Wells Fargo's stagecoach pulls in, unloads more banking competition

Just over a decade ago, Northrim Bank opened its doors in a trailer in a Midtown Anchorage parking lot with a handful of employees and total assets that today probably wouldn’t pay the salary of a mediocre professional shortstop. Now the Anchorage-based bank has grown to about 240 employees, and increased its assets nearly fiftyfold to $560 million. "We’re no longer the little guy,’’ said Northrim Bank president Marc Langland. "Just the smaller guy.’’ The bank has always been scrappy in its advertising approach, portraying itself as the David against banking Goliaths, while stressing local ownership and control and especially service. Langland himself stared in television commercials as a basketball, hockey and baseball player taking on "big bank" teams. Those advertisements, produced several years ago, are on the air again with the merger of National Bank of Alaska and Wells Fargo Bank. "They work for this one, too,’’ Langland said. After an 18-month transition period, NBA officially became Wells Fargo Bank Alaska on June 23. Some 400 signs have been installed around the state at a cost of more than $2 million. The market entry of the banking giant with its logo of a horse-drawn coach has set the stage for aggressive marketing campaigns by nearly every financial institution in the state. The general theme, either directly or indirectly, points to NBA no longer being an Alaska bank.

This Week in Alaska Business History July 15, 2001

Editor’s note: "This Week in Alaska Business History" revisits events that shaped our past."Those who cannotremember the past arecondemned to repeat it."-- George Santayana, 1863-195220 years ago this weekAnchorage TimesJuly 16, 1981Sohio plans major 5-year expansionBy Deb DavidTimes WriterSohio Alaska Petroleum Co. intends to increase its staff by 50 percent over the next five years, beef up its 1982 operating budget by 25 percent and branch out from its Prudhoe Bay operations, says the company’s top executive.In an interview with the Times Wednesday, Sohio’s George Nelson said the company has aggressive plans for tapping Alaska’s oil reserves. He recently was named vice president and general manager of operations for Alaska.Puffing a pipe in his Cook Inlet-view office and cautiously weighing his words, Nelson says Sohio’s plans to bolster its work force over the next five years would allow the company to carry out its Prudhoe Bay program. New field discoveries could cause an even larger employment binge.The Ohio-based company currently employs about 1,000 in Alaska. A 50 percent increase would expand the staff to 1,500.Anchorage TimesJuly 17, 1981Stevens submits bill to transfer railroadBy Betty MillsTimes Washington BureauWASHINGTON -- Sen. Ted Stevens, R-Alaska, introduced legislation today to pave the way for the transfer of the federally owned Alaska Railroad to the state by October 1982.Stevens has been meeting with representatives of the Federal Railroad Administration in recent weeks to hammer out details of the legislation. A hearing on the bill is planned next month in Anchorage, and Stevens hopes to secure enactment before Congress adjourns this fall.The bill transfers the 350-mile railroad to the state by the end of fiscal 1982 on the condition that the state continue to operate the line. No money would change hands in the transfer.10 years ago this weekAlaska Journal of CommerceJuly 15, 1991Gas Pipeline DelayWhat it’ll take to get $14 billion project movingBy Ray TysonFor the Alaska Journal of CommerceThe key markets in Japan want sale guarantees for North Slope producers before entering into contracts with Yukon Pacific Corp. to deliver huge volumes of liquefied natural gas, Yukon Pacific President Bill McHugh said.Just last month Yukon Pacific laid off half its staff here when it became clear the lack of producer as well as market commitments would delay start-up of the Trans-Alaska Gas System until sometime after the company’s projected 1997 start-up date."Japan is used to seeing LNG projects where the gas owner and project sponsor present the project together," McHugh said. "They don’t see it in Alaska right now, so they consider it an anomaly."Essential to TAGS’ success, Japan says it’s willing to buy Alaska LNG but not until after 2000. BP Exploration (Alaska) Inc., ARCO Alaska Inc. and Exxon -- the principal owners of Prudhoe Bay gas -- also indicate they will not sell their gas until after the turn of the century because of its importance in recovering crude oil from the giant field.Alaska Journal of CommerceJuly 15, 1991’91 Season construction outlookBy the Alaska Journal of CommerceMillions of dollars in government construction projects are under way in Alaska this year, while new commercial construction projects remain in a lull, except for development at Unalaska.A $10 million hotel, centerpiece of a $50 million Margaret Bay development project announced last month, will be developed and operated by Unisea Corp., says Greg Jones, president of Alaska Diversified Properties Inc., developer of the Margaret Bay project.Architect Larry Cash of Cash Barner Usher Architects in Anchorage is designing the 105-room hotel for Unisea, said J. Richard Pace, president of Unisea. When completed in 1992, the hotel will have meeting rooms, exercise facilities, a lounge, coffee shop and first class restaurant, all overlooking the ocean, Pace said.-- Compiled by Ed Bennett.

Around the World July 15, 2001

STATELand acquired for new Nome area hospital NOME -- Norton Sound Health Corp. has purchased a 42-acre parcel to build a long-awaited new hospital.The corporation, which has eyed a new facility since 1994, bought the land from Alaska Gold for about $900,000, according to Joe Cladouhos, corporation president. Construction on the new hospital, depending on federal funding, could begin between 2003 and 2005 and be completed by 2007."We’re very pleased about purchasing the land," Cladouhos told the Nome Nugget. "We’re kind of landlocked here so we’re really happy about obtaining it."With the purchase, the health corporation may have improved its status among communities needing new facilities. Currently, the Indian Health Service ranks the Norton Sound region third nationally in terms of need.Cladouhos said a new hospital could cost as much as $85 million and provide the region with significantly better care.Home Depot purchases Fairbanks land for storeFAIRBANKS -- Home Depot representatives have signed papers giving the company ownership of 12.7 acres of land off the Johansen Expressway to build their second Alaska superstore.The papers were signed last week and contractors have begun grading the site for the 130,500-square-foot building. Roger Hickel Contracting of Anchorage is the general contractor, said Chuck Sifuentes, Home Depot spokesman.Home Depot announced in January its intention to build a Fairbanks store. The company said it would start construction in the spring and open by the end of the year. However, company officials said cleanup of contaminated soil on the site took longer than anticipated.The store will now open in spring 2002, Sifuentes said.NationWorried consumers shut their wallets in MayWASHINGTON -- Consumers, worried about their jobs in the face of layoffs, were a bit tightfisted in May, borrowing money at the slowest pace in 19 months.Consumer credit rose by a seasonally adjusted $6.5 billion in May, or a 4.9 percent annual rate, the Federal Reserve reported July 9. That was a much smaller increase than the $9.5 billion rise in credit that many analysts had forecasted.The 4.9 percent growth rate was the slowest since a 4.7 percent rate of increase registered in October 1999.The slowdown in borrowing "reflects job insecurities and the impact of actual layoffs, which are making consumers more cautious," said Paul Taylor, chief economist at the National Automobile Dealers Association.Federal Reserve Chairman Alan Greenspan has said one of the biggest factors determining whether the economy slips into recession is how well consumers hold up during the slowdown. Consumer spending accounts for two-thirds of all economic activity and has been a key force in keeping the struggling economy afloat.Cities fuel growth, mayors tell CongressWASHINGTON -- Metropolitan areas powered the nation’s economic good times during the 1990s, said a U.S. Conference of Mayors report aimed at persuading Congress and the White House to pump more money into cities and suburbs.America’s 319 largest metro areas accounted for 85 percent of the nation’s gross domestic product and 84 percent of the country’s jobs, according to the report July 10.Nationally, the census showed that 226 million people lived in metro areas in 2000, up 14 percent from 1990.Suburban population grew 22 percent to 140.6 million, while the number of Americans living in central cities increased 10 percent to 85.4 million.Maker of Chuck Taylors tries for a comebackNORTH READING, Mass. -- For more than half a century, Chuck Taylor All-Star sneakers -- canvas, with a trademark star logo -- ruled every schoolyard, high school, college and pro basketball court in America.But Converse Inc., the company that invented basketball shoes, continues to struggle under a full-court press of problems.Since January, the company has sought bankruptcy protection, closed three North American factories and moved production to Asia, and then was sold at auction for $117.5 million to cover debts.Chuck Taylors, once worn by 70 to 80 percent of hoops players, are now more often seen on counterculture teens and baby boomers. Converse’s basketball shoes account for about 2 percent of athletic footwear sales.New chief executive Jack Boys says there’s room for Converse in a world dominated by Nike Inc. and Reebok International Inc.Safeway beats estimates for 2nd-quarter earningsPLEASANTON, Calif. -- Grocery chain Safeway Inc. met Wall Street’s expectations July 9, reporting a 9 percent increase in second-quarter earnings.For the three months ended June 16, Safeway posted net earnings of $307.3 million, or 59 cents per share, compared with $280.9 million, or 55 cents per share, in the year-earlier quarter.Safeway is one of the largest food and drug retailers in North America, with 1,688 stores in several Western states.WORLDIMF pins Germany’s growth at 1.25 percentBERLIN -- Germany’s economy will likely grow just 1.25 percent this year, the International Monetary Fund said July 9, joining other experts in predicting deeper trouble for Europe’s largest economy.In a report released by the German government, which has been counting on sturdy growth to help it cut unemployment and state borrowing, the IMF withdrew its earlier forecast of 1.9 percent.Europe’s biggest economy is being hit harder than expected by a global slowdown. Private sector economists already cut their 2001 growth forecasts to as little as 1 percent, though the government is still officially aiming for 2 percent.Euro officials see sunnier economic forecastBRUSSELS, Belgium -- Euro-zone finance chiefs expressed guarded optimism July 9 that the European and world economies might be about to rebound after months of slowdown."We are realistic but also optimistic about the next two quarters," said Belgian Finance Minister Didier Reynders, who chaired the monthly meeting with his euro-zone colleagues.European ministers at the G-7 meeting July 7 in Rome were encouraged by U.S. Treasury Secretary Paul O’Neill’s assessment that American growth should accelerate to above 2 percent in the fourth quarter and grow by 3 percent in 2002.Japan trade surplus shrinks againTOKYO -- Japan’s trade surplus with the world plummeted 86.1 percent in May from a year ago for the 11th straight month of year-on-year decline, the government said.The merchandise trade surplus -- the measure of all goods exported minus those imported -- came in at 80.1 billion yen, or $651 million, the Finance Ministry said.Imports rose 14 percent in May from the same month last year while exports fell 0.9 percent, the ministry said.High global prices pushed the value of crude oil imports up 19.6 percent in May, from last year.Compiled from business wire services.

