All eyes on Bristol Bay after state predicts a record season, but fishery’s economics still in flux

The summer salmon season is due to ramp up in Alaska over the next few months, and the main focus of this year’s salmon fishery statewide will be on Bristol Bay sockeye. Of the 160.6 million salmon of all species that the Alaska Department of Fish and Game forecasts will be harvested in 2022, 74 million of those are sockeye and about three-quarters of those would come from Bristol Bay. Another 67.2 million are pink salmon, with the rest made up of smaller numbers of the other three species. If the forecast proves accurate, this will be the biggest year ever for the Bristol Bay fishery. With a total predicted return of more than 75 million and a projected harvest of about 60 million in the bay, it would blow away the existing total-run record of 66.1 million, and dwarf last year’s harvest of 40.4 million. Like all forecasts, it comes with a degree of uncertainty—salmon runs are inherently hard to predict—but it tracks with the upward trend in Bristol Bay the last five years. “We have used similar methods since 2001 to produce the Bristol Bay sockeye salmon forecast, which have performed well when applied to Bristol Bay as a whole,” the biologists wrote in their forecast report for Bristol Bay. “Since 2001, our forecasts have, on average, underforecast the run by 12% and have ranged from 44% below the actual run in 2014 to 19% above the actual run in 2011.” The total number of fish isn’t the only factor to consider in the economics of the region, though. Last year, biologists recorded a significant drop in the average size and weight of sockeye harvested in the fishery — largely due to the fact that it was mostly younger fish coming back. Younger fish are typically smaller, which is worth less to the fishermen and to the processors. However, that banner forecast has sparked speculation about a high-value fishery this summer. Fishermen from other areas have been looking at ways to buy into the Bay over the last few years, pushing the average price for a permit above $232,000 this year. That’s the highest price since 1997, according to the Commercial Fisheries Entry Commission. Processors have yet to announce a pre-season exvessel price, and it’s hard to know exactly what factors will go into setting what fishermen will be paid. Dan Lesh, an economist with the McKinley Group who tracks seafood, said there are a number of factors both domestically and internationally that go into shaping salmon prices on the market. For one, the amount farmed salmon in the supply chain affects wild salmon prices, and like other businesses, the farmed sector has had disruptions lately, he said. There are also concerns about transport logistics for wild-caught salmon, such as the pilot shortage. One factor that’s drawn speculation since February has been the ban on imported Russian seafood. Since Russia invaded Ukraine in February, a number of countries — including the United States — have blocked the sale of any Russian seafood products. Historically, Russia has competed with the United States on salmon. While it does block much of the movement of products like snow crab, both U.S. and Russian salmon go through a middleman for processing before hitting shelves: China. After that salmon is sold into China for processing and reexport, it becomes hard to distinguish what is Russian and what is American, Lesh said. The Alaska Seafood Marketing Institute says it’s too early to determine what the effect of that ban will be on the market for Alaskan seafood, said Ashley Heimbigner, its communications director. “Alaska and Russia are just two players in the larger global seafood trade and Alaska’s competitors have their eyes on the growing U.S. domestic market as well,” she said. “We can’t necessarily assume that product substitutions necessitated by the sanctions will result in significantly more Alaska purchases. However, ASMI will continue our work to increase the awareness and value of Alaska seafood throughout our markets.” The big flush of Bristol Bay sockeye into the market may affect the types of salmon products made, too. Processors have limited capacity, especially for a fish like salmon, where they all arrive at once. Lesh said the industry may see more emphasis on the frozen and canned products this year as opposed to the fresh market. One other challenge on the domestic side may be pressure from inflation. Americans have seen their grocery bills increase significantly in the last year, and while wages have increased as well, it’s not an even effect. Alaska wild-caught salmon tends to carry a higher price than other types of fish products. However, other types of meat have increased dramatically in cost recently—the U.S. Department of Agriculture estimated that across the board, meat products are expected to rise 4.5% to 6.5% in 2022. Lesh noted that wild salmon has not experienced as much of an increase, and may make it more competitive with other types of meat. “Besides crab, most of the price increases have been higher in other proteins, like steak,” he said. “You can substitute other low-cost seafood products (for Alaska salmon), but I don’t think our prices have gone up enough to worry.” Heimbigner said retail was a successful outlet for salmon during the pandemic, when restaurants and fresh seafood markets were shut down. Inflation, staffing and supply chain issues are affecting that sector, but she noted that one marketing opportunity is in frozen seafood. “Consumers are learning that there is no quality difference when it comes to frozen vs. fresh seafood, and in the case of seafood from Alaska where the catch is frozen just after it leaves the water, freezing locks in nutrients and preserves quality,” she said. “Along the same lines, tinned and canned seafood, like canned Alaska salmon, has seen a surge in popularity.” Alaska’s commercial salmon season kicked off Monday in the Copper River area, where drifters were able to get nets out for king salmon for a 12-hour period. The Copper River kings are the first of the season, and most years carry a premium price. For example, Pike’s Place Market in Seattle was reportedly offering a 1-pound fillet of Copper River king salmon for $129.99 on Monday. Elsewhere in Alaska, there are above-average pink salmon runs predicted for Lower Cook Inlet, Kodiak and Prince William Sound wild pinks. Kodiak’s sockeye salmon run predictions look close to average as well. Southeast Alaska’s pink salmon run is projected to be weak this year, as is Upper Cook Inlet’s sockeye salmon run. Reach Elizabeth Earl at [email protected]

Japan eyes support for US LNG project expansions to shore up its energy needs

Japan has long placed a priority on securing energy for the islands nation, which has little of its own fossil fuel resources and no pipelines to crude oil or natural gas suppliers. A pair of Japanese utilities helped pioneer the seaborne trade of liquefied natural gas when they signed a long-term contract in 1967 to take gas from the LNG plant that would be constructed in Nikiski, on the east side of Cook Inlet. It was the second LNG plant in the world, and the only one on the Pacific for years. It closed after nearly a half-century of production. Now, with global LNG supplies tight, Russian gas of questionable political longevity and most of its nuclear power plants still closed after the 2011 Fukushima plant disaster, the Japanese government is looking to North America for help to meet its supply needs. The government is looking to help finance expansion of existing U.S. Gulf Coast gas liquefaction plants as among the quickest options for long-term delivery of more of the fuel to the nation of 125 million people. Japan is not moving away immediately from taking Russian LNG but is looking for alternatives. “The U.S. has expansion plans at existing projects, which could boost production in a relatively short period of time, and Japanese companies are showing interest (in those projects),” Minister of Economy, Trade and Industry Koichi Hagiuda said at a press conference in Tokyo on May 10. “Japan intends to contribute to starting up these U.S. projects with public financial support and proceed to cooperate with the U.S. in order to stabilize global LNG supply,” he added. Hagiuda visited the U.S. and met with Energy Secretary Jennifer Granholm on May 4. “We expressed our intention to cooperate in areas including upstream investments during the discussion,” he said of his meeting with Granholm. With six LNG export terminals in operation on the Gulf and East coasts, the U.S. was Japan’s fourth largest LNG supplier in 2021, accounting for about 10% of Japan’s total LNG imports of just over 74 million tonnes that year. Russia, with its two export terminals, supplied 9% of Japan’s LNG imports and was the nation’s fifth-largest supplier, according to data from the Ministry of Finance. State-owned Japan Oil, Gas and Metals National Corp., known as JOGMEC, is the likely candidate for investment in new U.S. LNG supply. The company provides equity capital for Japanese companies’ oil and gas exploration and production work, as well as loan guarantees to support financing. JOGMEC’s support to bring more U.S. gas to Japan is expected to go toward existing projects where Japanese companies already are involved, which includes two on the Gulf Coast: The Sempra-led Cameron LNG terminal in Louisiana, and Freeport LNG in Texas. Participants in Cameron, which started up in 2019, include trading houses Mitsui and Mitsubishi as well as marine shipper Nippon Yusen Kabushiki Kaisha (NYK Line). At 12 million tonnes annual production capacity, the partners are looking at a more than 50% expansion, targeting an investment decision next year. On the Pacific, Mitsubishi is a partner in the Shell-led LNG project under construction in Kitimat, British Columbia. The terminal is expected to start shipments in 2025, with expansion possible. Osaka Gas and LNG importer JERA, a 50-50 joint venture between Tokyo Electric Power and Chubu Electric Power, are among the participants in Freeport LNG, which is planning an expansion to add 5 million tonnes to its current annual production capacity of 15 million tonnes. The terminal shipped its first cargo in 2019. While turning more toward U.S. projects, JOGMEC, along with Japanese trading house Mitsui, jointly hold a 10% stake in the Arctic LNG-2 project which is under construction in Russia’s far north, with a scheduled start-up date next year. Western sanctions against Russian companies, however, could delay the equipment, expertise and financing needed for the project to reach its full build-out capacity of almost 20 million tonnes per year, which the lead partner, Russian gas producer Novatek, had expected to reach by 2026. The Japan Bank for International Cooperation in 2021 signed on to participate in almost $1.8 billion of project financing for Arctic LNG-2, joining Chinese, Russian and other banks in the package. “Considering the future demand for LNG in our nation and the world, we have to move ahead with this project,” Mitsui CEO Kenichi Hori said of the Russian project at a May 2 news conference. “Otherwise, the world’s energy balance will collapse, or there will be shortages.” Japanese companies also hold stakes in Russia’s first LNG export plant, Sakhalin-2, on Sakhalin Island, about 800 air miles north of Tokyo. The plant, which sent its first cargo to Japan in 2009, includes Mitsui and Mitsubishi among its partners. Russia’s second LNG project, Yamal, started operations in 2017. Although no Japanese company owns a stake in the project, the state-run Japan Bank for International Cooperation helped with financing the development, which is majority owned by Novatek, the same company leading the Arctic LNG-2 project. And while the Japanese government is looking to help finance additional U.S. LNG capacity, Prime Minister Fumio Kishida told reporters on May 9 the country would maintain its stakes in oil and gas production at Sakhalin-1 and Sakhalin-2 in Russia. He had told an online meeting of the leaders of the Group of Seven countries a day earlier that Japan will ban Russian crude oil imports “in principle” as part of a G-7 campaign. But it will take time, he said. “We will take steps to phase out imports in a way that minimizes the adverse impact on people’s lives and business activities,” Kishida told reporters. In addition to funding from the Minister of Economy, Trade and Industry, Japanese companies Itochu, Japan Petroleum Exploration Co., Marubeni and Inpex have stakes in Sakhalin-1, which was operated by ExxonMobil until it decided to exit from Russia. The U.S. is expected this year to claim the title of world’s largest LNG exporter, a fast rise to the top after the first Gulf Coast exports in 2016, fueled by booming shale gas production and about $100 billion in investment in liquefaction capacity, storage tanks, docks and jetties, and pipelines to deliver feed gas. A seventh U.S. export terminal came online earlier this year, with two more under construction on the Gulf Coast. Larry Persily can be reached at [email protected]

