FISH FACTOR: Salmon harvest keeps setting records; watching Walmart

Alaska’s 2013 salmon season has yielded the largest catch ever, and the value of the fishery is also headed for the record books. The statewide catch on Sept. 6 was nearing 265 million fish — the old record was 222 million in 2005. A bumper run of pink salmon is behind the big harvest — the mindboggling catch was approaching 213 million fish. The previous record was 161 million pinks, also in 2005. Some boats are still out on the water, but the big pink catches have gone by, said Geron Bruce, assistant director for the state commercial fisheries division. Things are pretty close to being wrapped up in Prince William Sound and also at the Alaska Peninsula, where a catch of nearly 8 million pinks ended a long string of disappointing seasons.    “At Kodiak they are still plugging away, but it’s very low numbers. Enough to keep a few of the die hards but not big fishing anymore,” Bruce said. Southeast will see one or two more pink openers, “where catches have dropped, but are still larger than in other areas.” Total salmon catches at the Panhandle topped 100 million, another record. “It’s really nice to see the whole Gulf of Alaska producing like this,” he added. It will be a few more weeks before we will know how much the 2013 catch is worth to Alaska salmon fishermen. The preliminary ex-vessel values (at the docks) will be released in October, and Bruce believes the total will top the chart. “I’m sure it will be a record. It’s just a question of how far into record territory we will be going,” Bruce said. Alaska’s highest value salmon catch was more than $700 million in 1988, but that is considered a statistical outlier. Alaska salmon prices were stratospheric, with even pinks fetching nearly $1 per pound. The salmon market crashed the following year. “That never happened before and it hasn’t since. I think this year is going to be right up there with 2011, which had a value of nearly $700 million. This season will approach or exceed that,” Bruce predicted.   Walmart watch John Sackton, editor of www.seafood.com, has been following progress between Alaska and Wal-Mart Stores Inc. as they work to make sure Alaska salmon is available to customers. He reported that 15 Walmart executives met with an Alaska delegation that included Stefanie Moreland, Gov. Sean Parnell’s fishery aide, State Commerce Commissioner Susan Bell, Alaska Department of Fish and Game Commercial Fisheries Director Jeff Regnart, Mike Cerne, executive director of Alaska Seafood Marketing Institute, and by telephone with representatives of Sens. Mark Begich and Lisa Murkowski. Sackton highlighted three important points of the meeting. First, Alaska is very important to Walmart, and the company is determined that its customers will have access to Alaska salmon for years to come. Second, under no circumstances was Walmart committed to a single eco-label. A significant part of the meeting revolved around the ways in which Alaska managed its fisheries sustainably, and how the third-party RFM (Responsible Fisheries Management Certification) worked, and the chain of custody requirements, Sackton reported. Third, Walmart said that next week they would respond with the next steps needed to move forward, and they were fully committed to resolving the issue so they can purchase Alaska salmon that meets their sustainability standards. Sackton added that by all accounts, “a good step forward” was taken and the outcome looks “very positive.” Weather alert Marine weather forecasts are set to change Oct. 1 for the Western Gulf of Alaska, the Aleutian Islands and Bristol Bay. The changes are intended to tighten up the wording, said James Nelson with the National Weather Service office in Anchorage. “We want to better serve our customers and not have excessive wording per weather zone, so that people can read the forecasts more easily and not get confused, especially across the marine weather radio broadcasts,” Nelson told KMXT.    Two changes will occur around Kodiak Island. The Barren Islands and Kamishak Bay Waters will become two zones: “Barren Islands East” and “West of the Barren Islands, including Kamishak Bay.” “Shuyak Island to Sitkinak” will change to “Marmot Bay to Sitkinak.” Nelson said the Eastern and Central Aleutians zones will be split, with separate forecasts for north and south of the islands. “The main reason we did that is due to wave height. With the chain of islands there are really stark differences between the Bering side and the Pacific side, ” Nelson said. The Bristol Bay weather forecast zone will be smaller to better accommodate vessels operating near shore. “We just went specifically with Bristol Bay. Before the zone was way out into the Bering Sea and into an area where it wasn’t transited by ship traffic all that often. So we tried to get more centric about it and make sure it was just handling the Bristol Bay area,” Nelson explained. The new marine weather forecasts include eight new zones and several other name and number changes. Watch/listen for them starting Oct. 1. Laine Welch lives in Kodiak. Visit www.alaskafishradio.com or contact [email protected] for information.

AJOC EDITORIAL: 'Smart power' wants another 'dumb war'

Testifying to Congress against the Vietnam War in 1971, John F. Kerry uttered what would become his most famous quote: “How do you ask a man to be the last to die for a mistake?” Sen. Rand Paul of Kentucky resurrected that statement as once-senator and current-Secretary of State Kerry went to Congress to seek authorization for military strikes on Syria. “How do you ask a man to be the first to die for a mistake?” Paul said. As of press time Sept. 4, Congress had not yet taken up a vote on a resolution to authorize the use of force against Syria, and there are a lot of quotes from the politicos of the anti-war left coming back to bite them now as they promote yet another intervention into internal Middle East and North Africa conflicts by a Democrat president. After screeching for years about the “cowboy” “unilateralist” President George W. Bush fighting his “illegal” wars for oil and Haliburton, President Barack Obama, former Secretary of State Hillary Clinton, Vice President Joe Biden, Kerry, et al, are now hankering for Obama to drop bombs on at least the sixth country of the Nobel Peace Prize winner’s term. (That’s Afghanistan, Pakistan, Yemen, Somalia and Libya so far if you’ve lost track.) Remember this one, from Obama back in 2002? “What I am opposed to is a dumb war. What I am opposed to is a rash war. What I am opposed to is the cynical attempt by (officials) to shove their own ideological agendas down our throats, irrespective of the costs in lives lost and in hardships borne.” How about this, from Hillary Clinton’s confirmation hearing in 2009? “As we focus on Iraq, Pakistan, and Afghanistan, we must also actively pursue a strategy of smart power in the Middle East that addresses the security needs of Israel and the legitimate political and economic aspirations of the Palestinians; that effectively challenges Iran to end its nuclear weapons program and its sponsorship of terror; and persuade both Iran and Syria to abandon their dangerous behavior and become constructive regional actors; and that also strengthens our relationship with Egypt, Jordan, Saudi Arabia, other Arab states, along with Turkey and our partners in the Gulf, to involve them in securing a lasting peace in the region.” Yeeaaah … how’s all that going? Also recall that Clinton called Syrian President Bashar al-Assad “a reformer” in 2011, and that then-House Speaker Nancy Pelosi undertook her own personal diplomacy to meet with Assad because Bush was just a big ol’ meanie. What geniuses. Sen. Paul’s question for Kerry cannot be asked about Libyan Ambassador Chris Stevens, State Department information officer Sean Smith, or former Navy SEALs Glen Doherty and Tyrone Woods. They are already dead, and they are dead because of failures at the highest levels of the Obama Administration to protect them after this president launched a war without Congressional permission in Libya to drive Muammar Qaddafi from power. And now, nearly a year to the day after Stevens, Smith, Doherty and Woods perished alone and without aid from their country on the 11th anniversary of Sept. 11, we are still without any answers about what was really going on in Benghazi and why dozens of CIA operatives and unprotected diplomats such as Stevens and Smith were on the ground in that hellhole in the first place. The country is also now in (more) chaos, and who knows where all those weapons have gone. But sure, let’s run that play again in Syria, this time with entrenched al-Qaeda operating and tons of chemical weapons. These people talk about learning the lessons from Iraq, but they can’t even learn the lessons of Libya. Clinton brazenly defied questions about Benghazi before Congress in January, shrieking in her best nails-on-chalkboard voice, “What difference, at this point, does it make?” Oh, it makes a lot of difference, Ms. Clinton. The administration that has stonewalled and outright lied and bypassed Congress at its whim is now seeking a last gasp at some kind of authority to drop bombs on Assad, apparently because British and French oil interests in North Africa aren’t going to give him the political cover he needs this time. However, Obama has already stated he has the authority to conduct strikes on Syria with or without Congressional approval. So the question about what difference it makes boils down to whether Obama will simultaneously spark both a wider regional conflict and a constitutional crisis at home if Congress rejects a strike on Syria and he attacks anyway. If this is smart power, it’s the best evidence yet of grade inflation at Ivy League schools. Andrew Jensen can be reached at [email protected]

