Palmer mine exploration permit on hold pending result of Hawaii water case

The tentacles of a legal battle over wastewater discharges in Maui have reached Alaska. Department of Environmental Conservation officials issued letters on Sept. 9 informing stakeholders that a wastewater discharge permit key to future exploration at the Constantine Metals Resources’ Palmer copper and zinc project near Haines mine would be remanded to Division of Water staff for review. Acting Division of Water Director Amber LeBlanc wrote to Southeast Alaska Conservation Council scientist Guy Archibald that the potential impact to Alaska wastewater discharge permits would be evaluated over approximately 90 days pending the outcome of a case now before the U.S. Supreme Court that originated in Hawaii. After that time, the division could uphold, revise or revoke Constantine’s Waste Management Permit for its Palmer exploration plan, according to LeBlanc. The Southeast Alaska Conservation Council, or SEACC, is one of several groups and individuals who requested an informal review of the project. Archibald said in an interview that DEC issued the wrong permit to Constantine altogether. He and Gershon Cohen, a project director for the group Alaska Clean Water Advocacy, argue the state agency should’ve examined the Palmer exploration plan under a more stringent Alaska Pollutant Discharge Elimination System Permit. They claim the Waste Management Permit for groundwater discharges is insufficient because the wastewater will quickly resurface in nearby Glacier Creek, which feeds the salmon-producing Klehini and Chilkat rivers. “The Waste Management Permit they issued basically allowed water degradation for Glacier Creek,” Archibald said, and does not analyze different options for managing wastewater at the site. Over the past year, Vancouver-based Constantine has been pursuing state approvals for its underground exploration plan. The company hopes to excavate a 2,000-meter tunnel that would serve as a space to conduct exploration drilling and collect geotechnical and hydrologic data, according to the plan submitted to the Alaska Mental Heath Trust Land Office. The Palmer project is located on Alaska Mental Health Trust property. Hawaiian connection The link between the State of Alaska wastewater permits and a Ninth Circuit Court of Appeals ruling in the case of Hawai’i Wildlife Fund v. County of Maui comes via the Clean Water Act. In many states, the Environmental Protection Agency administers the National Pollution Discharge Elimination System Program as required by the Clean Water Act. In Alaska, the state took primacy of the program starting in 2008, which allows the Department of Environmental Conservation to oversee the federal pollution discharge elimination system requirements, so long as the state standards are at least as stringent as the EPA’s. In the Maui case, the Hawai’i Wildlife Fund and attorneys for the national environmental law firm Earthjustice contend the County of Maui for decades has been polluting near shore ocean waters by injecting millions of gallons of treated sewage water into the groundwater. The contaminated water — pumped into four injection wells that are about 200 feet deep and roughly a half-mile from the ocean — then resurfaces through the shallow ocean floor near a local beach. The wastewater effluent has damaged coral and other marine life in the area, according to Earthjustice. The groups brought a lawsuit against the County of Maui and in 2014 a federal District Court of Hawaii judge found the wastewater injection well operation violates the Clean Water Act because the wastewater seeping up through the ocean floor can be traced back to the injection wells. The county’s appeal to the Ninth Circuit Court of Appeals was rejected as well. A three-judge panel of the federal appeals court ruled in February 2018 that the water injection wells are indeed “point sources” that discharged polluted water into a federally regulated navigable water. That makes the wells subject to National Pollution Discharge Elimination System Program regulation, the 2018 ruling states. “Agreeing with other circuits, the panel held that the Clean Water Act does not require that the point source itself convey the pollutants directly into the navigable water,” Ninth Circuit Court Judge D.W. Nelson wrote. “The panel held that the County was liable under the Act because it discharged pollutants from a point source, the pollutants were fairly traceable from the point source to a navigable water such that the discharge was the functional equivalent of a discharge into the navigable water, and the pollutant levels reaching navigable water were more than de minimis.” Had the courts ruled that wastewater is a non-point source pollutant, it would be outside the purview of the Clean Water and instead be subject to state regulations. Maui County further appealed the case to the U.S. Supreme Court and oral arguments are scheduled for Nov. 6. Palmer plan Constantine’s water management plan for Palmer states that groundwater expected to seep into the tunnel would be collected and run through a water management facilities and ponds at the floor of the Glacier Creek valley before being discharged back into the ground via diffusers about six feet below the surface. The two settling ponds are designed to handle 500 gallons per minute and hold up to 358,500 gallons each for 12 hours to allow solid materials to settle out of the water before it is sent back underground. The ponds would have surface spillways to release excess water if they are inundated due to melt water, rain runoff or unexpectedly high levels of seepage into the tunnel, according to the water management plan. Alaska Clean Water’s Cohen wrote in a July 25 request for an informal review by DEC that Constantine’s water management plan does not account for treating the water for residue from explosives used in the metal exploration work or hydrocarbons released from vehicles working in the tunnel or drilling compounds, “which will quickly make their way to fish-bearing segments of Glacier Creek and the Klehini River due to the connectivity of the groundwater to nearby surface waters.” Cohen said in an interview that the wastewater will quickly percolate through the loose glacial till soil that makes up the bottom of the valley and end up in the streams still carrying the contaminants. He wrote further in the review request that analysis of the area’s groundwater has been “wholly inadequate.” “We have no confidence that the operator [or the Department] has any credible knowledge of the eventual fate of the discharges, which will affect nearby salmon habitat and possibly the drinking water wells of nearby residents,” Cohen wrote. DEC staff wrote in a July 17 response to comments on the Waste Management Permit that the permit establishes surface water quality triggers at three sites and includes water quality monitoring at four sites “to assure and document the absence of a surface water discharge.” As it stands, Constantine’s Waste Management Permit is good through mid-July 2024. Constantine Vice President of External Affairs Liz Cornejo said in an interview that the permit delay has not impacted the company’s operations, as it was not planning to start work on the tunnel and other facilities until next year. Cornejo also wrote via email that the company agrees with DEC’s decision to not move forward with the permit, and subsequent construction, until the Maui case is resolved. “Construction of the underground ramp [tunnel] will not begin and no water discharge will occur until we have DEC support and approval,” she wrote. Alaska weighs in Alaska Attorney General Kevin Clarkson joined 19 other state attorneys general in supporting Maui County through an amicus brief filed with the Supreme Court. The states argue the Ninth Circuit’s decision drastically expands the Clean Water Act and would place a huge burden on states, such as Alaska, that have taken on pollution discharge elimination programs. “All told, the ‘fairly traceable’ standard threatens to drown state environmental protection agencies under a wave of newfound responsibility, requiring them to process and issue a swell of technologically challenging and complex NPDES permits to sources that have never before been subject to that process. Handling this flood of new permits will leech already scarce resources from other programs better equipped to address groundwater pollution,” the Supreme Court brief supporting Maui states. DEC spokeswoman Laura Achee said department officials aren’t sure about the implications of the Maui case because it’s still unresolved and therefore they aren’t commenting on issues relating to Constantine’s permit. Further complicating matters is a tentative settlement in the case approved by the Maui County Council on Sept. 20. Earthjustice spokeswoman Liz Trotter said the settlement would have county officials find another way to dispose of the wastewater, pay reclamation fees and most importantly, it would mean the Ninth Circuit’s ruling stands. However, Maui County Mayor Michael Victorino has yet to sign off on the agreement, which is required for it to be valid per the county’s procedures. Victorino’s spokesman Brian Perry said the mayor is weighing his options and has not yet decided whether or not to approve the settlement. “He’s doing his due diligence and giving the case the attention it warrants,” Perry said in a brief interview. He said the wastewater injected into the wells is “a step below drinking water” and the half of it not put into the ground is used by area farmers and property owners for irrigation. County officials view the issue as one over home-rule, not a debate over environmental laws with national implications. “Our concern is our own wastewater system, period,” Perry said. He added that the county would like to reuse all of the water as Earthjustice wants, but developing such a system could be prohibitively expensive. “The water has to go somewhere because people aren’t going to stop using the bathroom,” Perry said. Elwood Brehmer can be reached at [email protected]