Hilcorp warns Alaska utilities about uncertain Cook Inlet natural gas supplies

Officials with several Alaska utilities say they’ve been informed by Hilcorp that the company does not currently have enough natural gas reserves in Cook Inlet to provide for new gas contracts. Those contracts face renewal in the next two to 11 years. The oil and gas company has said an ongoing drilling program could change that, the utilities say. Also, the state says Cook Inlet has plenty of gas awaiting discovery to meet future needs, while Hilcorp has an ambitious plan to continue investing in the Inlet, at least in the next few years. Also, the utilities generally say they don’t have short-term concerns about gas supply, and Southcentral Alaska isn’t facing the situation from around a decade ago, as concerns about gas availability in the winter prompted discussions about rolling brownouts and voluntary reductions in home heat. But the notice still provides a significant challenge for six utilities from Homer to Fairbanks, along with two state agencies. It’s also led to questions about Hilcorp’s long-term plans for the Inlet, a basin with decades-old infrastructure and declining gas and oil. A state official said Hilcorp has indicated it wants to reduce its role in the Inlet in the decades ahead. A Hilcorp spokesman said in an email Monday that it expects to spend hundreds of millions of dollars in Cook Inlet to produce gas there in the coming years. “Since coming to Alaska, Hilcorp has invested nearly a billion dollars on natural gas projects in the Cook Inlet,” said the spokesman, Luke Miller. “We anticipate spending hundreds of millions of dollars in the next few years and drilling 17 new wells this year to produce additional natural gas for Alaskan homes and businesses. We are proud of the work we have done to revitalize the Cook Inlet basin and fuel local Alaskan markets over the last decade. Hilcorp is committed to continuing our investment into the future and satisfying the commitments we have made to local end users.” The company is the dominant energy supplier for more than half the state’s population, providing around 85% of the gas that heats and powers homes and businesses across much of Alaska. The gas it produces from the Cook Inlet basin travels in pipes to be generated into electricity at power plants or to eventually reach homes for heating. The new group, which has begun holding meetings but does not yet have a name, will look for ways to diversify the utilities’ energy supply, including with new sources of renewable power or gas, members said. The groups consists of the largest utilities in Alaska: Enstar Natural Gas and Chugach Electric Association based in Anchorage, and Matanuska Electric Association in the Palmer-Wasilla area. They’re teaming up with Homer Electric Association and, in Fairbanks, Golden Valley Electric Association and the Interior Gas Utility. The Alaska Energy Authority, a quasi-governmental agency created to lower energy prices, and Alaska Department of Natural Resources, which will provide data on gas prospects, round out the members. “We understand the uncertainty inherent in relying on a single source to meet a significant portion of our demand,” the group said in an announcement last week. “Our goal is to work together for long-term solutions,” it said. “This requires a better understanding of each utility’s constraints and needs based on existing contracts and forecasting our collective demand growth into the next decade as well as considering additional options to meet the unique energy needs of our region.” Hilcorp tells utilities: Don’t rely on us The utilities that buy gas from Hilcorp say they’ve been told that the company doesn’t have the gas available to meet their next contractual cycle, at least not at the moment. The meeting was held in April, a state official said. Chugach Electric and Matanuska Electric, the state’s two largest electric utilities, face expiration dates in six years. The contract for Enstar, which provides gas for heat and cooking for more than half the state’s population, expires in 2033. “This is a matter of being prudent,” said Lindsay Hobson, a spokeswoman with Enstar who’s in the new group. “We need to be proactive in looking at that time frame, and it’s an opportunity to be collaborative to better understand the market.” Homer Electric faces the first contract expiration date in April 2024, for what state officials have described as a relatively small amount of gas. Several utility representatives said last week they have no indication that Hilcorp is leaving the Inlet. “The way they worded it to gas purchasers was not to rely on Hilcorp for gas beyond existing contracts,” said Julie Hasquet, a spokeswoman with Chugach Electric. “I don’t think they’re leaving.” Curtis Thayer, executive director of the Alaska Energy Authority, said Hilcorp has indicated it wants to play a smaller role in the Inlet in the decades to come. “(Some of) the utilities have gas contracts for the next 10 years, so it’s not that they’re leaving the Inlet,” Thayer said. The electric utilities get about 80% of their energy from natural gas, with most of the rest from hydropower, primarily from the state-owned hydroelectric project at Bradley Lake near Homer. A small amount of solar and wind energy completes the picture, he said. Besides Hilcorp, a few small companies provide a fraction of the Inlet’s gas, Thayer said. Driving the formation of the new group, in part, is that “Hilcorp has indicated they would not like to have 80% of Cook Inlet (gas production),” he said. “They’d like to see that decrease over the next couple decades.” The group will consider what the longer-term energy picture in the Cook Inlet region will look like, Thayer said. Ramping up renewables Also driving the discussion, Thayer said, is the electric utilities’ preexisting planning to increase their renewable-based power, and a bill from Gov. Mike Dunleavy to dramatically increase renewable energy use in Alaska in the next two decades. The state energy authority will lead the new group’s efforts to look at renewable opportunities, such as large-scale wind, solar or tidal projects that the authority may be able to support with loans, Thayer said. They could be independent power projects, owned by companies that sell their power to the utilities, he said. The Bradley Lake hydroelectric project could also be expanded to provide more power, he said. Hilcorp has played a critical role in Cook Inlet, once the state’s top oil and gas region until the giant Prudhoe Bay field was developed in the 1970s on the North Slope. The company arrived in the Inlet more than a decade ago, as the state offered generous tax credits to oil and gas companies to incentivize production. The Houston, Texas-based company has been credited with helping resolve concerns about declining gas supply in the Inlet in winter that surfaced around that time. Also, utilities in the new group helped develop an underground natural gas storage area in a depleted gas reservoir in the Inlet, ensuring that a bank of gas is available to avoid potential winter shutdowns. In more recent years, Hilcorp has turned much of its attention to the North Slope, becoming the operator of Prudhoe Bay, after acquiring BP’s assets in 2020. Homer Electric isn’t currently concerned, said Brad Janorschke, the general manager for the utility, in an interview last week. But long-term solutions that include more renewables will need to be figured out, he said. The utility is closely watching the situation involving Hilcorp and the Cook Inlet gas supply, he wrote in May 10 report to members. “Hilcorp held a meeting with their stakeholders to inform them that while they have sufficient gas for their existing fuels contracts, they did not have firm gas available beyond that,” Janorschke wrote. Hilcorp told the utilities it won’t be able to provide gas for new contracts, unless ongoing drilling turns up new gas reserves, Janorschke wrote. “My understanding is they want to see what happens with this drilling season before proceeding with signing any gas contracts,” Janorschke said in the interview. Utilities will always need natural gas to make power, since renewable energy is seasonal and fickle, he said. State confident in gas reserves An official with the Alaska Department of Natural Resources said Cook Inlet still has ample gas to meet future needs. “There are several fields with large amounts of known natural gas reserves that companies are working on developing — if these projects are successful, they could provide significant additional volumes for the utilities to place under contract,” said John Crowther, deputy commissioner for Natural Resources, in an email. Crowther said the state can provide geological and other data about gas opportunities. The state is also evaluating regulatory requirements and fiscal terms in Cook Inlet that may be obstacles to development, he said. The Interior Gas Utility in Fairbanks buys a small amount of gas from Hilcorp, under a contract that will not end for 10 years if the utility opts to renew it periodically, said Elena Sudduth, a spokeswoman with the utility. The utility might have to look beyond Cook Inlet for gas, she said. A direct pipeline from the North Slope to Fairbanks could provide gas for the utility, which is small but quickly growing, she said. The utility could also receive gas from an offtake pipe from the proposed large gas line project, an idea long discussed by Alaska political leaders and oil companies but never built. Golden Valley Electric makes most of its power from coal but buys gas-generated electricity from Southcentral utilities to reduce costs, said Meadow Bailey, a spokeswoman with the utility. The utility is concerned that if additional sources of gas are not found, there will be less gas-generated power for Golden Valley to buy. That energy source provides a strong value for the utility, Bailey said. She said the new group can look for solutions. “We are definitely concerned because we rely on the other Railbelt utilities to generate electricity for us using natural gas,” she said. “It benefits our members to use as much natural-gas-generated electricity as we can.”

Energy conferences will focus on innovative solutions to Alaska energy problems

Four days of conferences in Anchorage will focus on finding solutions to energy challenges in Alaska starting May 23. The in-person events will center on renewable energy opportunities to lower high power prices, innovative ideas such as geothermal and nuclear to support rural towns and ways to deliver energy more efficiently in Alaska, among other topics. Investment experts familiar with funding opportunities for projects will also be speaking at the events, said Givey Kochanowski, senior adviser for the Arctic Energy Office in Alaska, part of the U.S. Energy Department. The Energy Department on Monday, May 23, will kick of the conferences with a one-day event called ArcticX. The conference will bring together Alaskans and federal energy officials focused on different technologies, Kochanowski said. Geraldine Richmond, under secretary for science and innovation at the Energy Department, will be a keynote speaker. Rob Gillam, with Alaska investment firm McKinley Capital Management, will be another. On May 24, the state will host the Alaska Sustainable Energy Conference, featuring three days of panels focused on energy policy, projects and solutions. Keynote speakers will include former Secretary of State Mike Pompeo and former Energy Secretary Rick Perry, both appointed by former President Donald Trump. They’ll appear virtually. Another keynote speaker will be Bill Ritter Jr., former Colorado governor and head of the Center for the New Energy Economy at Colorado State University. The event will also feature experts who have hands-on experience addressing Alaska’s costly and carbon-based energy supplies, such as Clay Koplin, former Cordova mayor and chief executive of Cordova Electric Cooperative, who has emphasized renewable energy use in the Prince William Sound community. Gov. Mike Dunleavy announced the conference in February. A key sponsor is the Alaska Center for Energy and Power, with the University of Alaska Fairbanks. Both events will be held at the Dena’ina Civic and Convention Center.

ConocoPhillips Alaska’s profits rise with oil prices in first quarter

The top oil producer in Alaska reported a sharp jump in quarterly profits at the start of the year, as the Russia invasion of Ukraine has boosted oil prices. ConocoPhillips Alaska on Thursday said it took home $584 million in its Alaska operations, about 29% higher than its net earnings in the final three months of last year. Oil prices for North Slope crude shot above $100 a barrel in March, shortly after Russia invaded Ukraine. Such prices haven’t been seen since 2014, and they’re juicing producer profits. Worldwide, ConocoPhillips earned $5.8 billion in the first quarter, more than doubling from the previous three months. In Alaska, the company in March reduced oil production by a small amount following a natural gas leak at the CD1 drilling pad at the Alpine oil field. The company and state regulators are investigating the leak. ConocoPhillips Alaska produces about 180,000 barrels daily. The company in Alaska paid taxes and royalties of $702 million during first three months, with $524 million of that going to the state, according to a statement from the company. The company is on track to make capital investments of $1 billion in Alaska this year, about the same as last year. It made $253 million in such investments in the first three months of the year, the company said. “This investment in Alaska will bring new projects online and add new barrels of oil to the trans-Alaska pipeline,” said Erec Isaacson, president of ConocoPhillips Alaska. The company earned $1.4 billion in Alaska last year, and launched new oil production in December at the Greater Mooses Tooth-2 drill site in the National Petroleum Reserve-Alaska. It’s working to develop a large oil discovery in the federal reserve called Willow. A decision by a federal judge last year hindered progress at the project. The Biden administration is now conducting more environmental analysis of the project’s potential benefits and drawbacks. ConocoPhillips has not made a final investment decision on Willow, which could cost $5 billion before oil flows. But the company has continued to move ahead with the project. Talking with investors in an earnings call on Thursday, ConocoPhillips chief executive Ryan Lance said that Willow will produce oil at competitive costs, below $40 a barrel.