FISH FACTOR: ASMI-McDowell Group report details value of state seafood

Want to know the average fish prices at the docks over a decade ... or where most Alaska fishermen and fishing fleets call home? Or how Alaska’s seafood industry stacks up against other state industries? What is likely the most comprehensive, user-friendly report ever done on Alaska’s seafood industry by region was just released by the Alaska Seafood Marketing Institute titled “Economic Value of the Alaska Seafood Industry,” the report was compiled by the Juneau-based McDowell Group, and includes all of the direct and indirect economic effects of the industry for Alaska, Washington and the nation.   Here are some highlights: The seafood industry directly employed more than 63,000 people in Alaska in 2011, meaning 1 in 8 workers earned at least part of their annual income from seafood. The industry accounted for 9 percent of all private sector resident earnings. Alaska residents account for 58 percent of the commercial fishing workforce in Alaska. The other 42 percent come from all over the U.S. and other countries.  The Alaska seafood industry created an estimated 34,500 jobs and nearly $2 billion in labor income for Washington residents in 2011. In fact, Alaska fisheries directly employ more Washington residents and generate more direct labor income than Washington’s fishing or logging industries.  Nationwide, the Alaska seafood industry puts 94,000 people to work. For every Alaska fisherman, processor, or direct support worker, an additional 1.24 U.S. jobs were created by the Alaska seafood industry.  Alaska accounted for 56 percent of the total U.S. commercial catches and 36 percent of total U.S. ex-vessel value (at the docks) in 2011. Although Alaska produces 95 percent of all salmon caught in the U.S., it represents only about 23 percent of the total U.S. salmon supply. Nearly 80 percent of all U.S. seafood is imported.  Salmon is Alaska’s most valuable species, worth 31 percent of the total dockside value in 2011. Alaska pollock is by far the largest fishery by volume, and the second most valuable. Halibut and black cod combined make up the third most valuable species, followed by crab, Pacific cod and flatfish. Alaska’s commercial fishing fleet included 32,000 fishermen on roughly 8,600 fishing boats in 2011. About two-thirds of all Alaska seafood is exported; seafood from Alaska accounts for 58 percent of all U.S. seafood exports ($3.2 billion in 2011). Salmon accounted for 75 percent of Southeast Alaska’s total wholesale value in 2011. The seafood industry accounted for 18 percent of all labor income earned in that region. Kodiak’s seafood industry provided about 56 percent of total employment. Kodiak is generally regarded as having the most diverse collection of fisheries in the state. The Bering Sea/Aleutian Islands region accounted for 73 percent of Alaska’s commercial seafood harvest by volume, and 37 percent of direct employment. Alaska pollock, the largest fishery in the country, accounts for over half of the region’s wholesale value. It is the only Alaska region where salmon does not figure prominently in the species makeup. Bristol Bay’s seafood industry relies primarily on the world’s largest sockeye salmon run. The commercial seafood industry accounts for 45 percent all labor income earned within the region  For the Southcentral region, salmon accounted for 78 percent of the total wholesale value. The region produced $430 million worth of seafood in 2011. The Arctic-Yukon-Kuskokwim (AYK) region is home to 42,534 residents and produced $19.8 million worth of seafood (first wholesale) in 2011. Salmon caught by setnet fishermen and a king crab fishery in Norton Sound account for most of the region’s commercial seafood harvest. The three largest seafood processing companies in Alaska are Trident Seafoods, Icicle Seafoods, and Ocean Beauty Seafoods. Compared to mining, for example, direct employment in Alaska’s seafood industry averages 30,900 direct workers per month, with annual labor income valued at $1.7 billion; mining employs 4,100 workers directly with total income of $300 million. In terms of fish prices at the docks, Alaska pollock averaged 17 cents per pound in 2012; Pacific cod averaged 27 cents. There were big drops in prices for halibut at $4.19 per pound (compared to $4.97 in 2011), black cod at $3.53 ($5.13 in 2011), and crab averaged $2.46 ($3.64 in 2011).  Prices for herring increased from 11 cents last year to 26 cents per pound. The average salmon price of 92 cents was a 9-cent increase from 2011. Across the board, the total average dock price for fishermen in 2012 dropped four cents to 35 cents per pound.  The ASMI report concludes that seafood is Alaska’s ultimate renewable resource which can provide economic benefits for centuries. Find the report at www.alaskaseafood.org. Farmed fish fanfare The farmed salmon industry is coming on strong with big plans to polish its image. Only 25 percent of consumers believe that farmed fish is the same quality as wild fish, according to a major study by the London-based Mintel Group. The National Fisheries Institute’s Salmon Council, which formed earlier this year to promote all wild, farmed, domestic and imported salmon products, is touting a $60,000 study on salmon consumption in the US.    Council chairman Rick Speed of Icicle Seafoods said the study gives a “clear and targeted picture of how to effectively market salmon in the U.S.,” and that the industry will seek a “one voice” approach. (Anyone joining the Salmon Council by the end of September will get a peek at the report findings). Inaugural members of the Salmon Council include: Icicle Seafoods, Inland Seafood, King & Prince Seafood Corp., Marine Harvest USA, Mazzetta Company, Morey’s Seafood, The Norwegian Seafood Council and Seattle Fish Company. Also newly launched this summer is the Global Salmon Initiative, or GSI, comprising 15 salmon farmers who provide 70 percent of the world’s production. The group pledges that 100 percent of its products will be certified by the Aquaculture Stewardship Council by 2020, and will measurably reduce impacts of fish farms on ecologically important regions. The GSI also touts the development of “vegetarian fishmeal” to reduce the amounts of wild fish that is caught and ground into fish feeds. Scientists at the University of Maryland replaced fishmeal with a blend of plant protein sources, with no difference in the growth rate of the fish. The United Nations’ Food and Agriculture Organization predicts global aquaculture production will grow 33 percent by 2021, while wild production will grow just 3 percent. Salmon watch Alaska’s total salmon catch was nearing 261 million fish by August 30; of that 210 million were pink salmon, which is almost 78 percent greater than the forecast. Laine Welch lives in Kodiak. Visit www.alaskafishradio.com or contact [email protected] for information.

EDITORIAL: Administration's Alaska-hire decision followed the law

Local hire has always been a favorite issue to demagogue in Alaska, and, as the 2014 election approaches, the well-worn theme has reappeared. The catalyst for last week’s dust-up was the state administration’s decision to drop a rule giving Alaskans in certain areas a hiring preference on public construction projects that are paid for entirely with state and local funds. Critics said that Gov. Sean Parnell’s administration was somehow doing this for political gain. That argument is difficult to swallow, given that the Alaska hire preference is a perennially popular concept, however fraught with legal problems it may be. In fact, Parnell’s administration was just following the law. Would his critics want the administration instead to break it? In effect, that’s what they suggest, because there is no way the preference can stand under current law in the urban areas of the state. The administration did the only honest thing it could when it dropped the preference for those regions. Preferences continue in effect in many rural areas because high unemployment makes them applicable in those areas, though not in every trade. The state’s law evolved after numerous court decisions rejecting earlier Alaska-hire preferences. Current law hasn’t been successfully challenged. The law says the commissioner of labor “shall” declare a zone of underemployment if he finds that “the rate of unemployment within the zone is substantially higher than the national rate of unemployment.” In that zone, the commissioner is allowed to decide how much work “must be performed under this section by qualified residents” on projects. The state has required 90 percent, given the flexibility in the law. The preference only applies on projects that are completely funded by the state and its political subdivisions, local governments. Projects with full or partial federal funding, which provide a majority of the public construction jobs in the state, don’t qualify. The preferences apply by craft and trade. (The law says an area, to qualify as a zone of underemployment, also must have “a substantial number of residents have experience or training” in typical public works jobs.) The zones are reviewed every two years, by law. The problem is obvious. Across the urban areas of Alaska and in some rural areas, the unemployment rate has fallen well below the national rate. That’s great news, but, when it happens, the state cannot by law maintain the preference. So last week, when the state released its biennial list of places where the preference applies, the major urban areas — Fairbanks, Anchorage, Juneau, Kenai and Ketchikan — were not on it. Most rural areas, where unemployment remains well above the national rate, are on the list, although many specific trades are no longer covered. For example, the preference still applies in the Denali Borough but only for carpenters. Some critics said the state has in the past treated the entire state as a zone of underemployment, implying that this policy should have been continued. However, had the Parnell administration analyzed the state as a single zone, all the Alaska hire preferences in rural areas would have disappeared as well. The administration did its job. It followed the law, and it did so in a fashion that preserves preferences where they’re defensible under the long legal history behind this policy.