Oil Search pushes up production date for Pikka

The company developing one of the largest oil prospects on the North Slope has applied with state regulators to change its plans and start producing oil a year early. Oil Search Alaska submitted a modification to its July 2019 Plan of Operations for its Nanushuk project in the Pikka Unit on Sept. 26 with the Division of Oil and Gas. The amended plan calls for some changes to the layout and size of the project’s three drill sites near the Colville River delta and moving the tie-in pad that will connect to ConocoPhillips’ Kuparuk River Unit that will link the project’s pipelines to the rest of Slope oil infrastructure at a site that won’t interfere with existing operations. But it also requests changes to the Nanushuk drill site B and associated pipelines that will allow the company to begin producing up to 30,000 barrels per day from the pad in 2022. Alaska leaders for Australia-based Oil Search had previously pegged late 2023 for startup of its Nanushuk oil project, which will require nearly $5 billion of investment and could produce upwards of 120,000 barrels of oil per day at its peak. According to the plan modification document, Oil Search hopes to initially transport liquids produced from drill site B to the Kuparuk Central Processing Facility-2 via pipelines that will pass through the Nanushuk Processing Facility site while it is being constructed. When its own Nanushuk Processing Facility is operational in 2023 or 2024, Oil Search will shift from sending unprocessed liquids to the Kuparuk facilities to sending sales-quality oil through them for shipment down the Trans-Alaska Pipeline System. The project changes will increase its overall gravel footprint by approximately 0.2 acres and add roughly 5,000 cubic yards of fill in total, according to the documents submitted to DOG. An Oil Search Alaska spokeswoman did not respond to questions about the changes in time for this story. This winter the company plans to conduct additional appraisal drilling and begin laying gravel for roads and work pads, Oil Search leaders have said. Oil Search received a favorable environmental impact statement record of decision for the project from the U.S. Army Corps of Engineers last May. The company reached a deal with Armstrong Energy in October 2017 to buy into Pikka and take over as the project operator for $400 million. This year the company exercised an additional $450 million option to completely buy out Armstrong and GMT Exploration Co., a silent working interest owner in Pikka, to take a 51 percent stake in the Unit. Spanish major Repsol holds a 49 percent interest in the Pikka Unit and the Nanushuk project. Most of the oil would come from its namesake shallow, conventional Nanushuk formation. It has been the source for smaller nearby discoveries by ConocoPhillips as well as Conoco’s Willow project in the National Petroleum Reserve-Alaska, which is similar in scale to Pikka but a couple years behind in the development process. The company announced Oct. 1 that current Oil Search Alaska President Keiran Wulff will take over for retiring Managing Director Peter Botten in February. The company’s current chief operating officer for its Alaska unit, Bruce Dingeman, will replace Wulff as its Alaska President. Elwood Brehmer can be reached at [email protected]

Movers and Shakers for Oct. 6

Jenna Krohn and Brett Watts have recently joined the firm of Hughes White Colbo Wilcox &Tervooren LLC as associate attorneys. Jenna Krohn graduated from the Mitchell Hamline School of Law in St. Paul, Minn., where she twice made Dean’s list and interned at the Municipality of Anchorage. She also worked full-time in human resources while attending law school. After graduating in 2008 from Case Western Reserve University School of Law in Cleveland, Ohio, Brett Watts practiced criminal law both the prosecution and defense side, immigration law, family law, and general litigation. Watts left immigration law to spend more time in the courtroom, and now his practice focuses primarily on family law and litigation. Hughes White Colbo Wilcox &Tervooren LLC was founded in 1939, as Davis &Renfrew in Anchorage. The firm focuses on litigation, product liability, insurance law, environmental law, condemnation and eminent domain, employment law and family law. Alaska Air National Guard Brig. Gen. Scott Howard was promoted at a ceremony Sept. 18 in the National Guard armory on Joint Base Elmendorf-Richardson, after holding the rank of colonel for three years. Howard is commander of the Alaska Air National Guard and assistant adjutant general-Air for the Department of Military and Veterans Affairs. After joining the Air Force, Howard spent seven years enlisted as an air surveillance technician. His first tour was at Tinker Air Force Base, Okla., followed by a tour at Geilenkirchen NATO Air Base, Germany. At this point, Howard had earned his bachelor’s degree in professional aeronautics from Embry Riddle Aeronautical University and was working on his master’s of aeronautical science. He was prompted by officers within his unit to commission, and went directly to Officer Training School after his tour in Germany. After commissioning as a second lieutenant, Howard was assigned to Tyndall Air Force Base, Fla., before he was sent to the 611th Air Control Squadron in Alaska. He was in the 611th for approximately two years when he decided to transfer to the Alaska Air National Guard’s 176th Wing. Chris Hamey joins Residential Mortgage as chief financial officer with 15 years of experience in accounting and audit through his career in Alaska. Hamey was born and raised in Juneau before moving to Anchorage to attend the University of Alaska Anchorage. Most recently he was the Accounting manager at Chugach Alaska Corp. He has also worked for Klondike Advertising, Inlet Petroleum Co. and KPMG. Hamey holds bachelor’s degrees in English and accounting, both from UAA. Ahtna Inc. announced Lori A. Kropidlowski, CF APMP, recently achieved Foundation Certification through the Association of Professional Management Professionals. Kropidlowski is the Business Development and Marketing manager with Ahtna Environmental and has more than 25 years of architecture/engineering/construction specific sales and marketing experience. She also holds her certification as a Certified Professional Services Marketer through the Society of Marketing Professional Services. Kropidlowski serves on the boards of directors for both the Society of Military Engineers and the National Association of Women in Construction. Jason Sellars joins Ahtna Environmental Inc. as a site supervisor. Sellars has been an Alaskan resident for 25 years, the last 23 years in construction throughout Alaska. His main accomplishments have been directly involved in approximately 75 percent of the building and installation of all the wind turbines in the state. Sellars was the site foreman in over 40 self-standing terrestrial communication towers, linking western Alaska to the rest of the world with telemedicine and high speed internet. Ahtna Engineering Services LLC hired Marlena “Marty” Brewer as senior chemist. She has more than 20 years of professional experience in biomolecular research, environmental laboratory analysis, environmental consulting, and working in an environmental regulatory capacity. Marty holds a master’s degree from the University of Arkansas for Medical Sciences and a bachelor’s degree from the University of Central Arkansas. First National Bank Alaska announced several recent hires, appointments and promotions. Senior Vice President Karl Heinz was promoted to senior regional manager and will now oversee bank operations in Fairbanks. Heinz joined the bank in 2003 and previously led First National branches in Eagle River, Glennallen, Haines, Kenai, Kodiak and Valdez. With 15 years of financial experience, Tim Redder joined First National as regional branch manager lending and was appointed vice president. Redder is based out of the Kenai Branch and will oversee operations on the Kenai Peninsula and in Kodiak. Vice President and Loan Officer Mike Frost was promoted to branch manager lending of the Soldotna Branch. Stephanie Daniels was promoted to Cash Management support manager and appointed assistant vice president. Daniels has 17 years of banking experience. Business Development Representative Debra Davies was appointed Business Development officer and will continue expanding and developing new customer relationships in the bank’s Escrow Unit.