Solar power heats up in Alaska

Households and businesses in Alaska are increasingly producing their own solar power and selling the excess electricity to utilities. The four major Railbelt utilities from Homer to Fairbanks reported in February that almost 2,000 solar installations are tied into their systems, primarily for small, residential projects. The numbers have grown rapidly in recent years. That includes in Anchorage, where growth is outpacing several Lower 48 cities, a new study shows. Solar panel installers, meanwhile, report strong demand for their services. They say homeowners are increasingly signing up after hearing positive reviews from neighbors with their own rooftop arrays. “In general, solar has been very popular for residential customers who want to reduce their energy bills,” said Chris Pike, with Alaska Center for Energy and Power within the University of Alaska Fairbanks. Pike installed 12 panels on his roof in the Rogers Park area of Anchorage a few years ago, something he doesn’t recommend unless people have construction experience like he does. He cut his annual power bills by more than half, even with trees blocking sunlight. “It’s what I hoped for and expected,” Pike said. “Depending on your use, you don’t need giant systems to impact your bill.” A research engineer at the Alaska Center for Energy and Power, Pike tracks the number of homes and businesses that produce their own power and sell the excess energy to utilities, under a system called net-metering. The vast majority of those projects are solar panel installations atop homes, cranking out electricity during long summer days. In the Chugach Electric Association service area that includes Anchorage, close to 600 residential customers had solar installations last year, along with 60 commercial customers, the utility reported in February. Eighty-five new residential projects were added to the system last year alone. Chugach Electric, the largest electric utility in Alaska, has 92,000 members. So the solar installations are a small part of the utility’s power picture, said Julie Hasquet, a spokeswoman with the utility. But the utility has taken steps to support more of those solar installations. In February, Chugach Electric requested and received approval from state regulators to expand its ability to allow more solar and other renewable projects through net-metering. “Increased use of renewable energy is a goal for Chugach and for many Alaskans,” Hasquet said in an emailed statement. Though the number of Anchorage installations remains small, they have increased rapidly compared to many other U.S. cities, said Dyani Chapman with Alaska Environment Research and Policy Center, a group that advocates for renewable energy and other issues. Anchorage recently rose to 55th place nationally for installed solar capacity, after ranking at the bottom of 65 major cities in 2015, Chapman said, according to a study from the organization and Frontier Group, a California-based think tank focused on climate and other issues. “There’s room to grow, but we’re growing faster than a lot of cities, as well,” she said. ‘Business has grown exponentially’ Falling prices for panels over the last several years is helping stoke interest, even with a slight uptick last year as the COVID-19 pandemic and inflation affected many products, said Ben May, owner of Alaska Solar, an installation company. But other factors have also offset costs, he said. Programs like Solarize Anchorage, a project involving the Alaska Center and the Alaska Center for Energy and Power where Pike works, have facilitated group installations by multiple households. That allows for better prices. “We buy them by the container-load now, 900 panels at a time, in the 40-foot containers,” May said. When May started Alaska Solar six years ago, he’d order a few pallets of solar panels at a time. But the business has grown to 12 employees from one, and he’s doing about 120 installations annually, he said. “Business has grown exponentially,” he said. Customers are opting for larger installations than they did a couple of years ago, he said. They’re less skeptical of the technology as solar arrays become more visible around town. The panels generate lots of energy in summer, making up for the dark winters, he said. Output is strong even in spring, thanks to sun-reflecting snow and electronics that work better in cold, he said. Also, Alaska’s relatively high power prices have encouraged many people to adopt solar power, he said. “We may not get perfect sunshine like Arizona, but the electricity we make is worth a lot more,” he said. On a sunny Wednesday afternoon in downtown Anchorage, two Alaska Solar employees working on a scaffolding platform ratcheted down the final panel on a tall garage roof. The homeowner there will produce about 50% of his own power annually, May said. Pike said upfront costs for the rooftop installations can be significant for many homeowners, often exceeding $10,000. But the projects typically pay for themselves in about 10 years, he said. The panels can last 30 years or longer. Outside the Anchorage area, the major Railbelt utilities report more than 1,300 customers with solar installations. More than 300 of those are within the Matanuska Electric Association service area that includes Palmer and Wasilla, said Julie Estey, a spokeswoman for that utility. The utility supports more solar installations and knows many of its members value renewable energy for its environmental benefits. The utility has seen “tremendous” annual growth in that area, she said. The pace could continue for perhaps a decade before it becomes a potential issue. “We can only accept so much variable power on the system before it begins to cost more,” she said. “But we definitely view (the installations) as part of our energy future, and managing it and understanding it better is something we’re working on.” High electric prices drive demand Mark Haller, a solar panel installer in Soldotna, launched Midnight Sun Solar in Anchorage a few years ago. But demand was so high on the Kenai Peninsula that he moved his operation and family there. Homer Electric Association, serving much of the Kenai Peninsula, has relatively high electric prices, Haller said. That’s driving more people to solar power, he said. “It’s been really fruitful,” he said. “We’re doing about 80 installations a year.” Most of his customers are homeowners. “There’s a lot of folks down here that are resiliency minded, too, and they want to do things on their own as much as they can,” he said. Federal tax credits cut 26% off the cost, which is another motivator, he and May said. The benefits fall to 22% next year, ending in 2024. Hans Vogel said he’s getting solar panels installed at his two manufacturing businesses in Palmer. He already has a solar installation at his home in Eagle River. Vogel’s businesses, Triverus and Trijet, are high-tech operations with fairly high demand for energy, he said. With tax incentives, he expects the installations will pay for themselves in five years, maybe less, he said. The panels will also add value to the buildings if he ever has to sell them, he said. And low energy prices will make the companies more sustainable, he said. “It’s just a total business case for us,” he said. “We’re committed to being here and consuming energy at this business for a while. So why not take advantage of this power from that big shiny thing in the sky?”

On Earth Day, a visit with Anchorage entrepreneurs who make sustainability their mission

On Earth Day last month, I turned down a small side street off of Spenard Road and was met by the sight of a small celebration. Kids tossed bean bags at a cornhole board, a small fire pit crackled, and a folk band played merrily as guests arrived. As I approached the parking lot festivities, I was greeted warmly by Blue Market AK co-founder Jennifer Gordont. Blue Market is a retailer in Anchorage founded on the principles of the triple bottom line: planet, people and profit. A small shop tucked away on West 31st Ave., Blue Market carries foods, household items and personal care products in bulk, so customers can bring their own reusable containers to fill up, rather than selling everything packaged in single-use plastics, glass or paper. If you happen to forget a container, it’s no problem; Blue Market has a collection of donated glass jars and bottles for anyone who needs one. Blue Market supports its fellow Alaska businesses, carrying almost entirely Alaska-made or grown products. Co-founder Jessica Johnson told me their goal is to “fit into the circular economy, and keep things as local as possible.” They have a set of mission-based standards for their products, including no packaging, Alaska-based, nontoxic, carbon-aware and fair trade. The festivities at Blue Market were in celebration of Earth Day. Earth Day is widely considered the start of the modern environmental movement, prompted by the release of Rachel Carson’s “Silent Spring” in 1962. “Silent Spring” detailed the devastating environmental and human health impacts of modern industrial pollution, which brought widespread awareness of environmental issues to the American public. Five years later, following a massive oil spill in Southern California, Wisconsin Democratic Sen. Gaylord Nelson proposed a teach-in on college campuses in early spring. He recruited the help of Denis Hayes, a young activist, in the hopes of inspiring collective action. On April 22, 1970, 20 million Americans mobilized across the country to protest the environmental damage of pollution on the first Earth Day. Fifty-two years later, Earth Day is celebrated almost worldwide, calling for action not just on pollution, but also on global climate change. Blue Market was my first stop on Earth Day to visit Anchorage businesses with a sustainability mission. My next was around the corner at the old Spenard post office, now owned and managed by Cook Inlet Housing Authority. I climbed the steps up the newly renovated building and found WILCO Supply in a small, sleek space with natural light pouring in from the large windows. The collection was artfully displayed throughout, perfectly complemented by the room’s decor. WILCO’s founder, Amy Slinker, came over and introduced herself to me, enthusiastically offering to show her products. WILCO Supply is a retailer of stylish bags, purses, and jewelry made from repurposed military items. They turn what would have been waste into modern-looking, sturdy, and useful items for service members and civilians alike. Slinker said her passion for sustainability comes from her family. She was raised on the principle of “reduce, reuse, and recycle.” In addition to her products being made from repurposed materials, she reuses packing materials for shipping orders, she said, to “incorporate eco-friendly processes in this business, to help do my part for the environment.” She highlighted one small bag, perfectly sized to carry a few personal items or toiletries, lined with repurposed Army Combat Uniform material, and a stunning gold necklace shaped from a bullet casing. An Army National Guard member herself who is also married to a veteran, Slinker understands the challenges of military life. In addition to her commitment to sustainability, her other mission, she says, is “to uplift the spouses of military service members, veterans and people transitioning out.” Her business supports military families by sourcing all of her products from entrepreneurial service members, veterans, and their spouses. WILCO Supply and Blue Market embody the principles of the triple bottom line: planet, people and profit. They are driven by more than just the traditional bottom line of making a profit; they support their community members and work towards a sustainable environment for future Alaskans. Our connection to the environment is a part of our identity in Alaska. Earth Day is both a celebration of the planet we call home, and a call to action to protect it. Our state’s innovators and entrepreneurs incorporate the values of Earth Day into their businesses all year, and Earth Day was a chance to celebrate and support the work that they do. Julie Gardella is with the University of Alaska Center for Economic Development.

U.S. LNG output is above capacity now, but can it last?

U.S. liquefied natural gas export terminals have been operating above capacity, helping to meet demand in Europe and producing solid profits for their owners and traders cashing in on high prices for the fuel. But the extra output cannot last. The liquefaction plants, which are overengineered to provide safety and reliability margins, can overproduce for a while but not nonstop, said Kristen Holmquist, head of data analytics at Poten & Partners. “We’re about as high as you can go,” Holmquist said during an April 27 webinar on LNG markets. Pushing too hard can lead to maintenance shutdowns, she said. Receiving and regasification terminals in Europe also have been running above capacity, said Jon McDonald, forecasting manager at Poten & Partners, a global firm specializing in oil, gas and shipping brokerage and commercial consultant services. The push to export more LNG is intended to help Europe replace Russian gas supplies as the continent works to cut off the flow of its energy dollars to President Vladimir Putin’s regime. The U.S. LNG industry already is seeing a slowdown from January and February, when feed gas into liquefaction plants on several days exceeded 13 billion cubic feet per day. Gas flows into the seven operating plants in April averaged about 12.3 bcf a day, due to maintenance needs. The decrease in production for April represents about six fewer LNG tanker cargoes for the month, worth about half a billion dollars. The volume going into LNG plants in April represented about 13% of total U.S. gas production that month. It was zero just six years ago, before the first of the terminals came online. The ConocoPhillips LNG plant in Kenai, which shipped its last cargo in 2015, was the country’s only liquefaction and export terminal for more than 40 years until it shut down. Though a pioneer, the plant was small by current standards, with an output not much more than 1.5% of current U.S. production capacity. U.S. LNG capacity will inch up by the end of the year to 13.8 bcf a day when Venture Global completes work on the last of its liquefaction units and reaches full production at its Calcasieu Pass terminal in Louisiana. After that, the next new plant is not scheduled to come online until 2025. Golden Pass LNG in Texas, a joint venture of Qatar Energy and ExxonMobil, will move U.S. capacity to 16 bcf a day. That same year, Cheniere Energy, by far the largest U.S. LNG producer with a terminal in Louisiana and one in Texas, expects to start producing from a $7 billion expansion of its operation in Corpus Christi, Texas. At full production, the eight U.S. export terminals will be capable of producing and loading 132 million tonnes of LNG per year — almost seven times the volume of the proposed $40 billion Alaska LNG project. The state-sponsored project is one of several in the U.S. and Canada with federal authorizations in hand but lacking customers and financing to proceed to a final investment decision. “Interest in U.S. projects has peaked again,” especially for developers that have approval from the Federal Energy Regulatory Commission, Holmquist said. Buyers are hesitant about projects still needing FERC authorization, fearful of permitting delays as U.S. policy veers toward growing concerns over climate change. In addition to permits, buyers look for low prices and flexibility not to take contracted cargoes when they are not needed, she said. U.S. LNG project developers broke from the traditional business model years ago in offering fixed-price contracts for liquefaction services, plus the cost of feed gas. That shifted the commodity price risk to the buyers, and ensured that the plant operators made a profit. Though developers gave up the upside of extra profits when LNG prices spiked, they avoided the downside of weak markets. Cheniere Energy was the first to sign up customers under fixed-price deals for liquefaction services at its Sabine Pass, Louisiana, terminal more than a decade ago. The going liquefaction rate started at $3 per million Btu of gas (1,000 cubic feet), with some deals a little higher and some a little lower. But as costs came down, and competition went up, liquefaction fees offered by U.S. project developers dropped to as low as $1.75 to $1.85 per million Btu, Holmquist said. Intense buyer interest, particularly from Europe, in taking more U.S. gas has pushed the rate to $2 or $2.25 in some new contracts, she said. A 50-cent increase in liquefaction charges can add more than $1.5 million to the cost of a standard-size tanker load leaving a U.S. Gulf Coast port. Delivery flexibility in contract volumes “means a lot in today’s market,” Holmquist said, particularly the option to pay the liquefaction fee and not take any gas. Foregoing delivery of an LNG cargo when prices are low saves the buyer from losing even more money on the gas than just the $2 or $3 per million Btu they would pay for unused services at the liquefaction plant. The LNG terminal owner is protected and still collects on the contract. Such flexibility was particularly important to buyers during the worst of the pandemic in 2020, when market prices for LNG at their low point were under $3 per million Btu and traders would have lost more even money buying the gas from U.S. producers, paying to liquefy and shipping it into depressed-demand markets. Charif Souki was head of Cheniere when it embarked on the export business and new pricing structure. He is now co-founder of LNG developer Tellurian, which has plans to build a terminal in Louisiana. Looking at growing demand worldwide for the fuel, Souki told The Wall Street Journal last week: “The best time to start an LNG facility would have been five years ago. … The next best time is today.” Not wanting to wait, Tellurian began early site work on its $12 billion Driftwood LNG plant in Louisiana last month, even though it has not completed financing.