FISH FACTOR: Sodexo latest to snub Alaska salmon over eco-labeling

Alaska salmon continues to get snubbed by ill-informed, far away big wigs who believe they are best suited to make the seafood choices for their customers.     Last week Sodexo, one of the world’s largest food purveyors, said its policy is to only serve seafood certified by (you guessed it) the London-based Marine Stewardship Council. In this case, the fish is targeted to the U.S. troops. Sodexo, a Fortune 500 company based in France, has an eight-year contract to provide food services to U.S. military mess halls, including $22 million worth of seafood each year. It’s likely that many other Americans also are not benefitting from Alaska seafood, as Sodexo provides foods to hundreds of federal, state and private hospitals, schools, prisons, assisted living centers and other facilities across the country. In a letter to Sodexo USA CEO George Chavel, Sen. Mark Begich called the salmon snub “outrageous” and an “appalling insult.”  “This company has decided that because of some labeling issue, they don’t think Alaska fish products meet their standards,” Begich fumed during a phone conversation as he was leaving a fisheries hearing in Kenai. “We believe the certification we have through Global Trust, the same that Canada and Iceland receive on their fish products, is as high a standard, if not higher, than what Sodexo wants.” The MSC spearheaded the sustainable seafood movement in 1997 — showcasing Alaska’s salmon fishery as its first big certification success. The Alaska salmon industry opted out of the MSC program last year, due to growing logo and licensing costs and concerns over inconsistent standards. Sodexo follows Wal-Mart and the U.S. Park Service in the fish fight about excluding Alaska salmon because of an eco-label. Both were quick to claim “salmon love” but admitted they do not have a clear understanding of Alaska’s new third party certification standards. Members of the Alaska Seafood Marketing Institute, or ASMI, and other industry stakeholders are scheduled to meet with Wal-Mart at its Arkansas headquarters next month. “What we are really asking is for ASMI, and others who are closely involved in the industry to educate us and give us more information,” said Chris Schraeder, Wal-Mart’s senior manager of Sustainability Communications, adding that it is the first time Wal-Mart has found itself in this type of eco-incident. Similarly, Begich said Aug. 23 that Sodexo USA had called him to say they want to work with Alaska and resolve the seafood spat. “They understand now that there are issues they were unaware of about Alaska’s sustainability programs, and how we track our products. We are happy to educate them,” Begich said.     He added: “In a backhanded way, all of this lets us tout the benefits of Alaska fish, and make something positive out of an adverse situation. I feel it is my responsibility to promote seafood for Alaska and all U.S. fisheries and this gives me a chance to contact these companies directly.” As chairman of the Senate Commerce subcommittee on Oceans, Atmosphere, Fisheries, and Coast Guard, Begich said he is ready to add eco-labeling clarifications to the Magnuson-Stevens Act as it undergoes reauthorization. People put down People magazine is the next up to receive an irate letter from Sen. Begich and other Alaskans for its recommendation that farmed fish is “a better choice” than wild caught fish. In his blog this week titled “The best fish to buy,” fitness and health food guru Harley Pasternak wrote that the many benefits of farmed seafood include “a reduced likelihood of contamination from mercury and PCBs,” which “are not as much of a risk in a controlled, farmed environment.” It is gratifying to see that readers gave the guru’s fish recommendations a big thumbs down.  Nearly all of the 60 comments bashed Pasternak — “a hit job on our fisheries”... “a shill for the farm fish industry”... think he’d eat it with a 10 foot pole?”... “real fish don’t eat pellets” ... “farm raised is genetically modified food”... and chastised him for a poorly researched article that will likely scare people away from eating more seafood. Who fishes where Many people are surprised to learn that 80 percent of Alaska’s seafood landings come from federal waters, meaning from three to 200 miles offshore. Oversight falls to the North Pacific Fishery Management Council, and its staff has compiled a booklet profiling the fishing fleets through 2010, with an addendum for 2011 that includes names of every boat. Some highlights for 2011: 81 trawl boats and 16 catcher-processors fish in the Bering Sea; 98 trawlers fish in the Central and Western Gulf of Alaska. There are 67 groundfish longline vessels, 137 pot boats, and 118 vessels in the jig fleet. The Bering Sea/Aleutian Islands crab fleet has 77 boats, there are four scallopers and 1,457 boats fish for halibut and sablefish. While most people imagine huge vessels in the federal water fisheries, 80 percent are less than 60 feet. By far, most of the boats were built in the 1970s and 1980s. Most of the catch in 2010 — 54 percent — was Alaska pollock, followed by flatfishes at 18 percent and cod at 15 percent. Halibut and sablefish were just one percent of the total catch; shellfish at 2 percent.  As to where the fleets call home — most of the large at-sea catcher processors report Seattle as their homeport; most of the catcher boats that deliver to shore plants hail from Alaska. Major ports for groundfish are Kodiak, Homer and Sand Point. For halibut and sablefish, top homeports are Homer, Kodiak, Juneau, Petersburg and Sitka. Find a link at www.alaskafishradio.com. Laine Welch lives in Kodiak. Visit www.alaskafishradio.com or contact [email protected] for information.

GUEST COMMENTARY: Ending statewide Alaska-hire preference has far-reaching impacts

A sweeping change happened when Gov. Sean Parnell, through his Deputy Commissioner of Labor and Workforce Development, ended statewide Alaska-hire requirements for public works contracts. With one stroke of the pen, a statewide Alaska-hire policy that’s been in place for the last 25 years to serve the interests of Alaskans and their families was made null and void by the elimination of Alaska-hire preferences in Anchorage, Fairbanks, Juneau, and other communities. Never before in Alaska’s history has a governor so diligently worked against the interests of his constituents. Time was when the majority of Alaskans knew their leaders labored for their benefit. We knew that our health and welfare were their top priority. No more. These last few years have shown that some want to give away our resources for less than the going rate, and now our jobs too! Gone are the statewide preferences for Alaskan boilermakers, bricklayers, carpenters, cement masons, culinary workers, electricians, engineers and architects, equipment operators, foremen and supervisors, insulation workers, ironworkers, laborers, mechanics, millwrights, painters, pile drivers, plumbers and pipe fitters, roofers, sheet metal workers, surveyors, truck drivers, tug boat operators, and welders. The ramifications of this change in the long-standing Alaska-hire policy are far reaching because the law is about wages and safety, too. Alaska-hire preferences are governed by “Title 36: Public Contracts.” Part of the law is sometimes called Alaska’s “Little Davis-Bacon Act” because one of its chapters is modeled after the federal Davis-Bacon Act that was signed into law in 1931 by Republican Herbert Hoover. That Act is named after its sponsors, Pennsylvania Sen. James Davis and New York Rep. Robert Bacon. Both were Republicans. Davis and Bacon wanted to provide some market stability because at the beginning of 1900’s, the United States government was already greatly involved in heavy construction projects. Federal and state officials wanted to prevent the “fly-by-night” contractors who performed shoddy work with an unskilled workforce. By establishing standards that contractors had to abide by on public projects, they provided a level playing field on which contractors could compete for work, rather than reward the practice of using low-wage, out-of-area workers in order to win work. The employment preference portion of Title 36 was put on the books, in part, because legislators believed that it was appropriate for the state to consider the welfare of its residents when it funded construction activity; the state had a special interest in seeing that the benefits of state construction spending accrue to its residents; and, that the state had a duty of loyalty to their citizens and should fulfill this duty by giving residents preference for employment on public works projects it funded. We’ve grappled with resident hire issues since the 1970s, when a huge influx of non-residents came to work on the oil pipeline construction. Consequently, each governor since the law was put on the books in the mid-80s has supported Alaska hire. Gov. Frank Murkowski was a grand champion for resident hire and established his Alaska Hire Initiative. He used his bully pulpit, and tasked almost every state department, board and commission to work on increasing the number of jobs going to Alaskans. Murkowski and his Labor Commissioner Greg O’Claray even went so far as to push for companies to increase the percentage of Alaskans on their payrolls as he subpoenaed records from Alaska’s major oil producers to determine where their employees live, how the workers are classified and whether all paid wages have been reported. Parnell didn’t even bother to fight for concessions on our behalf or require any accountability from the oil companies when he pushed to lower taxes of major oil producers. Thanks to the elimination of the statewide Alaska-hire preference, as leaders look to grow Alaska’s infrastructure, and construct buildings, dams, roads and other energy producing projects, Title 36 no longer provides a means for construction quality and efficiency, resident hire or guarantees that a certain wage be paid. By getting rid of the statewide Alaska hire, Parnell has backed away from the state’s commitment to keep Alaskans working. Andrée McLeod, a registered Republican, has lived in Alaska since 1978. She worked in the administration of Gov. Frank Murkowski at the Alaska Workforce Investment Board within the Department of Labor and Workforce Development.