OPINION: Stop the shenanigans and seat Revak

We are truly through the looking glass in Alaska politics when it is more important to pledge allegiance to Senate President Cathy Giessel than to the laws as written. Gov. Michael J. Dunleavy nominated Rep. Josh Revak on Sept. 27 to fill the Senate seat vacated by the untimely passing of Sen. Chris Birch of District M after six Republican senators led by Giessel voted to reject Rep. Laddie Shaw on Sept. 20. Revak is the other elected Republican from the district and he quickly earned the strong and public endorsements of two-thirds of Alaska’s congressional delegation from his former bosses Rep. Don Young and Sen. Dan Sullivan. The fact that Young and Sullivan chose to weigh in at all on an internal state party matter should not go unnoticed by the Republican senators who shot down Shaw and in particular Giessel, who offered a backhanded slap at the representative who succeeded Birch in a Facebook newsletter video that told viewers in a pathetic defense of their actions their betters in Juneau knew things they don’t about Shaw. “Many times we know these individuals in a way that perhaps you don’t, and that is part of a decision-making process,” Giessel said in perhaps the best unintentional argument against the insularity of Juneau ever uttered. “This Senate Majority caucus is focused on being reasonable, responsible and rational,” Giessel went on, with the obvious implication being that Rep. Shaw was none of those things. Young’s and Sullivan’s statements in support of Revak, a decorated Army veteran who worked for both on veterans’ issues, could not have been more clear: Don’t you dare smear him the way you did to Shaw. Shaw’s great mistakes from the Geissel Six’s perspective were his answers to questions about whether he would follow the law on setting the Permanent Fund dividend and the location of a special session called by the governor. Whether or not Giessel and her gang of 5 choose to acknowledge it, they don’t have a monopoly over the party and the PFD formula and the special session statutes remain on the books. Giessel tried to muddy the waters by claiming that the Legislature was following the law when it set the PFD at $1,300 less than the statutory calculation by pointing to the passage of Senate Bill 26 in 2018 that allows a draw of 5.25 percent of the Permanent Fund’s value to pay for both government services and the dividend. “The law was changed,” she asserted, but then gave up the ghost. “We have competing statutes.” That’s it in a nutshell. SB 26 didn’t amend the PFD formula and she knows it. The Supreme Court has given the Legislature carte blance to ignore the laws they pass and she and her cohort of both Republicans and Democrats are taking full advantage of it. They don’t want to try to pass a law that changes the formula because they either don’t have the votes or they fear a public backlash. They didn’t want to seat Shaw because he believes until the law is changed it should be followed. Giessel’s curt statement acknowledging Revak’s appointment was a sign she’s not planning to give him any more due consideration than she gave Shaw, and that’s a shame. That men of character like Shaw and Revak don’t pass muster with Geissel and her minority of senators says more about her standards than it does about theirs. Andrew Jensen can be reached at [email protected]

GUEST COMMENTARY: Hilcorp’s Prudhoe purchase will ultimately benefit Alaska

The recent announcement that BP is selling its Prudhoe Bay assets to Hilcorp Alaska may have surprised Anchorage and Alaska, but the Anchorage Economic Development Corp. believes in the industry’s strength, Hilcorp’s efficient business model and that positive outcomes will ultimately result from this change. This is far from the death knell for Alaska’s oil and gas industry. It’s a transition to a different business model than what we’re used to. Hilcorp didn’t buy this asset to take it down to zero. Hilcorp’s investment is indicative of confidence in its ability to produce additional revenue. When Hilcorp first came into the oil and gas scene in Cook Inlet, we saw a production and investment renaissance. Hilcorp has ramped up exploration and production plans in Cook Inlet over the last several years, relying heavily on new and existing professional services firms, resulting in a nice bump in the economy on the Kenai Peninsula. We may be able to expect some of the same in the North Slope. Before the country’s recession kicked in, the U.S. was at an all-time record high oil production of about 9.6 million barrels a day. The United States had more than 525,000 people employed nationwide in the oil and gas extraction industry for 2015. At the bottom of that recession, that number dropped dramatically, and the workforce dropped to just more than 350,000. The national oil industry recession has ended, and oil production is projected to rise to a new record of 12.2 million barrels per day in 2019; however, the oil and gas workforce has only risen to about 436,000. With new technology, production is a more efficient process. The Hilcorp business model has embraced this new way of doing things. With this changing business model, and with Hilcorp leading the way, other mid-size exploration and development companies may be attracted to Alaska. From Hilcorp to ConocoPhillips, Oil Search and more, we are seeing a lot of activity going on in the North Slope and I believe we will see a solid turnaround there in the next three to five years. Here in Anchorage, I see opportunity. Looking at AEDC research and reports and a talented, skilled labor pool at the BP headquarters, I see a match between needed skills and available workforce. The city has seen a net loss of about 20,000 people in the last five years, between people moving out of Anchorage to the Lower 48 and the number of new people coming in from the Lower 48. This net loss of families and workforce to the Lower 48 leads to a lack of qualified candidates to fill open jobs. I also hear from employers that many other industries are seeing a skillset shortage. Where does that leave us? A fresh opportunity for skilled workforce and employers, both in the oil industry and in other sectors of the economy including project management, logistics, accounting, and HR to name a few, who may be able to tap into a significant talent pool to fill their openings. While I am sorry to lose BP, they, too, are transitioning to the industry’s new realities. A legacy field with declining performance is not the right fit for a major like BP anymore. There is much to be applauded in what the company has done for Alaska, the revenues it has generated, the employment it has provided for Alaskan families, the investments it has made in our community, and the way that BP employees, volunteerism, and philanthropy have become part of the fabric of our state. We’re going to lose some of those people, and it saddens me that friends I’ve known for many years will be moving to other parts of the world. I want to close with my deep gratitude to BP for its contributions to Anchorage, Alaska, and to AEDC over its long history in the state. BP has been a tremendous partner with Alaska over the last 60 years. But I believe in Anchorage, I believe in the change that Hilcorp brings to the table, in this industry as a whole and I look forward to the transition ahead. We’re going to see an evolution in this industry over the coming years — and a resultant change in employment — that I’ll be watching closely. Bill Popp is president and CEO of Anchorage Economic Development Corp.

GUEST COMMENTARY: Opportunities, challenges for Alaska as Northern Sea Route opens

