Even in subzero Alaska, researchers discover 'urban heat island'

Climate change caused by people is a tough thing to measure in most places, but not in big cities. The clustering of humans, cars, pavement and rooftops makes some cities warmer than surrounding areas. Called "urban heat islands," they exist from Los Angeles to Atlanta to New York. Even Alaska has one.A few researchers in Berkeley, Calif., have devoted themselves to the study of heat islands. They’ve found that Los Angeles is 6 to 8 degrees Fahrenheit warmer than the surrounding areas. That may not seem like a lot, but those few degrees add up when you multiply them by the cost of air conditioning in millions of homes and offices.The Heat Island Group, as the researchers call themselves, reports that intense heat absorbed by dark shingles can penetrate buildings, making air conditioners work harder. Members of the research group compared roof surfaces by painting one roof black and another white. The black roof was 70 degrees warmer than the air. The white roof was 18 degrees warmer than the air.Much of the heat in big cities radiates up from road pavement. Researchers tested fresh asphalt for reflectivity and found that it absorbed 95 percent of solar radiation. Aged asphalt, which is gray rather than black, absorbed 90 percent, and experimental white asphalt soaked up just 50 percent. With the three pavements side-by-side, members of the group measured the following temperatures: new pavement was 123 degrees, faded asphalt registered 115, and the white surface 90. The Heat Island Group concluded that if all L.A.’s pavement were more reflective, the city could save $90 million a year in cooling costs.While air conditioners are a novelty in Alaska, we have a heat island right here in Fairbanks. In the 1970s, Carl Benson and Sue Ann Bowling of the Geophysical Institute at the University of Alaska Fairbanks drove around town during winter with a temperature sensor mounted on a mast above the car. They measured the warmest temperatures, about 20 degrees above the coolest, in the city center near the Chena River, while outlying areas were coldest. The Chena creates a basin that should hold the coldest air, but the Fairbanks city core, with cars and homes and other sources of manmade heat, was one of the warmest areas in town.Jan Curtis, the state climatologist for Wyoming who used to work for the Alaska Climate Research Center, compared Fairbanks to Eielson Air Force Base to see how the Fairbanks heat island evolved during the last 50 years. Using long-term temperature records, he and other researchers found Fairbanks’ heat island has grown with the city’s population, while Eielson’s temperatures also increased but not at the same rate as Fairbanks. During the 49-year period Curtis studied, the population of Fairbanks grew by more than 500 percent while Eielson remained almost constant.Fairbanks, with cold, stable air in winter, is the only place in Alaska where researchers have seen the heat island effect. Anchorage has more than enough people, cars and pavement to warm things up, but the ocean and the Chugach Mountains stir the air and hide any evidence of a heat island.The staff at the Alaska Climate Research Center studied the Fairbanks heat island to distinguish between a general warming trend felt all over and the local effects caused by a clump of people. The heat island in Fairbanks probably saves people a few dollars in heating costs, Curtis said, but this island still offers little refuge from an interior Alaska winter.Ned Rozell is a science writer at the Geophysical Institute at the University of Alaska Fairbanks. This column was issued by the Geophysical Institute last month and first appeared in 1999.

First National Bank Alaska, state OK credit card deal

The State of Alaska signed a six-year contract with First National Bank Alaska to provide credit card services for state agencies. The contract consolidates purchasing capability for goods, services and travel into the One Card Alaska program.Implementation work will begin immediately, with state agencies beginning conversion in March, travel and procurement functions converting before fall, and fleet functions following.Services under the contract are available to all three branches of government and the University of Alaska.First National Bank will eventually provide fleet services under the One Card Alaska program. Gene Darling, manager of the statewide equipment fleet in the Department of Transportation and Public Facilities, foresees operational efficiencies as well."The One Card Alaska program will replace our branded fuel cards which limit our purchasing options. It will allow all Alaskan service stations the opportunity to sell fuel for state vehicles," he said.The structure of the credit card industry yields contract terms that benefit both parties. Card services under the contract are anticipated to cost the state nothing, yet First National Bank benefits from the transaction volume.

Alaska, Russian pact to generate business

A recently signed agreement between World Trade Center Alaska and a Russian business organization should help generate future business for members from the two groups.The agreement with the Sakhalin Association of Business People stemmed from the Alaska group’s visit to Sakhalin Island last fall. Under the agreement, the organizations aim to work together to expand business for their members."The intent is to be pretty deep and continuous and multidimensional," said World Trade Center Alaska Executive Director Robin Richardson.The groups aim to establish weekly communication and pinpoint areas where they can work together on specific projects, Richardson said. Also, members of the Sakhalin association are interested in participating in Alaska panels including the upcoming Pacific Rim Construction Oil Mining Expo and conference and a seafood conference in March, she said.PACCOM is set for Feb. 20-21 at Sullivan Arena in Anchorage. World Trade Center Alaska is organizing the first annual Business of Seafood Forum for March 5-6 also in Anchorage.Meetings between group members also would be part of the proposed Alaska visits, she said.Richardson believes the agreement of cooperation will help Alaska and Russian businesses locate joint venture partners. The Sakhalin Association of Business People helps find experienced companies from its members."It makes doing business so much easier," she said. "It’s nice to know you have a group of people working together as team members."Later this year Richardson hopes to secure approval from officials in Hokkaido, Japan, to participate in the agreement. The Alaska organization led a trade mission to Sakhalin and Hokkaido last year.World Trade Center Alaska tallies about 250 members, and the Sakhalin group’s Web site said it totals 700 members representing the oil and gas, seafood, transportation, construction and telecommunications industries.The agreement was signed Oct. 2 after Alaskans returned from the trade mission to Sakhalin.One example of the group’s cooperation came during World Trade Center Alaska’s trade mission to Sakhalin earlier this year. One delegate from Alaska represented a construction equipment rental and sales company, and the Sakhalin association helped identify members interested in doing business with the Alaska delegate, Richardson recalled.