GUEST COMMENTARY: Health insurance tax will hurt small businesses

These days it is difficult, if not impossible, to escape news of the upcoming implementation of the Patient Protection and Affordable Care Act. Lately, it seems like exceptions and delays to the law are being handed out to different groups on an almost-daily basis. But as the co-owner of ProComm Alaska, a two-way radio communications company located here in Anchorage, I am discouraged that one element of the health reform law that will deal a big blow to local small businesses has not yet been addressed. The health insurance tax, or HIT, is a little discussed aspect of the health care law. While it was initially billed as a fee on companies that sell health insurance policies on the fully-insured market, small businesses and their workers will be the ones that pay the price for it. Eighty-eight percent of small businesses purchase insurance policies subject to the new tax, and the non-partisan Congressional Budget Office (CBO) has stated it expects that the costs insurance companies incur from the HIT will “be largely passed on through to consumers in the form of higher premiums.” Over the years, our company has been witness to the increasing cost of health insurance, and the HIT will only add to the sticker shock. Some experts say that when the HIT takes effect beginning in January, it will increase health insurance costs for the average family by $500 per year for the first 10 years of the law. Over that same time period, the HIT is expected to raise more than $100 billion nationwide. During the second decade, that cost of this new small business tax is projected to double, much of it coming from the hardworking employees of small businesses in Alaska and elsewhere in America. Local family-owned small businesses are the key to the economic health of our nation, employing roughly half of America’s workforce. The importance of small businesses is magnified in Alaska. ProComm Alaska is just one of our state’s 68,000 small businesses, which together employ over 280,000 Alaskans — nearly 40 percent of the entire population. Policies like the HIT will stifle economic growth and hurt companies like ours. According to a recent NFIB Small Business Economic Trends poll, just 9 percent of small businesses plan to increase employment, and more people think the economy will get worse over the next six months than improve. It is easy to see why local businesses in Alaska are concerned about rising health care costs. Small businesses already operate with tight budgets and the HIT forces them into difficult decisions about how to allocate resources. Paying the HIT instead of passing the cost onto their employees could mean not hiring additional staff or not opening a second store. While the clock is ticking before the HIT takes effect in 2014, some lawmakers are working on behalf of their small business constituents to address this problem. Bipartisan legislation has been introduced in the U.S. House of Representatives to repeal the HIT. Between that bill and a similar one in the U.S. Senate, a total of 250 members of Congress support removing this new tax burden from small businesses. I recently had the opportunity to host Sen. Mark Begich at ProComm Alaska and discuss my concerns about the HIT with him. I know Sen. Begich has the best interest of all Alaskans at heart, and I certainly hope he will join with the rest of our Congressional delegation in pushing for a solution to this looming problem and do right by Alaska small businesses. Linda Peters is the owner of ProComm Alaska.  She can be reached at [email protected]

Fairbanks offers good arguments for F-16s

Air Force officials received an earful from Fairbanks area residents and their elected leaders during the past two days of hearings. The range and depth of comments surely must give the Air Force some pause as it nears a final decision on whether to move F-16 fighter jets from Eielson Air Force Base to Joint Base Elmendorf-Richardson in Anchorage. Fairbanks has a huge economic interest in the outcome. For some, that’s reason to view the points raised by our representatives with some skepticism. However, economic interest merely explains why Fairbanks leaders have been so persistent in raising the arguments. It doesn’t defeat the arguments. The issues involve everything from the well-being of military personnel to global strategy. Some of the more obvious deficiencies of the Air Force plan have been much discussed. But consider some of the lesser-known but still important points being made by our representatives this week. • The Army uses a variety of facilities at Eielson. It needs them. If the Air Force shuts them down, it might save the Air Force some money. However, the Army would still need to use the facilities. It would cost money to maintain them. So the expected savings from closure of these specific facilities could be a phantom, from the broader perspective of the overall Department of Defense budget. • All reasonable alternatives to a proposed action are supposed to be considered in the environmental impact statement process. The draft document created by the Air Force earlier this year lacked a thorough consideration of these alternatives. It wasn’t because the alternatives weren’tt brought to the Air Forces attention. It simply chose not to explore them. • Military personnel need security clearances for their jobs. Lacking such clearance can limit advancement. One factor that can block a persons eligibility for clearance is a record of home foreclosure. (The thinking is that foreclosure indicates a level of financial stress that can affect a person’s judgment if they’re presented with an opportunity to profit from the sale of secrets.) The reassignment of a large number of personnel to Anchorage could depress the housing market around Eielson even further and leave people with no ability to pay what they owe on homes that they must sell. Foreclosure could be a result. Air Force personnel could suffer lasting damage through no fault of their own. • The alleged savings from the F-16 move come in part from the destruction of 17 buildings at Eielson. The demolition of nearly new buildings must be accounted for as an enormous cost, not only in lost asset value but also in lost opportunity, when calculating any savings from the move. In less accountant-like language: What a waste. These and many other arguments make it imperative that the Air Force at least back up and reassess the conclusions reached in its draft environmental impact statement. Some would dismiss Fairbanks interest as just money-grubbing. Yes, it is primarily about money, the nation’s money, which should not be spent in a fashion that appears penny wise but is pound foolish. Fairbanksans, regardless of their financial interests, have the right and obligation to make that argument as persistently as possible.

AJOC EDITORIAL: Dems want to have it both ways in attacks on Treadwell

In the facing space you’ll find a response to my editorial from last week calling out the Democrats for playing the race card against Lt. Gov. Mead Treadwell as their opening volleys of the 2014 U.S. Senate campaign. Democratic Party Chair Mike Wenstrup is upset because his party didn’t use the word “bigot” to describe Treadwell, and for me to draw that conclusion from their accusations is an ad hominem attack on them. Even as they make inflammatory statements that Treadwell has a “record of opposing Alaska Natives’ voting rights” and Wenstrup goes so far as to accuse him of conducting a “jihad” against Natives’ rights, they claim at the same time to not to know his personal motivations for doing so. In contending that they are not accusing anyone of being a bigot, the Democrats are trying to have it both ways. They allege Treadwell and Gov. Sean Parnell are “systematically” going after Natives’ rights, but don’t want to be charged with playing slimy racial politics while they do so. The Democrats claim they are making a nuanced argument free of accusations of racism, but that’s not how it sounds when they are going after Treadwell over a U.S. Supreme Court decision involving the Voting Rights Act that was established to prevent discrimination based on race. Nothing in the June 25 Supreme Court decision legalized discrimination. It simply found that the 2006 methodology in the VRA is no longer appropriate, and it is unconstitutional to allow Indiana to pass a voter ID bill without Department of Justice approval while South Carolina can’t. Nor does it help their cause when the Democrats are peddling a padded list of alleged voter suppression claims that almost entirely pre-date Treadwell’s time in office since December 2010. Party Communications Director Zack Fields acknowledged that 11 of the 21 poll places referenced in Wenstrup’s response where changes were made to early voting happened before Treadwell was elected. One of those claims — that Treadwell “rejected” early, in-person absentee voting at several Alaska villages in 2012 — falls apart on a simple reading of the letter from Treadwell’s office to Kim Reitmeier of the ANCSA Regional Association. “First, I want to emphasize that the division takes your concern seriously,” Treadwell wrote. After describing the other methods of voting available, Treadwell concluded, referring to the VRA, “Unfortunately, due to constraints of federal law, I cannot make further adjustments or changes for the 2012 elections … The division may not make any changes affecting voting — even if it appears minor or indirect or ostensibly expands voting rights — without federal preclearance …” “This administration has made a conscious decision to maintain polling places in all communities,” Treadwell wrote, and invited Reitmeier to a personal meeting to discuss her concerns. If that’s a “jihad,” al-Qaeda better come up with a new word. So should state Democrats.