I took this picture on Aug. 26 at the port of Petropavlavsk-Kamchatski. This is the Russian icebreaking containership Sevmorput loading containers of Russian Far East fish products for export to Europe. The fact that the containers are from Maersk Shipping Lines, the largest shipper in the world, is testament that the Northern Sea Route is developing into a true world shipping route. This presents both opportunities and challenges for Alaska and we need to manage both of these unless we want to be left behind. On the opportunity side is the potential for direct shipments to Europe for Alaskan products, from fish to timber to minerals. This could be especially beneficial to Alaska’s fishing industry that sells many of its products into the European market. It also represents a major opportunity for a container trans-shipment hub and fueling port such as The Aleut Corp. has proposed at Adak. On the challenge side is the risk of potential vessel casualties and pollution of Arctic waters. This clearly calls for strong prevention and response measures in a bilateral approach with Russia, which shares our common heritage of Arctic oceans. Ocean circulation patterns in the Arctic indicate that an incident anywhere could be carried across the entire Arctic. Fortunately, a public/private partnership, the Marine Exchange of Alaska, in conjunction with the U.S. Coast Guard and the State of Alaska has developed the most comprehensive prevention program in the world. This consists of 135 receiving stations throughout the coast of Alaska that receive the location data of vessels transmitted by the vessel’s AIS (automated identification system) transmitter. Vessel AIS transponder systems are required by international law. This data is monitored 24/7 by specialists of the Exchange, ensuring fidelity to offshore routing measures, identifying vessels in distress and nearby vessels who could respond, transmitting real time weather data and other safety information to the vessels via AIS. However, not all vessels are required to follow these safety measures, which points to the need for cooperation with Russia in protecting our Arctic waters, either through bilateral regulations or through proposals to the International Maritime Organization. There is currently an effort by Russian Far East regional governments and Alaskans to form the Bering Pacific Arctic Council, similar to the Barents Council, which can promote and oversee Arctic shipping prevention measures. Safe shipping measures are also supported by the Arctic shipping members of the Arctic Economic Council, so this should be a realizable goal. These measures will be necessary to answer critic’s consistent opposition to any development in the Arctic, no matter how misguided. A recent example of this was French President Macron’s announcement during the recent G-7 meeting in Biarritz, France, calling for no shipping the Arctic. He claimed this was because the faster, ice free route was the “consequence of our past irresponsibility.” Ironically, the vessels using the Suez or Panama canal routes instead of the Northern Sea Route will burn much more fuel and produce subsequent increased CO2 emissions. The French shipper CMA CGM then dutifully said it wouldn’t use the route, at the same time announcing conversion of many of its vessels to LNG fuel. Because LNG wouldn’t cause any pollution in the case of a vessel casualty and is an ideal fuel for Arctic shipping, it proves once again that once you get on the politically correct posturing train, the next station you inevitably arrive at is Stupid. And let’s not forget that Arctic LNG shipping as the Russians have developed may be the method we use to commercialize our North Slope gas reserves if a pipeline cannot be financed. Alaska and our Arctic neighbors can’t afford to let others who don’t live here and don’t understand us, or our environment, set the agenda for our future. We have to do that for ourselves. We have the tools. We just need to use them. Paul Fuhs is President Emeritus of the Marine Exchange of Alaska, and a consultant on Arctic port development. He was recently named as the US Coordinator of the Bering Pacific Arctic Council Working Group. He can be reached at [email protected]

GUEST COMMENTARY: Board of Regents must lead on restructuring the UA system

On Sept. 20, the Senate State Affairs Committee heard from the University of Alaska Anchorage Faculty Senate. I was there and listened, however the Board of Regents is still best suited to decide about structuring the University of Alaska at this time. First a context, then a comment. In a break from normal procedure, the State Affairs Committee was used to hear additional faculty voices. Those voices were appreciated, and I will consider them in this priority: First, constitutionally, then statutorily, and then budgetary. The Board of Regents has the primary duty to own and manage our university. The legislators have a duty to fund and describe by law the outline of the university. The Governor has the power of veto and proposal. The state is small in population and large in geography as well as diverse in its culture and economy. Each campus has taken on different missions that complement our communities and should complement a unified but diverse UA system. The Sept. 20 hearing was informative, and there were many credible speakers (including Dr. Forrest Nabors, together with faculty). There is a general consensus on a few areas, namely that the Alaska Constitution, Article VII, Sections 2 (“The University of Alaska is hereby established as the state university…”) and 3 (“The University of Alaska shall be governed by a board of regents…”) represent the controlling authority. Presently, under that controlling authority, information is being collected and circulated by relevant decision makers. The Board of Regents met in Anchorage on Sept. 12-13. Public testimony was collected, both from Anchorage and around the state. Additional opportunities for public testimony are at From Nov. 7-8 there will be a scheduled Board of Regents meeting in Fairbanks too. As we go through this period of history, it’s important to remember: This is about all Alaska; not just one community, or one community versus another. The University of Alaska, to be fair, just like all of us, should be looking for ways as to “how we can do it better.” But, that’s a disciplined process. A process found in our state constitution. In my view, at this time, structural changes to our university system primarily rest with the decisions by the University of Alaska Board of Regents (which know the complexities of our university system). The legislature has had a role, prior to Sept. 20, and that occurred when the legislature inserted intent language in this year’s budget. The intent language tasked the Board of Regents with looking at all issues related to consolidation and the different campuses. The due date for that board report is Dec. 1. Before the Legislature does anything, if anything at all, about structuring, it may be wise to see what that report says. Allow the Board of Regents to do their work, pursuant to their authority, for the benefit of the entire University of Alaska system. John Coghill is from Fairbanks and represents Senate District B.

House passes landmark cannabis banking legislation

A bill moving through Congress could open up a legal path for financial institutions to offer banking services to cannabis businesses. The Safe and Fair Enforcement Banking Act, HR 1595, passed the House of Representatives on Sept. 25 by an overwhelming and bipartisan vote of 321-103. The bill would prevent federal regulators from punishing financial institutions that choose to do business with cannabis establishments in states that have legalized its use. Specifically, a federal financial regulator wouldn’t be able to terminate or limit the depository or share insurance of a depository institution; prohibit, penalize or discourage financial institutions from providing services to cannabis businesses and would provide protections for ancillary businesses in transactions with cannabis-related businesses, among other protections. Federal financial regulators also wouldn’t be able to take any adverse or corrective action on a supervisory loan simply because it involves a cannabis business, an employee of one or the owner of a business working with one, according to the bill. Rep. Don Young, one of the bill’s sponsors in the House, said in a press release that his constituents highlighted the banking issue in meetings. Young, co-chair of the Congressional Cannabis Caucus, has consistently held that cannabis legalization should be up to the states, not the federal government. “When cannabis businesses are not permitted to utilize traditional financial institutions, they are forced to operate cash-only businesses, leaving significant amounts of cash out in the open and making these businesses high-profile targets for robbery and other crime,” Young said in a release. “The SAFE Banking Act is as much a public safety bill as it is a cannabis bill, and I am proud to have been an original co-sponsor of this important initiative.” Lack of access to banking is one of the biggest hurdles for the cannabis industry. Since Alaska’s industry came online in 2016, retailers have been forced to operate on a cash basis, and cultivators have had to pay their taxes in cash. In 2018, retailers conducted more than $130.4 million in total transactions, and cultivators paid more than $15.6 million in taxes, according to the Alcohol and Marijuana Control Office. Having to operate on a cash basis makes businesses more vulnerable to theft, and employees are limited in their ability to deposit paychecks earned from working with cannabis. Other financial services, like loans, are also off-limits, which hamstrings businesses from being able to operate like other retailers or farmers. Earlier this year, a handful of Alaska cannabis businesses got the chance to try a pilot program for banking through Credit Union 1, but it was short-lived. In August, the credit union announced its intentions to cancel the pilot program because a critical insurance program wouldn’t be renewed if the pilot program continued. “The Alaska Marijuana Industry Association and its members are thrilled to see the SAFE Banking Act pass the House with strong bipartisan support, and hope it will move swiftly through the Senate without hurdle,” said Lacy Wilcox, President of the Alaska Marijuana Industry Association, in a press release. A similar bill was introduced in the Senate in April with 33 co-sponsors, including Alaska Sens. Lisa Murkowski and Dan Sullivan. The Alaska delegation has generally agreed to support legislation delegating more cannabis regulation authority to states. The Senate version of the bill has not moved through hearings. Though HR 1595’s language talks about cannabis, it would also affect the hemp industry. Because of its association with cannabis — hemp is a non-THC-bearing part of the cannabis plant — hemp farmers are also not allowed to access banking services under current federal law. Industrial hemp farming itself was legalized nationally in 2018. Because of its murky legal status, hemp industry stakeholders have also reported difficulties accessing banking services. Senate Majority Leader Mitch McConnell, R-Kentucky, introduced the Hemp Farming Act of 2018, in part because of the interest in farming hemp in his home state. McConnell’s office did not return requests for comment on the SAFE Banking Act, but in previous public statements and newsletters has indicated support for banking availability for hemp-related businesses. Because cannabis is legal either recreationally or medicinally to some extent in 33 states, the District of Columbia and Puerto Rico, the American Bankers Association is encouraging the federal government to do something. The gap between federal and state law has caused confusion for financial institutions and creates risk for those who choose to provide services to cannabis businesses. “Current proposals in both the Senate and the House that seek to provide greater clarity and bridge the gap between state and federal law provide a solid starting point for discussion,” the ABA wrote in a statement. “We look forward to working with policymakers of both parties to find solutions that provide the legal and regulatory certainty banks need to best serve their communities.” The Senate is currently in recess and will return Oct. 8. ^ Elizabeth Earl can be reached at [email protected]

