Alaska Miners Association celebrates 80 years

Mining is one of Alaska’s oldest industries and the Alaska Miners Association exemplifies that. The trade group was founded before World War II and is celebrating its 80th anniversary during its annual convention in Anchorage at the Dena’ina Convention Center Nov. 3-9. Mining continues to be a major industry in Alaska; it employs roughly 13,000 people at small placer and prospecting camps to world-scale mines across the state, according to the Alaska Department of Labor. But even the enduring association doesn’t match the history of mining in Alaska. Commercial mining and Alaska’s “gold rush” years started more than a century before when Russian engineers discovered gold near the Kuskokwim River in 1832, according to the group. The Kuskokwim River valley long supported placer gold operations and today is home to the Donlin Creek gold prospect. With a resource of approximately 33 million ounces, the Donlin mine will be one of the largest open-pit gold operations in the world when it is developed. As for the convention, state Department of Environmental Conservation Commissioner Jason Brune, a former Anglo American representative, will be the keynote speaker Nov. 6, and he will give an update on the mining-related issues the department has dealt with in the first year of Gov. Michael J. Dunleavy’s administration. Dunleavy’s first public appearance after being elected last year was at the Miners convention, where he emphatically declared Alaska would be “open for business” with him as governor. Department of Natural Resources Commissioner Corri Feige will provide the keynote address Nov. 7, sharing her vision for mining in the state and BLM Alaska officials will discuss new priorities regarding mining on federal lands in the state on Nov. 8, according to materials provided by the association. As is customary, the convention will also feature numerous discussions regarding mining policy in Alaska as well as updates on the plethora of large prospects — from copper and gold to graphite and rare earth elements — across the state. Representatives from several of Alaska’s large producing mines will also discuss what their companies have learned in developing metal prospects in the state’s sensitive environment and harsh climate in presentations Nov. 7. Evening activities will start with a history night and inductions into the Alaska Mining Hall of Fame and the convention will conclude with the Alaska Miners Association’s annual awards banquet.

