Movers and Shakers for June 2

Eric Gettis has been promoted to vice president of clinics for the Southeast Alaska Regional Health Consortium. Gettis will have system-wide responsibility for creating standard operating procedures and uniform processes to improve access to care at specialty and primary care clinics and ensure alignment of patient and provider satisfaction. Gettis previously held the position of SEARHC’s director of practice management. He has a master’s degree in counseling and guidance and a bachelor’s degree in education from Pacific Lutheran University in Tacoma, Wash. Before joining SEARHC, he held multiple management positions at Lourdes Health Network, including director of physician practices. Thrively Digital, Alaska’s oldest and largest digital agency, has hired Eric Fullerton as its new director of account strategy. Fullerton, formerly vice president and director of marketing for the Alyeska Resort, brings a wealth of experience to the position. He’s spent more than 25 years in the ski, travel, tourism and hospitality industries, and has a proven track record in marketing, sales and technology. Fullerton has an MBA from Phoenix University in the areas of internet, traditional and electronic marketing. Ahtna Netiye’ LLC announced that Eric McLaurin has joined the company as the new vice president of business development. McLaurin will be responsible for identifying strategic business opportunities and fostering strong industry relationships. McLaurin has a military background and brings more than 28 years of federal business development experience across engineering, construction, base operations and support, facility management, environmental, disaster recovery and information technology programs. He has directed business units of varying sizes with staff located throughout the U.S. and at international sites. McLaurin holds a bachelor’s degree in mechanical engineering from Southern University of Baton Rouge and is a professional engineer and registered environmental manager. United Fishermen of Alaska announced the hiring of Scott Kelley as executive administrator effective in June. Kelley, a Juneau resident, brings vast experience in commercial fisheries as the former director of Commercial Fisheries for the Alaska Department of Fish and Game. Kelley is replacing retiring UFA employee Mark Vinsel who has worked for UFA for 18 years in several capacities, including executive director. UFA is the statewide commercial fishing umbrella association, representing 35 member organizations from fisheries throughout Alaska. The U.S. Small Business Administration Alaska District Office announced ChemTrack Alaska Inc. as the Alaska Woman-Owned Business of The Year. Carrie Jokiel is the president of ChemTrack, an 8(a) and Economically Disadvantaged Women-Owned Small Business specializing in environmental engineering, remediation services, spill management, emergency response, and construction. Jokiel is a well-known business advocate at both the federal and state levels. She champions for small businesses and women-owned businesses through her community involvement, participation in hearings to the Senate Committee on Small Business and Entrepreneurship, and through her mentorship to many Alaskan businesses. Jokiel is a graduate from the SBA Emerging Leaders program. She was also a member of the 2014 Alaska Journal of Commerce Top Forty Under 40. Chugach Electric Association Inc. members re-elected Bettina Chastain and Harold Hollis to the utility’s board of directors. Election results were announced May 21 at the annual meeting. Of Chugach’s 69,320 members of record, 6,719, or 9.7 percent, cast ballots. Chastain was first elected to the board in 2015. Hollis was appointed in July 2018, after former director Sisi Cooper resigned. The board elected new officers May 22. Chastain was re-elected chair; Susan Reeves was reelected vice chair; Stuart Parks was reelected secretary; and Rachel Morse was reelected treasurer. Alaska USA Federal Credit Union announced that Bryce Deeney has been selected for the position of vice president, payments. Deeney brings extensive experience to the new position, having previously worked as vice president of integrated payments for a software payments company. At Alaska USA, Deeney will focus on the continued development of the credit union’s money movement platforms, such as credit and debit cards, bill pay, and peer-to-peer payments.