US economy grew at modest 2 percent rate in second quarter

WASHINGTON (AP) — The U.S. economy grew at a modest 2 percent annual rate in the second quarter, a pace sharply lower than the 3 percent-plus growth rates seen over the past year. Many analysts believe growth will slow further in coming quarters as global weakness and rising trade tensions exert a toll. The April-June increase in the gross domestic product, the economy’s total output of goods and services, slipped from a brisk 3.1 percent gain in the first quarter, the Commerce Department reported Sept. 26. The government’s third and final look at second-quarter GDP growth was the same as the previous estimate, although the components were slightly altered. Consumer spending and business investment rose at slower rates than previously estimated, but this was offset by slightly stronger gains in government spending and exports. In the current quarter, analysts believe GDP is likely growing at the same modest 2 percent rate, and they are forecasting a similar outcome in the final quarter. For the year, GDP is expected to rise around 2.2 percent, down from the strong 2.9 percent gain seen last year, which had been the best performance since 2015. President Donald Trump, who is counting on a strong economy to boost his re-election bid, has called the economy’s performance the best ever. But after a spurt in growth last year due to the president’s $1.5 trillion tax cut program, growth has slowed noticeably to slightly below the 2.2 percent annual growth rates turned in during the current economic expansion. While the economic recovery from the Great Recession is now in its 11th year, the longest in U.S. history, it has been the slowest in terms of annual growth rates, a fact economists attribute to slower growth in the labor market, due to the retirement of baby boomers, and a slowdown in productivity. Trump, however, repeatedly attacked Obama administration economic policies for the lackluster GDP rates and pledged to achieve annual growth above 3 percent with his economic program of big tax cuts, deregulation and tougher enforcement of trade laws. The economy has achieved four quarters of 3 percent-plus GDP rates since Trump took office in early 2017, but economists doubt that this pace can be achieved on a sustained basis given the labor force and productivity issues facing the country. This year’s expected slowdown has been attributed to a fading of the impact of the Trump tax cuts as well as adverse effects of Trump’s trade war with China. Mark Zandi, chief economist at Moody’s Analytics, said that if Trump carries through with an escalation of the tariffs nest month and in December, it could be enough to push the country into a recession next year. “It all hinges on the president and what he decides to do with trade,” Zandi said. “If he follows through on this tariff threats later this year, then in all likelihood growth will slow and we would end up in a recession next year.” Zandi is forecasting that GDP growth this year will slow to 2.3 percent and then slow further to 1.6 percent next year, but that is based on no escalation in the trade war with China. The GDP report showed that consumer spending, which accounts for 70 percent of economic activity, came in at a sizzling rate of 4.6 percent, the best quarterly performance since late 2014, but down slightly from last month’s estimate of a 4.7 percent rate of gain for consumer spending. Spending by the federal government and state and local governments increased at a 4.8 percent rate in the spring, up from last month’s estimate of a 4.5 percent gain. In a separate report, the Labor Department said Sept. 26 that the number of Americans filing initial claims for unemployment benefits, a proxy for layoffs, rose by 3,000 last week to 213,000. That is still a low level indicating a strong labor market.

UPS gets government approval to become a drone airline

DALLAS (AP) — UPS has won government approval to operate a nationwide fleet of drones, which will let the company expand deliveries on hospital campuses and move it one step closer to making deliveries to consumers. Many regulatory obstacles remain, however, before UPS — or other operators who are testing drones — can fill the sky over cities and suburbs with drones carrying goods to people’s doorsteps. United Parcel Service Inc. said Oct. 1 that its drone subsidiary was awarded an airline certificate last week by the Federal Aviation Administration. Even before getting that designation, UPS Flight Forward, as the subsidiary is called, has operated more than 1,000 flights at WakeMed’s hospital campus in Raleigh, North Carolina. The designation removes limits on the size of the company’s potential drone operation. Flight Forward can fly an unlimited number of drones, a key step toward expanding the operation. It can also fly drones at night — the company plans to do that after installing the necessary colored warning lights on each machine. However, UPS still faces severe restrictions before it can run a large commercial operation with drones. For example, drones won’t be allowed to fly beyond the sight of the operator without an FAA exemption for each route. Also, each flight will need a separate operator. Scott Price, the company’s chief strategy officer, said UPS will eventually apply for FAA permission to have a single operator fly multiple drones at the same time. The airline certificate lets UPS fly drones carrying more than 55 pounds, “but we’re not comfortable we have the hardware for that yet,” Price said in an interview. Operations will be limited to campus-like settings because FAA has not yet written regulations to allow commercial drone flights over populated areas. Price said UPS is eyeing “hundreds” of campuses in the U.S., including hospitals, colleges and office complexes. Price said the Wake Forest experiment has been successful, with only “a few” drone flights canceled for mechanical problems or because of bad weather. He said none have crashed. With a special FAA exemption, the company operated a drone flight there on Friday beyond the sight of the operator, which Price said was a first for a revenue-generating delivery. UPS believes the earliest commercially viable uses of drones will be for same-day deliveries, for augmenting truck-borne deliveries in rural areas, and for larger drones that could carry cargo of up to a ton from one rural area to another. Price said the latter idea is still years away. Transportation Secretary Elaine Chao called the decision a step forward in integrating drones into the U.S. airspace and maintaining U.S. leadership in unmanned aviation. UPS is racing against technology companies and startups to develop commercial-scale deliveries by drone to consumers. CEO Jeff Bezos promised in 2014 that drones would be making deliveries to people’s homes by 2019, but regulatory and technological hurdles proved too much for that prediction. Earlier this year, the FAA gave permission for a unit of Google parent Alphabet Inc. to make drone deliveries, but only in a tiny piece of southwestern Virginia. Other delivery companies such as Germany’s DHL Express are testing drones. UPS rival FedEx plans to take part in tests by the Alphabet unit, called Wing Aviation. In the U.S., drone operators have been frustrated by the lack of FAA regulations to allow drones to fly over urban and suburban areas, and to set rules for remote identification of drones. The latter rule would help law enforcement agencies, which were given authority under a law passed last year to track, intercept and destroy drones that they deem a security threat.