FISH FACTOR: Otter impacts still frustrating Southeast divers, crabbers

They are certainly cute but the voracious appetites of sea otters continue to cause horrendous damage to some of Southeast Alaska’s most lucrative fisheries. How best to curtail those impacts will be the focus of a day-long stakeholders meeting set for November 6 in Juneau. “All of the people who have anything to do with the otters hopefully will all be in the same room at the same time,” said Phil Doherty, co-director of the Southeast Alaska Regional Dive Fisheries Association based in Ketchikan. A 2011 report by the McDowell Group showed that otter predation on sea cucumbers, clams, urchins, crabs and other shellfish cost the Southeast economy nearly $30 million over 15 years. And their population has skyrocketed since then. Four hundred otters were reintroduced to Southeast by the Alaska Department of Fish and Game from Amchitka Island in the 1960s after nearly being wiped out by fur traders at the turn of that century. The otters, which rose to nearly 26,000 in the latest assessment updated in 2014, are under federal protection and managed by the U.S. Fish and Wildlife Service. The animals can grow up to 100 pounds and typically eat the equivalent of a quarter of their weight each day. Last year, at the urging of 20 Southeast towns, organizations and Native groups, the Alaska Senate passed a resolution asking for the state to take over otter management and to provide for more protections. “If the population continues to go unchecked, predation from sea otters inevitably threatens the future of dive and crab fisheries, jeopardizing hundreds of jobs and tens of millions of dollars in economic activity,” Sen. Bert Stedman, R-Sitka, wrote in a statement. One suggested solution has been to allow increased hunting by Native Alaskans, the only people allowed to do so, and lowering the Native blood “eligibility” to one-quarter of a percent. But Doherty said at a growth rate estimated at between 12 and 14 percent a year, hunting can’t keep up with the population. Another problem is restrictions on what Natives are allowed do with the otters they hunt. “The Marine Mammal Protection Act clearly states what Alaskan coastal Natives can do with sea otters,” Doherty explained. “They have to produce a finished product that is in the tradition of Native art and how they’ve used them over the years. They cannot harvest sea otters and sell just the pelt on the open market.” Patrick Lemons, Alaska chief of marine mammal management for the U.S. Fish and Wildlife Service said last year that the Marine Mammal Protection Act limits the agency’s response and they cannot intervene to protect commercial fisheries until a species is at “optimum sustainable population.” The agency recently put the Southeast region’s otter carrying capacity at 77,000, Doherty said. “Until we’re at that carrying capacity, they will manage the sea otters in a very conservative mode. And once we get to 77,000 otters, we can kiss some of these industries goodbye, and it is not just the dive fisheries. The Dungeness crab fishery here in Southeast is being severely impacted and otters eat king and Tanner crab, so there’s going to be impacts on all of the shellfish fisheries.” While the upcoming meeting will provide a valuable exchange, Doherty is not optimistic about the outcomes. “Because the otters are so protected within the Marine Mammal Protection Act, I don’t think anything is going to change the tide of the sea otter population here in Southeast Alaska,” he said. The day long Nov. 6 otter meeting will take place at the Andrew P. Kashevaroff Building in Juneau. It is free and open to the public. Pebble hearing in DC Threats posed to the Bristol Bay watershed by the proposed Pebble mine took center stage in Washington, D.C., at an Oct. 23 hearing of the House Transportation and Infrastructure Committee. Opponents are hopeful the hearing might help put the brakes on the Pebble permitting process. “If Pebble is developed, there is no doubt it will forever change who I am, who my people are, where I come from. And it will rob our children’s children of their right to continue being Native people as we have for thousands of years in Bristol Bay,” said Alannah Hurley, executive director of United Tribes of Bristol Bay. Alaska Public Radio’s Liz Ruskin was at the hearing and reported that Pebble Partnership CEO Tom Collier, the only witness to support the mine, “tilted back in his chair and looked at the ceiling as Hurley spoke.” Alaska Congressman Don Young, who has not taken a position on the mine, criticized the witnesses for “not being scientists.” In a video of the hearing, Young said: “You’re not listening to the science. You are saying a lot of what ifs. Can and cannots. Should we or shouldn’t we. And this committee has a responsibility to review those that are directly involved. Not those that may be affected about it. It’s about science.” Committee Chairman Peter DeFazio, D-Ore., an outspoken Pebble critic, questioned the permitting process. He had especially harsh words about the way in which the U.S. Army Corps of Engineers is assessing the project, which many have criticized as being rushed and sloppy. “What I first want is a proper review and a proper comment period, and I don’t believe the Corps is doing either of those things,” he said at the hearing. “And I’m going to push them very hard to push back, even if Donald Trump is pushing on the other side.” DeFazio was referring to a pull back of special protections the EPA had proposed on the Bristol Bay watershed in 2014. The proposed restrictions were abruptly withdrawn this year on July 30 after Trump had a brief meeting with Gov. Michael J. Dunleavy. That EPA pullback has prompted three