AJOC EDITORIAL: NMFS Alaska puts trawlers ahead of conservation

The final vote to limit chinook salmon bycatch by the Gulf of Alaska bottom trawl fleet to 7,500 per year was 10-1, but the decision by the North Pacific Fishery Management Council was hardly as decisive as that margin would indicate. While the drama was lacking on the final chinook salmon limit vote in Juneau on June 8, the council came precariously close to adopting a cap for the non-pollock trawl fleet of 10,000 rather than 7,500. The six-member Alaska delegation on the 11-member council fought off that effort, but they were certainly not aided by National Marine Fisheries Service Alaska Region Assistant Administrator Glenn Merrill. Merrill joined the Pacific Northwest council delegation that routinely puts trawl fleet interests over salmon conservation by voting in favor of the cap of 10,000 chinooks for a final tally defeating the effort of 6-5. Let’s be real here: a cap of 10,000 chinooks for the Gulf bottom trawl fleet is so large as to render it meaningless. That total has been exceeded just once since 1996, and even choosing 7,500 is above the 10-year average. However, it is possible and even reasonable to see the rationale for choosing a limit of 7,500, as that amount will be split between the various vessel types and between the central and western Gulf because some fleets may be more likely to be shut down by splitting up a lower cap. Still, under a cap of 7,500 chinooks, the bottom trawl, or non-pollock, fleets would have faced closures in four years since 2000. That lives up, at least partly, to Magnuson-Stevens Act National Standard 9 to “minimize bycatch to the extent practicable” while balancing National Standard 1 to achieve “optimum yield” in a fishery. It is understandable that Pacific Northwest members on the council would vote to protect their constituencies who rely far more on Alaska trawl fisheries than they do upon salmon. And while these fleets face risks of being shut down because of caps on prohibited species catch on chinook, this is hardly different from the current situation when ground trawlers are shut down for hitting halibut limits. This perspective is sympathetic to trawlers trying to make a living, but the “P” in PSC stands for prohibited for a reason, and that’s why it’s also called a limit and not an allocation. Merrill’s vote, though, continues a pattern by NMFS Alaska Region of resisting efforts to reduce trawl bycatch in the Gulf of Alaska fisheries whether it is halibut or chinook salmon or tanner crab despite the dire situation facing all three of those species and the dependency of Alaska residents upon them be they subsistence, commercial or sport users. That pattern fits into why Merrill, an alternate council member, was casting votes in the first place. His boss, NMFS Alaska Region Administrator Jim Balsiger, is married to pollock and processor lobbyist Heather McCarty and based on Commerce Department conflict of interest rules he often steps aside from his official duties so that McCarty can lobby the council on issues affecting her clients. Balsiger hasn’t always stepped aside on votes after McCarty has lobbied the council, though, and there is a major deficit of trust in the council process among a wide array of fisheries stakeholders based on their relationship and the way decisions and regulations emanate from the Alaska Region office. For instance, at the June 2011 council meeting in Nome, Balsiger was the key voice who spoke up during deliberations to swing the vote in favor of an amendment to bump up the pollock chinook bycatch limit from the preliminary preferred alternative of 22,500 to the final approved total of 25,000. McCarty was one of only a handful of pollock representatives who gave public testimony in Nome. Then, at the June 2012 council meeting in Kodiak, Balsiger (like Merrill did in Juneau) joined members of the Pacific Northwest delegation in supporting a delayed rollout of halibut bycatch cuts. That measure was shot down 7-4, with council Chairman Eric Olson and Alaska Department of Fish and Game Commissioner Cora Campbell immediately speaking out against Balsiger’s support for that stall tactic. McCarty didn’t lobby the council at the Kodiak meeting in June 2012, but her client John Whiddon of Pacific Seafoods did. Whiddon submitted a letter to the council on behalf of Kodiak processors asking for either no cuts or a smaller cut in halibut bycatch. Whiddon, at the time, was also putting his name forward for appointment to the International Pacific Halibut Commission on which Balsiger sits as the federal designee to the six-member U.S.-Canadian body. It might sound bizarre to think that someone against cutting halibut bycatch would think it even possible to be appointed to the IPHC. It’s not so strange when you consider that Philip Lestenkof, the president of the St. Paul Community Development Quota group that McCarty also represents, was a virtual unknown within the fisheries community until he was named to the IPHC early last decade and currently holds one of the seats now opened up. Choice Commerce Department appointments have come often to McCarty, who has been a member of both the Marine Fisheries Advisory Committee, or MAFAC, and the North Pacific Research Board, which hands out Commerce Department grant funding. When McCarty’s term expired on MAFAC last year, she was replaced by Julie Bonney of Kodiak, who is easily the most well-known Gulf of Alaska trawl fleet representative. What is truly astounding about the way NMFS Alaska Region has favored trawl interests is how it looks when juxtaposed against the ridiculously thin science it has used to justify draconian fishing closures in the far western Aleutian Islands supposedly to protect food sources for Steller sea lions. Despite mountains of evidence that halibut bycatch negatively impacts the species, or the decline in tanner crab populations around Kodiak or chinook salmon around Alaska, NMFS Alaska consistently sides with the trawl fleet while it is standing by junk science shutting down fisheries in the Aleutians. Then again, McCarty doesn’t have any clients way out there.

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

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

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

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

AJOC EDITORIAL: ACES works...for North Dakota

Here’s a headline from Bloomberg you won’t see the Juneau spendaholics touting as they run their dishonest campaign against the recently signed oil tax reform bill: “Alaska North Slope Premium Drops to Lowest Level in 16 Months.” Because West Coast refiners lack access to the more extensive pipeline infrastructure of the Midwest and rely heavily on imports, Alaska North Slope crude has long traded at a premium compared to West Texas Intermediate, or WTI, crude. However, as Bloomberg reporter Eliot Caroom documented, that premium spread is shrinking. On May 28, the premium between Alaska North Slope crude, or ANS, and WTI was down to $8.90. That’s the lowest it has been since Jan. 4, 2012. A few months ago, on Feb. 25, the premium between ANS and WTI was $18.75. What’s going on is simple, and it’s not good for Alaska in more ways than just the drop in prices. “ANS has weakened against WTI and Bakken this year as refiners including Phillips 66 announced they would move more oil to their West Coast refineries from North Dakota,” Caroom wrote. Caroom then quotes Andrew Lebow, a senior vice president at Jefferies Bache LLC in New York: “The rail movement from the midcontinent west is competing with ANS,” Lebow said. “With the additional rail capacity, it makes sense that WTI-ANS has tightened.” Well, it makes sense to anyone with a basic working knowledge of global markets, supply and demand, or math. So don’t bother telling Les Gara, Bill Wielechowski, Hollis French, or any of the other economic illiterates who don’t understand anything except playing political games with Alaska’s future and who are recklessly injecting at least another year of uncertainty into our state business climate with their foolhardy drive to repeal SB 21. While Gara and the Gang mug for cameras and spread their horse pucky, the Bakken fields in North Dakota that now surpass the North Slope in daily production are not just taking jobs and investment away from Alaska anymore. Now the cheaper Bakken crude is taking away Alaska’s market share on the West Coast. But don’t worry, I’m sure Wielechowski will have a press release out soon explaining why all this is proof ACES works. Yeah, ACES works great, if you’re a senator from Bismarck.

AJOC EDITORIAL: Opponents of tax reform still don't get it

On the opposite page you’ll find that Rep. Les Gara has his knickers in a twist over the spurt of positive news flowing from the North Slope in the aftermath of the latest legislative session that ended with passage of a comprehensive oil tax reform bill. A few days after Senate Bill 21 passed on the final day of the session April 14, ConocoPhillips said a rig was en route to the Kuparuk River field on the North Slope; Brooks Range Petroleum declared a goal for a 2014 production start-up at its small Mustang field; and the Spanish major Repsol announced three successful test wells drilled this past winter near the Colville Delta, and that two of them look promising for development after the tax change. All of the companies praised the passage of SB 21 as an important step in the economics of these developments going forward and, naturally, this hasn’t sat well with the opponents of tax reform who are no rookies at playing PR themselves. It is more than mildly amusing to observe these folks get so self-righteous while they brand tax reform a “giveaway” and proclaim a negative first quarter earnings report from ConocoPhillips as proof ACES works. Sen. Bill Wielechowski accusing Gov. Sean Parnell of spreading “propaganda”? Please. An amoeba has more self-awareness. Of course we are not naïve enough here to believe there is no political timing to these announcements or comments about SB 21 — of course there is — but we are certainly not gullible enough to believe that ConocoPhillips mobilized an additional rig for the Slope earlier this year in the belief that ACES would continue. The most casual observer knew that oil taxes would be cut in some manner this session after the Alaska voters spoke in the 2012 elections and broke up the Bipartisan Majority blocking Parnell’s signature policy goal in the Senate. The only question would be by how much. Let’s examine that for a moment. Under SB 21, eliminating the punitive progressivity formula reduces revenue by $1.4 billion in fiscal year 2015, the first full year of the regime. However, raising the base tax rate to 35 percent and limiting capital expenditure credits raises $1.725 billion to fully offset the elimination of progressivity and then some. Where the fiscal hit happens — which assumes no new production from either legacy fields or new fields — is in the per barrel tax credit ranging from $0 at high prices to $8 at low prices. This is the smartest way to issue credits. The companies get credit for what they produce, not for what they spend. Alaska receives no tax revenue from barrels that aren’t produced; but neither do the oil companies receive tax credits for not actually increasing production. There’s a phenomenon that happens under highly progressive tax systems like ACES, with its investment tax credit system, called “gold-plating.” Essentially, companies have an incentive to maximize expenses because as prices fall, the state absorbs a greater and greater share of the costs and takes less and less for every $1 drop in prices because expenses remain a constant or increase. So while opponents of tax reform routinely point to job and spending numbers on the Slope as proof ACES works, they do so while blithely ignoring the fact that production has not kept pace. Those who claim Parnell is giving away tax dollars are, in fact, cheerleading for a program in which the state is footing the bill for companies to maintain the status quo of decline. Under the per-barrel credit of SB 21, companies get tax credits for performance by increasing production. The upside for the companies is they get to keep more of their revenue, which has coincidentally been proven over time to be the surest economic incentive to grow. In Gara’s defense of ACES, he bizarrely points to the ConocoPhillips move at Moose’s Tooth as having the goal of reducing the Kuparuk field decline from 6 percent per year to a 3 percent decline per year. Like Wielechowski’s backhanded congratulations to ConocoPhillips every quarter even when production and profits fall, the small-mindedness is astounding. The goal isn’t simply to decline at a slower rate. The goal is to stop declining and move to growth. And unlike the days of rock bottom oil prices in the late 1990s and early 2000s, companies now have every reason to produce more. One of the most absurd criticisms of SB 21, however, is that it doesn’t require companies to spend their Alaska profits in Alaska. This is the greatest evidence of all that the opponents of making Alaska a competitive oil jurisdiction just don’t get it. What if other countries or states mandated that Shell or Repsol couldn’t spend their profits in Alaska? Despite Alaska sitting on top of the globe more connected to the international community in most ways than to the rest of the U.S., these critics still think they can craft such a regime that would restrict the capital decisions of multi-national corporations with options. The correct path is to make Alaska hospitable enough that it’s better for the majors and the up-and-comers to not only make profits here, but to reinvest here. Maintaining hostile postures and punitive taxes in the midst of a friendly regime oil boom in the Lower 48 is the worst choice our state could make.