State puts royalty gas up for bid

Alaska is soliciting bids for 400 million cubic feet per day, or roughly 80 percent of its royalty gas, from the estimated 35 trillion cubic feet of gas on the North Slope.The sale is contingent on a pipeline being available to carry gas to market in the continental United States. Three North Slope producers, BP Exploration (Alaska) Inc., ExxonMobil Production Co. and Phillips Alaska Inc., are engaged in feasibility and engineering studies for a large-diameter pipeline from the North Slope.The move also aims to ensure that independent companies now exploring for gas on the North Slope, who are not among the companies now planning the pipeline, will have access to the new gas transportation system once its built.A second goal is to use Alaska’s ability take its royalty gas in-kind as a tool to encourage firms that will own the gas pipeline to build extra capacity or plan for an early expansion of the system. Currently, the three producers and an independent pipeline consortium are studying the proposed project.Under terms of state oil and gas leases, the state can either sell its one-eighth royalty in-value to producers or take the gas in-kind, selling it to others. Over the years, much of the state’s royalty oil from North Slope crude production has been taken in-kind and sold to refiners in Alaska.Proposals for buying royalty gas are due Jan. 31, according to officials at Alaska’s Division of Oil and Gas. The state expects to select the winning bidders Feb. 1.

Seminar to help tour industry, land managers network

State and federal agencies coupled with an ecotourism association are sponsoring a tourism symposium Jan. 29-31 in Juneau. Sponsors are the U.S. Forest Service, the state Division of Community and Business Development and the Alaska Wilderness Recreation Tourism Association."Working Together -- Tourism in Southeast" will feature presentations, panel discussions and small group discussions. The sessions aim to provide a forum for communities, land managers, tour operators and other organizations to share ideas and expertise.Key topics include current and emerging trends, visitor demographics, new ideas and initiatives, viewpoint and solutions.Symposium organizers hope this event will build on relationships and cooperation gained at a similar symposium conducted in March 1999 in Sitka.Registration is $75 and includes two lunches, refreshments and a resource notebook. For more information, visit (www.fs.fed.us/r10/workingtoget her /index.shtml) or call Marti Marshall at 907-586-8872 or Aneta Synan at 907-465-3961.Fifth Princess hotel in Alaska takes shape near Copper RiverConstruction continues this month on Princess Tours’ fifth hotel in Alaska, the Copper River Princess Wilderness Lodge, according to company officials. The 84-room hotel is set to open in May.During January workers will install mechanical and electrical systems, handle painting, floor work and plumbing, and install electrical fixtures.Workers already had already begun landscaping work, as well as sign installation and some utility projects.The structure should be complete in mid-March, Princess Tours officials said. Furniture and electronic equipment is scheduled to arrive in April.The hotel is being built near the Wrangell-St. Elias National Park and Preserve with views of the Copper and Klutina rivers.

Summit Alaska wants new gravel dock

A new barge docking facility for unloading gravel is being proposed at the Williams Petroleum Terminal near the Port of Anchorage.Summit Alaska Inc. has applied for a permit with the U.S. Army Corps of Engineers to build the facility to off-load gravel shipped across Knik Arm from the company’s pit at Point MacKenzie.Since 1996, the company has unloaded gravel at a dock between the Williams Petroleum Terminal and Ship Creek. A permit was not renewed at that dock because of increased activity by Alaska West Express, Spenard Builders Supply Inc., Northland Marine Services and others.Plans call for moving an existing 300-foot-long conveyor and floating gravel hopper to the proposed location. Pipe piling and mooring dolphins would be installed to support half the length of the conveyor system. The conveyor would transport gravel from barges to be stockpiled at a three-acre site subleased by Williams Alaska Petroleum and owned by the Alaska Railroad Corp.Summit Alaska says it will post an observer to keep a lookout for beluga whales during pile-driving operations. The company says it will stop driving piles if a beluga whale is spotted within 2,000 feet of the operation.About 7,500 cubic yards of fill and concrete rubble will be placed on about a third of an acre of tidelands to create a road dike to the site. Another 800 cubic yards of stone or concrete riprap would be placed along the dike perimeter.The conveyor system would be supported equally by the dolphins, pipe piling and the dike, according to Summit’s permit application.The hopper and a portion of the conveyor will be removed during the winter months to avoid ice damage, according to the company’s permit application.About 2,000 cubic yards of mud and rock from a 100-foot by 300-foot area would be dredged at the end of the conveyor system for barge berthing, according to the company.The company also has requested permission to maintain water depths at the new site by dredging about 2,500 cubic yards of material annually.Summit Alaska wants to begin construction in March and have the project completed by May, according to federal permit application.Public comments on the proposed work will be accepted by the U.S. Army Corps of Engineers until Jan. 11.