lawsuits against the EPA by nearly 20 diverse groups. Last week’s hearing is “typically the first step before an investigation on the permitting process is launched,” said Molly Dischner, communications director for United Tribes of Bristol Bay. The Pebble Partnership has spent more than $2 million on federal lobbying so far this year according to public disclosure forms, Liz Ruskin reported. A final environmental impact statement on the project is expected in January. Fish game changer Just as farmed salmon grown in sea cages toppled markets for wild fish a few decades ago, land-based farming is set to change the game again over the next decade. It will come in the form of recirculating aquaculture systems, or RAS, and will cause even more disruption to world markets. That is the conclusion of Rabobank, a Netherlands-based leader in food and agriculture financing that is among the 30 largest groups in the world. A Rabobank report this month identified more than 50 RAS proposed projects around the world with an estimated output to equal 25 percent of current salmon production by the year 2030. That totals roughly 550 million pounds of fish; in comparison, Alaska’s 2018 salmon catch produced 605 million pounds of salmon. The report said most of the land-based farms are planned in Norway, but proposed production volumes are highest in the U.S. where six farms are planned. In the U.S. Maine is taking the lead where Portland-based company Whole Oceans has received two leases alongside and underneath the Penobscot River. It plans to break ground on a $180 million RAS facility next year and begin output of 11 million pounds of Atlantic salmon annually. The report said RAS could disrupt traditional ocean-based fish farming over the next 10 years adding “it’s not a question of if, but of how much.” Blue opportunity The Alaska Ocean Cluster, an arm of the Bering Sea Fishermen’s Association, is seeking a manager for its Blue Pipeline Incubator, or BPI, in Seward. “This is a blended position made possible through a partnership between the Ocean Cluster, the City of Seward, the Seward Chamber of Commerce and the Small Business Development Center,” said Casey Rangel, program manager. The BPI Manager will oversee all operations of the incubator and will act as the liaison to Seward’s ocean-based industries. Requirements include a bachelor’s degree in business administration or a related field. Salary is $65,000 to $75,000+ commensurate with experience. Applications will be accepted until the position is filled. Learn more at www.alaskaoceancluster.com/about/employment. Laine Welch lives in Kodiak. Visit www.alaskafishradio.com or contact [email protected] for information.

GUEST COMMENTARY: Passing the baton for a competitive Alaska

I’ve learned that getting old is much like a mature oilfield. There comes a time to pass the reins in order to remain competitive and productive, a time for the younger and more energetic to take the lead. That’s how we keep our businesses — and our oilfields — competitive and productive. Here at Lynden, young, smart, hardworking people continue to replace us old warhorses. The same happened in Cook Inlet, and now it’s spreading across the North Slope. These transitions are natural, appropriate and good for Alaskans. The time has come for BP to sell its aging Alaska assets, just like Chevron, Shell and Marathon did in Cook Inlet. Prudhoe Bay is in decline and as it enters its twilight years, it needs a different kind of operator, one that can bring innovation to old problems, one that can reduce costs and operate more efficiently. It also needs a tax and regulatory environment that is stable and competitive. We all know that BP has worked hard to slow the severe decline at Prudhoe Bay. For two years after Senate Bill 21 passed, production actually increased. But BP was struggling to bring investment dollars to Alaska with Prudhoe Bay competing against projects in more than 78 countries across the globe. I have worked with BP in Alaska for nearly 50 years and admire their accomplishments, their generous support of our charities, their employment of so many outstanding Alaskans and Alaska contractors and their positive economic impact on our state. That said, BP understands that mature, high-cost oilfields require nimble operators. We should be thankful that they turned to a company like Hilcorp. Hilcorp is a proven entity that not only turned Cook Inlet around, it is working miracles at North Star and Milne Point. It knows how to make older, declining fields productive again, and it has not hesitated to make the investment needed to breathe new life into these aging assets. As Alaska grapples with recession and budget constraints, it is critical that we do everything possible to keep our resource industries competitive, that we attract new investment and grow our oil production. That’s the best way to provide good jobs, to pay for our government services, including schools and roads, and to support our charities and our Permanent Fund. That’s why it is important that we support companies like Hilcorp, which is willing to invest the billions of dollars it takes to acquire old fields and make them productive again. That’s their job. Our role is to ensure our state is competitive in the global marketplace and stop threatening the industry with increased taxes and unstable tax policies. Increased production is essential to maintaining a healthy economy. Transition from retiring Alaskans to the next generation of employees and from the large oil companies to smaller, more aggressive and nimble companies is not only a natural progression, it is healthy for Alaska. Jim Jansen is the Chairman of the Lynden Companies and a Co-Chair of the KEEP Alaska Competitive Coalition.