FISH FACTOR: Salmon census stable; algal bloom bites Norway

Salmon abundance in the North Pacific has declined slightly over the past decade, but salmon catches remain near all-time highs. For nearly 30 years the North Pacific Anadromous Fish Commission has summarized abundances and catches of salmon as reported by its five member countries: Canada, Japan, Korea, Russia, and the U.S. The Commission tracks all salmon species caught in the North Pacific, Bering Sea and the Sea of Okhotsk, and also provides the venue for coordinating research and enforcement activities. For 2018, the total salmon catch topped 1 million metric tons, or more than 651 million fish, the highest catch ever for an even-numbered year. That’s nearly 200 million more salmon than were caught in 2017. Russia led all other nations for salmon catches in 2018, taking 63 percent, or 676,200 mt. The U.S. ranked second for salmon catches at 27 percent at nearly 287,000 mt, with Alaska taking all but 8,700 mt of the total U.S. catch. The other three nations all were in single digits for salmon catches. Pink salmon made up 55 percent of the North Pacific catches by weight, followed by chums at 26 percent and sockeyes at 16 percent. Cohos comprised just 2 percent of the total salmon catch and Chinook was less than 1 percent. Hatchery releases from the five countries have been fairly stable since 1993 at about 5 billion fish released annually. The U.S. accounted for 44 percent of total hatchery salmon releases last year, mostly coming from Alaska. That was followed by Japan at 34 percent, Russia at 17 percent and 5 percent from Canada. Chum salmon made up 59 percent of all hatchery releases with pink salmon at 29 percent. Chinook salmon made up 5 percent, sockeyes at 4 percent and coho salmon at 2 percent of hatchery releases. The commission said variability in annual North Pacific salmon catches has been more pronounced during the past decade, primarily due to unpredictable pinks. A particularly low pink salmon catch in 2018 (71,300 mt) resulted in the lowest total North American catches of salmon in 40 years. Nature bites Norway Global salmon markets are getting shuffled by a massive algae bloom that has suffocated more than 8 million farmed salmon in Norway with no end in sight. Norway is the world’s largest farmed salmon producer and its supply numbers can set the mark for fish prices around the world. The Norwegian Directorate of Fisheries estimated the salmon loss so far at more than 25.5 million pounds of Atlantic salmon valued at more than $82 million. That would still amount to less than 1 percent of the industry’s output last year, when Norway produced nearly 1.3 million metric tons (nearly 3 billion pounds) of salmon, according to the New York Times. (That compares to Alaska’s catch of more than 605 million pounds of salmon.) “The algae has a chemical composition that affects the membranes of the cells in the gills and they are destroyed, so the fish actually dies due to lack of oxygen,” said Lars-Johan Naustvoll, a biologist at Norway’s Institute of Marine Research. Though the algae bloom is a natural event, fish growers said it is rare for it to be so concentrated and so lethal. Salmon farms are especially at risk since the salmon held captive in large net pens can’t swim away from it. Most blame an off kilter climate and warming oceans for the killer algae event. More salmon challenges The makers of genetically modified salmon are embracing the “Frankenfish” name, saying it’s much like the Frankenstein monster in the book written by Mary Shelley in 1817. Undercurrent News reports that Sylvia Wulf, CEO of AquaBounty Technologies, said: “It was the uneducated mob that didn’t understand the benefits of the science that killed Frankenstein. Let’s applaud the Frankenfish, because it’s designed to solve real-world global challenges.” Wulf was speaking at a Recirculating Aquaculture System Technology conference last week in Washington, D.C. In March, the Food and Drug Administration removed a three-year-old import alert that prevented AquaBounty from importing eggs from a Panama facility for grow out and sale in the U.S. With that regulatory barrier gone, the company is now gearing up to go to market. A first batch of eggs is on its way to a growing facility in Indiana with a goal of sending thousands of 8- to 11-pound genetically tweaked Atlantic salmon to supermarkets next fall. The fish is altered to grow three times faster than normal salmon. AquaBounty tested its fish in Canada in 2017 and 2018 and each time it sold out within a few