Ice eases; Cook Inlet opens to all ships

Upper Cook Inlet was reopened to single-hulled tanker barges Dec. 27 after being closed for six days because of severe icing conditions.Only two barges were affected by the closure, both of which were carrying aviation fuel and ethanol while being towed from Valdez, according to Stuart Greydanus, operations manager at the Port of Anchorage.The fuel barges, owned by Crowley Marine and Petro Marine, were diverted from Anchorage to Homer until the closure was lifted, according to Petty Officer Keith Alholm, a U.S. Coast Guard spokesman in Kodiak.The Coast Guard closed Cook Inlet Dec. 21 after Carl Anderson, owner of Cook Inlet Tug and Barge, reported he was having difficulty maneuvering a 100-by 400-foot tank barge and his tug through the ice."The (harbor)master reported that after two hours of battling the ice pack he was able to turn about and head south to open water," the Coast Guard said in a press release.The barge was not damaged, and no fuel was spilled, Alholm said."There were no real problems," Anderson said.Anderson said the below-zero temperatures that lasted several weeks in Anchorage caused the severe icing conditions, which occur regularly in Cook Inlet, but this year’s was earlier than normal, Anderson said.Alholm said Cook Inlet was closed for similar conditions two years ago.Special winter rules imposed by the Coast Guard since Nov. 29 remain in effect in Cook Inlet, Alholm said.The rules affect all vessels transiting Cook Inlet and require that all shipboard equipment such as winches and ballast systems be operable in temperatures as cold as 40 below zero.Vessels also must maintain enough draft to keep propellers below the ice, according to Coast Guard rules. Vessel crews also are required to have adequate cold weather gear.

Airport officials petition borough to subsidize German airline flights

FAIRBANKS -- Fairbanks International Airport officials are asking the Fairbanks North Star Borough to pledge $50,000 to $250,000 to help lure Condor German Airlines back to Fairbanks.The airline began service between Fairbanks and Frankfurt, Germany, last year on a trial basis."We made it through the inaugural season. Fairbanks is now on the map," marketing director Dave Carlstrom, who has been negotiating with Condor, told the borough economic development commission Dec. 27.The problem, however, is that not enough Europeans are coming to Fairbanks to support the flight and Condor needs more Alaskans to travel to Europe.To entice the airline, Carlstrom wants the Borough Assembly to underwrite seats on Condor flights in case not enough local residents purchase tickets. He appeared before the economic development commission to ask that it endorse a resolution urging the assembly to act.The cost of round-trip fares from Fairbanks to Frankfurt range from about $600 to about $1,400.Five tourism-related businesses have pledged $50,000 each to guarantee the service and are giving $10,000 up front, with the money going into an escrow account. Carlstrom needs five more participants or the borough to take on a majority share.Such guarantees are standard for towns of Fairbanks’ size in order to attract airlines such as Condor, Carlstrom said. He called the risk-sharing agreement an "internal political necessity.""Local sponsorship assures Condor we don’t take them for granted," Carlstrom said.The commission agreed that it wanted to support Condor, but it did not decide how and how much. It will address the issue again Jan. 10.Assemblywoman Bonnie Williams, who sits on the commission, doesn’t support the borough being one of Condor’s backers."The borough doesn’t belong in risk guarantees," Williams said.Other commission members agreed with Williams. No one on the commission voiced support for the borough being one of Condor’s major backers.The commission discussed other options for supporting Condor, including appropriating money to the Fairbanks Convention and Visitors Bureau to increase its share of sponsorship.FCVB, Fountainhead Development, the Riverboat Discovery, Doyon Tourism and Omni Logistics are the five backers Carlstrom has lined up so far. He said he has approached the Alaska Railroad, the consortium that owns the new SpringHill Suites by Marriott, Prospector Outfitters and the Fairbanks Daily News-Miner.Lissa Robertson, special assistant to Borough Mayor Rhonda Boyles, said the mayor wants to support Condor but doesn’t have a proposal in mind. Boyles is out of town on borough and personal business."She would like to see the borough step up," Robertson said.