Busy engineers mean busy builders

If you get the economic weather forecast from people at the leading edge of the economy -- the engineers who design things to be built -- it’s for sunny skies.When engineers, designers and people who provide services to developers and the construction industry are busy, it means there’s business confidence and new investment coming in, said Mel Nichols, president of DOWL Engineers."Even without a big natural gas project, we see a very positive outlook here," Nichols said. "There’s low inflation, a healthy, vigorous oil industry" and continued expansion of private commercial projects and public infrastructure.DOWL is having a very strong year, Nichols said. Business is up about 15 percent from last year. The company is one of a handful of major civil engineering firms in Alaska.Jonathan Widdis, vice president for business development of ASCG Inc., another major civil and architectural services firm, agrees with Nichols."We’re expanding in all areas," he said. "Everything is busier than last year."ASCG does a lot of work in transportation and wastewater projects. The company is very active in rural water and sewer projects, "but our architecture division is also doing well," Widdis said.Nichols said a steady and gradually expanding Alaska economy is just fine with him. "When growth is too fast, there are problems.""Our biggest problem has been finding good people. Work is easier to find than people," he said.Nichols and Widdis work on the civil side of engineering, but one of the fastest-growing segments of the industry in recent years in Alaska has been in petroleum-related engineering.VECO Alaska Inc.’s engineering division has grown rapidly, at times employing up to 400 people on Alaska oil gas projects. VECO is assembling the big Northstar oil process modules of BP Exploration (Alaska) Inc. in Anchorage, and while the company is employing 450 construction workers to build the modules, about 55 engineers in VECO’s local offices were also assigned to the project.VECO has spent 55,000 manhours on Northstar engineering, said Tom Maloney, VECO’s vice president for business development. VECO has now formed an alliance with Fluor, the international process engineering company, in doing conceptual engineering on the proposed North Slope natural gas project.Natchiq Inc., the petroleum services subsidiary of Arctic Slope Regional Corp., is also heavily engaged in engineering, in a partnership with Parsons Engineering, according to Jack Laasch, president of Alaska Petroleum Contractors, a Natchiq subsidiary.The two companies are doing process facility engineering on the Alpine oil field and other North Slope producing fields, and they are now engaged in conceptual engineering of a $2 billion gas processing plant for the North Slope that would be part of the planned gas pipeline.Some of the engineering work on that project is being done in Anchorage, Laasch said.The two companies are also part of a consortium of engineering firms working on expansions or new pipelines to move Alaska gas from Alberta, Canada, to Lower 48 markets. NANA Development Corp. of Alaska is also working on that project in a joint venture with Colt Engineering.In another significant development, Natchiq and Parsons are also part of the front-end engineering team on Exxon Mobil’s Sakhalin I project in the Russian Far East, Laasch said. There the companies are working on a possible gas pipeline from Sakhalin to northern Japan."This could be a huge project," he said. Several Alaska engineers have been sent to Houston, Texas, to work on the project, Laasch said.Nichols, at DOWL, sees a continued strong market for civil engineering services. Federal money for public infrastructure is pouring into the state, but the outlook for commercial projects in Alaska is good, too."Retail is far from overbuilt. There’s less going on this year for several reasons, but there continues to be new projects." he said.A lot of areas in the commercial sector tend to be overlooked until shortages develop, and then people see the possibilities, Nichols said. That happened with hotels in recent years, and it’s now happening with office buildings.Nichols has been with his company since 1962, and despite the ups and downs in the state’s economy, he can only count a handful of years in which the company had to hustle for work.The outlook continues to be good, too, Nichols said.