days, the company said. The fish were not labeled as genetically modified, as Canada does not have a labeling requirement. By law, U.S. companies have until 2020 to begin labeling foods that contain 80 percent or more genetically engineered materials with a mandatory compliance date of Jan. 1, 2022. But it will fall to customers to find out on their own, as labels may be a symbol, a digital link, text message, phone number or web site. AquaBounty called the labeling requirement “good news” saying that the market will be awash in so many bioengineered products, customers won’t focus on their fish. Nearly 2 million Americans opposed the FDA’s approval of Frankenfish and 60 major grocery chains pledged not to sell it, including Safeway, Kroger, Target and Whole Foods. In a touch of irony, Wulf said AquaBounty plans to expand sales to China and South America, but has no plans to pitch Frankenfish to Europe because of “their anti-genetically modified leanings.” Seafood minus the sea Wild fish, farmed fish, Frankenfish — get ready for seafood grown directly from cells — with no head, tail, bones or blood. National Public Radio calls it “fish without the swimming and breathing part. It’s seafood without the sea.” In fact, it is whole fillets grown from a needle biopsy’s worth of muscle cells from a single fish. The cells are cultivated and fed a blend of liquid vitamins, amino acids and sugars. The resulting fillets can be sold fresh or frozen or made into various seafood dishes. A San Diego based company called BlueNalu is pioneering the cellular aquaculture as one of six companies focused on growing cell-based seafood. Finless Foods, for example, is focused on blue fin tuna; a company called Wild Type is working on salmon. All are likely five to 10 years away from having actual product on the market. The companies point out cell-growing uses no genetic tweaking, nor does it introduce anything new that doesn’t already exist in nature. They claim they’re not looking to replace wild or farm-raised seafood, and instead offer a third alternative. But the fledgling industry is poking at some tender industry spots: illegal and overfishing, climate impacts, bycatch and food waste. They note that cell-grown seafood is free from antibiotics and pesticides used in fish farms, potential ocean contaminants and micro particles of plastics. Referring to the more than 3.2 billion people globally who depend on seafood for at least part of their protein, a BlueNalu spokesman said “Catch, grow or make it, I’m not even sure we’ll be able to meet demand.” Alaska fish keeps Seattle afloat If not for Alaska’s fisheries, the Port of Seattle would be a shadow of what it is today. An economic report released in May reveals that Seattle is home port to about 300 fishing vessels and all but 74 make their living in Alaska. The Seattle-based boats harvest Alaska pollock, Bering Sea crab, flounders, salmon and many other high value species, and they vary in size from huge catcher-processors with 150 crew to small seiners and trawlers. In 2017, vessels that moored at one of Seattle’s three terminals and operated in the Alaska fisheries generated gross earnings of more than $455 million, nearly half of the total gross earnings from those fisheries. Boats fishing in Puget Sound and other Washington areas earned $26.6 million at the Seattle docks. An estimated 7,200 jobs were directly associated with commercial fishing at the Port of Seattle in 2017. Of those jobs, 5,100 were on fishing vessels, and all but 200 operated in Alaska fisheries. Additional revenues to the port came from various support services, staff and on-shore port tenants, including seafood processing and cold storage facilities. Factoring in all segments of commercial fishing at the Port of Seattle, fishing activities generated more than $671 million in business output in 2017. It also produced more than $13 million in state of Washington taxes. Between 2011 and 2017, Port of Seattle customers harvested between 800,000 and 1.3 million metric tons of seafood from the North Pacific fisheries. Harvested tonnage increased by more than 500 percent over this period, or approximately 23 percent per year, based on a compound annual growth rate. Factoring in indirect and induced impacts, the total statewide economic impact of commercial fishing operations to the Port of Seattle accounted for 11,300 jobs, $543 million in labor income and over $1.4 billion in business output in 2017. Laine Welch lives in Kodiak. Visit www.alaskafishradio.com or contact [email protected] for information.