Employers should know rights of those on military leave

Following the events of Sept. 11, many employers may have employees who have been called to active duty in the military or National Guard. These employees have many rights under the Uniformed Services Employment and Reemployment Rights Act of 1994. Employers need to be aware of these rights to ensure they comply with the law in dealing with employees who have taken leave for military service.USERRA requires employers to provide leave to employees to serve in the uniformed services. Any individual who is absent from work because of service in the uniformed services is entitled to re-employment rights. Employers are generally required to return employees to the same or an equivalent position, with the same benefits, including seniority rights, they would have received had they not taken military leave.For instance, if an employee would have been promoted to a new position during the period in which he or she is on military leave, then, when the employee returns to work, he or she must be re-employed in the new position.The uniformed services include the Army, Navy, Air Force, Marine Corps and Coast Guard, as well as the Army National Guard and Air National Guard. "Service in the uniformed services" includes duty by reserve members of the Army, Navy, Air Force, Marine Corps or Coast Guard, and members of the national guards, who are called to active duty.To qualify for re-employment benefits, the cumulative total of the employee’s absences from work for military service must not exceed five years. In addition, employees are required to provide advance notice of their military service to their employers when possible.However, employees are not required to provide notice if military necessity prohibits the giving of such notice or when giving notice would be impossible or unreasonable under all the circumstances. Typically, individuals who are called to active duty should be able to give at least a few days’ notice to their employers.Employees are also required to apply for re-employment benefits within a specific period of time after concluding their military service. If an employee has served between one and 30 days, then the employee must report back to work for the next regularly scheduled work shift, allowing a reasonable amount of time for the employee to arrive at home and rest.If an employee serves between 31 and 180 days, then the employee must report back to work within 14 days following the completion of their military service. If an employee serves more than 180 days, then the employee must report back to work within 90 days after the end of their military service. If employees fail to meet these deadlines, then they may lose their re-employment rights.Once employees return to work, USERRA prohibits employers, even at-will employers, from discharging an individual who served for more than 181 days without just cause for a period of one year. If an individual served between 31 and 180 days, then they cannot be discharged without just cause for a period of six months after returning to work. This provision overrides Alaska’s at-will employment doctrine.Employers are not required to re-employ individuals who serve in the uniformed services if the employer’s circumstances have so changed as to make such re-employment impossible or unreasonable. For instance, if, while an individual is serving in the uniformed services, an employer decides to lay off some of its employees, and the individual would have been one of those laid off, then the employer can still do so. However, employers should exercise great caution before proceeding in such a fashion.Additionally, employers are not required to provide re-employment rights when it would cause an undue hardship to the employer, meaning it would cause significant difficulty or expense. In deciding whether providing reemployment rights would create an undue hardship, the courts will consider the nature and cost of the re-employment; the financial resources of the employer; the size of the business; and the type of business, among other factors.USERRA contains many other provisions and nuances. Any employer who has an employee who serves in one of the national guards or who is a reserve member should revisit any policy regarding military leave to ensure it complies with the requirements of USERRA.Furthermore, before taking any employment action with respect to an individual who is returning from military service, the employer should consult with legal counsel to ensure it is not violating any provision of USERRA.Kimberlee Colbo is a member of Hughes Thorsness Powell Huddleston & Bauman LLC in Anchorage. She can be reached via e-mail at ([email protected]).

PenAir crash cause still mystery

Federal investigators have not yet determined the cause of the Peninsula Airways Inc. crash Oct. 10, Alaska’s deadliest commercial aircraft accident in 14 years.The National Transportation Safety Board Dec. 20 issued an investigation update on PenAir Flight 350, which crashed just after takeoff from the Dillingham airport, killing the pilot and all nine passengers.A team of investigators from NTSB headquarters in Washington, D.C., said tapes of pilot Gordon Mills’ radio transmissions before takeoff and from several of his previous flights were being examined.According to the NTSB update, "preliminary examination has found no evidence of unusual sounds or actions by the pilot prior to takeoff on the accident flight.’’Preliminary toxicology tests performed on Mills "revealed no evidence of drugs or alcohol,’’ according to the NTSB.Investigators have not found any problems with the Cessna 208 Caravan’s engine or propeller hub."Preliminary information has revealed that the engine was running at the time of impact and the propeller was within its operating range,’’ according to the NTSB update.Investigators continue examining the engine monitor, which records any problems with the engine in flight. Also being examined are the airplane’s flight instruments and engine gauges, the NTSB said.The plane was bound for King Salmon when it crashed shortly after takeoff. Witnesses saw the plane take off and then suddenly nose dive about half a mile from the runway. The weather was clear and windless the morning of the accident.The NTSB said it will "release more factual information as it becomes available.’’ Meanwhile, PenAir officials are doubling up pilots on the airline’s fleet of four Cessna 208s, said president Orin Seybert."We are doing this voluntarily, for ourselves and for our customers,’’ Seybert said.Adding a pilot reduces the airplane’s payload by about 200 pounds, but adds experience in the cockpit, Seybert said."It costs us a little money but adds a much greater level of safety,’’ Seybert said.Of those killed in the crash, four were board members of the Bristol Bay Native Association. Two others were employees of the Native corporation.Bryan Carricaburu, chief pilot and director of flight operations, said Seybert, who lived many years in Dillingham, was related to several of the crash victims."It was a shock to everyone and a blow to the community,’’ Carricaburu said.

Connecticut bar decides depression question was one too many

Bar to stop asking about applicants’ depression: It’s bad enough that applicants to the Connecticut Bar have to answer all those exam questions. Up until recently, they were also forced to respond to the question of whether they had ever been diagnosed with or hospitalized for clinical depression.The Connecticut Bar Examining Committee has decided to remove the question from the applicant questionnaire. An American Bar Association resolution, passed prior to the question appearing on the Connecticut questionnaire, states that such questions "intrude too far, and in any event, yield information of questionable value."Lawyer’s anthrax hoax costs him his job: A prosecutor in Cook County, Ill., thought it would be funny to take an envelope, write the return address of a person being prosecuted by another lawyer in the office, sprinkle some sugar on it and then leave the envelope on the colleague’s desk. Evidently, others in the office just didn’t find the anthrax hoax very funny. The 27-year-old lawyer has resigned after admitting he had done it.New York lawyers share office space with firms after Sept. 11: New York lawyers displaced as a result of the Sept. 11 attacks on the World Trade Center were able find help from other Manhattan law firms. Latham & Watkins, for example, offered space to about 30 lawyers from Cleary Gottlieb. The Cleary litigation department was given space at the firm Paul, Weiss, Rifkind, Wharton & Garrison. Several other firms and clients also came through with available space. According to a partner at Cleary Gottlieb, none of the other firms asked for money and instead of leases, handshake agreements were made.Lawsuit of the month: A litigation that is sure to be fought like cats and dogs has resulted from a claim filed in San Diego. The plaintiff is a disabled man who uses a service dog to help him with his activities. The man went into a city library only to see his Labrador Kimba attacked by "the library’s pet cat." The claim states that the cat leaped from a counter and "without provocation, began clawing Kimba, at times with all four paws." Veterinarian bills amounted to $46.49. The claim is for $1.5 million.HistoricalThe first American law school was opened in Litchfield, Conn., in 1775. The case law method of instruction was introduced at Harvard Law School at the end of the 19th century.TrivialThe number of discrimination and harassment suits filed against employers in federal court grew by what percentage during the 1990s?(a) 50 percent(b) 100 percent(c) 200 percent(d) 300 percent(answer following Footnote below)Hearsay"My bailiff has a train to catch."-- A California judge, just before granting a prosecution motion in a murder trial, as quoted in a dissenting opinion.FootnoteMore than 500 lawyers showed up when the Bar of the City of New York asked for attorney volunteers to assist families of victims of the World Trade Center attack with the processing of death certificates.Trivia Answer: (d) According to Forbes magazine, federal cases grew by 300 percent in the 1990s.Have something to share with Out of Court? E-mail it to Chet Olsen at ([email protected]).