Movers & Shakers for May 1, 2022

The Public Relations Society of America (PRSA) has announced that Jennifer Thompson, president and CEO of Alaska-based Thompson & Co. Public Relations, has been named the 2022 Chair of PRSA’s Counselors Academy, which focuses on the business and leadership of public relations agencies. Counselors Academy is one of 14 Professional Interest Sections which focus on a variety of areas of expertise and are offered exclusively to PRSA members. Sections provide specialized content and networking opportunities, as well as exclusive online communities, newsletters, training and in-person events. Thompson has served on the Executive Committee of Counselors Academy since 2016 and most recently served as Chair-elect after fulfilling the Secretary/Treasurer role. “The past two years have been incredibly difficult, and as we start to emerge from a global pandemic, we are all navigating our new future in business,” said Thompson. “Having the opportunity to collaborate with fellow Counselor’s Academy members during this time has proven to be such a valuable resource and I’m looking forward to leading this group of PR professionals over the next year where we will collaborate, learn, share and celebrate our successes.” Coffman Engineers, Inc. (Coffman) is pleased to announce the promotion of Nicholai Smith, PE, and Rob Wasserman, PE, SE, to Principal at the Anchorage office. Smith is an electrical engineer and leads commercial and industrial design projects. He is also the electrical department lead for key oil and gas clients. He received his Bachelor of Science in Electrical Engineering from the University of Wyoming. Smith started with Coffman in 2010. In 2020, Smith was selected by his peers for the Anchorage office Neil Pearson Award because he is an excellent mentor, leader, and engineer who works hard to maintain positive relationships with clients and coworkers. Wasserman is a project management professional and civil and structural engineer in Coffman’s Anchorage office. Wasserman specializes in industrial projects including petroleum facilities, liquified natural gas facilities, refineries, and terminals. He earned his Bachelor of Architectural Engineering from the University of Wyoming and joined Coffman in 2017. “Nicholai and Rob are dynamic leaders who bring a wealth of knowledge to our company and clients. They make concerted efforts to mentor and train their staff and emphasize leadership, accuracy, and hard work to build lasting relationships,” said General Manager, Tom Looney, PE. Michael Mussell will join Peter Pan Seafood Company, LLC in May as executive vice president of projects, ingredients, and canning and Matt Frazier has started in a regional sales manager position. “Both Michael and Matt are exceptionally talented,” said Rodger May, Peter Pan Seafood owner and chief growth officer. “We have significantly moved away from a commodity company to a value-added company. As we continue to work with our customers to meet their exact needs, including developing more value-added products, both Michael and Matt will play a key role in helping us deliver the high-quality Alaska products our customers are looking for.” Mussell has more than 30 years of experiences in the seafood industry. After earning a bachelor’s degree from the University of California Santa Barbara and a master’s from San Diego State University, Mussell honed his craft spending most of his career building and developing production facilities and new applications for Omega 3 oils and low molecular weight fish proteins in Europe, South America, Africa and North America. Mussell’s past experience includes his role as chief operating officer at Austevoll Seafoods/Austral Group; the startup, BlueWave Marine Ingredients; lead of marine platforms at 3D Corporate Solutions and chief commercial officer of ingredients for Nutrimar, a part of the Kvera/SalMar group. “Peter Pan is undergoing a transformation,” Mussell said. “I am enthusiastic that I can bring my experience to help create more value from underutilized co-products while furthering our environmental commitment to being good corporate citizens and create shareholder value at the same time.” Frazier brings more than 15 years of experience in the seafood industry, especially the retail and food services space to his new position. He has worked with Sysco, Sea Port Products, Direct Source Seafood, Northern Seafood Sales, Central Market Mill Creek and 10 years working on commercial fishing boats. Frazier has experience and knowledge from every stage of the process from how fish is caught to how it’s sold at the retail level. “Peter Pan has a customer-first culture,” Frazier said. “Part of my role will be working closely with the end customers to develop the products they want and need. We’re really focused on relationships and that includes combining forces with the fleet to harvest wild Alaska seafood sustainably and responsibly and then deliver the kinds of value-added products the end customer is looking for. It’s a big deal and Americans want product that is harvested and produced sustainably, here at home in the U.S.” Frazier says he’s a dreamer and has a lot of ideas; he’s looking forward to building relationships with customers and working closely together as Peter Pan works to deliver value-added solutions centered on sustainability.

Council asks industry for recommendations on Bristol Bay red king crab

After the first season closure for the Bristol Bay red king crab fishery in decades, the North Pacific Fishery Management Council is seeking more data on how to rebuild the stock and stabilize the fishery. The Bristol Bay red king crab fishery is historically one of the most valuable in the state, but for the last decade, the stock has been declining. Last fall, surveys showed that the female biomass of the stock had fallen below acceptable levels for harvest, and managers closed it. Stakeholders have been working with the council since to try to identify the best paths forward to rebuild the fishery and improve scientists’ understanding of how crab are moving and reproducing in the area. At the April NPFMC meeting, the council members approved a motion to ask the industry to come back with a list of voluntary actions harvesters and other industry stakeholders can take to help reduce bycatch of Bristol Bay red king crab and reduce discard mortality in the directed fishery. Industry stakeholders include not just the directed harvesters in the red king crab fishery, but also reach to the Pacific cod sector, pollock, and Amendment 80 fleets, which impact red king crab stocks based on area and bycatch rates. Rachel Baker, deputy commissioner for the Alaska Department of Fish and Game and a representative for the state to the council, said the industry recommendations would come back by October. Baker’s motion also asks the council staff to expand the discussion paper to include a number of additional scientific aspects, including analysis of the impacts of seasonal closures to pelagic trawl, groundfish pot, and longline gear within a portion of the Bristol Bay red king crab fishing area called the Red King Crab Savings Area and a table for all sources of mortality for the crab across federal fisheries. Baker said there is a general recognition that more scientific information will be necessary to consider items like rolling or seasonal closures to protect mature female red king crab, which was proposed as a solution, and for the council to adequately weigh the costs against the benefits. “We know we lack information related to distribution of red king crab,” Baker said. “There is ongoing work … that you’ve heard about, and the state is a partner in that.” The directed harvesters are already taking on some voluntary measures to help reduce their discard mortality—essentially, the crab that are not kept because they are not of legal size but die anyway. Jaime Goen, the executive director of the Alaska Bering Sea Crabbers Association, told the council at its meeting on April 9 that the harvesters are working with the other sectors to do the same, prioritizing protecting females, prioritizing mating opportunities, and protecting critical habitat. The reason for the stock decline in Bristol Bay is not entirely clear, with some looking to warming ocean temperatures while others point to fishery factors like bottom-trawl impact and bycatch. Goen asked the council to consider options they know they can control, such as adaptive management measures. “This stock is clearly and immediately in need of greater conservation and management,” she said. In their public comment to the council, the ABSC noted that the pot cod fleet voluntarily stayed out of the red king crab savings area and the subareas during the A season, both of which are important for red king crab. For the long-term, the association asked for the council to ban pelagic trawling entirely from the red king crab savings area and to prohibit all gear except longlines from that area when the directed fishery is closed. ABSC also asked for management measures like dynamic closures, protecting additional areas near Amak and Unimak islands from fishing impacts, and requiring pelagic trawl gear to be on the bottom no more than 10% of the time, among other measures. This season has been a hard one for many crabbers. Between the closure of the Bristol Bay red king crab fishery and nearly 90% cut to the snow crab quotas in the Bering Sea due to poor survey numbers, the ABSC estimates that the industry lost about $200 million in revenue. While some crabbers say they understand the reason, it doesn’t lessen the impact. Siri Dammerell, a crabber, told the council her family has had to take on additional jobs and dip into their savings to make it through. “The cancellation of king crab hit us hard, and the lowering of (snow crab) hit us more,” she said. “We understand that there’s a need for rebuilding the BBRKC and urge you to act now, before it is too late.” The discussion paper released by the council for the April meeting outlines four areas of further consideration: Bristol Bay red king crab molting and mating, red king crab boundaries, bottom contact by pelagic trawl gear, and flexible spatial management measures in the fishery. The actual distribution of red king crab in Bristol Bay seems to be shifting to the north, according to the most recent survey data from the Alaska Fisheries Science Center, including to some areas outside the current boundaries of the normal survey. The science is not settled as to whether those crab are actually Bristol Bay red king crab, though, or another stock, according to the discussion paper. The AFSC, Fish and Game, and the Bering Sea Fisheries Research Foundation are working together on new tagging techniques to help understand the stock distribution and movement outside the normal summer trawl survey period, according to the discussion paper. The council accepted Baker’s motion and plans to hear back from the industry at the October meeting. Council member Kenny Down recognized that six months for feedback is not very long, and also recognized that the need for action in the Bristol Bay red king crab fishery is urgent. “It’s not the decisions that we make that are going to haunt us — it’s the indecision,” he said. “Eventually, I do see that we’re going to have to make some hard decisions here regarding BBRKC, and potentially snow crab, as well.” The council is scheduled to meet again in June. Reach Elizabeth Earl at [email protected]