GCI offers plan for rural Net service

Anchorage-based General Communication Inc. has outlined a plan for providing high-speed Internet access for 152 rural Alaska communities by 2004.As part of GCI’s $15 million project, the company intends to begin offering cable modem service in 2002 in Bethel, Cordova, Homer, Kenai, Ketchikan, Kodiak, Nome, Petersburg, Seward, Sitka, Soldotna and Wrangell. Also next year, GCI plans to serve 48 other towns with high-speed Internet access via digital subscriber line or wireless technology.Another 42 communities would receive the service in 2003 followed in 2004 by service to 50 communities, GCI officials said. The total of 152 communities represents all Alaska towns the company currently serves.The move comes after Alaska Network Systems, a company whose shareholders consist of 12 Alaska local telephone companies, announced its application last month for a $24 million federal grant to fund Internet service to 139 Alaska villages.The two proposals have 98 villages in common.The grant, coupled with $8 million from Alaska Network Systems, would pay for satellite circuits and other expenses associated with providing Internet access, according to the grant proposal.Alaska Network Systems filed the grant request June 1 to receive funding from the Department of Agriculture’s Rural Housing Service Community Facilities grant.ANS President Ed Cushing said that state USDA officials told ANS representatives in late June of their intent to forward the grant request to the national level for approval."All indications are the grant will go through," he said.Cushing said ANS will be "using the grant as zero-cost capital so we can offer low-cost service to ISPs."Both ANS and GCI, along with regulators and others state officials, are seeking ways to reach rural Alaska areas that lack inexpensive dial-up service with Internet access. Bush residents are typically faced with high costs for Internet service.Lt. Gov. Fran Ulmer has been promoting a plan to bring Internet access to some rural villages currently served only at the local school and library through a federally funded program. That program gives money to eligible schools and libraries to defray the cost of providing Internet to those facilities. Ulmer’s plan seeks Federal Communication Commission approval for rural Alaska residents to use the school Internet access after hours.Ulmer is a member of the Federal Communications Commission Local and State Government Advisory Committee and chairwoman of the state Telecommunications Information Council.She could not be reached for comment.The Alaska Telephone Association, whose members are shareholders in Alaska Network Systems, lodged comments with the FCC disagreeing with the state’s plan. Some Alaska telephone companies already provide Internet access to less populated communities.In a January study by Juneau-based McDowell Group Inc., 267 Alaska communities were surveyed and, of those, 164 did not have local dial-up Internet service at the time of the survey. The report was part of a telecommunications services inventory of rural Alaska completed for the Denali Commission.GCI’s project includes expanding its cable modem service, which the company had planned since starting the service in Anchorage in November 1997, said David Morris, GCI public affairs manager.The plan, including high-speed Internet access to Bush communities, "all came together in the past two or three weeks," he said.The project is made possible by advances in satellite and wireless technology, Morris said.Earlier this year GCI signed agreements in two regions to provide dial-up and high-speed Internet service. By August GCI plans to serve 10 villages in the Kotzebue area through an agreement with Maniilaq Association and OTZ Telephone Cooperative. By September similar service should be ready to serve residents in Akutan, False Pass and Nelson Lagoon through an agreement with Aleutians East Borough.Morris said GCI’s plan differs from Alaska Network Systems’ proposal."It will be private industry dollars that provide this service. It won’t be subsidized," he said.Cushing of ANS countered, saying that private enterprise had not yet provided such rural Internet service."It wasn’t till the ANS proposal surfaced that GCI came out with its press release," Cushing said.According to Cushing, the ANS project would allow any Internet service provider to deliver access to rural areas."The ANS plan will create an open public nondiscriminatory access system that meets very specific access goals," he said. "By contrast the GCI press release appears to describe a proprietary, private closed end-to-end Internet service only compatible to GCI."He also contends that GCI can’t argue with ANS’ proposal since GCI receives federal funds to provide Internet access to rural Alaska schools.Morris said the school program’s funding differs from ANS’ plan because it provides a subsidy to the schools, which then can competitively bid for a provider. AT&T Alascom and Alaska local exchange carriers also bid, he said.By contrast the ANS plan would provide funds for one group, not the end user, and would lack a competitive bid process, Morris said.ANS was formed in 1996 by a group of Alaska telecommunications companies with the goal of offering long-distance service. ANS owned, operated and maintained an interexchange telecommunications network in Alaska but discontinued long-distance service in late 2000, Cushing said.The organization redirected its efforts to offer a means of providing Internet service to rural Alaska through a consortium. Members include Alaska Communications Systems, OTZ Telephone and TelAlaska. GCI and AT&T Alascom are not ANS members.According to GCI’s Morris, the company will re-examine its high-speed Internet services to rural Alaska if ANS wins the grant.Morris also said Alaska Republican Sen. Ted Stevens asked ACS, AT&T Alascom and GCI to come up with a plan for providing rural Internet service. Funding for such a plan would have gone to all providers in the state to provide Internet access, rather than just one entity, he said. However, the companies were unable to work together, he said.

Bristol Bay heads for low salmon catch

ANCHORAGE -- Bristol Bay’s salmon harvest this year likely won’t reach even the slim preseason forecast of 15.6 million reds. Notably absent from returns to all the river systems are red salmon that spent two years in salt water before returning to spawn.As of July 2, just under 6.7 million salmon had been netted in Bristol Bay, where fishing typically peaks around July 4. The total run stood at 9.5 million fish, nowhere close to half of the projected run of 24.3 million reds.And it appears this year’s peak may have come and gone."All of these runs look like they’re early,’’ said James Brady, central region supervisor for the Alaska Department of Fish and Game. "We may already be at the peak or past the peak right now.’’Biologists out in the field agree that the run appears to be at least five days early. Sockeye salmon normally spend two or three years in salt water after a year or two in fresh water. But while the "three-ocean’’ fish, those that spent three years in salt water, are returning in good numbers, two-ocean fish are notably absent.A test fishery that nets salmon returning to the entire bay showed two-ocean fish made up 6.5 percent of the sockeye netted, according to James Browning, a Fish and Game biologist in Dillingham. The forecast was for those fish to make up 51 percent of the catch."The main thing is those two-ocean fish comprise an important component of the Kvichak run,’’ Brady said. That run is often the biggest in the bay, but it has been a bust the last two years. The run follows a five-year cycle that was expected to peak last year."In all the river systems, the percentages are all 90 percent or more three-ocean fish,’’ said area management biologist Jeff Regnart. That doesn’t bode well for next year, because next year’s three-ocean fish will come from the same flow of outgoing smolt that produced the dismal return of two-ocean salmon this summer.Survival rates could be related, ironically, to mild winters when the fish were growing in the lakes, Regnart said. Sockeye spend one or two years in fresh water before heading for the ocean.With the mild winters in the region, young fish grew faster in fresh water and more went to sea after just one year, instead of waiting. Those smaller fish apparently had a much grimmer survival rate.On top of that, when those fish headed out in 1999, the spring was extremely cold."We know that 1999 was a La Nina year and a continuation of cold water temperatures,’’ Browning said.Whatever the cause for the slim returns, the Kvichak escapement is almost certain to fall far short of the escapement goal of 2 million fish.The lowest salmon catch in recent years was the 10 million fish netted in 1998. That harvest, coming on the heels of a 12-million-fish season, triggered a disaster declaration for the Bristol Bay region.It’s too early to tell if this year’s catch will test that low figure. It’s clear that fishermen won’t gather the 20.5 million sockeye caught last year, let alone the 30 million or 40 million fish that were caught in the big years of the middle ’90s.Despite the low run, the posted price remained at 40 cents a pound. That’s down from 65 cents last year. With post-season adjustments, fishermen have received well over $1 a pound as recently as 1999.But tough competition from farmed fish and a declining yen have put major downward pressure on prices. There’s also a hefty supply of canned salmon left over from last year.

Public involvement sets Northwest transportation plan apart

Bookshelves around Alaska are heavy with reports that have studied the possibilities of building highway and rail systems in the Arctic to access untapped natural resources and to move them to market. John Aho, principal project manager and vice president of CH2M Hill, has looked at about 150 such privately and government-funded reports in the last couple of years, while his company crafted its portion of the Northwest Alaska Transportation Plan. The 3-inch-thick report, to be issued this month in draft form, is the most comprehensive of its kind and will be used to guide potential development, Aho said. "This one is different,’’ Aho said of the draft plan. "I don’t think it will be studied and then put away on a shelf.’’ What sets this plan apart from others is the amount of public involvement undertaken while drafting the plan, according to Aho and state officials, who have spent the last two years getting feedback from industry officials and from Arctic residents. The draft plan studies the economic potential of the Arctic such as coal, gold and copper reserves and outlines 11 transportation corridors to those resources and then to potential ports. A companion plan is being prepared by the state that looks at possible transportation links for residents themselves. The state is still gathering comments for its draft plan. State officials say they have visited all the villages in Northwest Alaska at least twice, so far. Once the state’s portion of the plan is complete, both sections will be combined into one document and will undergo further public scrutiny. A final study is at least a year or more away, state officials said. Money for the plan comes from Sen. Frank Murkowski, R-Alaska, who won Senate approval in 1998’s federal highway bill for $2.5 million. The money was intended to study a northern rail line linking Canada and Alaska, but once the state got the funds, it widened the scope to include marine, aviation and highway systems. Developers have long known that with enough money and muscle a road or railroad can be built almost anywhere, even in Arctic Alaska. The plan makes clear that the largest hurdle developers will face in developing transportation infrastructure in the Arctic isn’t rock, water or ice. "First and foremost of challenges to construction in Northwest Alaska is permitting,’’ the report said. "Addressing regulatory agency concerns about environmental impacts is an expensive and time-consuming task." Public comments so far from Arctic residents have reflected "guarded optimism’’ for any sort of road or rail, said Jeff Ottesen, project manager for the state Department of Transportation and Public Facilities. "They’re very wary of what access would mean and how it would impact subsistence,’’ Ottesen said. Northwest Alaska is a vast storehouse of natural resources, many of which have not been explored to determine their economic feasibility, the report said. The long list of potential corridors in the study forms the backbone of a network throughout the Arctic, providing access to a mineral district, not a specific deposit or location. Proposed corridors in the study include general route descriptions. Major river crossings are identified, and general topography described. Tables are provided showing land status. The draft report touches on the huge expense of construction in the region. It costs about $1 million or more a mile to build a gravel road in the Arctic and annual maintenance can be as high as $75,000 a mile for those roads, the report said. Road construction and maintenance in urban areas typically runs about 10 percent less than in rural areas, said Dave Eberle, regional director of the state DOT. Steve Borell, executive director of the Alaska Miners Association, said the draft report is the most comprehensive of its kind and will give developers an "understanding’’ of the potential for accessing resources. "There is a lot of public involvement, not just one group’s idea,’’ Borell said. Development of any kind in the Arctic will be tough but not impossible, Borell said. "The political needs will be very great. ... There would be major political work in addition to the physical,’’ Borell said. He said any access linking the Arctic to existing rail or highway systems probably wouldn’t work. Instead, he envisions shorter rail or road routes linked to a deep-water port. "The real concern to a road alternative to the Parks Highway is that all of the sudden you have 10,000 people on it going out to shoot moose and caribou.’’ In addition to the political hurdles, the capital costs in developing transportation infrastructure would be "horrendous,’’ Borell said, adding that several projects would be needed to pay for any major highway or railroad. "No one project could pay for the whole thing,’’ Borell said. "One coal mine will not a railroad pay.’’  