Mat-Su Borough wants another review of Port MacKenzie site

Just six days before the close of public comment on the draft environmental impact statement for the Alaska LNG project, the Matanuska-Susitna Borough has accused federal regulators of failing to prepare an “adequate analysis” of the municipality’s Port MacKenzie as a potential site for the multibillion-dollar gas liquefaction plant and marine terminal. The borough filed a motion with the Federal Energy Regulatory Commission on Sept. 27, calling on FERC to prepare a supplemental draft EIS “in order to cure the foundational defects in the current draft.” The public comment period on the 3,800-page draft closed Oct. 3. The borough wrote in its Sept. 27 filing that it intended to submit additional comments before the deadline “to address technical deficiencies in the report,” but filed its separate motion for a supplemental draft EIS “in an effort to draw attention” to what it believes are “significant flaws” in the environmental review. The alleged shortcomings in judging Port MacKenzie as an alternative to the project’s preferred LNG terminal site in Nikiski, on the Kenai Peninsula about 65 air miles to the southwest, “should be immediately addressed and corrected so that the draft EIS is able to withstand scrutiny upon review by the commission or a federal court,” the borough wrote. As an intervenor in the Alaska LNG docket at FERC, the Matanuska-Susitna Borough has the legal right to challenge the final EIS and commission decision in federal court, as do other intervenors: The Kenai Peninsula Borough, which is defending Nikiski as the preferred site, and the city of Valdez, which is promoting its community for the project. Though Valdez has not submitted detailed objections to the draft EIS, it has asked FERC to extend the comment period. The city issued a statement back in July: “It is apparent that the draft EIS fails to rigorously explore and objectively evaluate” Valdez as an alternative site to Nikiski. The draft “ignores the substantial advantages associated with the Valdez alternative,” and “unlawfully” includes speculative impacts, the city wrote. All three Alaska municipalities have hired lawyers to represent their interests before FERC. They are arguing over a state-led venture that has no firm customers for the gas in a highly competitive global market, no partners, no investors or financing for the proposed $43 billion project to move North Slope gas through a pipeline the length of the state to a liquefaction plant and marine terminal for export. The state agency in charge of the venture, the Alaska Gasline Development Corp., cut more than half its staff this summer as it halted its commercial and finance efforts to instead focus on completing the EIS. Trustees for Alaska, an Anchorage-based environmental law group reviewing the EIS for several clients, also has asked FERC to extend the comment deadline by at least 30 days, the same as Valdez, depending on when the state project team submits additional information requested by federal regulators. The Matanuska-Susitna Borough has long promoted the essentially dormant Port MacKenzie property, about four miles across Knik Arm from downtown Anchorage, as a potential site for the proposed Alaska LNG terminal. Other unsuccessful efforts over the years have included a much smaller LNG project proposed by private interests that folded in 2017. The municipality filed its motion with FERC about 12 weeks after Mat-Su Borough Manager John Moosey told the Alaska Journal of Commerce that while his staff was still reading through the draft EIS, he thought it showed the Port MacKenzie site “in a fair and more accurate light, and that’s really what we wanted.” The borough has complained for the past several years that the port was not fairly judged as a potential project site. Nikiski was selected as the preferred site in 2013, when the project was led by North Slope oil and gas producers ExxonMobil, BP and ConocoPhillips. The state stuck with Nikiski when it took over full control of the project in late 2016, after the companies declined to spend a lot more money on the effort. “If the State of Alaska believes Nikiski is the best place and the project can happen, we’re all in favor of that,” Moosey was quoted in the Journal of Commerce on July 10. The producers, when they were leading the project, and the state-created Alaska Gasline Development Corp., after it took over management, asserted that multiple factors made Nikiski a better site than Port MacKenzie. The project teams said winter sea ice, dredging of shipping channels, strong currents and tidal ranges, and conflicts with critical habitat for the endangered Cook Inlet Beluga whales all counted against Port MacKenzie. In past filings, the borough has rebutted many of the objections. In its latest filing, the borough said FERC dismissed Port MacKenzie from “full consideration as a reasonable alternative site” based on factual inaccuracies. “Even though the draft EIS lacks adequate analysis,” the borough said, “the current draft appears to show that Port MacKenzie is in fact” the least environmentally damaging practicable alternative. For example, the borough said, laying the gas pipeline to Port MacKenzie instead of to Nikiski would reduce the affected wetlands by 27 acres, out of about 1,600 acres. Stopping the line at Port MacKenzie would avoid displacing about two dozen residences and businesses near Nikiski, the borough added. “The draft EIS should be supplemented with a full ‘hard look’ analysis of the Port MacKenzie alternative,” the Mat-Su Borough wrote in its motion to FERC. It also alleged the draft includes “muddled statements” about which project site would cause the least environmental damage. If the FERC-led environmental review fails to provide “sufficient factual information to make this determination,” the borough said, the U.S. Army Corps of Engineers, with regulatory authority over wetlands, dredging and fill, “will be required to supplement the draft EIS at a later date.” A failure by FERC to do its job “likely is delaying the inevitable,” the borough said. Unless FERC changes its schedule, it plans to issue the final EIS in March 2020, with a commission vote on the project application in June 2020. While the Alaska municipalities battle over the project site, AGDC continues working to answer detailed engineering, construction and operations questions from federal regulators. AGDC submitted 295 pages of information, tables and maps to FERC on Sept. 25. The packet included: • A comprehensive table of waterbodies that would be crossed by the main pipeline, the 62-mile line from the Point Thomson gas field to Prudhoe Bay, compressor stations, work camps, access roads and other project construction activities. In addition to other details, the table lists the width of each waterbody and how AGDC would lay the pipeline, such as trenching, and at what time of year. • Revised air dispersion modeling of emissions along the pipeline route, at the gas treatment plant at Prudhoe Bay and liquefaction plant at Nikiski. • Updated annual emissions calculations for maximum LNG carrier operations at the loading terminal in Nikiski. The calculations include emissions from as many as 360 LNG carriers a year, plus support vessels. Larry Persily is a former Alaska journalist, state and federal official who has long tracked oil and gas markets and projects worldwide. He is the Atwood Chair of Journalism at the University of Alaska Anchorage School of Journalism and Public Communication.

Uber adds more services to its app in its quest for profit

SAN FRANCISCO (AP) — Uber is cramming more services into its ride-hailing app as it explores ways to generate more revenue and finally turn a profit. The makeover announced Sept. 26 includes force-feeding its food delivery service, “Eats,” into the Uber app that millions of people use to summon a ride. That means Uber users who don’t already have the “Eats” app may now be asked whether they want to order some food in the ride-hailing app. Uber also will start making other changes to the ride-hailing app as part of its effort to create an “operating system for life,” according to company CEO Dara Khosrowshahi. “This is a big change for us, but we, as a company, have never been afraid of big changes,” Khosrowshahi said. Although Khosrowshahi didn’t mention it, Uber is under intensifying pressure to start making money. With the exception of when it has generated a windfall by selling a part of the company, Uber has done nothing but lose money since its inception, while also pioneering a way for people to easily find someone come pick them up at prices that undercut traditional taxis. With its losses still mounting, Uber’s stock has plunged by nearly 30% since pricing its shares at $45 apiece when it became a publicly held company in May. The stock gained 8 cents to $31.76 in Sept. 26 trading. In an effort to reverse its losses, Uber has been gradually raising the cost of rides and becoming more aggressive it its attempts to plumb new sources of revenue. That has included food delivery and helping passengers find other means of transportation on bikes and scooters. Uber Eats has proven popular, with revenue surging 80% during the first half of this year to $1.1 billion. But Uber remains mired in a morass of red ink, with losses of $6.2 billion during the first half of this year. Most of that setback reflected nearly $4 billion in employee stock compensation that it had to record as part of its initial public offering, but even without that accounting expense, the San Francisco company still isn’t close to making money, much to the dismay of investors. So, Uber will be rolling out a new menu of services in its ride-hailing app. It has already been testing the concept among some users in the U.S., Europe and Australia within the ride-hailing app’s map section, but now it will create a new gateway at the bottom of the app. Users of the ride-hailing app will get the new services feature, whether they want it or not, according to the company. Eats will be included in the newly created menu, and at times Uber may ask a user if they want to order some food from a nearby restaurant participating in the service. Depending on user reaction, Uber may add other services, such as a supermarket delivering groceries. In a recent research report, HSBC analyst Masha Kahn predicted Uber also could team up with department store chains, banks and digital subscription services with a variety of offers served up through the ride-hailing app. Even if Uber is able to bring in more revenue with a new range of services, it still may face a long road to profitability. It still faces a number of concerns about the safety of its services, and California recently approved a new law that could force it to end its practice of classifying its drivers as independent contracts and treat them as full-time employees instead. That could require Uber to begin paying a variety of new benefits that would dramatically increase its expenses.