EDITORIAL: State forced to fund federal railroad mandate

The Alaska Railroad received about half of what it asked for from the Alaska Legislature to keep moving ahead on the major technological upgrade known as “positive train control.” The $19 million inserted by the House into the capital budget is far short of the $35 million the railroad asked for to keep the project going for the next two years. As a result, expect the railroad to be back in Juneau next year seeking more funds, as it struggles to regain financial stability. Freight revenues are down because of reduced shipments of jet fuel from North Pole and reduced coal exports from Healy are also hurting railroad finances. Positive train control is one of the biggest changes to railroad operations in decades, but it comes at a price — estimated to reach $155 million for the Alaska Railroad during the next five years. The railroad has spent about $55 million already. With the $19 million added to the capital budget just before adjournment, the railroad still needs about $70 million to finish the job. Former President George Bush signed the Rail Safety Improvement Act of 2008, which requires railroads to have the new technology in place by the end of 2015. With this equipment, signals will be sent between trains to maintain safety and switches will be monitored to assure the proper alignment. Computers on each train and at railroad offices would track the position of each train by GPS and make automatic speed and braking adjustments. The federal law says that if this equipment is not in place by the end of 2015, the Alaska Railroad will not be able to provide passenger service. There are some reports that an extension for the nation’s railroads will be approved, as railroads in every part of the country are struggling to meet this challenge. With the deadline fast approaching, the state-owned railroad has to move with all deliberate speed to come into compliance. We’re glad to see the Legislature recognized the importance of this project to one of the most crucial links in Alaska’s transportation infrastructure. Time to approve Keystone XL -Topeka Capital Journal Now that the State Department and the state of Nebraska have signed off on an expansion of the Keystone pipeline, there seems to be little reason for President Barack Obama not to approve the project as soon as possible. That means the pipeline expansion should get this country’s OK in mid-May. The State Department issued a report March 1 that raised no objections to proceeding with construction of the pipeline expansion. That report started the clock on a 45-day period for public comments, after which Obama will decide whether to approve the project. Nebraska has some issues with the pipeline’s route through that state — it was proposed to cut through some environmentally sensitive areas — but Nebraska Gov. Dave Heineman earlier this year signed off on an alternate route that avoids the state’s Sandhills region. With the State Department and Nebraska on board, there is no reason for further delay. Opponents of the expansion project content the Canadian crude the pipeline would transport significantly increase greenhouse gases because it is the “dirtiest” crude to be found and requires additional refining. That said, the original pipeline has been in operation for years and is carrying the Canadian tar sands crude to refineries in Oklahoma and Illinois. Canada, having found an abundant source of oil, isn’t going to stop its production. The tar sands crude will find its way to refineries and that work can create jobs at U.S. refineries and spin-off jobs. The pipeline expansion also will create a more cost-efficient method for moving oil from fields in Montana and western North Dakota to U.S. refineries. Much of the oil from those states now is being transported by rail to refineries in the west. The original Keystone pipeline enters the U.S. in North Dakota and runs south through that state, South Dakota, Nebraska and Kansas to Cushing, Okla. An intersecting line carries some crude to Patoka, Ill. The pipeline expansion, known as Keystone XL, would enter the U.S. in Montana and cut diagonally across Montana, South Dakota and Nebraska, where it would connect with the existing pipeline. The project also calls for extending the current pipeline from Cushing, Okla., to refineries on the Gulf Coast. Obama already has said he doesn’t object to that segment of the expansion. Given that tar sands crude already is being refined in the U.S., and that more would be with the addition of the Oklahoma-Gulf Coast link to the existing pipeline, Obama should have an easy decision to make. He should keep in mind that the pipeline also will be carrying a lot of U.S. crude in a more economic manner, which would impact the final cost of the refined product. It’s time to approve the project and increase the flow of crude to U.S. refineries.

GUEST COMMENTARY: The Gipper, Iron Lady tower over 'Leaders' today

Back when I was still writing speeches and giving policy advice to naïve candidates foolish enough to listen to me, I once told a young, first-time congressional candidate who was depressed about all the negative attacks coming his way that you can tell a lot about a man by the enemies he attracts. Such was the case with Ronald Reagan and Margaret Thatcher. The vicious loons on the far left were apoplectic when these two towering figures were in office — at the same time! And this week, with the death of Lady Thatcher, her petty, small-minded enemies are staging celebrations of her passing. How pathetic. As much as I detest what Barack Obama is doing to the United States of America, I cannot imagine rejoicing at his demise. As I have tried to teach my children and grandchildren, everyone is loved by someone, and that someone can easily be hurt during a time of grief. In the case of Margaret Thatcher, she was loved by many and admired by millions. Her combination of dignity and resolve throughout her career has enshrined her name in the ages. Like Reagan, she had that unique ability to tell you to go to hell and yet make you feel as if you might actually enjoy the trip. Now that she is gone, her antagonists diminish themselves with every cheer or nasty comment in which they indulge. Some of these buffoons, who have been planning for this celebration for a decade, are urging people to show up on Saturday in London’s Trafalgar Square to join their tasteless revelry.  Another measurement of greatness by which to gauge a leader is the number of quotes one can attribute to that person. There are certainly exceptions to that rule. For example, while I consider Calvin Coolidge to be the second-greatest president of the last 100 years, after Reagan, the only quote from “Silent Cal” that leaps to mind was his acerbic response at a dinner party to left-wing critic Dorothy Parker. When Parker informed Coolidge that someone had bet her she could not get him to say more than two words, he is reputed to have replied, “You lose.” However, as a confirmed word geek, I do love great quotes, and as I was contemplating the meaning of Margaret Thatcher’s life, leadership and passing, it occurred to me that one indication of greatness is whether the next generation remembers anything you said. Reagan and Thatcher are quoted endlessly. So was Winston Churchill. In fact, how many prime ministers of the United Kingdom — other than Churchill, Thatcher and Tony Blair — can you even name off the top of your head? One of the best known utterances from the Iron Lady was “The problem with Socialism is that sooner or later you run out of other people’s money.” It is a sentiment that she practiced, and her belief in individual achievement helped her lead Great Britain out of some of its darkest days. Another Thatcher quote echoes Reagan’s first inaugural statement that “government is not the solution to our problems; government is the problem.” In a 1987 interview with Women’s Own magazine, referring to those who demand more from government, the prime minister said, “They are casting their problems at society. And, you know, there’s no such thing as society. There are individual men and women and there are families. And no government can do anything except through people, and people must look after themselves first. It is our duty to look after ourselves and then, also, to look after our neighbors.” I could not tell you one thing that current British Prime Minister David Cameron has ever uttered. And one of the few quotes from Barack Obama that any of us will remember is the one from his 2008 presidential campaign: “We are five days away from fundamentally transforming the United States of America.” We will remember that one, and many will regret not having contemplated its true meaning. May Margaret Thatcher, along with her great friend and ally, Ronald Reagan, rest in peace, and may we be so fortunate as to see such greatness again. Patton describes himself as a recovering political speechwriter. He can be reached at [email protected] or on Twitter at @Doug_Patton.