Oil Search gets federal approval for Nanushuk project

The company working on one of Alaska’s largest oil prospects in decades now has the key federal authorization to develop the project. Oil Search Ltd. announced Thursday that it has received a favorable record of decision from the U.S. Army Corps of Engineers on the environmental impact statement, or EIS, for its Nanushuk oil project in the Pikka Unit on the central North Slope. The record of decision, signed May 14, marks the end of nearly four years of study on the roughly $5 billion project, which has the potential to produce upwards of 120,000 barrels of oil per day at its peak. Peter Botten, managing director of the Papua New Guinea-based producer said in a formal statement that two appraisal wells the company drilled last winter into the southern portion of Pikka reinforce earlier expectations that the oil available for the project should allow for peak production of at least the long-held estimate of 120,000 barrels per day. The trans-Alaska Pipeline System, commonly known as TAPS, is handling about 500,000 barrels of oil per day this year. North Slope production peaked in the late 1980s at approximately 2 million barrels per day. The project is also expected to support more than 1,000 drilling and operations jobs and “several thousand direct construction jobs,” said Oil Search Alaska President Keiran Wulff, who added in a formal statement that the company “will make every effort to work with companies located within the state of Alaska to maximize local hire.” Oil Search is planning a busy 2019-20 winter season with additional drilling work and the start of laying gravel for the project’s future roads and pads, according to Botten. “We remain very excited about the opportunities for Oil Search in Alaska and are looking forward to making material contributions to the state and the local communities, while also delivering value for Oil Search shareholders,” he said. 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. Wulff said last fall it planned to exercise a $450 million option to fully buy out Armstrong from the project this year. An Oil Search Alaska spokeswoman said the buy out is on schedule to be completed by the June 30 deadline set as part of the initial deal. Spanish oil major Repsol is also a 49 percent owner in Pikka. While official estimates are more conservative, Armstrong Energy CEO Bill Armstrong has consistently said he believes more than 1 billion barrels can be produced from the Pikka Unit. First oil production is expected in late 2023, Wulff has said. Most of the oil would come from the 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 Corps of Engineers ultimately chose Oil Search’s preferred development option, which differed from the plan Armstrong initially submitted for its Clean Water Act wetlands fill permit. Wulff noted in a company release that Oil Search changed the plan at the behest of residents of the nearby Native Village of Nuiqsut, who use the Colville River Delta where the project is located for subsistence harvests. The approved plan moves a drill site near the Colville further from the river; realigns some north-south roads to interfere less with east-west migrating caribou; and narrows roads from up to 38 feet wide to 32 feet among other revisions. The changes will also result in a 22-acre reduction to impacted wetlands compared to the original plan, according to the corps. Overall, the project will fill 266 acres of wetlands, the EIS states. “We are committed to close collaboration with the people and organizations of Nuiqsut and neighboring communities to ensure our activities in the field are conducted in a sensitive and respectful manner,” Wulff said. Elwood Brehmer can be reached at [email protected]