Airport looks to gain -- keep -- cargo business

As airport planners in Anchorage watch the rapid growth of the air cargo industry and look to the future, they can’t help but glance over their shoulders, too.Several airports in Canada, the Lower 48 and Russia want a piece of Anchorage’s burgeoning air cargo industry, expected to more than double in the next 20 years.So as important as attracting and expanding air cargo business is, retaining it is equally important, according to Morton Plumb, director of Ted Stevens Anchorage International Airport.Anchorage rivals Memphis, Tenn., as the busiest cargo airport in the United States. Anchorage International caters to nine domestic all-cargo airlines, 17 international all-cargo airlines and four international all-cargo charter airlines.The state-owned airport averages nearly 520 cargo flights weekly.About 2.7 million tons of cargo passed through Anchorage last year. Projections, based on data from aircraft manufacturers, put the number of tons at 7.5 million by 2020.One in 10 Anchorage residents are employed by an airport-related business, Plumb said.Air cargo operations are expected to grow about 6 percent annually over the next several years, Plumb said.State officials are crafting an updated master plan for the airport, a document that will guide development of the airport over the next two decades.Based on projected growth, there will be a need for a four-fold increase in cargo facilities, as well as a 25 percent increase in other aviation-related facilities, according to the state.Anchorage’s rapid rise in the air cargo industry has not been lost on officials at other airports, especially those in Vancouver, British Columbia, and Seattle, Plumb said."They sure would like to have all of this business," said Linda Close, marketing manager at Anchorage International Airport.Close said several airports are bold in their attempts to snag business from Alaska. But the sales pitch for Anchorage is strong, especially when it comes to geography.Plumb is quick to point out that Anchorage is less than nine hours by air from 95 percent of the industrialized world, including Asia, Europe and North America.According to Close, Anchorage is one of the least expensive airports in the world do business. The airport charges 58 cents per landed pound of cargo. Many airports charge several dollars a pound, she said."When you have a 747 that weighs 850,000 pounds, that’s a big savings,’’ Close said.Fuel costs in Anchorage also are some of the lowest anywhere, she said, thanks in part to in-state producers Tesoro Alaska Co. and Williams Alaska Petroleum Inc."We’re very competitive. ... We have a lot of pluses here,’’ Close said.A threat to growth at the Anchorage airport may come from new polar routes between North America and Asia, recently opened by an agreement between the Canadian and Russian governments.The new routes, which would bypass Alaska, could cut flight times by a few hours, but would lessen the amount of cargo carried.Plumb believes the routes will impact people more than packages."The benefit will be for passengers,’’ Plumb said. "Payload vs. range has been -- and always will continue to be -- the driving factor.’’"Passengers prefer an expeditious route. Cargo usually can withstand a short interruption without devastation,’’ Plumb said.Also, to ensure the growth of the cargo industry in Alaska, federal rules must be amended to allow for more liberalized cargo transfers, according to airport and state officials.Alaska’s congressional delegation is working on relaxing those rules.All major cargo carriers have a presence in Alaska, and that’s no mistake, said Rudy Tsukada, of the state Division of International Trade and Market Development."The big guns all know of Alaska’s advantages, that’s why they’re here,’’ Tsukada said. "The state of Alaska does a good job in keeping those folks here.’’Both Plumb and Tsukada see the future economic growth in "value-added" businesses associated with air cargo, such as distribution and packaging operations, even light manufacturing.But luring those types of businesses is a challenge, Tsukada said.Plumb and Tsukada like to point out that Anchorage International Airport hasn’t had a closure in nearly 10 years because of snow."It’s a perception issue,’’ Tsukada said. "Alaska has its image of huge labor costs ... and snow. The single largest hurdle is the lack of knowledge or understanding for Alaska.’’

ASCG Inc. grows from two engineers to top company in 20 years

ASCG Inc., one of Alaska’s largest architectural and civil engineering firms, celebrates its 20th anniversary this year. The company, a subsidiary of Arctic Slope Regional Corp., has grown to become one of the largest employers in Alaska and one of the top engineering firms in the nation. In 2001, ASCG was ranked No. 148 in revenues out of 500 of the top U.S. engineering firms, according to surveys by Engineering News Record, a trade publication. ASCG had $51 million in gross revenues last year and has set a goal for each of its divisions to grow 5 percent yearly without the benefit of acquisitions, a goal that has been met four years in a row, according to John McClellan, ASCG’s president and chief executive officer. "This is the only company ASRC has started from scratch. It’s something the corporation is quite proud of," McClellan said. All of ASRC’s other subsidiaries were acquisitions. When was ASCG was formed in 1981, McClellan was one of the two engineers working for the company. He transferred to the parent company in 1987 to do corporate planning, and returned as ASCG’s president in 1996. The company’s initial focus was in improving the infrastructure in the North Slope communities which are home to ASRC’s shareholders. "We were able to develop an expertise that we’ve now taken worldwide," McClellan said. ASCG is still heavily involved in rural Alaska projects, in water and sewer, schools, airports and other transportation projects, but also works on projects in the state’s larger communities and in the Lower 48, with offices in Denver and Albuquerque, N.M. One recent contract award in New Mexico is a $70 million academic and dormitory facility, which will be built in phases. ASCG is now doing overseas work as well. "We are sharing our engineering expertise, technical skills and sensitivity to local cultures and traditions with projects in Sri Lanka, Macedonia, Czechoslovakia and the (former) Soviet Union," McClellan said. The company offers not only engineering services but also architectural, surveying, inspection, construction management, planning, financing, construction administration and operations assistance. Diversification has also been one key to the company’s success, McClellan said. "Don’t rely solely on sectors that will crash in a bad economy. During downturns, tighten your belt and keep going," he said.  