AJOC EDITORIAL: Cantwell letter to SEC latest nonsense over Pebble

Thanks to Sen. Maria Cantwell, the federal budget put forth by Sen. Patty Murray wasn’t the dopiest thing to come out of the Washington delegation last week. On March 18, Cantwell sent a letter to the Securities and Exchange Commission asking the agency to investigate Northern Dynasty Minerals Ltd. for what she alleged may be “inaccurate information” filed with the SEC or “intentionally fraudulent” testimony by the company to the Environmental Protection Agency. There has been a lot of nonsense surrounding the proposed Pebble mine, but Cantwell has set a new standard by making Murray look like the brains of the Washington Senate outfit. Cantwell claims Northern Dynasty, the Vancouver-based co-owner of the Pebble prospect along with Anglo American PLC of London, is either misleading investors or the EPA about a preliminary economic assessment prepared by Waldrop released in February 2011 and filed with U.S. and Canadian agencies. The Waldrop Report laid out the potential economic value of developing Pebble based on 25-, 45- and 78-year mine life scenarios. The development scenarios described in the Waldrop Report were then used by the EPA in preparing its assessment of potential mining impacts on the Bristol Bay watershed released in May 2012. Referring to the 2011 release of the Waldrop Report, Cantwell wrote to the SEC, “Northern Dynasty subsequently informed the SEC and investors that the proposed Pebble mine design and specifications are feasible and permittable in a press release from 2011 that is currently on file with your agency.” Then, referring to the public hearings on the assessment conducted in Anchorage, Cantwell wrote, “Recently, however, the Northern Dynasty Minerals referred to the very same Waldrop Report as a ‘fantasy proposal’ when it delivered formal testimony to the EPA in August of 2012. This contradictory use of the Waldrop Report is extremely concerning as it is unclear whether Northern Dynasty Minerals is misleading investors by attracting investment for a ‘fantasy proposal’ or it is intentionally providing fraudulent testimony to the EPA.” Perhaps it is unclear to Cantwell because her statements are the real fantasy. First, let’s go back to the Waldrop Report, and what it actually says about Pebble being “feasible and permittable.” Here is the sentence Cantwell is quoting from (emphasis mine): “While the mineral development project described in this Preliminary Assessment is considered to be economically viable, technically feasible and permittable under existing regulatory standards in Alaska and the United States, it must be noted that no decision has been taken by the Pebble Partnership to seek permits for the project as described.” That’s called a disclaimer, Sen. Cantwell. No fewer than three times in the first six pages of the Waldrop Report are published disclaimers that the project as described may vary “in a number of ways” from what is ultimately proposed by the Pebble Partnership. Now, consider Cantwell’s retelling of the August 2012 public hearings when she claims Northern Dynasty referred to the Waldrop Report as a “fantasy proposal.” Following Cantwell’s citation to an Aug. 7, 2012, report by KTUU, we find Cantwell gets neither the context, the company nor even the quote itself correct.  According to the KTUU story, Pebble Partnership CEO John Shively was clearly not referring to the Waldrop Report but to the EPA’s hypothetical mine laid out in the draft assessment. “The fantasy mine the EPA uses to measure the substantial impacts in this very large watershed has no basis in reality in the 21st century,” Shively said, according to the KTUU story. Indeed, the mine described in the EPA assessment was savaged by the peer review panel assembled to critique the document. Peer reviewer John Stednick of Colorado State University wrote: “The level of detail in the assessment of the potential system failures varies considerably and baits the question — why? Does this demonstrate lack of understanding of failure prediction, lack of failure prediction, or writing team expertise?” Reviewer William Stubblefield of Oregon State University wrote: “… the potential reality of the assessment is somewhat questionable. It is also unclear why the EPA undertook this evaluation, given that a more realistic assessment could probably have been conducted once an actual mine was proposed ...” Phyllis Weber Scannell, a former Alaska Department of Fish and Game biologist, wrote: “Some of the assumptions appear to be somewhat inconsistent with mines in Alaska.” In short, Shively isn’t the only one calling the EPA mine scenario a fantasy. So are the peer reviewers hired by the EPA. The other fantasy is that stupidity like this unfounded allegation out of a U.S. Senator’s office is in any way helpful to the process.

AJOC EDITORIAL: Sequester an overdue dose of reality for DC spendaholics

Two days after this issue of the Journal went to press, the much ballyhooed “sequester” was set to take effect March 1 with an automatic $44 billion in federal spending cuts over the rest of the fiscal year split equally between the Defense Department budget and domestic spending. Naturally, the prospect of cutting 12½ days of deficit borrowing has given our elected leaders in Washington, D.C., an excuse to do what they do best: full-blown panic mongering. Unlike the so-called “fiscal cliff” of automatic tax increases or the every-few-months debt ceiling extensions, both sides of this issue had very real reasons for not wanting to see a deal get done. Fiscal hawks see this as a small, albeit crude, first step toward the long overdue process of getting our deficit and debt under control before it engulfs even more of our economy. President Barack Obama, who rarely conducts a press event anymore without surrounding himself with firefighters or children or people in hard hats, is eager to use the sequester as yet another political cudgel with which to bash Republicans upon their thick noggins. Nevermind that the idea of the sequester originated in his White House, or that Obama vowed in November 2011 to veto any attempt to reverse the automatic spending cuts put in place when the Super Dooper Debt Committee created in the August 2011 debt deal failed — shockingly! — to agree on a plan to make spending cuts in something other than across-the-board fashion. To hear Obama tell it now — and during last fall’s debates with Mitt Romney — the sequester was a GOP plan and he has no idea how it came into being despite the fact he signed the bill. We all know nobody in Congress reads legislation before they vote for it, there’s no reason to expect our absentee president to know what he is signing either. This president has spent more time on his golf game — 115 rounds give or take — than he has addressing our country’s coming fiscal disaster. Add it up, and at about five hours per round, it amounts to 72 working days, or about 14 working weeks, worth of golf in just more than four years. Remember when the press pretended to care what presidents did with their spare time? Ah, those were the good ol’ days of speaking truth to power. Now the media breathlessly report on Obama hanging out with Tiger Woods and golf coach Butch Harmon or Michelle Obama presenting at the Oscars with the critical eye of Teen Beat magazine. No one has seemed to notice that Obama rolls into his home office no earlier than 9:30 a.m. according to the official White House schedule, or that during February he received his daily briefing only four times before 10 a.m. Most employees who show up that late every day would get fired, not rehired. Well, America rehired him. The sequester is a dose of reality for that decision, as if skyrocketing gas prices weren’t enough, or the persistent unemployment of 8 percent that would be well into the double digits if so many millions of Americans hadn’t completely dropped out of the workforce over the last four years of Hope’n’change. Gas prices — that’s another issue the media used to care about when they could accuse George Bush and Dick Cheney of profiting from it. When rising prices are caused by inflationary policies of the Federal Reserve that are enabling Obama’s deficit spending and concentrating wealth among those who can access the overnight borrowing window, the press has gotten a lot less curious about the root cause of pain at the pump in the absence of any discernable economic growth. There is no leadership in D.C., and it’s about time some product of their never-ending trifling blew up in their faces. As far as that goes, leadership is not sending out press releases blasting others for lack of leadership. Leadership would be walking into Majority Leader Harry Reid’s office and asking him why the hell the Democrats in the Senate haven’t passed a budget in four years, then going on the floor and saying the same. Regular order is a distant memory under the most feckless Senate leader in modern history, but only in alternate political universe could we hope to see that press release from our state’s Democratic Sen. Mark Begich. Begich has sponsored several bills to address issues like tax reform and Social Security, so his Feb. 24 statement criticizing nameless “Republican and Democrat leaders” misses the mark. The problem in Congress is Reid. There are no Republicans blocking Begich’s bills from being brought to the floor. There are no Republicans blocking a sequester alternative in the Senate, because the Senate Democrats led by Reid haven’t proposed one and neither has Obama. This is how Obama and Reid have run Washington ever since they lost the House in 2010. Manufacture a crisis, do nothing, blame Republicans. Lather, rinse, repeat, and count on the media to soap their backs and carry the water. Reid isn’t going to bring a bipartisan piece of legislation sponsored by Begich or any other reasonable Democrat to the floor, because it’s far more advantageous to preserve a political weapon than to take an issue off the table. That’s how Reid and Obama approach every situation and it has truly grown wearisome. Then again, most Americans might not notice anything as a result of the sequester. That would be the worst outcome for the tax-and-spenders who are consolidating our present and future generations’ wealth into D.C. and a few surrounding counties that now top Silicon Valley in per capita income. What if the economy doesn’t crash because a measly 1 percent of federal spending is cut? The most dangerous thing for Obama acolytes and the D.C. parasites is if the American public figures out the government can get by with less. That’s the reality too many Americans have already been living for the last four years. Andrew Jensen can be reached at [email protected]