GUEST COMMENTARY: What are the options regarding Permanent Fund dividends?

Editor’s note: This is the fourth installment of a continuing series on the Permanent Fund dividend and Alaska’s fiscal system. Two broad options—and several sub-options—exist for the Permanent Fund dividend. Let’s show the array of possibilities before setting out some pros and cons. (Note that neither the appearance nor the location of an item on this list implies endorsement of that idea.) First, the State of Alaska could eliminate dividends. Such elimination could occur (a) with no other action; (b) through a “full cash-out,” which would involve the distribution to Alaskans of the entire Permanent Fund principal and/or the Permanent Fund Earnings Reserve while ending dividends; or (c) through a “partial cash-out,” which would distribute to Alaskans part of the principal and/or the Earnings Reserve while ending dividends. Second, we could maintain dividends. Maintaining dividends could happen by (a) means-testing the dividend so that lower-income residents receive higher payments than higher-income Alaskans; (b) following the statutory formula for setting the annual dividend created in the 1980s; (c) keeping in place the current statutory formula, but ignoring it (as has occurred since 2015); (d) amending the statutory formula (presumably to follow it); or (e) amending the Constitution to include a dividend formula, either the existing one or a new one. Now for some pros and cons. Arguments for and against various versions of eliminating dividends Wiping out dividends would save $1 billion or more per year. Your support or opposition for abolishing dividends outright probably depends both on your view of the rationales for dividends and your sense of what the alternatives are. Alaskans of all stripes would agree that such a straight-up elimination appears politically difficult. Cashing out the whole Permanent Fund principal would pay more than $70,000 to each Alaskan. It requires a constitutional amendment — which the Legislature would have to put on the ballot for voter approval — so it would take a while. Given that the budget relies heavily on the spending of Permanent Fund earnings, dissolving the Permanent Fund principal would put a giant hole in the budget. It would also leave no savings from the one-time oil wealth. Cashing out the entire Permanent Fund Earnings Reserve would pay more than $17,000 per Alaskan and could occur much faster, because by law the Legislature could do that at any time (assuming either no veto by the governor or a veto that was overridden). Wiping out the Earnings Reserve would accelerate the State of Alaska’s fiscal reckoning. Partial cash-outs of either the Permanent Fund principal or the Permanent Fund Earnings Reserve face the same pros and cons as full cash-outs, but to a lesser degree. Arguments for and against maintaining various versions of dividends That’s enough for now on options for dividend elimination; let’s consider pros and cons of various versions of keeping it. Converting dividends to a means-tested program would be legal and would save money if the payments of higher-income Alaskans were cut while lower-income residents remained the same as they would be under the current statutory formula. Means-testing dividends would also fly in the face of the philosophical arguments for dividends and probably weaken political support for dividends. Following the current statutory dividend formula would continue to make dividends the State of Alaska’s largest outlay. In the absence of other changes such as deeper budget cuts than many Alaskans seem to want and/or substantial revenues from taxes (either from the levying of broad-based taxes—perhaps income or sales—or from an increase in oil taxes), following the statutory dividend formula appears to create a big and continuing fiscal gap that will come to bite Alaskans. Leaving the statutory dividend formula in place while failing to follow it seems to be a recipe for arguments in the Legislature about the level of the dividend that eat up the session each year. Putting the statutory dividend formula in the Constitution would be both hard and raise the same questions of fiscal sustainability that following the current statutory formula does. Putting the dividend in the Constitution, however, would mean that the dividend would have to be paid under the formula regardless of the prevailing fiscal circumstances. The last two options to discuss involve a new dividend formula that ideally would be both fair and fiscally sustainable. If the new dividend formula is in the statutes, legally the Legislature could ignore it. Politically, however, adopting a new statutory formula after a full debate might make that formula stick. This list’s remaining option would be to put a new dividend formula in the Constitution. Again, constitutional amendments take time and substantial effort. The framers of the Alaska Constitution made the document hostile to dedications and fixed formulas out of a desire to give the Legislature maximum leeway to address the state’s issues and problems as they arose. Supporters of “constitutionalizing” the dividend argue, however, that the experience of the last four years shows that leaving the Legislature the freedom to decide the dividend every year breeds political dysfunction, as that single decision seems to exhaust — or even exceed — the bandwidth available to lawmakers. If there is a new dividend formula, what should it be? Cliff Groh is an Anchorage lawyer and writer as well as the legislative assistant who worked the most on the bill in 1982 that created the Permanent Fund dividend we have today.