Remote Canadian community working towards local gas supply

Almost 10 years ago, Inuvik, in Canada’s Northwest Territories, just shy of the Beaufort Sea, started received deliveries of liquefied natural gas for its power generators from a gas plant near Vancouver, more than 2,200 highway miles to the south. The regional utility later brought on supply from a new liquefaction plant near Grand Prairie, Alberta, only about 1,700 miles away for the tanker trucks. And now, an Inuvialuit corporation is looking to build a plant less than 100 miles north of Inuvik to produce LNG and synthetic diesel to supply the town with the cleaner-burning fuel for its power plant and diesel for transportation and heating uses. The business plan for the project, estimated at C$160 million, says there is enough gas in a field nearby to meet the needs of the region’s 4,000 residents on the road system for 50 years. “It would be great to have a local supply, a stable supply,” said Mike Harlow, manager of petroleum resources for Canada’s Northwest Territories. The territorial government provided a C$300,000 design grant for the Inuvialuit Energy Security Project (ISEP), which is being managed by the Inuvialuit Petroleum Corp., a subsidiary of the regional Indigenous corporation that encompasses six communities in the territory’s far north. The Inuvialuit Regional Corp. “is doing it on its own,” Harlow explained at an Arctic oil and gas conference in Calgary on March 30. The corporation in 2021 awarded about C$3.4 million in local contracts as it works through its business plan, permitting and other tasks before a final investment decision. Corporation officials did not return phone calls or emails for an update on the project timeline, which in its most recent website postings call for start-up of production by 2023. Development is entirely up to the corporation, which owns the surface land and subsurface rights, Harlow said. The territorial government is helping with some staff and regulatory support, he said. The government paid to build the C$300 million 85-mile all-season road linking Inuvik with Tuktoyaktuk to the north, the two communities in the Inuvialuit region on the road system. The energy project would depend on the road to deliver its fuels. Inuvik, population 3,200, the largest of the Inuvialuit region’s communities, is about 185 air miles straight east from the Alaska border. If it is successful, the Inuvialuit gas project could provide a template for rural Alaska communities with untapped gas reservoirs nearby. The two-lane, gravel Inuvik to Tuktoyaktuk Highway opened in 2017 after four years of construction, replacing a winter ice road. The highway to the Arctic Ocean provides the necessary access to a gas and condensate well on Inuvialuit land that the corporation wants to develop for its energy project. The corporation would need to build about 2.5 miles of road to reach the wellsite, which is about 10 miles south of Tuktoyaktuk. The well, known as M-18, was drilled by private companies under a corporation lease in 2002 and has never been put into production — it’s what’s known as “suspended.” But the potential is immense, the corporation said in its 2020 project summary. “The M-18 field contains an estimated in-place resource of 334 billion cubic feet of natural gas. For comparison, the Ikhil gas field, which has been the primary supplier of natural gas to the town of Inuvik for close to two decades, contained 14.5 billion cubic feet of natural gas.” Inuvik has two power plants, a standby facility that runs on diesel and the main plant that was fueled with gas delivered by pipeline from the Ikhil well starting in 1999 until gas flow to the plant stopped in 2012. The regional utility, the Northwest Territories Power Corp., started bringing in LNG in 2013. The M-18 field contains high-quality gas, with a substantial volume of condensate. “The gas is sweet, with no hydrogen sulfide, and contains a very minor amount of carbon dioxide…Condensate rates from the well are estimated at 30 to 40 barrels per million cubic feet of natural gas production. Harlow said the initial plan is to produce about 5 million cubic feet of gas per day to liquefy for tanker truck deliveries on the Inuvik-Tuktoyaktuk Highway. The condensate would be used to produce synthetic diesel. The module processing facilities would be constructed offsite and trucked to the location. A gravel pad at the well site would support the gas processing modules, storage tanks and the tanker truck loading operation. The energy project “will provide a local, secure supply of propane, natural gas and synthetic diesel for energy use in the Beaufort Delta for more than 50 years,” according to the corporation’s most recent fact sheet on the project. An additional benefit would be disconnecting fuel costs in the region from outside forces, such as LNG and diesel prices in Alberta, which fluctuate with global commodity markets, the corporation said. During peak operations, the plan is for four LNG tanker deliveries a day from the wellsite gas plant — each tanker truck could carry as much as 1 million cubic feet of gas as LNG. There would be one synthetic diesel cargo a day in a standard fuel truck. The project description does not provide estimated costs of natural gas or diesel to users, other than to say the intent is to come in under the cost of fuels trucked into the region from Alberta. It also notes that synthetic diesel is cleaner burning than ultra-low sulfur diesel trucked in from refineries. The fuel, created by rearranging carbon and hydrogen atoms, has very little sulfur, nitrous oxide or particulate matter. “From a technical and environmental perspective, synthetic diesel represents the best hydrocarbon to create from the M-18 well’s production and it can be used locally to reduce greenhouse gases and other emissions.” The corporation’s partner in the energy project is its current supplier of LNG, Ferus Natural Gas Fuels, which in 2014 opened its gas liquefaction plant west of Grand Prairie, in the northern half of Alberta, near the border with British Columbia. The plant can produce 50,000 gallons of LNG per day, equivalent to more than 4 million cubic feet of natural gas. Ferus NGF, a privately held Alberta-based company, will provide technical support for the project. One recent change in Inuvik’s power demand, which could come next year, is not addressed in the LNG project’s development plan: Wind power. The regional utility is looking at installing a wind turbine in the community, possibly by early 2023, to reduce diesel consumption. The single turbine is expected to carry the territory a third of the way toward its goal of reducing emissions from diesel-generated power by 25%, Andrew Stewart, director of strategic energy for the Northwest Territories’ Department of Infrastructure, was quoted in news reports in March. Larry Persily can be reached at [email protected]

Movers & Shakers for April 24, 2022

The Alaska Association of Secondary School Principals (AASSP) is proud to announce our Alaska Principal of the Year for 2022 is Mary Fulp, principal of Colony Middle School in Palmer. Principal Fulp is a lifelong Alaskan who received her Bachelor’s in Education at the University of Alaska Anchorage. She also completed her Master’s in Educational Leadership, with a Superintendent Endorsement from UAA. Fulp has spent 24 years working in education in Alaska and 17 years as a principal in the Mat-Su School District. Principal Fulp has been an advocate for education throughout her career, serving as Past-President of the Alaska Council of School Administrators (ACSA) and the Alaska Association of Secondary School Principals. She also serves as a principal mentor for the Alaska School Leadership Academy. She was selected by her peers as the AASSP Region 8 Principal of the Year for 2022. Each year, the AASSP State Principal of the Year winners are submitted for consideration to be the NASSP National Principal of the Year. NASSP will announce three finalists in July. Fulp will travel to Washington DC in September for the NASSP Principals Institute. The University of Alaska Fairbanks has selected Dermot Cole, Sarah James and Michael Williams Sr. to receive honorary doctorates in 2022. Cole, a longtime Fairbanks author and journalist, will receive a Doctor of Humane Letters degree. James, a Gwich’in leader and educator, will receive a Doctor of Humane Letters degree. Williams, a sobriety advocate and well-known musher, will receive a Doctor of Laws degree. Cole, who grew up on a rural Pennsylvania farm, moved to Alaska after studying at Chinese University of Hong Kong and Montana State University. He graduated from UAF with a journalism degree in 1979. While a student at UAF, Cole began working at the Fairbanks Daily News-Miner as a sports reporter. His role at the newspaper expanded to include politics, business, the environment, the arts and a long-running column. He also spent four years as a columnist for the Alaska Dispatch News. Cole currently writes a blog, “Reporting from Alaska,” which provides political analysis and commentary. Cole is also a noted historian, writing five books on Alaska and Fairbanks. His many honors include awards from the Fairbanks Historical Preservation Foundation, Midnight Sun Council of the Boy Scouts of America and the UAF Alumni Association. James was born in Arctic Village, raised by her parents in traditional subsistence activities with respect for air, water, land, life and sky. She left home to attend Chemawa Indian School in Oregon, graduating in 1967, then moved to San Francisco to attend Heald Business College and work for Blue Shield Insurance. James moved back to Arctic Village in 1970, serving as the village health aide, a preschool teacher and special education aide. In 1988, James was appointed by Gwich’in elders to serve as a spokesperson for the Gwich’in Steering Committee. A founding member and board chair of the organization, she traveled the world for 30 years to educate audiences about the Gwich’in people and the importance of sustainable stewardship. She has received many national honors related to her decades of advocacy against oil exploration and drilling in the Arctic National Wildlife Refuge. Williams grew up in Akiak, learning traditional Indigenous subsistence skills and culture. Leaving home to attend Chemawa Indian Boarding School in Oregon, he was an outstanding high school athlete and his class president, graduating in 1972. After losing six of his brothers to suicide and alcohol-related deaths, Williams became an advocate for sober living and a traditional lifestyle focused on Indigenous culture and language. He used the Iditarod to promote a message of sobriety, winning the race’s Most Inspirational Musher award three times. As an advocate for Indigenous education, Williams is a longtime board member for the Yupiit School District and served on the Alaska State Board of Education. He served as an advisor to a veterinary program offered by UAF and Colorado State University to provide services to communities in the Yukon-Kuskokwim Delta area. Cole, James and Williams will be among those recognized at a ceremony at 5 p.m. April 29 in the Davis Concert Hall on the Fairbanks campus. Bryan Schroder, of counsel to the law firm Cashion Gilmore & Lindemuth, has been named by Defense Secretary Lloyd Austin to the Department of Defense Military Justice Review Panel. The panel was created by statute and is charged with doing periodic reviews of the military justice system, including issues surrounding the court-martial process and sentencing of military members. The Panel provides reports to the Armed Services Committees of both the U.S. Senate and House of Representatives. Members serve eight-year terms. Schroder was the United States Attorney for the District of Alaska from 2017-2021. Prior to serving as the U.S. Attorney, he was a prosecutor in the U.S. Attorney’s Office from 2005-2017. Before joining the Department of Justice, Schroder was a career U.S. Coast Guard officer. He retired as a Captain after 24 years of service. In his current practice, Schroder conducts internal investigations, assists clients in responding to government enforcement actions and managing crisis response, and provides counseling on compliance with federal and state law. Please submit Movers & Shakers entries to [email protected]

War in Ukraine propels the price of Alaska oil past other benchmarks

While the cost of one is most certainly not worth the other, Russia’s invasion of Ukraine is proving to be an indirect windfall for Alaska’s treasury. Alaska North Slope crude oil traded for $115.14 per barrel on April 14, according to state Department of Revenue officials. That same day, oil indexed to the Brent benchmark sold for an average of $111.70. A premium of $3.43 per barrel for Alaska oil on a given day may not seem like much initially, but it has been larger in recent weeks and represents a reversal of a longstanding trend. Over time, it adds up. The Brent benchmark originates from London with oil largely sourced from North Sea fields. It typically trades at a premium of a few dollars to Alaska North Slope, or ANS, crude. However, the normal Brent premium to ANS crude most recently started fading in late March, several weeks after President Joe Biden issued a March 8 executive order banning imports of Russian oil, gas and coal in an effort to retaliate economically against Russian President Vladimir Putin for his decision to invade Ukraine in late February. The current ANS premium over Brent peaked so far peaked at $4.99 per barrel on April 11. Lower 48 oil sold on the West Texas Intermediate market, which typically carries the lowest value of the three, in recent weeks has gone from $2-$3 less than ANS to up to $9-per-barrel cheaper than Alaska oil. Though in totality it is a swing of less than $10 per barrel from the traditional state of global oil markets in more stable geopolitical and economic times, the likely temporary paradigm shift could have a material impact on Alaska’s finances. A change of $1 per barrel in the average price of ANS crude over the year equates to a change of about $80 million to $85 million in unrestricted state revenue, according to Tax Division officials. Revenue officials last month forecast an average ANS price of $91.68 per barrel this fiscal year. The ANS-Brent price difference is the largely the result of there simply being less oil — specifically less of the light, sweet crude produced from the North Slope and Russia — available to refineries in Washington and California where most of Alaska’s oil is sent, according to Alaska Department of Revenue researchers and others. Members of the Revenue Department’s economic research group wrote in response to questions about the price difference that West Coast refineries have been working to meet the increased demand for fuel that materializes most summers while also dealing with the lack of Russian crude that has created a tighter supply in the West Coast oil market. A similar situation is playing out in the Asian market, the economists wrote, as well. Longtime Alaska petroleum economist Roger Marks concurred, writing via email that the lack of Russian oil on the West Coast is driving up the demand for Alaska oil. Last year, West Coast refineries purchased up to 3.5 million barrels of light, sweet oil per month from Russia during the peak of summer. Those refineries purchased more than 5.8 million barrels of Russian oil in total last June, according to data from the federal Energy Information Administration. “Additionally, Saudi Arabia has increased their posted price premiums relative to Brent and other benchmark crudes. This makes ANS relatively more attractive in instances where ANS is competing with Saudi crude,” they wrote. The last time ANS crude sold for more than Brent over a prolonged period was the spring and summer of 2019, when the Trump administration reimposed economic sanctions on Iran, limiting the Middle Eastern country’s ability to export oil. That coincided with about 36 million barrels of Russian oil being contaminated by organic chloride, which ultimately squeezed oil supplies for the West Coast. The state researchers emphasized that oil markets are in a period of high volatility and they would expect any large price differentials between ANS and Brent-priced oil to eventually be resolved by more fundamental supply and demand forces, though it’s unclear when that might happen. For its part, Congress might have slowed a resolution in oil markets at least a little by reinforcing the president’s ban on Russian energy. The House overwhelmingly passed the Ending Importation of Russian Oil Act April 7, shortly after it was unanimously approved by the Senate. The law, which prohibits all forms of Russian energy in the U.S., allows the president to end the import ban, unless it is rejected by Congress, if the administration certifies that Russia has withdrawn its forces from Ukraine and ended the corresponding military hostilities; Russia poses no threat of aggression to a member of NATO; and Moscow recognizes Ukraine as a free and independent state. Elwood Brehmer can be reached at [email protected]