Sites must be accessible

Government is becoming more accessible to people with disabilities.Section 508 of the Rehabilitation Act Amendments of 1998 requires that all government information systems be fully accessible by disabled users. This applies to computers, printers, telephones, video and multimedia products, operating systems, software, information kiosks, intranets and Web sites. Section 508 states that federal employees and members of the public with disabilities must have access to electronic and information technology comparable to access provided to individuals without disabilities.The law, signed by President Clinton in 1998 as part of the Workforce Investment Act of 1998, requires the development of standards that established a minimum level of accessibility, enforced by the federal government, and a compliance testing and reporting procedure. These directives fell under the oversight of the U.S. Access Board, an independent federal agency devoted to accessibility for the disabled.The new standards could cost the federal government up to $1 billion annually, according to some estimates, and the figure only applies to the purchase of new equipment. It doesn’t include the cost of retrofitting or redeveloping existing Web sites, which could be significantly higher. Advocates point out that this is still a small portion of the $38 billion spent each year by the government on information technology equipment.Federal agencies are moving into high gear to bring their Web sites into compliance. Although final details on compliance standards, testing and approval procedures have only recently become available, some deadlines have already passed. And the law allows, with some limitations, for the filing of lawsuits against agencies that do not meet Section 508 standards.Agencies affectedThe law applies to all federal agencies when they create, purchase, maintain or use information systems -- including Web sites. It also applies to Web sites created and maintained under contract to a federal agency, but only to the extent that the Web site is funded by federal dollars.Some exemptions apply, specifically in the case of systems used for national security, military intelligence and cryptologic activities. Purchases that would "pose an undue burden on the agency" would also be exempt, so long as the the "undue burden" was consistent with language in the Americans with Disabilities Act. In this case, the agency is required to provide access to information and data via alternative methods.Making a site compliantThe criteria for Web site compliance are based on accessibility guidelines developed by the Web Accessibility Initiative of the World Wide Web Consortium, which ensure access for people with visual impairments.These individuals use a variety of assistive technologies to access computer-based information, including screen readers that translate information on the screen into audio output or Braille displays. Many of the techniques used in recent years by Web developers make translation difficult or even impossible.To make a site compliant, the U.S. Access Board, the General Services Administration and the Federal Technology Accessibility Initiative compiled a checklist to help federal agencies evaluate their Web sites and modify them for compliance.According to the checklist, text equivalents must be provided for every nontext element including graphics, photos, charts and maps. Information conveyed using color must also be understandable in the absence of color, tables must be formatted to be properly translated by screen readers, and frames must be identified for navigational purposes.Any plug-ins used on a Web site must also comply with standards for software applications. Adobe’s Acrobat Reader 5.0, for example, meets these standards. Multimedia presentations must have equivalent alternatives, and they must be synchronized with the original.The standards are relatively straightforward. Given the widespread use of frames and tables to accomplish visual layouts and the more recent adoption of multimedia technologies that tend to thwart the best efforts of screen readers, however, adoption of these standards can require a complete overhaul of a Web site.The guidelines recommend testing Web sites under the same circumstances as when a visually-impaired individual would be using them. While many Federal agencies and departments have developed their own testing procedures, there is currently no standardized method for verifying Section 508 compliance.Where to learn moreA copious amount of information on Section 508 standards can be found online, primarily provided by the federal agencies charged with implementation of policies and directives. Ironically, many of these Web sites are not themselves fully compliant with Section 508. Key sites include:* U.S. Access Board (www.access-board.gov);* General Services Administration (www.gsa.gov); and* Federal IT Accessibility Initiative (www.section508.gov).A number of Web development agencies and programming specialists around the country are now touting Section 508 compliance testing and Web site conversion. Their offerings range from manual re-coding -- suitable for smaller sites -- to automated tools, which are best for large ones.Scott Gere is chief executive at Impact LLC, a communications and technology company in Anchorage. He can be reached via e-mail at ([email protected]).

Business Profile: Sweet Basil Cafe

Name of the company: Sweet Basil CafeEstablished: 1998Location: 335 E St., AnchorageTelephone: 907-274-0070Major focus of services: Sweet Basil Cafe serves soups, sandwiches, fruit and vegetable juices, espresso drinks and other menu items, as well as offering custom catering services.History of the company: After working as a chef at Seven Glaciers Restaurant, Tanya Newall and her husband Simon Newall, who was a chef at the Crow’s Nest, chose to open Sweet Basil Cafe. They started the business in May 1998 and in that first year worked 218 days out of a possible 224 days remaining in the year. Their efforts are paying off as the couple cites steady growth.Sweet Basil Cafe’s catering can serve five to nine course dinners for between six to 40 people or buffet service for up to 150 people.In summer the Newalls employ two to three part-time workers and one part-time worker during winter. The chefs aim to use Alaska grown produce in summer and also buy fresh pasta from Alaska Pasta Co. plus meat from Alaska Game Sales. They also visit ethnic grocery stores in Anchorage to procure ingredients.The Newalls note that an important business factor is organization and "staying on top of financials, food costs and labor costs." They also note that another asset is their partnership, which complements each other’s talents and is based on trust.Top accomplishment of the company: "I honestly believe that when you’re passionate about something, like Tanya and I enjoy food, and customers say, ’I enjoyed it,’ it’s really satisfying," said Simon Newall. "It’s a lot of fun having our own place," Tanya Newall said.Major players: Tanya and Simon Newall, owners, Sweet Basil Cafe.Tanya Newall attended Anchorage Community College then trained at the Culinary Institute of America in New York. Simon Newall studied at the French Culinary Institute in New York. After domestic and international travels, they met in Seattle. He took a liking to Alaska during a visit meeting Tanya’s relatives. They moved to Alaska and took jobs at separate restaurants.-- Nancy Pounds

Japan imports record volume of salmon -- but it's farmed, not wild Alaska fish

Japan imported a record volume of salmon in the first four months of this year, increasing 33.5 percent compared with the same time last year. The Internet site Fish Information Service reported that most of the increase was because of a 33 percent increase in imports of farmed coho. The second largest increase came from farmed trout imports, which totaled 13,100 tons, an increase of more than 53 percent. "The United States is the absolute loser in the Japanese market, with exports down almost 40 percent during this period," FIS said. "The ’winners’ were Norway with 38.7 percent and Chile with 37.8 percent. In general, prices in the Japanese market are far lower this year than one year ago. The average price for frozen imported sockeye for the first four months of this year is the lowest average seen during the last five years." University of Alaska Anchorage fisheries economist Gunnar Knapp said that sockeye salmon last year accounted for only 20 percent of total Japanese salmon imports, down from 57 percent in 1993-94. Business mission planned The World Trade Center Alaska is planning a business mission to Chile, designed for seafood harvesters, processors, policymakers, transportation/logistics professionals, seafood product suppliers, educators and related industry professionals. The trip, which is scheduled for Nov. 3 to 11, will review supply chain and food distribution models, including site visits and executive briefings with professional associations, harvest sites, processing facilities, marketing and distribution companies, technology and telecom related and logistics companies in Santiago and Puerto Montt, according to a press release. For more information, contact the center at 907-278-7233. Farmed halibut update Intrafish reports that Norway’s investments in halibut farming is starting to pay off. According to the newspaper Aftenposten, the company Nutreco will produce 1,000 tons of farmed halibut to markets in the next two years. Another company, Nordic Seafarms, is reportedly producing halibut at a cost of $2.93 a pound and plans to sell it for $4 a pound. The newspaper said Stolt Sea Farm expects its halibut operation to break even this year after many years of running at a loss, and pegs production at 300 tons this year. "Developing a new species into a commercial product takes eight to 10 years," said Stolt’s Niels G. Stolt-Nielsen. According to the Norwegian Seafood Export Council, 37 percent of the halibut produced in Norway is distributed on the national market. The bulk of Norwegian halibut exports is sent to Great Britain, Germany and Sweden. Seal lions like herring Seafood.com reports that the scientific journal Nature has a report from the Prince William Sound Science Center stating that Steller sea lions avoid pollock and instead seek out herring. Infrared scanners tracking sea lions in their nighttime feedings in the Sound revealed the animals only preyed on herring, which gathered at night at depths of 32 to 105 feet, but never touched the pollock, which swim at depths of more than 325 feet day or night. "Despite the much greater abundance of pollock, the infrared system revealed that foraging by Stellers was exclusively on herring and was conducted only at night," said Gary Thomas and Richard Thorne of the Prince William Sound Science Center. According to Seafood.com, "This finding supports other evidence that the decline in the population of the endangered sea lions is not related to the Alaska pollock fishery."  