Alaska hire preference in limbo after AG drops defense

Editor's note: This story has been updated with a statement from Associated General Contractors of Alaska Executive Director Alicia Siira. Alaska’s local hire requirements are a touchy subject these days. On one hand, they are a means to ensure the residents of a state with historically high unemployment aren’t passed over when often large, nationwide construction firms are looking for help. At the same time, though, several iterations of Alaska hire laws have been struck down as unconstitutional, which appears to have led Attorney General Kevin Clarkson to conclude the current in-state hire mandates for many public projects are illegal, too. Clarkson issued a formal legal opinion Oct. 3 contending the state’s Alaska hire statute violates portions of both the U.S. and Alaska constitutions. In the 11-page opinion written for Gov. Michael J. Dunleavy, Clarkson wrote that laws intended to economically benefit Alaska residents at the expense of nonresidents violates the Privileges and Immunities Clause of the U.S. Constitution. Similarly, provisions in the current law could at times put Alaskans from one region of the state ahead of others when being considered for certain work, meaning it violates the Alaska Constitution’s Equal Rights, Opportunities, and Protection Clause, according to Clarkson. Clarkson’s interpretation of the Alaska hire law was published as the state Department of Labor and Workforce Development was being sued by SECON, a Juneau-based general contractor firm that works extensively on government-funded Southeast road projects as well as Ricky Kirby, a seasonal SECON paving equipment operator from Yakima, Wash. The Labor Department implements the Alaska hire law. SECON is a subsidiary of Colaska Inc., which is part of the larger Colas USA group of construction companies. While the law was being challenged, the case had not been adjudicated and state Superior Court Judge Peter Ramgren had not indicated how he might rule on the complaint, according to court records. Filed in July, the lawsuit alleges the state’s residential hiring preference violates the Privileges and Immunities and Commerce clauses of the U.S. Constitution and the Equal Protection Clause of the Alaska Constitution. SECON was fined by the Labor Department and paid $3,678 in July 2017 for violating the Alaska hire law while working on a public water system project; the company was additionally fined 17 separate times from Feb. 15 to May 20 for not meeting resident hire thresholds on a host of projects it worked on earlier this year, according to the complaint. The 2019 fines totaled $158,670. The complaint asserts that SECON is a union contractor managed by Alaskans and has an 85 percent resident workforce but is periodically forced to hire Outside laborers such as Kirby to work on its projects in the state. As it stands, state law requires that staffing for state or locally funded public works projects be conducted with a 90 percent Alaska resident hire requirement by trade when a given project is in a region of the state deemed to be a Zone of Underemployment by the Labor Department commissioner. A region of the state can be considered a Zone of Underemployment if the unemployment rate for the area averaged 10 percent more than the national unemployment rate over the prior 12-month period. The entirety of Alaska can also be deemed a Zone of Underemployment if the criteria are met statewide. Labor Commissioner Tamika Ledbetter found all of Alaska to be a Zone of Underemployment in the most recent employment preference determination issued by the department June 13. The determination was effective through June 30, 2021, for 21 trades — boilermakers to culinary workers to carpenters and tugboat workers — until Clarkson’s opinion. The subsistence lifestyle and lack of economic opportunities prevalent in rural Alaska and the state’s highly seasonal industries have historically combined to give the state a significantly higher unemployment rate than the rest of the country. The resident hire preference was suspended in 2013 under former Gov. Sean Parnell when the Lower 48 was continuing to recover from the Great Recession that largely missed Alaska. It was reinstated statewide in June 2015 by Gov. Bill Walker’s administration after the national unemployment rate had fallen below Alaska’s, which at the time was mostly holding steady. According to the most recent data available from the Labor Department, nonresidents made up 20.9 percent of the Alaska workforce in 2017. Kirby’s and SECON’s attorney Michael Geraghty wrote in the complaint that the state cannot justify upholding the Alaska hire law because there is no good reason for treating nonresidents differently than Alaskans. Discriminating against nonresidents won’t improve the employment situation of residents because workers from Outside “are not the ‘peculiar source of the evil at which the statute is aimed,’” Geraghty wrote, citing a 1978 U.S. Supreme Court ruling that struck down a prior Alaska hire law focused at oil industry employment based on the Privileges and Immunities Clause. “The residency law, thus, unlawfully discriminates against out-of-state individuals like Kirby who have the requisite skill, knowledge, and experience to work on publicly funded projects in Alaska, but for the residency law,” the complaint further contends. Geraghty was attorney general for Alaska from 2012-14 under former Gov. Sean Parnell. Kirby, according to the complaint, can make more money working on Alaska projects for roughly half the year than he can working in his home state of Washington for the same amount of time. Kirby is a member of the International Union of Operating Engineers, Local 302, which covers Alaska, Washington and Idaho. Local 302 Juneau district representative Corey Baxter said in an interview that union contractors such as SECON call him when they need workers for projects in the area. Baxter subsequently calls Local 302 union halls in Anchorage and Fairbanks if there are not enough Southeast workers to fill projects. However, he said it can be a challenge to get workers to temporarily relocate, particularly in summer when work is plentiful. “We can’t force somebody to come down to help,” Baxter said. He added that union officials always try to hire in state when they can, but sometimes they have to go Outside to meet the labor demand. SECON’s complaint lays out a similar scenario. The state does have a detailed process by which companies can have the local hire requirement waived on a case-by-case basis; it includes advertising the positions that need to be filled statewide for at least three days, according to an informational paper published by the Labor Department. The Associated General Contractors of Alaska, a trade group that represents numerous contractors subject to Alaska hire requirements, issued the following statement from Executive Director Alicia Siira. "In the construction industry, few people believe in local and Alaska hire more than we do," she said. "This determination will not open the floodgates to Outside contractors coming to Alaska. It costs more for a contractor to import labor from the Lower 48 than it does to hire local. The public projects that the Alaska hire law applies to have a prevailing wage requirement — workers are paid at published rates. These requirements also include paying $100 per day to workers whose domicile is more than a specific number of miles away from the job. There are not margins on construction projects to allow contractors to hire Outside labor unless it's absolutely necessary because workers are not available. And why would they? The excellent training Alaskans recieve in the construction trades results in some of the best trained workers in the country, and our industry wants to make sure they stay in Alaska." Clarkson wrote in his opinion that just because the Alaska hire law is based on good intentions, that doesn’t mean it passes legal muster. “Despite its popularity among some Alaskans, Alaska hire has not fared well in the courts,” also referencing the 1978 Supreme Court ruling and other rulings by the Alaska Supreme Court against broader Alaska hire laws that have since been repealed. “The U.S. Supreme Court has long held that the Privileges and Immunities Clause ‘plainly and unmistakably secures and protects the right of a citizen of one state to pass into any other state of the union for the purpose of engaging in lawful commerce, trade, or business without molestation,’” Clarkson wrote, citing the same U.S. Supreme Court precedent as Geraghty. Department of Law spokeswoman Cori Mills wrote via email Oct. 29 that the state was close to finalizing a settlement with SECON. But some legislators are not keen on the attorney general not defending the laws they’ve passed. House State Affairs Committee co-chair Rep. Zack Fields, D-Anchorage, called Clarkson’s opinion “politically charged” in a statement issued shortly after it was published. He acknowledged that courts have struck down local hire mandates for privately funded projects, but noted that, except for Dunleavy, both Democrat and Republican gubernatorial administrations since 1986 have implemented Alaska hire laws. Senate President Cathy Giessel, R-Anchorage, sent a letter to Clarkson Oct. 22 in which she wrote that his opinion “caused consternation” to her and many of her constituents. The State of Alaska has long tried to find a balance between being unjustifiably parochial and supporting employment for Alaskans, according to Giessel. She wrote that Alaska hire laws have been “tested and refined through the judicial process” but the current version has not been thrown out in court. Giessel stressed that as attorney general, Clarkson has a constitutional duty to enforce and defend the laws of the state, including Alaska hire. “Your ad hoc determination that the laws of our land, which remain untested in the courts, are unconstitutional is a diversion into the lawmaking field that is rightfully the purview of this branch of government (the Legislature). I respectfully urge you to cease a law creation process that appears to be done by executive fiat,” she wrote. “I also respectfully urge you to modify or revoke your Oct. 3 opinion in recognition of the constitutional obligation of the executive branch to faithfully execute the laws of this state enacted by the Legislature.” Clarkson responded to the Senate President Oct. 29, writing in a four-page letter that he and Dunleavy share her desire to see Alaskans working on projects in the state, but stressed that he took an oath of office to defend the state and federal constitutions. "Nowhere in law is the attorney general charged with a duty to defend every statute, however plainly unconstutitional it may be," Clarkson wrote, contending Alaska Supreme Court precedent gives the attorney general the discretion to handle the state's legal matters as he or she deems appropriate. At this point it’s unclear if Dunleavy, who has long stressed a need for state officials to follow the laws of the state — most often regarding the Permanent Fund dividend — will seek to repeal Alaska hire in the upcoming session. A spokesman for Dunleavy did not respond to questions in time for this story. Elwood Brehmer can be reached at [email protected]