Going nuclear: Alaska is a big target for small reactors

Nuclear industry giant Westinghouse is targeting Alaska for deployment of its small-scale reactor technology. Representatives from Westinghouse’s nuclear division have been traveling to Alaska in recent months and talking with key decision-makers in the state about their eVinci micro-reactor, which they insist utilizes a design that makes it a totally safe, economically viable alternative to the diesel-powered generators relied upon across the vast majority of Alaska. “It will enable economic growth because you will no longer be constrained by energy,” Mike Shaqqo, a senior vice president with Westinghouse Electric, said of the eVinci nuclear reactor. Developed to fit in four transportable modules easily moved by truck, railcar or barge, the five-megawatt micro-reactor system requires about an acre — in line with the footprint of a diesel powerhouse and fuel tanks it is meant to replace, according to company representatives. In addition to the five-megawatt electrical generation capacity, the eVinci can also provide sufficient heat to support a small district heating loop as well, Westinghouse Senior Advance Reactor Commercialization Director Mike Valore said in an interview. “The number of things you can do with this — it almost gets boiled down to, what can you do with heat and what can you do with electricity — which is a lot,” Valore said. The small Westinghouse reactor is designed to operate uninterrupted for eight years, at which point it would be loaded back on a truck and sent back to one of the company’s facilities for refurbishment and refueling. Another eVinci reactor would also be ready to immediately take the place of the first. “We bring the reactor with the fuel in it and we also take it away with the fuel in it,” he said. The wholly encapsulated system eliminates the need to store spent fuel onsite while it cools. The eVinci reactor is cooled with a series of looped cooling pipes filled with liquid sodium. The passive system consists of hundreds of cooling loops that do not rely on high-pressure pumps to move coolant through them, Valore said, thus removing a significant point of failure common in many larger reactor systems. He further stressed that the steel canister that surrounds the eVinci reactor is coated with layers of silicone carbide that can withstand temperatures in excess of what the reactor and triso uranium fuel could produce in a worst-case scenario. “It cannot melt. It will not melt. No bad guy can take it and make bad stuff out of it,” Shaqqo added. He describes it as operating ostensibly like a continuously-charged battery for end-users. The ability to easily regulate the power production also makes small-scale nuclear generators a compliment to, not a replacement for, more variable sources of renewable energy. As for cost, study conducted in 2020 by Canadian nuclear generator Bruce Power and Westinghouse analyzing the feasibility of using the micro-reactor at remote mine locations across Canada concluded the eVinci could reduce power costs by up to 44% over diesel, depending on the price of oil and potential carbon fees. In cost-of-power terms, that translates to an all-in cost that will likely be about 25 cents per kilowatt-hour for the first few commercial eVinci units, Valore said. However, the eVinci project leaders expect the costs to fall significantly once a couple dozen units have been built, largely through economies of scale in manufacturing. The micro-reactor could also cut power-related carbon emissions at those remote sites by up to 90% as well, according to the feasibility study. The eVinci developers expect to conduct a long-term demonstration in the coming years before being ready to commercialize the technology by 2027. That coincides with the U.S. Air Force’s plan to start micro-reactor pilot program, but is truly a coincidence, according to Shaqqo. Air Force officials announced last fall that Eielson Air Force Base near Fairbanks had been chosen as the location for the small-scale nuclear power test run. Defense officials have contemplated numerous alternatives in recent years to the coal- and oil-fired heat and power plants that support several military installations across Interior Alaska. While Westinghouse is a longtime participant in the nuclear industry, having developed large reactors in use across the U.S., Europe and elsewhere, it is just one of several small-scale nuclear developers looking to enter the market as soon as the U.S. Nuclear Regulatory Commission finalizes the regulatory framework for commercial operation of micro-reactors, a lengthy process which is ongoing. Copper Valley Electric Association leaders announced in February they were embarking on a feasibility study with Seattle-based Ultra Safe Nuclear Corp. to determine if the company’s Micro Modular Reactor system could be used to displace the diesel generators the Glennallen utility relies on for part of each year when its hydropower sources are unavailable. Copper Valley CEO Travis Million said when the study was announced that the concept had 100% backing from the utility’s board members and one of his goals with the study is to educate the public on the system and its safety features while making sure to listen closely to any concerns. Sen. Lisa Murkowski has been a longtime backer of small-scale nuclear development; her omnibus Energy Act of 2020 authorized new nuclear research programs and the federal infrastructure bill that she helped negotiate with President Joe Biden includes investments in advanced nuclear technologies, as well. On the state level, Gov. Mike Dunleavy introduced legislation earlier this year to exempt small-scale nuclear projects from a statutory requirement that the Legislature approve the siting of nuclear projects in Alaska and relieve state agencies of the requirement to conduct studies of potential statutory and regulatory changes concerning nuclear development in the state. Those bills are working their way through the House and Senate, but the potential economic and emissions benefits from widespread small-scale nuclear deployment are not worth the broader possible side-effects, according to some. Alaska Community Action on Toxics Executive Director Pamela Miller wrote in testimony to the House Resources Committee on the governor’s micro-reactor legislation that small-scale nuclear reactors still come with serious health and safety concerns and “are a false solution for our energy needs and the climate crisis.” “Nuclear power is destructive throughout its life cycle from the mining of uranium which is done predominately on Indigenous lands through the enrichment process to the untenable problems of disposal of radioactive waste,” Miller wrote further. Valore said the used eVinci reactors would be shipped to a licensed Westinghouse facility in the Lower 48 with the spent fuel inside, after which the fuel would be sent to a licensed storage facility. The Department of Defense and other federal agencies often assume fuel liability for nuclear projects they are involved with. Alaska Environment Action Director Dyani Chapman said that while nuclear technology has come a long way over the decades, micro-reactors still use uranium, which may be handled safer in use than it once was, but must still be mined. “Mining of uranium is dangerous. It leaves radioactive tailings piles that can contaminate soil and water and compromise public health,” Chapman said. “Dollar for dollar there’s just better, cleaner options that we have available to us.” She insisted that Alaska’s leaders should be focused on maximizing the use of wind, solar, geothermal and other forms of renewable power in the state, and the materials needed for those investments can be sourced in creative ways to minimize environmental impacts as well. Mining advocates have consistently said a transition to relying on renewable energy for the nation’s primary power will require many new mines for key materials such as graphite, lithium, copper and other critical minerals. Chapman acknowledged it’s a complex issue, but said options like reprocessing existing mine waste and tailings or extracting the needed materials through recycling should come first. “When we’re thinking about setting up for renewables we should start by using what’s already been extracted. We may get to a point where we have to make other decisions, but we should do what is going to cause the least environmental damage first, always,” Chapman said. Correction: A prior version of this story stated the spent nuclear fuel would be stored in casks at the reactor site. Westinghouse officials clarified it will be shipped offsite in the reactor and handled at the company’s licensed facilities in the Lower 48. Elwood Brehmer can be reached at [email protected]

We are making Alaska’s Purple Heart Trail the longest in the nation

Nine hundred miles of highway winds through Interior and Southcentral Alaska, beginning at the border with Canada and ending on the Homer Spit at the "End of the Road." Covering an even larger area, the Alaska Marine Highway system connects 3,500 miles of coastal Alaska from the Aleutians to the Inside Passage. Every year, thousands of visitors and residents traverse these highways in cars and on ferries. Seeing this opportunity, the Military Order of the Purple Heart (MOPH) has been working for years to designate Purple Heart cities, boroughs, roads, and bridges across the US to honor and thank veterans who have been wounded or killed in combat while serving our nation. The MOPH began efforts in Alaska in 2008 with the designation of the highways between Alaska-Canada as the Purple Heart Trail. Nearly 15 years later, my colleagues and I in the Alaska Senate unanimously passed Senate Bill 203, a bill that I sponsored that extends Alaska's Purple Heart Trail highway designation. Once the House passes the bill, the trail honoring veterans' service will run continuously from the Alaska-Canada border down to the End of the Road in Homer and on the entire Alaska Marine Highway System.  At approximately 4,500 miles, Alaska's Purple Heart Trail will be the longest in the nation's already-expansive network of trails and will include the first-ever marine highway.  It is a fitting record for the years of dedicated effort and thousands of hours given to the project by the MOPH, Alaska MOPH state and chapter Commanders, and veterans with the support and cooperation of numerous city, borough, and state elected officials and employees.  With more resident veterans per capita than any other state, the Purple Heart Trail serves as a tangible demonstration of Alaska's appreciation for the sacrifices made by our wounded and fallen soldiers. Of our 65,000 veterans and approximately 21,000 active-duty military members, many carry with them the scars that earned them a Purple Heart medal.  Signs on the highway and AMHS ferries will stand as a thank you to veterans and an opportunity for those traveling to or around our great State to begin solemn conversations about the meaning of the Purple Heart and the sacrifices that Purple Heart recipients made. In the words of combat-wounded Army Veteran and Alaska Commander of the MOPH, John Knott III, "Let everyone who drives or rides the ferry on the Purple Heart Trail think about the risk all veterans willingly take when they serve our country in the military and know that Alaska recognizes and honors the sacrifices made by Purple Heart recipients and their families." In 2008, the Military Order of the Purple Heart, spearheaded by future National MOPH Commander Ron Siebels, partnered with Sen. Johnny Ellis and the 25th Alaska State Legislature to designate the highway between the Alaska-Canada border and Fairbanks as the Purple Heart Trail. In subsequent years, cities, boroughs, university campuses, roads, bridges, and even the State of Alaska have been given the Purple Heart designation.  Like his predecessors who established the original trail, Commander Knott and the Alaska MOPH spent the last three years reaching out to communities along the highway we propose to designate, gathering letters and resolutions of support from each one.  The Purple Heart Trail designation reflects Alaska's heart for our veterans and the enthusiastic support for the Trail's extension by my colleagues and communities around the state has decisively demonstrated that it is time to make it happen. It is an honor to partner with the Alaska Military Order of the Purple Heart on this legislation and an even greater honor to serve those who have paved the way for our freedom.   Senate Bill 203 unanimously passed the Alaska State Senate on Monday, April 11th, 2022. It is now being considered by the House of Representatives. If passed, construction would be completed this fall. Sen. Josh Revak represents District M in South Anchorage. He is also a candidate for U.S. House.