AJOC EDITORIAL: House Dems should send student loan bill to DC

Last week it was noted in this space that there have been several not-so-pleasant and costly surprises associated with the implementation of the Affordable Care Act, aka Obamacare. This week, state Rep. Les Gara, D-Anchorage, reminded us of another one. Gara and his fellow House Democrats have introduced a bill, HB 17, that calls for the reducing of principal on student loans for Alaska residents by as much as 2.5 percent per year depending on the amount appropriated by the legislature to fund it. Gara has been banging this drum for a while now over the past two years, with his go-to quote being to point out that the difference in interest rates between a student loan and a car loan. “Alaska Student Loan Corporation loans have been at seven percent and above in recent years when you can get a used car loan for less than three percent,” said Rep. Gara. “That people who want to better their job prospects through college education or job training have to pay twice the rate of a used car loan seems wrong.” Awww, it “seems wrong.” Nothing sums up the typical emotion-based appeal of legislating we see so often, whether it is student loans, gun control or health care. If you don’t support Gara’s bill, you probably don’t care about students, only greedy lenders. If you think Alaska’s oil taxes are uncompetitive, you must want to give away “our oil.” If you don’t support reactive and ineffective gun controls of the sort floating around Vice President Joe Biden’s resodded dome, you must hate children. And of course, not supporting Obamacare pretty much means you want kids with Autism living on the streets. Or so we’ve been told. Gara should know very well why the cost is going up for student loans offered by the Alaska Student Loan Corp., which funds the Alaska Commission on Postsecondary Education. If he doesn’t, it could only be called willful ignorance. The reason costs are going up is because back in early 2010, Congressional Democrats couldn’t get the books to balance for Obamacare even with the cooked-up assumptions they were sending to the Congressional Budget Office. In order to back up the now laughable claim that Obamacare would reduce the deficit, the Democrats in D.C. took over the student loan business as part of the bill and claimed it would save $67 billion over 10 years. Before Obamacare passed, Rep. Gara, the Alaska Student Loan Corp. offered a variety of incentives and reductions that, if fully taken advantage of, could reduce the interest rate on a student loan to as low as 3.35 percent. In 2009, the last year Alaska Student Loan Corp. could offer traditional loans, more than $4 million in benefits were distributed to student borrowers through waived origination fees, and reductions in interest rates and principal balances. And as for those subsidies to student lenders that were cited as a cost saving of the federal takeover, well, it was one of the biggest lies among many told in the selling of Obamacare. Between 2008 and 2009, the Alaska Student Loan Corp. rebated nearly $7 million back to the U.S. Department of Education based on the dramatically reduced interest rates set by the Federal Reserve at the onset of the 2007 recession. Now that the federal government has taken over direct student loans, the only product the Alaska Student Loan Corp. can offer is the Alaska Supplemental Education Loan, which must be financed through the private capital markets where tighter credit standards apply, the federal guarantee is gone and an unsecured loan simply cannot be obtained at the same rate as a secured loan for the used car Gara keeps talking about. This is how Diane Barrans, executive director of the Alaska Commission on Postsecondary Education, described the student loan business before Obamacare: “We used capital markets to finance the loans, the federal government underwrote it, we provided local servicing, and when we had an opportunity to provide discounts on those loans we provided discounts and rebates to allow borrowers to benefit,” she told the Journal back in 2010. Here’s another unpleasant fact from the government takeover of the student loan business: it has a disproportionate impact on middle class borrowers who would have qualified for the various incentives offered by Alaska Student Loan Corp. Under the federal takeover, while the government is borrowing on three-month Treasurys at less than a half-percent, it is charging middle class borrowers 6.8 percent on direct loans and more than 8 percent on consolidated loans. The Alaska Student Loan Corp., and other entities like it around the country in Montana, Wyoming and North Dakota, would have passed those savings on to their borrowers. That arrangement is over, and the DOE is pocketing the cash instead. This is what Wyoming Student Loan Corp. CEO Phil Van Horn told the Journal in 2010: “Those of us, the baby boomers, can tip our hats to the students who are going to subsidize our health care.” If Gara and his fellow House Democrats really want to find someone to blame for the cost of Alaska student loans going up, they need look no further than their counterparts in D.C. who rammed through Obamacare and used America’s college students to pay for it. Andrew Jensen can be reached at [email protected]

FISH FACTOR: Salmon markets looking strong; comment period extended

In a word, the outlook for Alaska salmon markets this year is favorable. That’s the conclusion of Gunnar Knapp, fisheries economist at the University of Alaska Anchorage in an overview of world markets to Alaska legislators. Knapp cited three key factors for the short-term outlook: lower sockeye harvests, strong canned salmon markets with low inventories, and strengthening prices for farmed salmon. Lower harvests can boost prices, and Alaska wild salmon tends to follow the price trend for farmed salmon, which dominates global markets. Alaska’s 2012 harvest of nearly 124 million salmon was the lowest since 1998. Farmed Atlantic salmon now accounts for two-thirds of world supply. Alaska wild salmon accounts for less than one third of U.S. fresh and frozen salmon consumption. Positive trends for Alaska show a steady increase in the value of pink salmon — nearly two-thirds of Alaska pink production was frozen in 2011 instead of going into lower value cans. That compares to less than 20 percent of pinks hitting the freezers in the late 1990s. Alaska also has diversified its markets, with less salmon going to Japan, and more going to Europe and China, where it is reprocessed into portions and sent back to the US and other places for sale. The dockside value of Alaska’s salmon harvests went from $164 million in 2002 to $603 million in 2010. (The value was nearly $660 million in 2011 and $506 million in 2012.) The wholesale value since then also has surged from $466 million in 2002 to $1.5 billion in 2011. Total processor margin and total ex-vessel (dockside) value have risen by similar amounts. There are 27 different limited entry salmon fisheries in Alaska, Knapp said, and the increased permit values show that salmon fishermen have become increasingly optimistic about the future of Alaska’s salmon fisheries. Knapp credits the good showing since 2002 to sustained and effective niche marketing, successful expansion of markets, new product forms, improved quality, and overall increased global appetites for salmon.  Even though market forces appear favorable at this point, Knapp cautions that only one thing is for sure — “The most certain thing is something will happen to surprise us,” he said. Salmon price watch Last year Alaska’s salmon industry figured prices would plummet since Chilean fish farmers were back in the game after several years, when a deadly virus wiped out their stocks. Prices dipped a bit, but not as badly as people feared. Here are the 2012 statewide price averages per pound by species, with 2011 prices in parentheses: Chinook: $3.99 ($3.53); Sockeye : $1.16 ($1.31); Coho: $1.16 ($1.15); Pinks: $0.43 ($0.46); Chums: $0.75 ($0.84). Comment period extended The Food and Drug Administration has extended the public comment period for genetically modified salmon, aka Frankenfish, to April 26. As of Feb. 14, the FDA had received nearly 32,000 comments, running 100-1 against approval of what would be the first man made animal for human consumption. Comment at www.regulations.gov. Lent seafood sales Ash Wednesday on February 13 marked the start of Lent, a time of fasting and soul searching for hundreds of millions of Christians around the world. The word Lent derives from the Old English lencten, meaning spring. Many believers will give up favorite foods during Lent, or they’ll devote time to volunteering or charity work. And what the peak holiday selling season from Thanksgiving to Christmas means to retailers, Lent means to the seafood industry. Food Services of America, for example, reports that Ash Wednesday is the busiest day of the year for frozen seafood sales, and the six weeks following is the top selling season for the entire year. The 40-day Lenten season, which this year runs from Feb. 13 to Easter Sunday on March 31, dates back to the 4th century. Ash Wednesday is so called from the ritual of placing ashes from burned palm branches on the forehead as a sign of repentance. The ashes symbolize the religious statement “remember that you are dust, and unto dust you shall return.” In many countries, the day before Lent, called Mardi Gras or Shrove Tuesday, has become a last fling before the start of the long fasting season. For centuries, it was customary to not eat meat during Lent, which is why some people call the festival “carnival,” Latin for farewell to meat. While nearly all seafood enjoys a surge of interest during Lent, the most traditional items served are the so-called “whitefish” species, such as cod, pollock, flounders, and halibut. But no matter what the seafood favorite, the six week Lenten season is good news for Alaska, which provides nearly 60 percent of the nation’s wild caught seafood to U.S. restaurants and grocery stores. Halibut scholarships If you are heading to college and have been involved in the halibut industry, scholarships await. The International Pacific Halibut Commission offers merit scholarships to support college, technical schooling and other post-secondary education. The scholarships are for $2,000 per year, and are renewable for a normal four-year period of undergraduate education. A committee of industry and Commission representatives reviews the applications and determines recipients based on academic qualifications, career goals, and relationship to the halibut industry. The scholarships for 2013 will be available for college entrance or continuation in fall 2013. Questions? Contact Eva Luna at (206) 634-1838, ext. 7661, or Bruce Leaman at ext. 7672. Applications may be downloaded from the IPHC website at: http://www.iphc.int/opportunities/scholarship.html. The deadline to apply is June 28. Laine Welch lives in Kodiak. Visit www.alaskafishfactor.com or contact [email protected] for information.


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