State still working with BP, ExxonMobil to refine AK LNG economics

New conclusions regarding the viability of the $43 billion Alaska LNG Project are still several weeks away from being made public, according to officials from the state agency leading the work. Interim Alaska Gasline Development Corp. President Joe Dubler said the state, BP and ExxonMobil have “preliminary answers” to the competitive assessment they are doing of the Alaska LNG Project and those initial results are being further vetted and analyzed before final conclusions are released. AGDC announced March 8 it had signed a memorandum of understanding with BP and ExxonMobil to assist the state corporation in finding ways to bring project costs down and get it through the federal regulatory process as smoothly as possible. Brett Huber, a senior advisor to Gov. Michael J. Dunleavy, said March 14 that AGDC, in consultation with the producer companies and the state Revenue Department would be conducting a 60-day review of the project to determine the state’s path forward. “We’ve agreed on inputs; we’ve agreed on the mechanics. So we’re using that model to finalize the future of Alaska LNG and what we think the competitive prospects are for the project,” Dubler said during AGDC’s May 22 board of directors meeting. Dunleavy has long been critical of former Gov. Bill Walker’s plan for a state-led Alaska LNG Project. He made it clear soon after being elected last fall that his administration would slow the pace of the project and try to bring the major oil companies back into the fold. In 2016, the international energy consulting firm Wood Mackenzie concluded the Alaska LNG Project likely wasn’t economic if developed by Alaska’s major producers, as first envisioned, in part because of the high internal return requirements oil companies typically have. However, a state-led project with federal tax exemptions could be viable, Wood Mackenzie said at the time. BP and ExxonMobil have major interests in seeing a successful Alaska LNG Project come to fruition. They combined to invest upwards of $4 billion between 2012 and 2016 to develop the North Slope Point Thomson natural gas field, which would be one of the main sources of gas for the project; Prudhoe Bay is the other. They also hold collective rights to approximately 70 percent — not counting the state’s royalty stake — of the 35 trillion cubic feet of gas expected to be available for sale through the project. The companies also signed separate and confidential gas sales precedent agreements with AGDC last year that outline the terms — including price — under which they would sell gas into the project. AGDC and the companies are also revisiting the $43 billion cost estimate, which is about three years old, to see if technological advancements and market conditions could bring it down. Spokesman Jesse Carlstrom said via email that potential cost savings have been identified primarily in the construction of the facilities for the project. Approximately $9 billion of the total project estimate is a contingency for cost overruns. Dubler added that corporation leaders who attended the LNG2019 in Shanghai in early April met with LNG shippers, investors, builders and customers that could be involved in Alaska LNG. He said the prospective participants were comfortable with the state’s new plan to slow the project and not start construction as soon as the Alaska LNG environmental impact statement is finished, likely in mid-2020. “We’re trying to find potential partners to get the state out of the driver’s seat and get other people in,” Dubler said. Officials from the governor’s office along with Natural Resources Commissioner Corri Feige and Revenue Commissioner Bruce Tangeman are planning a trip to China next month to discuss the future of the state’s role in the project with officials from Sinopec, the Bank of China and China Investment Corp., according to Dubler. The state-owned oil giant and financial companies signed a nonbinding joint development agreement with AGDC in November 2017 to advance the prospect of financing up to 75 percent of the project in exchange up to 75 percent of the LNG it produces. LNG exports to China have declined dramatically this year after retaliatory tariffs were imposed and are now scheduled to increase from 10 percent to 25 percent on June 1. Dubler reiterated that the administration feels a 75 percent stake in the project is too much for one investor and wants to spread potential investment more broadly. “We think that once we get the (Federal Energy Regulatory Commission) permitting completed it will open up the door for a lot more different types of firms and industries looking to invest in this project,” he said. FERC is scheduled to release the draft Alaska LNG environmental impact statement, or EIS, next month. AGDC Program Management Vice President said during the meeting that the corporation is anticipating a 90-day public comment period for the draft document, that will distill the roughly 150,000 pages of environmental, socioeconomic, and engineering data AGDC has submitted to FERC into a roughly 4,000-page EIS. Elwood Brehmer can be reached at [email protected]