Northwest natural gas needs growing

KENNEWICK, Wash. -- The demand for natural gas has grown by more than 150 percent in less than 20 years in the Northwest.With nine new natural-gas-fired power plants either recently completed or under construction, analysts are starting to look at the long-term availability of affordable supply and the timely addition of pipeline capacity."Those are legitimate concerns," said Dick Watson of the four-state Northwest Power Planning Council, which will study natural gas in an 18-month review of the region’s electricity systems.Natural gas for home heat became popular in the 1980s, and consumption continued to increase in the 1990s with the start-up of new gas-fired power plants in places like Hermiston, Ore., Rathdrum, Idaho, and Vancouver, Wash.The majority of new power generation under construction in the region now is also gas-fired because the plants are relatively inexpensive to build, considered more environmentally friendly than nuclear or coal power and are more certainin returns on investments.The building boom has added pressure to identify new sources of natural gas to fuel the plants, along with meeting demands of residential and business customers.The number of wells being drilled annually in the rich gas fields of Alberta and British Columbia has more than doubled since 1995, but the deposits tend to be smaller than earlier developments."You have to run faster and faster to stay in place," said Arne Olson, who edited a recent study of the regional natural gas industry done by the Washington Office of Trade and Economic Development’s energy policy division.Most agree there’s plenty of gas available, both in Canada and the Rocky Mountains, but the cost will rise because more wells must be drilled to get the same amount of gas.Alternative sources are uncertain. Constructing pipelines to new sources in Alaska and northern Canada, where weather could increase wear and tear on drilling rigs, can be very expensive.Coal-bed methane could be another source for gas but it likely would be expensive and could present environmental problems. Deep-water drilling in the Gulf of Mexico also could face environmental limitations.Importing liquefied natural gas from Australia or the Middle East is problematic because one-quarter of it would evaporate in transit."There’s a bunch of concerns we don’t understand really well," said Mike Warwick, a Portland-based energy consultant for the U.S. Department of Energy’s Pacific Northwest National Laboratory in Richland."All of those things look like they’re pushing the price up."Natural gas customers can expect increasing competition for supply in the coming years."The low prices we experienced a couple years ago are not likely to reappear," said John Jones, director of the Northwest Gas Association, which represents regional gas utilities.Power plants are major consumers. A 1,300-megawatt project proposed for Wallula, now in the permit approval process, would by itself be able to burn 13 percent of the gas consumed in 1999 in the states of Washington, Oregon and Idaho combined.Last year’s opening of the Alliance Pipeline, which greatly improved the Midwest’s access to well fields in western Canada, also introduced competition for the source of two-thirds of the Northwest’s gas.Transmission systems operated by Northwest Pipeline, which draws on Canadian and Rocky Mountain supplies, and PG&E Gas Transmission Northwest, which carries gas from eastern British Columbia through Eastern Washington en route to California, are running at capacity.Incremental expansions are planned for each, but not enough to serve all of the plants receiving permits. Though costly, pipelines can be expanded with relative ease, either by adding compressor stations or laying new pipe parallel to existing ones.From beginning to end, expansion projects can take up to three years. Industry analysts seem confident pipelines will be sufficiently expanded to satisfy demands for more gas. Still, the state study warns that if new gas fields and pipelines aren’t developed in a timely manner, "the industry may experience price spikes leading to temporary economic dislocation, long-term upward pressure on gas prices, or both."