Marijuana board wrangles with unincorporated area licenses

As more cannabis entrepreneurs seek to open businesses all over Alaska, the Marijuana Control Board is dealing with the question of how to provide adequate process for unincorporated areas. So far, the majority of cannabis businesses are in the urban areas of Anchorage, Wasilla/Palmer, Fairbanks or Juneau. There is a smattering in smaller urban areas like Kenai/Soldotna, Homer, Bethel, Ketchikan, Kodiak and North Pole. But the board has granted a few licenses to businesses in communities that are small, unincorporated and aren’t even represented by a borough government. When applicants are looking at establishing a retail, cultivation or manufacturing facility for cannabis products, there is an extensive publishing process involving running public notices in newspapers or radio stations and providing notice to a local government, which could voice objection to a license and provide a platform for the public to testify about it. In the case of unincorporated and rural communities, there is no local government, and there may or may not be a publication of general circulation to publish a notice in. One aspiring business in Tok has explored these problems throughout the application process. 907 Promos, a holding company, bought land in Tok with the intention of opening a retail shop called “Tokin Up,” but has run into snags that have held it up since February. Because Tok does not have a local government, the owners had to obtain signatures from a majority of the residents within a five-mile radius of the proposed location for a petition to the Marijuana Control Board. Tok is a spread-out community, and the most recent complete census was done nearly 10 years ago, in 2010. Initially, the applicants used data from the Alaska Department of Commerce and Community Development, but that proved to be less than precise. Determining exactly how many people lived within the five-mile radius involved drawing a digital fence on Google Maps and dropping a pin on every single rooftop, according to a letter from Lance Christian Wells, the legal firm representing 907 Promos. “They printed off each grid section to provide a ‘current map’ of Tok,” wrote legal assistant Jessika Smith in a letter to the board. “Applicants drove up and down every street and driveway identified from the ground, satellite, or sky, knocking on doors to gain support and collect signatures.” Smith wrote that the Alcohol and Marijuana Control Office, or AMCO, had told them this process had worked in other small communities, but when they presented the map they developed as a household count, it was denied. They switched to using a mathematical model, basing a population estimate on the number of households, but it came up much higher than the census count. When they disregarded outbuildings and abandoned residences, it came up far smaller. So the applicants and AMCO approached the state demographer for help. The Alaska Department of Labor’s demographer, Eric Sandberg, estimated that there were approximately 869 people older than 21 in the area. The applicants also ran into snags with public notice, because Tok doesn’t have its own newspaper, Smith wrote. Radio stations either didn’t offer advertising or wouldn’t advertise for a cannabis facility because of their federal funding. “Seemingly out of options, licensees were able to gain approval from AMCO to provide public notice through unconventional means — by mailing public notice to each and every PO Box in Tok once a week for three weeks,” Smith wrote. “Residents do not use home addresses for mailing or have mailboxes within their community, so this should have covered everyone living in or around Tok.” Throughout the process, residents of Tok who opposed the opening of a retail facility submitted public comment to the board, with comments dating back to April. The applicants managed to gather 617 signatures as of September, with 579 needed, said AMCO Director Erika McConnell during the Marijuana Control Board’s Oct. 22 meeting. However, only 490 of those people were vetted as living within the radius and being older than 21, she said. Johnathan Guest, one of the applicants with 907 Promos, told the board they felt confident in the community support as long as the board decided on a number of signatures they needed. “We absolutely feel we can meet the standard if you allow us to add signatures after the vetted number,” he said. Board member Loren Jones said it seemed unlikely the board would run into this situation again — Tok is a fairly large community for an unincorporated one without a local government. Most unincorporated communities in the unorganized borough tend to be very small, like Naukati Bay in Southeast, where the board previously granted a limited cultivation license. Naukati Bay has a population of about 113. The board voted to postpone the decision on the petition until its November meeting, until AMCO could verify more of the signatories’ addresses. The topic of how to provide adequate voice to neighbors of cannabis establishments in unincorporated areas has come up before at the board. In 2017, Talkeetna’s first retail cannabis shop opened on its Main Street, with approval from the Matanuska-Susitna Borough. Some residents of Talkeetna, which is unincorporated, voiced opposition to it, but the borough’s code allowed it. Marijuana Control Board chairman Mark Springer said during the board’s discussion on legislative priorities that in addition to recognizing tribal governments as local governments for the purpose of protesting cannabis licenses, the state could consider nonprofit community associations — essentially, community organizations recognized by the state that represent the interests of unincorporated communities, receive state and federal grants, provide services or enter into contracts or agreements. “If we had that in Tok, we would not be having this issue right now,” he said. Other legislative priorities for the board include evaluating the current cannabis tax structure for possible reform, transporting between license types, indemnification for minors assisting in investigations, prohibiting personal solvent-based manufacturing, clarifying the personal plant cultivation limit, setting possession and transportation limits for concentrates and edibles and requiring a majority of the board to adopt regulations. Elizabeth Earl can be reached at [email protected]

Stocks set another record. The champagne’s still corked.

NEW YORK (AP) — U.S. stocks are back at a record. Don’t feel excited? Neither does Wall Street. After a shaky few months, the stock market has pushed through worries about President Donald Trump’s trade wars, weakening corporate profits and the slowing global economy to set another all-time high. The S&P 500 closed Oct. 28 at 3,039.42, eclipsing the previous record set on July 26. The resurgence belies how much caution still runs through markets, however. The strongest performers in recent months have been companies that pay big dividends and are more likely to hold up during downturns. Investors, meanwhile, remain hesitant to plow their money into stocks. “We’ve slowly crept up to these all-time highs, but there’s still a lot of uncertainty,” said Emily Roland, co-chief investment strategist at John Hancock Investment Management. “We’re open to the idea that there could be a reacceleration in global economic growth, but we haven’t seen confirmation yet.” Some glimmers of increased optimism have shone through the past couple of days, such as improved performance for smaller companies and tech stocks, but plenty of apprehension is still apparent in the catalysts for the S&P 500’s return to a record high: Defense has been the best offense Of the 11 sectors that make up the S&P 500, the ones seen as the stodgiest have been the best recently. Since July 26, utilities have jumped 6.3 percent. Profits for these kinds of companies are generally steadier than for the rest of the market, but also slower growing. That’s why they don’t typically do better than the overall market when times are good. But their relatively high dividends look more alluring now that the Federal Reserve has cut interest rates twice since August, in hopes of protecting the economy. The only other sector in the S&P 500 to rise more than 1.4 percent is another high-dividend sector, real estate, which is up 5.6 percent. Stocks that rise with a strong economy are scuffling If investors were feeling gung ho, they’d likely be piling into areas of the market closely tied to the strength of the economy, which are known as “cyclical” stocks. They are not. Energy stocks have been the worst performers in the S&P 500 since July 26, down 5 percent, for example. And tech stocks lagged the S&P 500 from late July until last week, after surging ahead of the rest of the market in the early part of this year. The struggles tie into all the uncertainty that still exists about how much trade wars will hurt the economy, said Willie Delwiche, investment strategist at Baird. That would hurt cyclical stocks more than defensive stocks. Low interest rates drive the market as much as anything else In addition to utilities and real-estate investment trusts, homebuilders have been among the market’s best performers recently. Lennar, PulteGroup and D.R. Horton are all up more than 16 percent in the last three months as lower mortgage rates have drummed up more business for them. The average 30-year fixed mortgage has a rate of 3.75 percent, down from 4.51 percent at the start of the year, according to Freddie Mac. Euphoria is still lacking Investors are still cautious, and they’re not chasing after the rising stock market. In four of the seven weeks through Oct. 16, they pulled more money out of U.S. stock funds and ETFs than they put in, according to the latest estimates from the Investment Company Institute. Before that, investors yanked a net $101 billion through the year’s first eight months and instead poured money into the safety of bond funds. To a contrarian, this is actually an encouraging sign. It means stocks could push even higher if investors do decide to get more aggressive with their portfolios. Recent performance suggests they might need a confidence-booster, such as a U.S.-China trade deal. “We’re not seeing an excessive amount of optimism out there,” said John Hancock Investment Management’s Roland. “That’s one reason the market could still have some legs here. We’re open to that, but we’re just waiting for some confirmation that the backdrop can support earnings growth going forward.” AP Business Writer Alex Veiga contributed.