Permanent Fund Corp. allocates $200M for in-state investments

The Alaska Permanent Fund Corp. is partnering with one of Alaska’s premier investment firms to put some of the capital from its $65 billion namesake fund to work closer to home. Anchorage-based McKinley Capital Management LLC will manage half of the newly formed $200 million Alaska Investment Program, which will seek in-state investments for the Permanent Fund, according to a Sept. 20 APFC statement. The Alaska Investment Program is a means of supporting growing businesses in the state but Permanent Fund Corp. CEO Angela Rodell emphasized that any investments made with the $200 million won’t get preferential treatment just because they’re in Alaska. “From my standpoint, our No. 1 and only goal is really to beat that private equity benchmark, so (the Alaska Investment Program) has to be contributive to the fund value in a positive way,” Rodell said in an interview. As with most investment funds, the APFC has return benchmarks, or standards, that its managers are expected to meet and ideally exceed. Those benchmarks vary for each type of investment and typically correlate to the amount of risk an investment entails. The private equity, or capital, investments that will be made with the $200 million demand a higher rate of return than do real estate purchases, for example, because they require accepting more risk of failure. The APFC uses a private equity benchmark established by the international firm Cambridge and Associates, which set a return goal of 12.7 percent for the just completed 2019 state fiscal year. The Permanent Fund’s roughly $8.7 billion of private equity investments beat that by netting a 19.2 percent return in fiscal 2019, according to the 2019 APFC Annual Report. Rodell said she is waiting to see what sectors of the economy the investment capital will be deployed into as the APFC Board of Trustees put few sideboards on the program beyond the return objectives and Alaska focus. “I think we’re all just really curious to see where this money is going to land and be put to work, but our goal is to make money for the (Permanent) Fund,” she said. The APFC Board of Trustees passed a resolution in September 2018 directing staff to establish the Alaska Investment Program. APFC staff had been working to set up the program in the year since, and Rodell, a former commissioner of the Alaska Department of Revenue, noted that the Alaska program will require a long-term view. She expects it will take upwards of five years just to deploy the $200 million, which says nothing about when those investments will start generating a return. “We will lose money to begin with; that is normal; that is not uncommon,” said Rodell, adding that private equity investments often follow what is called a “J-curve.” “You have to spend a lot of money before you start to see that positive cash flow return and return on investment, so the challenge with this is everybody has to be really patient. It’s not going get deployed in six months and its not going to be making money in eight months and I think that will be a challenge for people because we like our instant gratification.” McKinley Capital CEO Rob Gillam said working with the APFC is nothing new for his company, as McKinley has managed Permanent Fund assets for 22 years. McKinley leaders are excited to invest in the state because they are “bullish on Alaska,” Gillam said. He stressed that the Permanent Fund trustees’ collective decision to devote $200 million to Alaska is an indicator they believe there’s money to be made in the state, as it could’ve been put towards projects literally anywhere else on the planet. The $100 million McKinley will manage will be focused on small to midsized investments in the $2 million to $15 million range with high growth potential, according to Gillam. While no Alaska investments have been made yet, Gillam said he sees them being largely in what he calls “new Alaska,” or sectors such as renewable energy, technology and logistics, to name a few. “Those are the kinds of companies that generally don’t have access to capital and we’re going to fill that role,” he said. “There’s an enormous amount of opportunities out there.” Gillam added that McKinley leaders understand the situation a lot of Alaska entrepreneurs looking for funding face because their company — founded in 1990 by Gillam’s late father and Alaska magnate Bob Gillam — didn’t have access to capital either. “When we founded McKinley Capital 30 years ago we got exactly zero capital support from anyone and fortunately we were able to scrape together a living and build a business. Now we’re a very global business with clients all over the world and investments all over the world from places like Botswana and Nigeria to the New York Stock Exchange,” he said. “It’s wonderful that there is now an opportunity to have capital available to Alaskans that wasn’t available 30 years ago.” McKinley now manages a roughly $5 billion investment portfolio. North Carolina-based Barings LLC, a subsidiary of the financial and insurance giant MassMutual, will manage the other $100 million in the Alaska Investment Program in private credit and infrastructure sectors. In the coming weeks McKinley will put an Alaska Investment Program application portal on its website. When the money is eventually invested and hopefully starts generating strong returns, Gillam said it will create what he sees as a “virtuous cycle.” “Oil and gas come out of the ground, a royalty goes into the (Permanent) Fund, they invest it, they generate a return, the return gets, in-part, paid back to Alaskans and now when this royalty gets invested in place like Alaska — a little bit — and a return is generated and money goes back to Alaskans,” he said. Technology allows McKinley to invest successfully worldwide, but being an Alaska-based firm provides the advantage of knowing what’s going on in the state, and what opportunities arise from that, first. “There’s a little of an ‘it’s raining out there’ kind of attitude (about the Alaska economy) and we would say that there are as many opportunities in Alaska today as there were a decade ago and we just need to start looking for them,” he said. “Look at our business. Nobody would’ve thought you could’ve built a Wall Street firm 30 years ago in Anchorage, Alaska, and here we are with offices in New York and Chicago and Abu Dhabi. What business next door to you or down the street or across town or in Fairbanks or in Juneau is being built today where somebody needs growth capital that could be the next McKinley Capital 30 years from now? There’s a lot of them and hardworking people and it’s our job to find them.” Elwood Brehmer can be reached at [email protected]

GUEST COMMENTARY: State has multi-year plan for fisheries priorities on federal council

Alaska’s federal fisheries for halibut, cod, pollock, flatfish, mackerel, sablefish and rockfish are economically important, both on a state and national level. They form the cornerstones of the economies of many of our coastal communities and provide numerous jobs at the fishing, processing and transportation/shipping levels. Through exports they provide a source of nutrition worldwide. As a result, decisions regarding their management are critically important to our state. Alaska shares management responsibilities for federal (3 to 200 miles) fisheries with the federal government. Decisions regarding the management of these fisheries are made via the North Pacific Fishery Management Council. This Council has 11 voting seats, of which 6 are nominated by the State of Alaska. As a result, Alaska has the opportunity to focus the work of the council on issues of import to our state and its fishermen and communities. We have spent the past several months speaking with a diverse range of user groups, delegations from our coastal communities, fishermen, processor representatives and other Alaskans to assess the issues facing them. These discussions were valuable, identifying not only the issues, but also in identifying priorities and potential solutions. Based on our discussions it is clear that many issues exist. Fortunately, we also found a willingness by many to roll up their sleeves and put in the hard work to resolve these issues. Based on these discussions we plan to focus our collective efforts in the council over the next several years on several areas, each of import to fishery participants and our coastal communities. First is to resolve long-standing issues related to the observer program for groundfish and halibut fisheries. It is critical that managers continue to have a robust observer program that provides high quality data for stock assessments and fisheries management. But the program needs to be affordable and minimize impacts on fishing and processing operations. As technologies improve, we need to better incorporate electronic monitoring systems into the program. Finding the right mix will be challenging but is critical towards ensuring catches and bycatch are accurately monitored and established limits are enforced in a manner that is economically viable for fishery participants. We also plan to focus our attention on developing a comprehensive management program for the Bering Sea and Aleutian Islands trawl cod fishery. Catch limits have declined in recent years and the pace of this fishery has grown to a point where fishermen safety and bycatch have become concerns. As we explore management alternatives for this fishery, we will consider options for rationalization of the fishery based on catch histories, protection of Bering Sea and Aleutian Islands coastal communities with shore-based processing plants, opportunities for cooperative fisheries strategies, and means to further reduce bycatch of halibut. As we develop these options, we will also need to assure that we protect existing fisheries in the Gulf of Alaska through enacting meaningful sideboards. We also plan to develop a funding mechanism for the compensated reallocation of commercial halibut individual fishing quota, or IFQ, to the charter boat sector to allow this industry relief from restrictive regulations enacted as a result of reduced allocations. This would fully implement the council’s recreational quota entity program that allows the charter industry to hold commercial quota purchased from willing sellers to allow private anglers the opportunity for more liberal harvest opportunities that mirror those of non-guided anglers. The program is based on a willing seller-willing buyer model financed by some type of charter stamp. Finally, we plan to explore options for abundance-based management options for bycatch of halibut in Bering Sea and Aleutian Islands groundfish fisheries. The allocation to directed halibut fisheries floats with abundance, where at lower abundance levels allocations are lower and at higher abundance levels allocations are higher. Halibut bycatch quotas, however, are fixed and become a larger portion of total halibut catch when abundance declines. We need to explore if there are options to float the bycatch quotas with overall abundance. We understand the complexities associated with this but need to assess the options available. Based on discussions with a wide range of users we will not begin development of a rationalization program for Gulf of Alaska trawl fisheries. While there is a consensus that there are significant issues with this fishery, there is not broad consensus on the biggest challenges facing the fishery and whether a rationalization program should be considered to address them. We would appreciate hearing suggestions from stakeholders for regulatory measures to improve management of the fisheries under the current management structure. There are many other issues including routine options such as setting annual catch limits and development of charter halibut management measures to longer term issues related to the halibut IFQ fishery and bare boat halibut charters that will require council time. We understand this and will continue our commitment to these efforts. In closing, we understand the importance of Alaska’s federal fisheries and their contribution to our coastal economies and to fishery participants in the harvesting and processing sectors. We have an excellent council team and are looking forward to working with others on issues facing these fisheries, including the priorities identified above. Doug Vincent-Lang is the commissioner of the Alaska Department of Fish and Game.