January-Issue-1 2002

Port sees expansion for shippers' new ships

To predict the economic growth rate for most of Alaska, a good place to start is the Port of Anchorage.Much of what is worn, driven, eaten or otherwise used by most Alaskans comes across the dock at the port, and major shippers say they expect about a 2 percent to 3 percent increase in activity for 2002.Many prefer to call the city-owned facility Alaska’s regional port since it serves more than 80 percent of Alaska, with an annual economic impact of $725 million.At an Anchorage Chamber of Commerce luncheon Dec. 17, port director and former Gov. Bill Sheffield said the port will double in size by 2020, if his plans for expansion and renovation of the port are done.Proposed plans call for a new deep-draft, multipurpose dock extension that would accommodate ships up to 1,000 feet long. Other work includes deepening the harbor from 35 feet at low tide to 45 feet; installing larger container cranes; renovating and widening the current dock; and developing some 40 acres of land to support the new dock.Once completed, the new "Intermodal Marine Facility" would handle cargo much more efficiently and enable large vessels to moor here, Sheffield said, adding that a larger dock could accommodate a homeported military ship and attract cruise ships.At an estimated $200 million, the ambitious expansion surprised Alaska’s senior senator in Washington, Sheffield said."Senator Stevens nearly fell out of his chair,’’ Sheffield said, when he broke the plans to Alaska’s longtime lawmaker. But Sheffield is confident money can be obtained for the expansion, through port profits, and state and federal grants. He said all work at the port could be done by the end of the decade.Last session the Legislature approved $6 million toward dock expansion and larger cranes that will allow for more and larger containers to be moved more efficiently and safely.Some 2,500 cargo containers arrive in Anchorage weekly at the peak of the shipping season, the majority of which are handled by CSX Lines and Totem Ocean Trailer Express.TOTE has two new cargo ships coming on line over the next 18 months, and CSX has plans for new ships on the drawing board, company officials said. Bill Deaver, vice president and general manager of TOTE’s Alaska division, said his company’s first ship should be in Anchorage in October, with the second ship arriving six months later. The company is spending $310 million for the new ships, designed for larger 53 foot roll-on, roll-off containers, instead of older 40 to 50-foot trailers. TOTE is adding a new trestle at the port to accommodate the larger containers.Deaver said shipping activity in 2001 was up about 3 percent, and he expects the increase to be similar in 2002.Eric Britten, business planning and development manager at CSX Lines, predicted about the same increase in shipping activity for his company next year."We see an increase of 1 to 3 percent every year, and that’s probably what we’d expect (next year),’’ Britten said. "Volumes are holding.’’Anchorage is not alone in ambitious port development plans. Across Knik Arm at Port MacKenzie plans to finish compaction and gravel work at the new dock there are slated for 2002.Marc Van Dongen, Port MacKenzie port director, said other improvements to the port district next year will include new electric and telephone lines.The new port, which opened last May, staged more than 4 million pounds of cargo, including 40 homes that were manufactured by Alaska Manufacturing Contractors, the first tenant at the new facility.Van Dongen said the construction of the homes generated about $8 million in revenues, which flowed back to the Matanuska-Susitna Borough in employee wages and to subcontractors and material suppliers.In effect, Van Dongen said, the $8 million port already has paid for itself.

In grim price market, state's miners have hope, plans for future

Alaska’s miners are grim-faced these days. Metals markets, with the exception of certain specialized minerals, are in dismal shape. No turnaround, at least in the near term, seems likely.Still, the problem is worldwide and Alaska is positioned better than any region in attracting what exploration funds there are, according to Steve Borell, director of the Alaska Miners Association.The state’s big advantages are that a huge area of land, about 150 million acres including state and Native-owned lands, is open to exploration. All of this acreage is underexplored and much of it is prospective for minerals, in terms of its geology, Borell said.Another plus for Alaska is that it has major mines that have not only been developed in a high-cost, remote locations in recent years, but continue to operate despite low prices and poor market conditions, he said.These include the Red Dog Mine in Northwest Alaska, now the world’s largest lead-zinc mine; the Fort Knox gold mine near Fairbanks and the Greens Creek silver and zinc mine near Juneau.The Usibelli coal mine at Healy, in Interior Alaska, continues to sell about half of its annual production in Pacific export markets, successfully competing against coal from Australia and other sources.And despite poor markets, companies are continuing development work. Permitting is continuing on the Pogo mine near Delta, a large, high-grade gold mine planned for development by Teck Cominco.In Southeast Alaska, Coeur Alaska Inc. has initiated a new round of permitting for its large Kensington gold project, based on a new development plan that could lower production costs.In Southwest Alaska, Nova Gold continues exploration on the large Donlin Creek gold mine, on land owned by Calista Corp., the Native regional corporation for the area. The company is working on a farm-out arrangement with Placer Dome, which has the lease with Calista.Nova Gold has commissioned a scoping engineering study for development of the mine, which could lead to more advanced pre-feasibility engineering work next year. The company will also release new reserve estimates to the mine next spring.But the market situation for many metals appears bleak. Zinc is at historically low price levels due to poor economic conditions in many industrialized nations, according to John Rense, chief operating officer of NANA Development Corp., the landowner at Red Dog Mine.Technology changes have also led to substitutes for zinc, reducing reliance on the metal in many industries, he said. This means that even when there is an economic recovery, zinc prices may not return to robust levels.The gold situation appears equally uncertain. Large amounts of gold are still held by governments and there is a long-term trend toward less reliance on gold to support currencies, and for governments to sell gold to raise cash.In recent months, as soon as there has been an uptick in gold prices governments have sold gold, which then pushed prices back down.