Valley hay farmers optimistic

WASILLA -- After two years of dismal hay harvests, horse owners and livestock ranchers may be in luck.The same hot, dry weather that fueled forest fires gave some hay farmers the sun-filled window they needed to cut and dry their crops.That’s welcome news to people who have been spending upward of $12 for a 50-pound bale of hay. In a more normal year, a bale would cost about $7, said Tim Sonnentag, co-owner of Alaska Animal Food Warehouse. A horse can eat three bales in a week.The hay news has also been good for some farmers who have struggled for the past few years with poor crops."We’ve had quite a phenomenal year, really," said Don Gossett, who harvested about 50 acres in late June at the University of Alaska’s experimental farm near Palmer.Other farmers have also gotten in nice crops, said Sue Benz, a Palmer-based statistician who tracks hay harvests in Alaska for the U.S. Department of Agriculture.Not everyone is having a banner year. Farmers at Point MacKenzie have been struggling with a drought that has stunted crops, turning normally chest-high grass into 6-inch stubs, said Scott Peterson, who farms about 475 acres for his S Bar S ranch.Others have cut crops only to have it rained on, which can discolor the hay, and in extreme cases, leach out the nutrients.Farmers typically need three or four days of sunny weather to dry the cut hay before it can be baled. If they don’t dry it first, the hay can mold, Peterson said. In the worst case, heat generated by the mold can cause a bale to catch on fire.Last year, constant rain and cool weather fouled up many hay farmers in the Matanuska-Susitna area."We just never got the three-day window we needed," said Bud Frohling, who runs Spring Creek Farms just north of Palmer.Near Delta Junction, the harvest was so poor that farmers earned a federal disaster declaration.

Alaska's wild salmon deserve organic label; it's time to speak up

What do you think of when you hear the term "organic"? Natural. Safe. Healthy. Of course! That’s why it’s surprising and disappointing that a federal advisory group wants the U.S. government to declare that wild fish cannot be labeled "organic." To anyone who has ever savored Alaska’s wild salmon that just doesn’t make sense. What could be more natural, healthier or more safe? That’s not how a task force of the National Organic Standards Board recently looked at it, however. They interpreted an 11-year-old law that regulates livestock on land to decide that aquatic animals do not deserve the organic label. That’s like trying to taxidermy a salmon skin around the form of a cow or a chicken -- it just doesn’t fit. The good news is, there is time for Alaskans to share their views on this enormous economic issue with the National Organic Program before Agriculture Secretary Ann Veneman has to make a final decision next fall. In June, I personally presented Alaska’s position on this issue to the NOSB. I strongly encourage you to add your voice on this critical matter and send a letter to this agency. First, it’s important to understand the task force’s recommendation and the impact on Alaska. The NOSB is responsible for considering what foods qualify for the organic label. The 1990 law governing organic labeling mandates that managers control all materials and aspects of production, whether it’s a crop or an animal. The task force report says, "only operations that introduce and continuously manage a discrete population of aquatic animals analogous to a herd of ruminants (livestock) or poultry are suitable for certification." Under those restrictive and "landlocked" definitions, it’s obvious that virtually no fish likely will qualify for the organic label. That will put an indisputably healthy and natural product at a distinct disadvantage in the marketplace where the term "organic" is increasingly appealing to consumers. At $8.8 billion, the organic market is growing 20 percent annually -- compared with about 3 percent in the rest of the retail market. The economic stakes for Alaska are enormous. If we were an independent country, our fish harvest would rank 12th in the world, worth more than $1 billion to fishermen annually. Seafood is Alaska’s top export, and our waters account for half of America’s fish production, by volume and in value. The seafood industry provides the greatest number of private sector jobs in the state -- more than 20,000 year-round and about double that on a seasonal basis. The livelihoods of more than one-third of Alaska’s towns are dependent on fish. The organic label will allow Alaska’s seafood to compete in a highly competitive market. It is ironic that Alaska fish are prized for their purity and wild origins -- meaning virtually no human interference until harvest -- while current standards for organic labeling emphasize human manipulation over every facet of production. Which is more natural? Alaska’s fisheries are inherently pristine and deliberately managed. The various species consume a completely natural diet. The ecosystems that support wild aquatic species are innately organic. They not only are in balance with nature, they are nature. Alaska’s constitution requires that resources be managed for sustainability. Thus, a cadre of public agencies and industry participants work collectively to manage and conserve an already organic system. Monitoring and oversight of the strength and health of various fish stocks is constant, from habitat quality to harvest quantities. Alaska managers want to minimize human impact on the marine environment -- not maximize it, as current organic standards suggest. It’s evident that current organic guidelines for onshore "livestock" are not applicable to offshore aquatic animals. Therefore, it makes sense for NOSB members, instead, to scrutinize the "Alaska model" of organic fish management through a different lens. U.S. Department of Agriculture regulations already exist that define commercial harvesting of fish as a type of wild crop. These guidelines could be applied to Alaska’s fish. Alaska policymakers respect stringent standards for certifying organic foods and do not wish to tamper with their integrity. Instead, we encourage the NOSB to consider concerns about aquatic animals as a springboard to develop appropriate standards that rightfully accommodate Alaska’s No. 1 organic product: fish. Lt. Gov. Fran Ulmer is a member of the Governor’s Salmon Cabinet and is president of the North Pacific Anadromous Fish Commission.  

NANA dislikes how Park Service issued Red Dog Mine road report

NANA Development Corp. officials are steamed over how a National Park Service report on lead and zinc dust contamination along a 55-mile access road to the Red Dog Mine in northwest Alaska was released.The contamination apparently resulted from ore trucking operations."We were very disturbed about the way this came out," said Helvi Sandvik, president of NANA Development Corp. "We were aware that the Park Service was doing the study but we anticipated an opportunity to review the draft, make comments, and ensure the report was given proper peer review. The Park Service gave us no opportunity to do that."John Rense, the corporation’s chief operating officer, said, "We’re committed that Red Dog will be well run from an environmental point of view, and we need to work with the Park Service. We support the quest for knowledge, but this report was treated in a very unprofessional, unscientific manner."We thought the study was a decent effort, but we’re disappointed that the Park Service chose to follow a path that created a drama."Sandvik said the written report contains inflammatory comparisons of the dust contamination to heavily polluted industrial sites in Eastern Europe, while in fact the mine is operating well within its permit limits.The Park Service told Sandvik the study was not intended to assess any effects on human health, but only to collect data, she said."But when the report was released they were quoted that this creates a tremendous health burden. I appealed to the Park Service to let us all first try and understand this, but they chose to put it out immediately. That has led outside interests to jump to conclusions that there’s a major problem."Trustees for Alaska, the Anchorage-based environmental law firm, has called for a shutdown of Red Dog Mine operations."My concern is that Trustees and other people are reacting with only pieces of information. I think we have a bigger responsibility to get all of the information," Sandvik said.Sandvik said she doesn’t yet understand how the Park Service report shows contamination -- when no contamination showed up in air and water quality monitoring that Cominco is required to do along the road.John Quinley, spokesman for the Park Service, said NANA was aware of the report and was given a copy a week before it went public."They understood the date we planned to release it," he said.Quinley also said the report had been "peer reviewed" as to its data collection methodology. Three specialists within the Park Service reviewed the data, as well as a scientist within the U.S. Environmental Protection Agency.He also said the Park Service informed Cominco Alaska Inc., the mine operator, about the survey last October, and provided preliminary results last March.Meetings have been set for July 17 with NANA officials to discuss the report and to plan formation of a technical working group to discuss further monitoring, Quinley said.Despite criticism over how the report was released, Sandvik said it is good that the Park Service has identified a need that must be dealt with."We’re getting together with AIDEA (Alaska Industrial Development and Export Authority) soon to look at this more closely," she said.The state development authority owns the Red Dog access road and port, which is operated by Cominco Alaska Inc., operator of the Red Dog Mine, under contract."This is a life issue for us at NANA," Sandvik said. "Red Dog is a major employer of our people. Before the mine went into development in the 1980s, many of our people felt they had no future in their communities, no hope.""Now people have good jobs. They’re supporting their families. They have pride," she said.NANA owns the land on which Cominco Alaska Inc., the operator, developed Red Dog, now the world’s largest zinc mine. NANA receives royalties from production, which are shared with other Alaska Native regional corporations, and is heavily engaged in support operations to Cominco.Lynden Transport and NANA now operate ore trucking operations for Cominco, carrying lead/zinc concentrates from the mine to large bulk storage facilities at the Chukchi Sea port.Sandvik said NANA and Lynden proposed bringing new, larger trucks with solid container covers last year. The suggestion was adopted by Cominco and the new trucks are being delivered this summer, she said.AIDEA officials said it isn’t yet understood how the lead and zinc dust came off the trucks.The solid container covers on the new trucks will be more effective than the tarps now used to cover containers on the trucks, but tarp covering procedures have improved substantially over the 12 years the mine has operated, said John Wood, AIDEA’s manager for the road and port."We don’t know whether that dust came off trucks in the first two years of mine operations, or continually," Wood said."It may also be possible the dust came off the trucks themselves, which get a fine covering during loading and unloading operations."Better truck washing procedures are now being implemented at the mine and port, he said.NANA exchanged lands with the Park Service in the 1980s to secure a corridor through a national monument. About 20 miles of the 55-mile road run through the national monument. The rest crosses lands owned by the state of Alaska or NANA itself.