Movers and Shakers for Sept. 29

Cassi Campbell was hired as Blueprint Alaska’s first account executive. Campbell will work for the agency’s clients in a variety of capacities, including managing social media, writing and editing content, providing event support, and media relations. Campbell, a born-and-raised Alaskan, graduated from the University of Wisconsin- River Falls with a bachelor’s degree in marketing communications with concentrations in broadcast journalism and psychology in 2011 and is scheduled to complete her master’s degree in strategic communications in December 2019 from Purdue University. Her professional work experience brings unique industry knowledge to the firm after working with Matanuska Electric Association from 2012-19 and the University of Alaska Anchorage’s Matanuska Susitna College from January-September 2019. Alaska Department of Transportation and Public Facilities Deputy Commissioner John Binder was appointed chair of the National Association of State Aviation Officials. As deputy commissioner of Aviation, Binder leads Ted Stevens Anchorage and Fairbanks international airports, along with 237 state owned airports across Alaska. NASAO is dedicated to representing the interests of the states and the public before policymakers at the federal level. NASAO works closely with the Department of Transportation, the National Aeronautics and Space Administration, the Transportation Research Board and the American Association of State Highway and Transportation Officials. Samantha Cherot was appointed as Alaska Public Defender, filling the position vacated in April by Quinlan Steiner. She will serve a term of four years upon legislative confirmation. Cherot has been an Alaska resident for 32 years, and has practiced law for nearly 12 years. She graduated from California Western School of Law in 2007, and most recently worked as an assistant public defender in Anchorage. Craig Campbell was appointed to the business owner/manager seat on the Alaska Railroad Corp. board of directors, effective Sept. 11 through Oct. 3, and reappointed Oct. 3 through Oct. 3, 2024. Campbell has an extensive background in both the public and private sector, with 35 years of aerospace experience in the U.S. Air Force and Alaska Air National Guard, culminating as the Adjutant General, Alaska National Guard, retiring in 2009 at the rank of lieutenant general and simultaneously becoming Alaska’s 10th lieutenant governor. Campbell has more than 15 years of aviation consulting experience, both in the U.S. and internationally. He served as president and CEO for Alaska Aerospace for seven years, and currently serves as president for Aurora Launch Services. Retired Col. John “Jack” Anthony was appointed to the aerospace industry seat on the board of directors of the Alaska Aerospace Corp., effective Sept. 11 through July 1, 2022. Anthony has nearly 41 years of space research, engineering, operations, leadership, program management, and education experience during his career. He has 26 years of service in the U.S. Air Force, retired in the grade of colonel, and also has experience working with the National Reconnaissance Office and National Aeronautics and Space Administration. He currently supports the National Space Defense Center as a part-time advisor and serves on the Aurora Launch Services Board of Directors. Rasmuson Foundation announced three new staff members and recognized an existing staff member with a career development opportunity. Tristan Agnauraq Morgan was hired as momentum fellow. She is participating in a partnership between Philanthropy Northwest and Rasmuson Foundation to prepare individuals from underrepresented communities for careers in philanthropy with a focus on diversity, equity and inclusion. Morgan grew up in Anchorage and attended University of Alaska Anchorage where she studied art and professional writing. While in college, Morgan interned with ASRC Energy Services, a subsidiary of Arctic Slope Regional Corp. After graduating in December 2017, Morgan began work as a human resources coordinator with Denali Family Services, where she also helped organize art and indigenous youth events with the direct service staff working with children and adolescents. Josh Hemsath was hired as program fellow. Hemsath is participating in a separate two-year fellowship with the program team, our grantmaking arm. He brings more than 10 years of experience with nonprofits in Alaska and around the Pacific Northwest. He grew up in the Anchorage area and holds a bachelor’s degree in community health from Montana State University and a master’s of public administration from the University of Washington. For the last six years, Hemsath represented Pride Foundation in Alaska as its regional philanthropy officer, the sole staff member in the state. Allison Macanga was hired as administrative assistant. She moved to Anchorage from New Jersey in 2016 and previously worked in New York City and Philadelphia, with experience in radio, video, and television production, including casting for a wide variety of reality TV shows. She has a bachelor’s degree in communications with a minor in screen studies from Monmouth University. Momentum fellow and external affairs associate Emily Kwon will take part in the Philanthropy Northwest Momentum program over the next two years to help her develop further as a professional in philanthropy. Kwon studied biological sciences at Arizona State University, where she became involved with the Asian Pacific American community including the Asian Chamber of Commerce. She joined the Foundation staff in 2017 as a communications intern and recently was promoted to serve as an associate on the external affairs team. Keli Hite McGee has been appointed as administrator at The Surgery Center of Fairbanks, effective Oct. 7. Most recently, Hite McGee served as chief human resources officer at the University of Alaska. Hite McGee’s background includes more than 20 years in communication, human resources, training and coaching, change management and leadership consulting with work in industries ranging from healthcare and higher education to private, state and federal organizations. Her career started as Golden Valley Electric Association’s organizational development officer, providing change management facilitation, followed by CEO of Hites Organizational Leadership &Training, where she worked with executives and organizations in the private and public sector to manage and implement change. Past healthcare roles included serving as CEO of Alaska Heart and Vascular Institute and as interim administrator for Anchorage Women’s Clinic. She has lived in Alaska for more than 25 years in communities throughout the state and is a graduate of University of Alaska Fairbanks. Chris Yelverton was promoted to senior payments advisor with KeyBank Alaska’s Enterprise Commercial Payments Group. Yelverton joined KeyBank in December 1998 as a teller and has held several positions in the retail division including [email protected] relationship manager and area retail leader. Yelverton joined the Commercial Banking team in August 2013 and most recently served as a Relationship Manager. A lifelong Alaskan, Yelverton graduated with a bachelor’s degree in finance from the University of Alaska Anchorage and is a graduate of the Pacific Coast Banking School.


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