Local governments weigh onsite cannabis consumption options

As the Marijuana Control Board is working on hemming up the regulations for on-site consumption, local governments are wrestling with how to handle their own rules. Cannabis entrepreneurs have long awaited state regulations allowing their customers to partake at retail locations. The board approved an initial set of regulations in December, with requirements such as only allowing smoking in a freestanding building with ventilation and limitations on individual consumption. Business owners said this would provide a more reasonable place, especially for tourists, to partake responsibly without violating laws against consuming in public. Lt. Gov. Kevin Meyer signed the regulations in early March, but the MCB has a few more changes to make, including defining what a “freestanding” building is and allowing more voice for residents of areas outside the jurisdiction of a local government. However, city and borough governments are deciding whether to let the state regulations stand or enact their own. There has already been a wide variety of opinions, ranging from applying no additional regulations to completely banning it within city borders. Fairbanks has already tackled it, while Anchorage and Kenai have ordinances pending and the City and Borough of Juneau is still considering information. The Anchorage Assembly was originally set to consider an ordinance to just allow the consumption of edible cannabis products on site, but a second ordinance would have allowed smoking in facilities as long as they met other requirements, including those for freestanding buildings and ventilation. Consideration of the ordinance was postponed at its May 21 meeting. One of the snags in approving onsite consumption is the state law banning smoking in enclosed public spaces and workplaces. Under the state law, the definition could include smoke from marijuana products and outdoor areas may be permitted under the law. However, the onsite consumption rules passed by the Marijuana Control Board would allow for the smoking of marijuana products as long as the facility has proper ventilation and is freestanding, with a smoke-free area for employees to monitor the activities in the consumption area. In late April, the Fairbanks City Council adopted an ordinance to permit onsite consumption as long as licensees met the other requirements for an endorsement through the Marijuana Control Board. Fairbanks City Attorney Paul Ewers said the city would probably defer to the state’s enforcement of the non-smoking law, as it’s not a city ordinance. “If it was a city ordinance, we definitely would (enforce it),” he said. “Our approach as a city would probably look to the state attorney general.” The City and Borough of Juneau is debating the same point about the smoking law. City Attorney Robert Palmer wrote in a memo to the council that if the members want to approve the consumption of cannabis by smoking in onsite consumption endorsements, they’ll have to have a “rational argument to distinguish marijuana from tobacco” or allow both. Currently, Juneau bans all onsite consumption by ordinance, and Palmer wrote that he wasn’t aware of a tobacco consequence if the edibles portion is repealed. “However, the definition of edibles would need to be narrow to avoid vaping and other inhalation forms of consumption that can affect nearby people,” he wrote. On the opposite end of the spectrum, the Kenai City Council rejected a regulations package for onsite marijuana consumption within its city limits and introduced an ordinance at its May 15 meeting to ban it entirely. The council referred the ordinance to the city’s Planning and Zoning Commission, as it required a zoning code change, and is scheduled to hear it again June 5. “We feel this ordinance is necessary to protect public safety and welfare,” wrote council members Glenese Pettey and Jim Glendening in their co-sponsors’ memo. The Alaska Department of Health and Social Services is not currently conducting any specific research into the effects of secondhand exposure to marijuana smoke, but DHSS Commissioner Adam Crum and Division of Public Health Director Jay Butler wrote a joint opinion article in December 2018 opposing the onsite consumption of cannabis, noting that some studies indicate little difference between the effects of inhalation of tobacco and marijuana smoke. The department leans on three main bodies of existing research about the effects of secondhand marijuana smoke, DHSS spokesman Clinton Bennett said in an email. Two of the studies — one from the World Health Organization in 2016 and two from the state of Colorado in 2014 and 2016 — indicate that secondhand cannabis smoke impairs lung function and contain many of the same cancer-causing chemicals in tobacco smoke, he wrote. The Alcohol and Marijuana Control Office is seeing public comment on its draft regulation revisions for onsite consumption — including further definitions for “freestanding” and setting up a process to give residents outside a local government’s jurisdiction a way to weigh in on an onsite consumption endorsement — until June 19. ^ Elizabeth Earl can be reached at [email protected]

Hilcorp lone Cook Inlet bidder for third straight year

Hilcorp Energy was the lone bidder in the State of Alaska’s annual Cook Inlet basin oil and gas lease sale for the third consecutive year. The Houston-based independent spent $190,350 on three lease tracts totaling 10,286 acres in the sale held Wednesday morning in Anchorage, according to the Division of Oil and Gas. Hilcorp has been the predominant oil and natural gas producer in Cook Inlet since purchasing significant assets from Marathon Oil in 2012. “We are pleased to see bid activity in the Cook Inlet lease sale,” Deputy Natural Resources Commissioner Sara Longan said in a prepared statement. “We recognize the focus of investment has been on the North Slope in recent years. Nevertheless, significant investment is made to sustain current Cook Inlet production, while exploration activities continue to inform and support future development.” The Cook Inlet sales have been quiet for several years. In 2016 the state received no lease bids for its original oil basin for the first time and industry representatives at the time largely blamed the state’s plans to curtail its tax credit program for exploration and development work. State officials note most of the leases covering the prospective areas in and around the Inlet are already leased. As Longan highlighted the recent North Slope sales, held each fall, have been some of the most lucrative in terms of dollars bid in the history of the state’s regular oil and gas lease sale program, with companies cumulatively spending upwards of $35 million in a single sale to acquire exploration acreage. Two of the leases Hilcorp acquired Wednesday are onshore tracts on the southern Kenai Peninsula near Anchor Point and BlueCrest Energy’s Cosmopolitan oil field; the third is near Trading Bay in the central portion of the Inlet where most of the offshore development has occurred.   Elwood Brehmer can be reached at [email protected]

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