Administration asks public 10 questions before reconsidering forest road ban

WASHINGTON -- The Forest Service has come up with 10 questions it wants the public to consider before revising a Clinton-era ban on logging and road construction on a third of national forest land.The questions include how the government can best satisfy competing interests while protecting national forests, and how roadless forests should be protected from wildfires, insects and disease.The government also wants to know what activities should be prohibited in roadless areas, how the rights of nearby property owners should be protected and what role local forest managers should play in protecting the areas."It is important to give people additional time to express their views on how best to move this process forward," Forest Service Chief Dale Bosworth said in a statement. "If we spend the extra time now, we have a better chance of coming up with a workable solution."The ban instituted by Clinton just before he left office ropes off 58.5 million acres from developers, loggers and mining companies. Environmentalists hailed the rule as much-needed protection for the most pristine parts of the national forest system.But some timber industry and off-road vehicle groups say the policy is too restrictive.The Bush administration also considers the policy flawed and Agriculture Secretary Ann Veneman in May promised to amend it, specifically to allow more local input. Veneman oversees the Forest Service.A short time later, a federal judge blocked implementation, saying the policy would cause "irreparable harm" to federal forests.The vast majority of roadless federal forests are in the West, including Alaska’s Tongass and Chugach national forests. Clinton’s order would have stopped all new road construction in the Chugach and all road construction in the Tongass, except for developments involving timber sales that were already proposed.The roadless rule is the subject of eight lawsuits in seven states, including Alaska.American Forest & Paper Association spokesman Michael Klein said the questions are a "good sign" if they look at whether the rule accomplishes its goals and was crafted in the best way possible.Klein’s group has filed one of the eight lawsuits against the Clinton policy.The 10 questions were to be printed in the Federal Register on July 10, which started a 60-day public comment period.

EPA's Whitman sees states as partners

Environmental Protection Agency Administrator Christie Whitman told Alaska business and government leaders in Anchorage July 9 that "responsible growth doesn’t mean no growth. The rest of America needs to understand that Alaskans can be good environmental stewards and still oversee responsible economic development.""Alaskans have a right to earn a living. Protecting Alaska’s environment doesn’t mean impovershing her people," Whitman, a former governor of New Jersey, told a breakfast group organized by the Resource Development Council of Anchorage.Whitman went on to say that "too many people in Washington, D.C., believe that all wisdom resides within the Beltway. The federal government should certainly be an ally in protecting the environment, but too many in Washington forget that being an ally is just that, a partner.""Washington needs to listen more and preach less," she said. "That’s why I’m here, to listen and absorb information about Alaska."Whitman also said there will be delays in appointing key regional administrators in her agency including Region 10, which includes Alaska.The Bush administration’s process of interviewing candidates for political appointments within agencies first in the White House and then giving agency heads a short list, plus delays brought on by the recent leadership change in the Senate, have pushed appointments to the EPA regional offices until later in the year, Whitman said.She hopes there will be a Region 10 administrator named by this fall but it could be as late as February. Whitman would not comment on a proposed Region 11, which would be based in Alaska, other than to say that it is now suggested that Alaska and Hawaii be in the same EPA region."That means everyone in my agency will want to work in a new Region 11," she quipped.The Alaska regional office is a substantial part of Region 10, she said, with more than 30 people.Whitman also would not comment on a question from the audience about the dispute between the state of Alaska and the EPA over a state air quality permit issued for a diesel generator at the Red Dog Mine in northwest Alaska.It is a matter in litigation and a comment from her would be inappropriate, she said. But in general comments later, Whitman said her policy will be to maximize the role of states in running environmental programs after they have been delegated by the EPA, which is the crux of the Red Dog permit dispute."We should set the standards, and let the states figure out how to meet them. We should get out of their way, and not try and micro-manage their decisions," she said in a press briefing after her talk.The Red Dog lawsuit, now before the 9th U.S. Circuit Court of Appeals, involves an EPA decision that new technology for controlling air emissions from diesel generators was superior to an older technology approved by the state in a permit issued to Cominco Alaska Inc., the mine operator.The state of Alaska asserts the older technology meets the EPA air quality goals and is less costly.Whitman had been in Alaska for four days touring rural villages where EPA and state funds are being used to improve village water and sewer systems."There’s been a huge improvement in the number of rural communities that have access to running water. But there are still challenges, with many villages still without access to clean water," she said."One of Alaska’s biggest challenges is its remoteness and the expense of doing these projects," Whitman said.She added that the rural "honey bucket" problem isn’t unique to Alaska. "There are many tribes in the Lower 48 states which also don’t have access to running water. It’s the functional equivalent to honey buckets," she said.

It's time to rethink your estate plan

The president has signed the Economic Growth and Tax Relief Reconciliation Act of 2001. The act phases in repeal of the estate and generation-skipping transfer taxes that will be fully implemented for the estates of people who die after Dec. 31, 2009. During the phase-out period, the transfer taxes will continue to apply, with the gradual reduction in tax rates and an increasing applicable credit amount. Estate planning during this phase-out period will be important for everyone. However, it will be extremely significant for those who are aged or in ill health, or who otherwise might not be expected to survive the eight-year period until final repeal. One or more of the following strategies or considerations might be appealing. Initial planning considerations The focus for an older individual unlikely to survive to repeal would be the reduction of the value of his or her estate for estate tax purposes, including the implementation of various techniques under current estate planning practice to transfer property at little or no gift tax cost. While the younger person in good health may seek to minimize the gift tax, he or she may more likely choose to postpone any immediate or future transfers. An older person who may not have otherwise provided for his or her surviving spouse might consider the establishment of a trust for the surviving spouse’s benefit. The trust should be established in order to defer the estate tax in the situation where one spouse is likely to die prior to repeal, and the surviving spouse may survive until after repeal -- if, in fact, repeal ever really occurs. It might be advantageous to immediately use the increase in the applicable exclusion amount, which now will also have an impact on the amount that can be transferred free from the generation-skipping tax. Gift tax retention The gift tax was always considered supplemental to the estate tax. The question arises, why was the gift tax retained? Retention was apparently deemed necessary because, as noted by several commentators, complete repeal of all transfer taxes would have led to a situation whereby taxpayers could drastically reduce or altogether avoid income taxes by way of transfers to relatives or others in lower tax brackets. Effective planning techniques Many currently used planning techniques involving lifetime transfers should remain effective. Of course, the use of lifetime giving in conjunction with the $10,000 annual exclusion and the gift splitting provisions between the spouses will continue to be an important planning device to shift assets to the next generation without depleting the existing estate. An installment sale to an intentionally defective grantor trust can still be beneficial as a freeze of the value of the transferred assets with the only gift being the initial contribution to fund the trust. The use of the family limited partnership or limited liability company or other closely held business interest in order to take advantage of appropriate discounting remains beneficial. Life insurance will still play a role in estate planning after full estate tax repeal. You may wish to insure against the potential capital gains tax resulting from carryover basis. In life insurance trusts, it may be useful to have provisions added allowing for distributions of the policy during the grantor’s life, to allow the trustee to distribute out the policy as the trustee determines, taking into account eliminating any liability on the trustee for so doing. Decreasing term life insurance may also be useful, decreasing as we near estate tax repeal. The danger, however, is that the estate tax will not vanish as scheduled, and it may then be more costly or impossible to obtain replacement insurance if needed to pay the tax. Reviewing will provisions In reviewing your will, a close review should be made of the provisions disposing of the unified credit exemption equivalent. Many of these provisions are drafted as a formula equal to the maximum amount that can pass free of federal estate tax. Under current practice, this amount does not pass outright to the surviving spouse and may even be directed away from the spouse. As the applicable exclusion amount increases, the resulting effect on many testamentary schemes may be to substantially reduce what the spouse receives, even to the point of inadvertently disinheriting the spouse or giving rise to the spouse’s right of election against the will under state law. Carryover basis Effective for persons dying after Dec. 31, 2009, the step-up in basis at death rule will be eliminated and thereafter, property acquired from a decedent will generally acquire a carryover basis. The act provides for a limited step-up in basis rule: Up to $1.3 million in estate property can be stepped-up, and an additional $3 million in property passing to the surviving spouse can be stepped-up. If an individual has not kept adequate records and is unsure of the basis of his or her assets, they might consider a sale or transfer of the property during his or her lifetime. While doing so will not necessarily avoid a dispute with the Internal Revenue Service over basis, the individual’s ability to provide facts in furtherance of his or her claimed basis might lead to a better settlement with the IRS than the executor could later obtain. On the other hand, if, because of advanced age or ill health, he or she seems unlikely to survive until after the end of 2009, and holding on to the asset still makes sense from an investment point of view, a lifetime disposition of the asset may needlessly squander the possibility for obtaining a stepped-up basis under pre-2001 act rules. If this were the case, the lifetime disposition would probably not be wise. A charitable remainder trust established at death after repeal would also serve to eliminate the impact of carryover basis because a charitable remainder trust would not have income recognition on the potential gain. The value of the noncharitable interest passing to family members would not be relevant as there would be no estate tax, and the need to obtain an estate tax charitable deduction would no longer exist. In the upcoming weeks and months, numerous estate planning strategies will likely surface. It should be interesting to see the ultimate impact of the new law. Allen Bingham is a partner with the accounting firm of Mikunda, Cottrell & Co.  