Recession worst since 1970s for air cargo industry

The world air cargo industry is in its worst slump in more than 30 years, mostly because of ailing Asian and domestic economies rather than from the impact of the terrorist attacks, according to Boeing Co. research.But the slide should be short-lived, as growth is projected to increase to historic levels by next fall. Despite the largest dip in three decades, the Seattle-based aircraft maker still expects air cargo traffic to triple over the next 20 years."This recession is the worst the air cargo industry has seen since 1970,’’ said Tom Hoang, Boeing’s regional cargo marketing director.World air cargo traffic levels are down 8 percent from January through September this year, compared to the same period in 2000, Hoang said."Even prior to the events of Sept. 11, the world air cargo industry had been in a state of recession,’’ Hoang said. "Sept. 11 fueled the current situation we’re in.’’The world air cargo industry has enjoyed an average annual growth of nearly 8 percent annually over the last three decades, Hoang said.The slump began a year ago, Hoang said, and is blamed on economic turmoil in Asia and the United States and the collapse of computer and telecommunications equipment sales, which represent about a quarter of all domestic air imports and exports.The war in Afghanistan actually leveled some of the losses from the electronic equipment shipping slowdown, Hoang said."The U.S.-led coalition military ramp-up in the Mideast has absorbed a great deal of freighter capacity, at least temporarily,’’ Hoang said. New federal rules diverting mail and cargo from the bellies of passenger planes to freighter aircraft also helped.Historically, Hoang said, growth in air cargo jumps significantly immediately after slow or negative-growth years.Hoang said the company’s projections for air cargo growth over the years have nearly hit the actual numbers.Ted Stevens Anchorage International Airport, one of the busiest cargo airports in the United States, uses projection data from Boeing and other aircraft makers to forecast future growth.Last month, airport director Morton Plumb said a forecasted 6 percent annual growth in cargo operations in Anchorage is probably overly optimistic, and he pegged the number at about 2 percent annual growth over the next few years. The new projections lessen the need for airstrips to be built outside of the facility’s current boundaries by 2020.Plumb said cargo activity from Federal Express and United Parcel Service was up in November compared with the same month a year ago. Passenger flights from Alaska Airlines, Northwest Airlines and Peninsula Airways also increased over the same period, he said."It’s been better than we expected,’’ Plumb said. "There are some positive indicators that provide for some cautious optimism.’’Dave Carlstrom, director of marketing at Fairbanks International Airport, said passenger traffic in October was up 3.6 percent over a year ago and cargo levels there have remained steady.Jack Walsh, an Alaska Airlines spokesman in Seattle, said the airline has kept all of its flights in Alaska since the events of Sept. 11. Ridership on the routes the airline serves Outside is down less than 5 percent, compared with a 20 percent average downturn for other carriers, he said."We’re very pleased with that,’’ Walsh said. "We’re still losing money, but we haven’t parked any of our airplanes in the desert and we haven’t laid off any people."

Challenges of 2001 aren't likely to disappear in new year

Alaska’s big commercial fishing industry is facing its challenges, but there are bright spots.Salmon fishermen and processors continue to be hammered by their competitors, farmed salmon in the case of the higher-value sockeye fishermen, and Russian wild-caught pink and chum salmon in the lower-value range.Bristol Bay sockeye fishermen saw a poor harvest in 2001 with low prices, and the outlook for 2002 is worse. In the Kuskokwim and Yukon River regions, another failure in the chum salmon run means continued hardship.Yet, amid all of this gloom some salmon fishermen did OK in 2001. There were large pink salmon runs in Southeast and Prince William Sound, and chum salmon runs and harvests met the estimates made by biologists, according to Chris McDowell, a fisheries economist who monitors Alaska fisheries.Around Kodiak, sockeye fishermen did better than other sockeye fishermen working further west in Bristol Bay and along the Alaska Peninsula.Overall, Alaska’s 2001 salmon harvest was large, although not a record. Markets for pink and chum salmon, which are mostly canned, remained fairly stable.Next year is more uncertain. The Bristol Bay harvest will drop even further, biologists predict, and no relief appears in sight for hard-pressed fishermen in the Yukon-Kuskokwim Delta.Farmed salmon will continue to flood markets, and production will increase from Russian and Japanese salmon hatcheries, which may undercut markets for pink and chum salmon, said Geron Bruce, deputy director of the state Division of Commercial Fisheries.Halibut continues to be a bright spot for the industry. Since a quota system for halibut and sablefish was implemented, the season for fishing has expanded and fishermen have developed new markets for fresh halibut, with strong prices.The outlook for the state’s big pollock and cod fishing industry in the Bering Sea is also good with an increase in the allowable catch in 2001 and similar harvest levels expected in 2002, according to Frank Kelty, resource specialist with the city of Unalaska.Gulf of Alaska communities with fleets fishing for pollock and cod will not fare so well next year, however. The allowable harvest has been cut substantially to allow fish stocks to rebuild.A positive note for the entire groundfish industry is that controversy related to Steller sea lions have cooled a bit. New research shows the causes of the sea lions’ decline to be more complex than believed earlier.

With new managers, ASI 'for real'