US deficit hits nearly $1 trillion. When will it matter?

WASHINGTON (AP) — The Trump administration reported a river of red ink Oct. 25. The federal deficit for the 2019 budget year surged 26 percent from 2018 to $984.4 billion — its highest point in seven years. The gap is widely expected to top $1 trillion in the current budget year and likely remain there for the next decade. The year-over-year widening in the deficit reflected such factors as revenue lost from the 2017 Trump tax cut and a budget deal that added billions in spending for military and domestic programs. Forecasts by the Trump administration and the Congressional Budget Office project that the deficit will top $1 trillion in the 2020 budget year, which began Oct. 1. And the CBO estimates that the deficit will stay above $1 trillion over the next decade. Those projections stand in contrast to President Donald Trump’s campaign promises that even with revenue lost initially from his tax cuts, he could eliminate the budget deficit with cuts in spending and increased growth generated by the tax cuts. Here are some questions and answers about the current state of the government’s finances. What happened? The deficit has been rising every year for the past four years. It’s a stretch of widening deficits not seen since the early 1980s, when the deficit exploded with President Ronald Reagan’s big tax cut. For 2019, revenues grew 4 percent. But spending jumped at twice that rate, reflecting a deal that Trump reached with Congress in early 2018 to boost spending. Why doesn’t Washington do something about it? Fiscal hawks have long warned of the economic dangers of running big government deficits. Yet the apocalypse they fear never seems to happen, and the government just keeps on spending. There have been numerous attempts by presidents after Reagan to control spending. President George H.W. Bush actually agreed to a tax increase to control deficits when he was in office, breaking his “Read my lips” pledge not to raise taxes. And a standoff between President Bill Clinton and House Speaker Newt Gingrich did produce a rare string of four years of budget surpluses from 1998 through 2001. In fact, the budget picture was so bright when George W. Bush took office in 2001 that the Congressional Budget Office projected that the government would run surpluses of $5.6 trillion over the next decade. That didn’t happen. The economy slid into a mild recession, Bush pushed through a big tax cut and the war on terrorism sent military spending surging. Then the 2008 financial crisis erupted and triggered a devastating recession. The downturn produced the economy’s first round of trillion-dollar deficits under President Barack Obama and is expected to do so again under Trump. Should we worry? As far as most of us can tell, the huge deficits don’t seem to threaten the economy or elevate the interest rates we pay on credit cards, mortgages and car loans. And in fact, the huge deficits are coinciding with a period of ultra-low rates rather than the surging borrowing costs that economists had warned would likely occur if government deficits got this high. There is even a new school of economic theory known as the “modern monetary theory.” It argues that such major economies as the United States and Japan don’t need to worry about running deficits because their central banks can print as much money as they need. Yet this remains a distinctly minority view among economists. Most still believe that while the huge deficits are not an immediate threat, at some point they will become a big problem. They will crowd out borrowing by consumers and businesses and elevate interest rates to levels that ignite a recession. What’s more, the interest payments on the deficits become part of a mounting government debt that must be repaid and could depress economic growth in coming years. In fact, even with low rates this year, the government’s interest payments on the debt were one of the fastest growing items in the budget, rising nearly 16 percent to $375.6 billion. Haven’t economists been making these warning for decades? Federal Reserve Chairman Jerome Powell says the day of reckoning is still coming but isn’t here yet. Most analysts think any real solution will involve a combination of higher taxes and cost savings in the government’s huge benefit programs of Social Security and Medicare. Any sign that Washington may take the politically painful steps to cut the deficit? In short, no. There has been a major change since the first round of trillion-dollar deficits prompted the Tea Party revolt. This shift brought Republicans back into power in the House and incited a round of fighting between GOP congressional leaders and the Obama administration. A result was government shutdowns and near-defaults on the national debt. But once Trump took office, things changed: The president focused on his biggest legislative achievement, the $1.5 trillion tax cut passed in 2017. This appeared to satisfy Republican lawmakers and quelled concerns about rising deficits. Democratic presidential candidates have for the most part pledged to roll back Trump’s tax cuts for corporations and wealthy individuals. But they would use the money not to lower the deficits but for increased spending on expensive programs such as Medicare for All. So the deficits won’t animate the presidential campaign? It doesn’t seem likely, though former Rep. Mark Sanford, who has mounted a long-shot Republican campaign against Trump, is urging Republican voters to return to their historic concerns about the high deficits. And economists note that today’s huge deficits are occurring when the economy is in a record-long economic expansion. This is unlike the previous stretch of trillion-dollar deficits, which coincided with the worst recession since the 1930s. But analysts warn that if the economy does go into a recession, the huge deficits projected now will expand significantly — possibly to a size that would send interest rates surging. Such a development, if it sparked worries about the stability of the U.S. financial system, might produce the type of deficit crisis they have been warning about for so long.