Palmer company makes high-resolution survey of Cook Inlet

When pioneering navigator Capt. James Cook entered the inlet that eventually was to bear his name, sailors’ arms were likely weary from heaving lead lines for constant depth readings. "The Inlet must’ve driven him nuts,’’ said Bob Kohut, a hydrographer with Terra Surveys LLC. "Cook Inlet is like a huge river. ... It has a dynamic bottom.’’ Like winds that shape and reshape desert dunes, the Inlet’s tidal action and currents constantly change the contours of its depths, and that makes life tough for navigators, Kohut said. The National Oceanic and Atmospheric Administration has hired Kohut’s Palmer-based firm to perform a hydrographic survey of about 85 square miles of Cook Inlet, including Knik Arm and the approaches to the Port of Anchorage. NOAA is spending $18.1 million this year nationally for seafloor mapping; $11 million of that is being spent in Alaska. Nearly $2 million is being spent in Knik Arm alone. The work in Alaska also is being done by NOAA’s 231-foot research vessel Rainier and other contractors, including LCMF Inc., a subsidiary of Ukpeagvik Inupiat Corp., Barrow’s village corporation. Two crews from Terra Surveys working 24 hours a day, seven days a week are collecting depth soundings using a state-of-the-art multibeam sonar, capable of collecting more than 3,000 soundings a minute. The technology -- which is only a few years old -- can survey the entire seafloor, instead of just parts of it as was done with single-beam sonar or lead lines and sounding poles. According to Terra Surveys officials, the system, which costs about $750,000 to outfit one vessel, requires precise positioning by Global Positioning System and corrections radioed from shore to one of the company’s boats. Compensation for the vessel’s pitch, roll, heaving and heading are done with devices like those found on missile guidance systems. Crews have been performing the hydrographic survey west of Fire Island past Port MacKenzie to just north of Cairn Point. The data is collected while on one of the company’s 31-foot boats, cruising at up to 11 knots, within designated grids. Crews obtain data traveling back and forth within the grids, not unlike mowing a yard, Kohut said. Depths of the Inlet range from 60 to 200 feet, Kohut said. Of most concern are shoals that are migrating into shipping lanes, he said. The company began its survey in early May and expects to finish by mid-August. When completed, the survey will contain some 1.2 billion soundings, requiring nearly 200 gigabytes of data storage. The survey data is processed in the company’s Palmer office and then turned over to NOAA to be used for new nautical charts for marine navigation. Updated charts, said Doug Baird, NOAA navigation adviser in Anchorage, "Helps everybody that’s on the water and gives everyone information to help keep boats off the rocks.’’ It was ship groundings nationwide and in Alaska that helped increase funding for NOAA, which constantly battles liability cases from vessel owners who blame outdated charts for running aground, Baird said. This year, Baird said, about 1,300 square miles of Alaska waters will undergo hydrographic surveys. "That represents one-tenth of 1 percent of the water we are responsible for,’’ Baird said, emphasizing the need for increased funding for updated and accurate charts. Baird said it takes up to two years from the time hydrographic data is gathered to the time a chart is published. He said NOAA is working on speeding that process so that charts are as accurate as possible, especially in waters like Cook Inlet where the depths are forever changing. "One of the issues we are trying to address is ensuring charts aren’t obsolete by the time they get to mariners,’’ Baird said.  

Oil companies to start sonar study for Beaufort Sea gas route

FAIRBANKS -- The major North Slope oil companies are poised to launch survey vessels from Prudhoe Bay this month to scout a proposed northern natural gas pipeline route, despite the fact that the route is widely condemned in Alaska.The "Over-the-Top" pipeline route would transport the North Slope’s huge natural gas reserves offshore to the Canadian Arctic, then south along the MacKenzie River on the way to the Lower 48.That route is roughly 350 miles shorter than the main alternative, a route paralleling the trans-Alaska oil pipeline to Fairbanks, then along the Alaska Highway.The Beaufort Sea proposal faces opposition from Alaskans concerned that jobs and gas would bypass the state. A state law was even passed with the intention of killing the Beaufort Sea route."At the same time this (over-the-top route) survey is going on, we have people walking the trans-Alaska pipeline route," said Curtis Thayer, spokesman for the pipeline consortium of BP, ExxonMobil Production Co. and Phillips Alaska Inc.The sonar study of the Beaufort Sea is slated to begin in mid- to late July, pending the expected issuance of a permit from the National Marine Fisheries Service.A pair of survey vessels would scout near the shoreline of the Beaufort Sea off the northern coasts of both Alaska and Canada.The vessels would chart the sea floor to find any hazards there.There have been similar studies in the Beaufort Sea, Thayer said, but this is the first by the pipeline consortium."We don’t know what the bottom of the Beaufort Sea looks like," Thayer said. "We don’t know what we are going to find."The companies are conducting a $75 million feasibility study on possible pipeline routes and design.Thayer, the spokesman for the industry consortium, said the law barring issuance of permits for the Beaufort Sea route is an issue to be dealt with later."That is a discussion that needs to be held between the state and the (companies) down the road, once a route selection has been made," he said.Thayer said it might become a question of whether the state is willing to lose a natural gas pipeline project entirely if the northern route turns out to be the only one that would be profitable.State legislators and the governor say the market is hungry for Alaska’s natural gas and sending it across the Beaufort Sea would mean allowing an Alaska-owned resource to be extracted with minimal benefit for state residents.The Fairbanks-based Northern Alaska Environmental Center says a pipeline should not run just offshore of the Arctic National Wildlife Refuge.A national environmental group, the Natural Resources Defense Council, recently announced its opposition for the same reasons. Both environmental groups say an Alaska Highway route would be preferable.The influence of Canada, however, will be a huge factor in any route decision.Leaders of the Yukon Territory favor an Alaska Highway route. But officials in the Northwest Territories want the line across their land in the MacKenzie River valley, providing local jobs and allowing their gas reserves to be developed as part of the same project.Late last month, a group of aboriginal leaders in Canada, representing some of the Northwest Territories land that would be crossed by the MacKenzie River route, publicly endorsed the proposal.Houston-based Arctic Resources Company Ltd., which is pushing the MacKenzie route, is suggesting the northern Canadian portion of the pipeline could even be owned by the aboriginal groups of that area."The endorsement of the aboriginal leaders marks a major milestone in getting to the right answer quickly on this important project," said Forrest Hoglund, chief executive officer of Arctic Resources, which wants to operate the pipeline.


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