When saving for higher education, a little can truly go a long way

Energy costs are up. Inflation is at 40-year highs. Interest rates are on the rise. And yet, there has never been a better time for Alaskans to start saving for higher education, because there is never a better time to start than now. That’s right — despite all the grim economic news, Alaskans can and should take steps now to set aside money for college, trade school, vocational training, or whatever postsecondary education is desired. Research shows that even relatively modest investments in a young person’s education savings can increase their chances of pursuing higher education and graduating. In fact, children with $500 or more saved for college are three times more likely to enroll, and four times more likely to graduate. That trend is proved out in the data for low- to moderate-income children, too. Every dollar counts, and even a small amount saved creates expectations that can help launch someone into a college career. Despite those encouraging statistics, far too many families are delaying and not saving, or not saving nearly enough. A “2019 College Savings: Lessons Learned” study showed that 42% of parents wished they had started saving for college earlier, and 22% wished they had researched more options. Here in Alaska, where every resident receives a Permanent Fund dividend, only about 2% of applicants choose to automatically invest part or all the annual windfall for future education expenses. This is a huge, missed opportunity. In Anchorage, more than 70% of business owners surveyed reported that availability of a skilled workforce was a top barrier to business growth, according to Anchorage Economic Development Corp.’s 2021 Business Confidence Index. Alaska employers need to cultivate the next generation of leaders, and they are actively looking for recent graduates of applicable programs who fit those roles. Education has always been a smart investment in a child’s future, but right now, thanks to Alaska 529, the return on investment, as it relates to future employment, is a particularly good bet. I invite employers to participate in a solution to workforce shortages by offering Alaska 529′s payroll direct deposit program as an employee benefit. Alaska 529 offers two of the most generous education savings incentive programs in the country. Launched just recently, the Dash to Save and Dash to Save More programs offer unique benefits not found elsewhere in the U.S. Specifically, the first 5,000 qualifying new Alaska 529 accounts opened this year with a minimum investment of $25 will be gifted an additional $250. Alaska 529 will also pitch in up to $100 annually to accounts with automatic monthly contributions and/or payroll direct deposits. This adds up to $350 in possible benefits, which quickly gets Alaskans close to that magical $500 threshold that research shows make a measurable difference in encouraging students to attend and graduate from college. Alaska 529 accounts grow in a tax-advantaged environment, and offer convenient, age-based investment options, where portfolios become more conservative as a child approaches post-secondary education. Static investment options (that keep the same allocation over time), are also available, including the UA Portfolio that offers a tuition value guarantee if used at the University of Alaska. When is the right time to start saving? Whether your student is an infant or a teen, the best time to start saving for future education is right now. Alaska 529 offers unique and generous benefits that can help families build their accounts and inspire young people to pursue education after high school, earn a higher standard of living, and build Alaska’s future. The bottom line is, it’s always better late than never, a little goes a long way, and something is better than nothing. We owe it to the next generation to get started now.   Lael Oldmixon is the program director for Alaska 529 and UA Scholars.

Movers & Shakers for April 17, 2022

The University of Alaska Southeast (UAS) uses the occasion of Student Commencement each year to recognize individuals in our community who’ve offered outstanding service to the university, the state of Alaska, or Southeast communities. Honorary degrees are bestowed on individuals who exemplify a significant and lasting contribution to the university, to the State of Alaska, or to the individual’s discipline or profession. The UA Board of Regents approves candidates who are nominated by local campuses. This year UAS will honor David Kiffer with an Honorary Doctorate of Humane Letters, to be presented at the UAS Ketchikan Commencement Ceremony on Saturday, April 30. David Kiffer is a community leader in Ketchikan and an important figure in the arts and letters of Southeast Alaska. He has worn many hats in his lifetime including journalist, regional historian, teacher, poet, musician, and mayor. He is currently the education coordinator at the Ketchikan Correctional Center and previously was the long-time executive director of Historic Ketchikan, a non-profit organization dedicated to historic preservation and sustainable historic tourism in Southeast Alaska. A noted columnist for local newspapers and websites, he has written hundreds of articles on regional history, exploring a wide range of topics and providing unparalleled documentation of many forgotten aspects of our history. He has written and published hundreds of poems. UAS will also honor Dr. Elliot Bruhl with a Meritorious Service Award, to be presented during the Sitka campus ceremony on Friday, April 29. Dr. Elliot Bruhl is a well-respected medical doctor who has served Sitka for many years. He is currently Senior Vice President and Chief Medical Officer for the Southeast Alaska Regional Health Consortium (SEARHC) and has been a leader in COVID-19 planning and response throughout Southeast Alaska communities. As a member of the COVID response Sitka Unified Command Team, he has provided especially noteworthy service for the community of Sitka. Bruhl and many others have selflessly dedicated themselves to lessening the impact of the pandemic on Sitka and throughout Southeast Alaska. The Central Council of the Tlingit and Haida Indian Tribes of Alaska (Tlingit & Haida) is pleased to announce the new Business & Economic Development (BED) Director, Janice Hotch. As the BED Director, Hotch will lead efforts that promote business and economic opportunities for the Tribe, its tribal business enterprises and citizens, and Southeast Alaska communities. These efforts will be achieved through partnerships with local, state, and federal agencies and supporting community sustainability and planning efforts, economic development projects, and job creation in Southeast Alaska. Hotch holds a Master’s certificate in Government Contracting from The George Washington University School of Business and a Bachelor’s degree in Communications from the University of Washington, as well as a Level III Procurement certification through the State of Alaska. She has served as a Tlingit & Haida Juneau Delegate since 2012 and comes to the Tribe from MRV Architects where she served as the Administrative Manager. Raised in a military family, Hotch grew up outside of Alaska until high school. Her parents are retired Major Donald Keen Sr. and Mary (Brown) Lekanof. She is married to Edward Hotch of Klukwan, AK and together they are proudly raising Carter (age 10) and Natalie (age 7). Her Tlingit name is Kooseen and she is L’uknax.ádi (Raven/Coho) from the Daaginaa Hít. Tiffany Coffman, a senior interior designer with Bettisworth North Architects and Planners, received the prestigious Certified Healthcare Interior Designer® (CHID) designation after passing a rigorous examination administered by the American Academy of Healthcare Interior Designers (AAHID). Securing this credential signifies that Coffman meets high standards for education, experience, training, and examination. The CHID examination requires participants to demonstrate knowledge and experience in a variety of core competencies affecting the acute care, ambulatory care, and residential healthcare interior environments. The CHID certificate is the highest designation for a healthcare interior design professional and is sought by many healthcare organizations when choosing an interior designer. AAHID is the professional body that identifies those designers uniquely qualified to meet the challenges of the healthcare interior design industry. Coffman holds a bachelor’s degree in interior design from Colorado State University. Please submit Movers & Shakers entries to [email protected]

Senate picks back up bill to extend apprenticeships to high school students

A way expand opportunities for high school students to go into apprenticeships is getting renewed attention in the Legislature. House Bill 132, sponsored by Rep. Zack Fields, D-Anchorage, would require the Alaska Department of Labor and Workforce Development and the Alaska Department of Education and Early Development to work with public school districts to develop programs to allow students to complete high school credits and apprenticeships at the same time. Right now, most public school districts offer career and technical education classes such as construction and welding, but this would expand that into apprenticeships in real work environments. Fields said during a mid-March hearing before the Senate Education Committee that he got the idea from observing how South Carolina built a similar program after realizing it needed more apprenticeship availability to supply the automobile manufacturing industry with skilled workers. “In South Carolina, they embedded (an apprenticeship program) in the community college system, and they were very successful,” he said. “These are non-union apprenticeships and South Carolina, by putting this tax credit forward, took some risk off the table for employers.” Apprenticeships are a generally accepted training path for trade occupations such as plumbing and carpentry. They are federally regulated, so apprentices have to register with the U.S. Department of Labor, which oversees requirements for training apprentices. In 2020, there were 1,932 active apprentices registered in Alaska spread across 318 programs, according to the U.S. Department of Labor. The House passed the bill in its current form during the last Legislative session, in May 2021. The Senate is considering it now, and is working on amendments to it in the Senate Education Committee. The version of the bill that passed the House instructed the state departments to work with public school districts on the apprenticeships, which would be available to students 14 and older who have completed eighth grade and meet the program requirements. For vocational programs, instructors would have to hold industry standard master skill certification or the equivalent. The House version also establishes a $1,250 tax credit per apprentice for businesses to incentivize participation. Fields said this is based on the South Carolina model. The bill has received broad support from trade unions and associations, including the Alaska AFL-CIO, the Associated of General Contractors of Alaska, the Association of Builders and Contractors, the Alaska State Pipe Trades Association, Alaska Ironworkers Local 751, the Alaska State Hospital and Nursing Home Association and the Mat-Su Borough School District, among others. Chris Dimond, the Alaska regional manager for the Pacific Northwest Regional Council of Carpenters, told the Senate Education Committee during an April 11 hearing that the bill could help to meet some of the demand for carpenters. He estimated that 200 to 300 carpenters are needed to fill the jobs on their books right now, and with more infrastructure money likely coming from the federal government soon, he said the need for more trained workers is serious. The training program could help students figure out what they’re interested in without fully committing, too, he said. Sometimes, new workers have come into the construction industry without fully understanding the demands, and left after a year or so, he said. “We see a lot of those folks drop out,” he said. “So creating these opportunities for students to be able to get these real-life job experiences to sort of be able to understand what the culture is like, what the physical demands are like, and so forth, I think will be a big help to backfill some of our workforce up here.” Apprenticeships aren’t just for construction trades, either. The Alaska Primary Care Association, which represents medical providers across the state, has apprentices working in practices everywhere from Barrow to Anchorage, Mari Selle, the chief of staff and Southcentral Alaska Health Education Center interim director, told the Senate Education Committee. In rural Alaska, health care facilities are already training their own employees out of the community. “In this environment where recruitment and retention in health care has been so difficult and is continuing to be so difficult, this really is an innovative way to recruit and retain workers into this really critical field of health care and human services,” Selle said. “When Alaska has strong state support and strong policies for apprenticeship, it puts us in a better position to garner federal funding.” Several of the senators expressed support for the core ideas of the bill, but reservations about the tax credit portion. Senate Education members introduced a committee substitute that removed the tax credit provision, among other changes. Fields said he would defer to the Senate’s decision about that section, though the program did have success in the models he’d based it on. The language about public schools also came up for debate. Senate President Peter Micciche, R-Soldotna, noted that he was concerned about unfairly dividing students into categories based on what type of school their parents enroll them in, and asked about removing the “public” from the bill. Fields responded that his inclination would be to leave the “public” language in. The Legislature has oversight over public schools through the Department of Education and Early Development and appropriates money to support them, but does not do the same for private schools. Sen. Shelley Hughes, R-Wasilla, agreed with Micciche and said students being privately home-schooled could benefit from these kinds of programs. “Part of the discussion was that they were pulling kids out of public school because traditional academic learning, book learning, doesn’t necessarily work for their children, that it’s more hands-on,” she said. “So I think there is absolutely a resource of future apprentices and people who would fit this type of work that could be drawn from the private schools and the private home-schools.” The bill is scheduled for another hearing before the Senate Education Committee on April 20. Reach Elizabeth Earl at [email protected]

