between the two airports. As would be expected, Anchorage Airport sees many times more cargo activity than Fairbanks Airport. In 2010 Anchorage saw a total of nearly 5 million tons of cargo freight pass through its airport, to make it the fifth largest airfreight port in the world, Parrott said, while Fairbanks moved 38,000 tons. Over the next 20 years Anchorage Airport can expect its freight load to increase by 76 percent to 8.8 million tons. Fairbanks Airport, it’s predicted, will move 49,000 tons in 2030, a 29 percent increase, according to the summary. For both airports, intra-Alaska cargo amounts are expected to remain fairly flat, meaning the increases will come in cargo moving to and from the greater North America and Asia. Both forecast summaries note that much of how future Asian-origin cargo traffic is routed will determine on which country it is coming from. China, Asia’s fastest growing economy, is farther from North America than Japan, the region’s slowest growing economy. If that trend holds, “an increasing percentage of Asia-North America air cargo will need to be transported a greater distance – a factor that would increase the number of flights which require a technical stop,” the summary notes, referring to refueling in Alaska. This could be good news for Alaska’s largest airports. In his presentation at the Oct. 10 trade conference, Parrott said he is encouraged looking at Anchorage and Fairbanks airports as partners. A recent agreement between the two means aircraft with a flight-plan leading to one can be diverted to the other without being charged an additional landing fee. The original fee will cover the unexpected landing. This is a convenience issue for international carriers, particularly those hauling cargo, because Anchorage and Fairbanks are a ten-minute flight detour away from each other, Parrot said. Additionally, being separated by the Alaska Range provides a weather barrier between the two. That barrier has prevented Anchorage and Fairbanks from ever being closed simultaneously, assuring aircraft on long international journeys will always have a place to land, Parrott noted. It may not seem outwardly important, he said, but it’s one of several reasons why he see’s a bright future for Alaska’s large airports. Elwood Brehmer can be reached at [email protected]

Annual Day of Caring draws 800 volunteers

United Way of Anchorage gathered more than 800 volunteers for its 19th annual Day of Caring in September, a day devoted to giving Anchorage corporations an avenue to give back to their community, Christine Gire, communications manager for the non-profit, said. “Day of Caring is the single largest day of corporate volunteerism in Anchorage,” Gire said. “It’s a day when UWA celebrates the commitment of local business volunteers for rolling up their sleeves and taking on much needed community projects.” Groups from 36 companies and organizations tackled 44 improvement projects throughout the city. “The work ranged from painting a room for a new resident as well as dust removal at the Pioneer Home to prepping the Alaska Botanical Garden for the winter to taking on some landscaping duties for The Arc of Anchorage,” Gire said. Independent Sector, a non-profit advocacy organization, provides statistics that put volunteer work into hard numbers. According to studies done by Independent Sector, corporate volunteers, such as those involved with Day of Caring, are worth an average of $21.69 per hour to both their employer and community. Day of Caring volunteers worked about four hours each, Gire noted. When those numbers are multiplied by the more than 800 volunteers who took part, Day of Caring raised more than $70,000 in volunteer labor in one day for the city of Anchorage. Not only are these events good for the community and good public relations for the corporate participants, Gire said, but they can foster a sense of value between the two. “Many companies want their employees to know they aren’t there just to make a profit, but that together they can make a positive impact within their community,” Gire said. “A feeling of connectedness results from community involvement and for many people that starts with the company they work for.” Immediately after the Day of Caring every year, United Way holds the Day of Caring Food Drive. This year the drive gathered nearly 400,000 pounds of food in one day for the Food Bank of Alaska. Gire said the food bank calculates a meal as 1.3 pounds, meaning the drive contributed an equivalent to more than 300,000 meals. While the upcoming holidays get people thinking about donating to local food banks, Gire said, the need is year-round, and are another great and easy way for corporations to give back to their communities. Sam Kirstein at the Fairbanks Community Food Bank said her organization is serving about 15 percent more people this year, a consequence of economic uncertainties and the soaring cost of energy in the Interior. However, donations, both financial and in food, are holding generally steady, she said. ”People are giving smaller amounts of money this year but there are more people giving,” Kirstein said. Local grocery stores and food-serving institutions donate food to the Food Bank and volunteers there package these into food boxes sufficient to last one person three days, she said. The goal is a 20-pound food box but if donations are down in any one week, the box could be down to 17 pounds. All major food stores and institutions donate including Safeway, Fred Meyer, Wal-Mart and major wholesalers like Food Service of America and vendors that support the Trans Alaska Pipeline System. The military commissary at Fort Wainwright, she said, has now been cleared to make donations after some paperwork was cleared up. Elwood Brehmer can be reached at [email protected]


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