Business at the once floundering Alaska Seafood International is now going swimmingly, according to Russell Schreck, the company’s new chief executive officer and chairman of the board.The company in early December sent air shipments of Alaska-caught salmon, halibut and cod to markets in England and the Lower 48. On Dec. 18, ASI sent its first 30,000-pound container of processed fish south by ship to Seattle, then by truck to an Illinois distributor which supplies restaurant chains and institutions.In January, Schreck said, a major West Coast grocery chain and a membership-based warehouse retailer will carry the value-added seafood as appetizers, dinners and salmon steaks under private labels and with the Great Alaskan Seafood Co. brand name.Schreck declined to name the two new major buyers until the products reach the retailers’ shelves next month."ASI is for real,’’ said Schreck, who took over the South Anchorage company earlier this year. "There is new energy here and things are going extremely well ... we will be a very dominate player in the seafood marketplace.’’No one could have said as much just a few months ago.Shortly after construction was completed in early 2000, Bank Sinopac, a major Taiwanese investor, did not extend a promised line of credit for operating capital, nearly sinking the $125 million seafood manufacturing plant.The near-failure fueled critics, namely established Seattle fisheries companies, who argued Anchorage was too costly a place to process fish.Others believed otherwise.In a complex restructuring deal, Sunrise Capital Partners LP put $5 million in equity into the ailing company and arranged a line of credit to begin operations last spring, in time for the summer fishing season in Alaska.In return, Sunrise became the majority owner, followed by the Alaska Industrial Development and Export Authority, Bank Sinopac, and a group of individual investors, including founder Howard Benedict.Sunrise is associated with the New York investment firm Houlihan, Lokey, Howard & Zukin, which specializes in turning around troubled companies.Schreck and a management team with expertise in food manufacturing and fisheries were brought in, replacing former senior managers. A sales staff also was established in markets in the Lower 48, Schreck said."There were no salespeople before I got here,’’ Schreck said.The new sales staff is aggressive and has landed major accounts, including a big-box membership club, a major grocery chain and Sterling, Ill.-based DOT Inc., a distributor that sells to restaurants, colleges, schools, hospitals, military installations and corporations that provide meals to employees, Schreck said.The market is growing for Alaska seafood, and ASI can and will be a major supplier, Schreck said."We can produce hundreds of thousands of pounds of fish a year, no problem,’’ Schreck said."Having salespeople where the markets are is very comforting to us,’’ said Jim McMillan, AIDEA’s deputy director of credit.AIDEA has invested about $50 million in ASI and owns title to the company’s buildings and land, which are valuable assets should the seafood venture fold.But McMillan said the company’s once-grim outlook has changed."There have been some naysayers out there and some bumps in the road," McMillan said. "Since Sunrise has come in (ASI) seems to be moving forward.’’McMillan said the company was immediately put at a huge disadvantage by having investor problems early on."Any business would have had the same problem, the rug pulled out from under their financial feet while they were ramping up," McMillan said.AIDEA, a state agency that promotes economic development through long-term loans, wants to see the business succeed and create new jobs, McMillan said.And that’s what the seafood company is now doing.The company has 150 workers on the payroll in Anchorage, and will add a second shift and about 20 new employees after Christmas, Schreck said. "It’s a whole new ball game," said Schreck, pointing out the phrase that is plastered on signs throughout the South Anchorage facility and on employees’ uniform hats.

Charities find uniting makes giving richer

One of the most successful holiday charitable programs anywhere in the United States started right here in Anchorage, at least partly because of hard times in the oil patch in 1995.In those days the oil industry was struggling because of low crude prices and a sagging economy. Holiday giving was a long-established tradition in the industry, and many of the nonprofit organizations had come to expect that the oil companies and their contractors would be a major source of such support.My colleague Joan McCoy looked around and realized that, because of layoffs, five of the six people who had helped in the company’s charitable gift-giving program the previous year were gone. Not wanting to be a grinch, McCoy did some head scratching to see how the company might meet nonprofit expectations that year with diminished resources.At the same time the Salvation Army, Catholic Social Services and members of the United Way of Anchorage board of directors looked at the industry’s decreasing size and economic conditions. They too knew it might be difficult to meet the hopes of those they served and wondered what could be done differently to make up the difference.The Marine Corps Reserve also was simultaneously deciding that its Toys for Tots program needed a better way to distribute the presents that the folks in Marine uniforms were collecting.Dennis McMillian, executive director of United Way of Anchorage, calls those simultaneous happenings "a harmonic convergence" that resulted in a better system for doing things, a cooperative system that seems uniquely well suited to Anchorage.The various agencies asked McMillan to help them get something organized, and all parties started brainstorming. They knew from the start that part of their dilemma was that many organizations were running their own programs, each with its own set of overhead costs.Their solution was a cooperative effort called Giving From The Heart, or GIFT for short. GIFT pulled together 40 organizations to collect toys and presents, raise money and provide Christmas food to Alaskans encountering hard times. They decided on a one-stop distribution system where individuals and families could come to receive presents and enjoy a seasonal feast.Because thousands of people were expected, GIFT needed a large space in which to handle the distribution. McMillan called the Anchorage Telephone Utility, which offered its big warehouse on Telephone Avenue. ATU became one of the two major corporate sponsors, a commitment later adopted by Alaska Communications System when that company purchased ATU from the Municipality of Anchorage. Phillips Alaska’s predecessor company, ARCO Alaska Inc., became the second large corporate sponsor and that relationship has lasted through the years as well.GIFT served 9,000 people that first year, and this year will probably serve 11,000 to 12,000. In developing the program, the many agencies found that they could serve more people, more effectively, than they could when working alone. The program also draws support from thousands of volunteers.McMillian says the program is uniquely suited to Anchorage because the nonprofit organizations here are much more open to working together than their counterparts are in most areas of the country. At one point McMillian’s enthusiasm for the GIFT way of doing things prompted him to offer it as a model program at the United Way of America Community Leaders Conference in Cincinnati. The response he got was that other parts of the country probably could not match the cooperative spirit in Anchorage and that the GIFT approach would have tougher sledding out there.Though I find it difficult to believe that they couldn’t do it our way in other parts of the country, it does say something nice about Anchorage that we can.Nancy Schoephoester is manager of philanthropy and community services for Phillips Alaska Inc. She can be reached via e-mail at ([email protected]).


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