Using Defense Production Act for mineral security ‘a start,’ Alaska leaders say

Late last month, President Joe Biden invoked the Defense Production Act to increase domestic production and supply of five minerals deemed critical primarily for their use in large batteries. To many Republicans and development advocates, the move is a significant acknowledgment that production of numerous metals will have to drastically increase for countless renewable energy targets across the country to be met. The crux of the argument is that full electrification requires untold numbers of big batteries that currently each require large amounts of minerals predominantly sourced from oversees, often from China. Sen. Lisa Murkowski said in a statement from her office that invoking the Defense Production Act to secure domestic critical mineral supply chains is an overdue and important step that should complement a host of other actions the administration should take to spur exploration and eventual mine development for graphite, manganese, cobalt, lithium and nickel. “My hope is that this decision marks the start of a much more serious emphasis on our nation’s mineral security, and that real projects, especially mines, in states like Alaska, result from it. It is also critical that the five minerals addressed under this decision are just the start, not the end, of federal efforts to rebuild our domestic supply chains,” she said. Federal permitting reform to decrease pre-construction time and costs for mine developers is high on the list of other issues that the Biden administration should tackle in that realm, according to Murkowski. Murkowski, Energy and Natural Resources Committee chair Sen. Joe Manchin, D-West Virginia, and other senators urged Biden to use the Defense Production Act to spur supply chain development for those minerals in a March 11 letter. Gov. Mike Dunleavy said he’s happy with the move by the Biden administration, but stressed that it goes against other actions the administration has taken related to mining in Alaska, most notably the decisions in February and March to reopen the environmental impact statement for the Ambler Mining District access road and subsequently suspend the right-of-way approved across federal lands for the 200-plus mile industrial road. “Stalling development of the road to the Ambler Mining District is preventing access to the cobalt for the lithium batteries and the copper for the wires for charging stations. Beyond (electric vehicles), the Biden administration ignores the gallium and germanium also at the Ambler Mining District that will be needed for the solar panels, smartphones, and computer chips of tomorrow,” Dunleavy said. “An emergency call for critical minerals makes it timely to reverse the recent and contradictory federal decisions on Ambler.” Passed in 1950 in response to the Korean War, the Defense Production Act has been used dozens of times by presidents since, most recently by Biden and former President Donald Trump to ramp up production of medical supplies and vaccines to fight COVID-19. The bipartisan group of senators highlighted the effectiveness of DPA in expanding production of supplies to combat the pandemic in their letter to the president. When it comes to mineral supply chains, the law can help provide financing for projects backed by the federal government via the Defense Production Act fund, which holds up to $750 million to ensure the country maintains an industrial base of important materials for wartime capabilities. Among other things, the money could underwrite feasibility studies for mine projects or productivity improvements at existing operations, as opposed to simply buying more minerals, according to congressional delegation staff. The designation also adds a national security component to projects in federal permitting, which could help prioritize a mine or processing facility amongst other projects being evaluated. Resource Development Council for Alaska Executive Director Leila Kimbrell called the announcement "a step in the right direction" but said she hopes there is still a broader look at what needs to be done to improve domestic supplies of the minerals in question. "We're encourage to hear the adminstration wants to focus on that domestic production but we're cautious in seeing how that will actually benefit Alaska," Kimbrell said. State officials also said that while the president's memo accompanying the order highlights the need for certain minerals to support the nation's energy transition, using the DPA puts the Department of Defense in charge of procuring those minerals for national defense purposes, a likely nod to the broader need for reliable, domestic supplies of the minerals listed and others. Department of Natural Resources Commissioner Corri Feige, who is in Washington, D.C. this week for talks about Alaska's role in national mineral security, wrote via email that the procurement and funding opportunities could be significant for Alaska. She added that the Procurement Technical Assistance Center within the University of Alaska is available to companies looking for funding or procurement help. "There will be funding available to companies for things like new facilities to process ores with different metallurgy, rework tailings at existing mines to recover what has already been mined and not captured, and purchase updated equipment like automated mining equipment that improve safety of mining operations," Feige wrote. "With their funding, DOD seeks to improve safety in the industry and drive broader applications of technology that can assist DOD in other areas." Feige has been meeting with staff from Alaska's congressional delegation and other members of Congress; officials from DOD and Department of Energy sub-agencies; mining industry leaders; and representatives from General Motors' supply chain division. Alaska is also home to the Graphite Creek flake graphite deposit on the Seward Peninsula north of Nome, which the U.S. Geological Survey recently recognized as the largest graphite deposit in the country. High-quality flake graphite is a primary component of lithium-ion batteries and the U.S. currently imports all of its graphite. China is the world’s major producer. Leaders of Graphite One, the Vancouver-based junior mining firm that owns the Graphite Creek deposit, have said they expect to release a pre-feasibility study for the mine project in the first half of this year. The company is also investigating graphite processing and recycling facilities in Washington. Graphite One CEO Anthony Huston said the Biden administration’s action validates the company’s plan to develop a full graphite supply chain, something companies exploring for rare earth metals and other minerals elsewhere in Alaska have advanced as well. “With this new defense designation under U.S. law, graphite joins a select group of ‘super-critical minerals’ that are essential to commercial technology and national security applications,” Huston said. Acting Director of the Offices of Manufacturing and Energy Supply Chains and Vehicle Technology in the Department of Energy David Howell testified in April 7 Senate Energy and Natural Resources Committee hearing that the USGS Critical Mineral List — including those in Biden’s Defense Production Act order — “are key building blocks for a transition to a (carbon) net-zero energy future.” Howell noted that Russia’s invasion of Ukraine caused prices for platinum group metals, which Russia supplies to the world, and other important commodities to spike over fears of supply disruptions. “The supply chain assessments found that the United States has appreciable resources of many critical elements, but domestic production is frequently limited by a dated and often unclear legal and regulatory structure for mining coupled with a lack of midstream capacity to process and refine the raw materials, even in cases where it has active mining,” Howell testified. “As a result, U.S. ores frequently are shipped to other countries for refinement, relegating mid-stream profits to others and making the U.S. vulnerable to supply disruptions.” However, longtime Alaska energy industry attorney and analyst Brad Keithley said the federal government’s financial involvement in highly competitive markets such as mineral commodities invariably leads to the government “picking winners and losers” and adds inefficiencies to those markets. “If we thought China was an insecure source (for critical minerals), what might be appropriate would be to either raise tariffs to where we sort of hit the threshold where people develop domestic resources or just ban the imports from China,” Keithley said. He referenced the domestic natural gas shortage of the late 1970s and 1980s that led to the Defense Production Act being invoked and eventual government purchases from the Synfuels coal gasification plant in central North Dakota for national defense. The plant “never made economic sense but we just kept turning the gas out,” Keithley said, adding that the government-financed project indirectly impacted the ability for some of his clients to get financing for gas projects elsewhere. “To the extent that we were producing from that coal mine, we were disincentivizing the production of gas — not huge, but it was there.” According to Dakota Gasification Co., which owns the Beulah, North Dakota plant, it remains the only commercial-scale facility producing synthetic natural gas in the country. Elwood Brehmer can be reached at [email protected]

Europe spending more on today’s gas and tomorrow’s energy transition

CALGARY -- The decision to reduce its dependency on Russian natural gas presents Europe with a near-term dilemma that holds long-term implications: Invest in new gas supplies, such as LNG import terminals, pipelines and bulking up gas storage, while also spending more to accelerate its transition away from fossil fuels to renewable energy. At the same time, liquefied natural gas suppliers worldwide will have to make their own decisions how much to invest in new production — if they see long-term demand and can secure yearslong contracts. “I think it’s clear there is going to be a near-term scramble” for alternative supplies to replace imported gas from Russia, said Tim Gould, chief energy economist for the Paris-based International Energy Agency. After getting past the next winter or so, meeting immediate energy needs and trying to refill gas storage, he said, “it’s not quite clear which way policymakers will turn” for their next round of spending and policy decisions on energy security. National security, a nation’s ability to protect itself and serve its own needs, “is even a greater mobilizing factor in the energy sector,” Gould said at a Canadian Gas Dialogues session in Calgary, Alberta, on March 30. The European Union wants to be climate-neutral by 2050, running its collective economy with net-zero greenhouse gas emissions. In recent years, Europe has relied on Russian gas and not worried much about supply, thinking it had enough time for the transition to green energy, Gould said. “I think that’s changed.” And while the continent is rushing to build LNG import terminals, maybe even new pipelines to move the gas around, investing billions in long-term fossil fuel imports runs contrary to its decarbonization plan, according to several speakers at the day-long session. The unknown is how the gas crisis will affect those long-term decarbonization efforts, Gould said. In the near term, energy shortages, high prices and damage to their economies are real concerns for European leaders as they work to replace Russian oil and gas. Moving the European Union away from imported Russian gas to domestic renewable energy could cost more than $1 trillion, researchers at German insurer Allianz estimated last month. Individual countries are already talking of accelerating their energy transition plans. Germany’s Ministry for Economic Affairs and Climate Action has proposed speeding up expansion of onshore and offshore wind resources and solar-power projects. The country now looks to reach almost 100% renewable electricity in 2035 — 15 years ahead of its earlier target. Doing two things at once — transitioning away from Russian gas to green energy, while at the same time desperately looking for replacement gas in the short term — can seem conflicting. “I think there’s a little bit of schizophrenia going on here,” Melanie Lovatt, senior LNG finance adviser at Poten & Partners, said during a webinar on Europe’s search for new gas supplies. “On the one hand, you’ve got this desire (political imperative) to get gas … very quickly, quicker than LNG infrastructure can manage. On the other hand, you have still a very strong desire to decarbonize,” Lovatt said. Poten & Partners is an international advisory firm on oil, gas and shipping markets. “Obviously, you can separate these intellectually. One is a short-term issue and the other is a longer term plan,” she said. Given that global LNG supplies will be tight until significant new supply comes online the middle of the decade, and while green energy sources are still ramping up, Europe will see some costly energy bills for the next few years. “If you are looking for five years of gas supply, that is going to be five really expensive years of gas supply,” Jason Feer, global head of business intelligence at Poten & Partners, said in the webinar. Those expensive gas invoices will come as nations also spend on long-term investments in wind, solar and other renewables. “There is this sense of whiplash” in Europe, Feer said. The acceleration in Europe’s timeline to reduce its need for imported oil, gas and coal supplies will likely speed up development and investment in cost-effective energy efficiencies and low-carbon fuels, Gould said. “It’s the way to go.” It’s less capital intensive, reduces consumption, and costs less for consumers, he said. “These crises are opportunities,” Canada’s former ambassador to China, Dominic Barton, said in a panel discussion. “This is often when the game changes,” said Barton, currently the chair of international mining company Rio Tinto. For example, he said, European nations and their energy providers are looking at spending billions of dollars to build new LNG import terminals to take in the fuel from the U.S., Qatar and other suppliers to replace Russian gas. But longer term, Europe is committed to greener energy. That could mean using those LNG import terminals in the future to take in liquid hydrogen, a possible low- or no-carbon fuel for the future. However, while natural gas liquefies at minus 260 degrees Fahrenheit, liquid hydrogen has to be kept at minus 423. “An LNG terminal would have to be very seriously over-engineered” to handle liquid hydrogen, substantially driving up the initial construction budget, Gould said. And while natural gas burns cleaner than coal, it cannot rest on that marketing slogan alone, said Luke Schauerte, a vice president with LNG Canada. The Shell-led venture is building a C$40 billion project that includes a 416-mile pipeline from gas fields in northeastern British Columbia and an LNG export terminal on the coast in Kitimat, B.C. Buyers are looking for “low-carbon energy solutions today and even lower-carbon energy solutions in the future,” Schauerte said. As countries and private industry look more at investments in cleaner energy, the world has been suffering an underinvestment in oil and gas, Gould said, leading to tight supplies and high prices that are stressing consumers. Investment in oil and gas exploration and development over the past seven years is down significantly, he said, in part because companies see a future of declining demand and have been reluctant to commit capital dollars to new projects that need years to pay back a return. Regardless of whether the industry boosts its capital budget to meet near-term demand for new oil and gas supply, “we need to see a sharp increase in the amount spent on the energy transition,” Gould said. Larry Persily can be reached at [email protected]

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