Movers and Shakers for Nov. 3

The Anchorage Downtown Partnership hired Mercedes Curran as office manager. Curran is a lifelong Anchorage resident and graduated in 2013 from the University of Puget Sound with a bachelor’s degree in music education. Since her return home, she’s been a member in the Anchorage Concert Chorus, coach and administrator for Anchorage Youth Soccer Club, referee and secretary for Anchorage Soccer Referees Association, and singer/performer in various Alaskan bands, theatre groups, and shows. She is also the co-host of the local talk/music radio show The Summit. Col. Brian Kile assumed command of the 168th Operations Group following his tenure as director of Operations of Joint Staff at Joint Force Headquarters, Alaska National Guard, assigned at Joint Base Elmendorf-Richardson. Kile enlisted the Air National Guard in 1990 as a loadmaster with the 210th Rescue Squadron. After serving several years in this position, he was selected for the Undergraduate Pilot Training Program, which marked his transition into the officer corps. Kile has served in numerous leadership positions, including 210th Rescue Squadron Assistant Director of Operations, 11th Air Force Rescue Coordination Center Deputy Director, 176th Operations Group HH-60G Standardization and Evaluation Pilot, 210th Rescue Squadron Director of Operations, 210th Rescue Squadron Commander, and 176th Operations Group Deputy Commander. Col. Richard Adams assumed command of the 168th Wing, Alaska Air National Guard, from Col. Bryan White during a change of command ceremony Oct. 20. Adams assumed command of the wing after serving as the commander of the 168th Operations Group, a position he had held since May 2018. Adams was commissioned in 1991 as a distinguished graduate through the ROTC program at the University of Colorado, Boulder. In 2004 he transferred from the active-duty Air Force to the Alaska Air National Guard. The Bristol Bay Native Corporation Education Foundation named University of Alaska Southeast education graduate Nancy Mills as their 2019 Student of the Year. From Chignik Lagoon, Nancy Mills was the first graduate from her school to earn a bachelor’s degree. Mills earned her master of education degree in special education from UAS in 2012. She is currently working toward a second master’s degree in educational leadership from UAS. She is the secondary and special education teacher at the Chignik Lagoon School. Trilogy Metals Inc. has signed an employment agreement with James “Jim” Gowans as CEO and president on an interim basis, effective Sept. 4. Gowans was president and CEO of Arizona Mining Inc. from 2016-18 when Arizona Mining was purchased by South32 Ltd. Previously he was a senior advisor to the chairman, co-president, executive vice president and chief operating officer at Barrick Gold Corp. from 2014-15. Gowans has extensive experience in Alaska. He completed the feasibility study for the Red Dog Mine, oversaw the design and construction of that mine and then operated Red Dog for three years after commissioning. The Alaska State Hospital and Nursing Home Association announced that Jared Kosin, JD, MBA, will become the organization’s new president and CEO. Kosin currently serves as the associate administrator of Mat-Su Regional Medical Center. He has worked closely with ASHNHA for seven years. Prior to his current role, he served as the executive director of the Office of Rate Review at Alaska’s Department of Health and Social Services. Other past experience includes policy and legislative leadership for the Colorado Speaker of the House, and Michigan Senate Majority Leader. Kosin will succeed Becky Hultberg, who announced in August she will depart ASHNHA in December to lead the Oregon Association of Hospitals and Health Systems. Kosin holds a juris doctor degree from Michigan State University College of Law, an MBA from the University of New Hampshire, and a bachelor’s in English with a minor in political science also from the University of New Hampshire.

UK sale close boosts ConocoPhillips income; nets $306M in-state

ConocoPhillips netted more than $3 billion in the third quarter as the major oil producer continues to focus its long-term strategy. Much of the large quarterly profit stemmed from closing a $2.2 billion sale of North Sea assets in Britain to BP during the period. The $3 billion net is a 60 percent year-over-year improvement and includes a nearly $1.8 billion gain from dispositions, according to the earnings report released Oct. 29. ConocoPhillips reported adjusted quarterly earnings — omitting one-time items — of $914 million, a 43 percent decrease from a nearly $1.6 billion adjusted profit a year ago. On the financial side, ConocoPhillips’ Alaska operations generated a $306 million third quarter profit, which was down 29 percent year-over-year from $427 million. Alaska spokeswoman Natalie Lowman wrote via email that ConocoPhillips paid $283 million in taxes and royalties to the State of Alaska in the third quarter. The company’s North Slope oil production increased 20 percent year-over-year to average 190,000 barrels per day; however North Slope oil prices for the quarter were down 18 percent from a year prior at $62.78 per barrel, according to the earnings report. ConocoPhillips invested $427 million in North Slope capital projects during the quarter, bringing its year-to-date capital spend in the state to more than $1.2 billion, compared to a full-year 2018 spend of just less than $1.3 billion. Lowman noted that the increased capital expenses mean the company “has reinvested 112 percent of our adjusted net income back into Alaska projects.” ConocoPhillips’ year-to-date adjusted net income in Alaska is $1.07 billion. The North Sea sale announced in July 2018 coincided with a North Slope deal with BP in which ConocoPhillips acquired the London-based major’s 38 percent stake in the Kuparuk River field, which it operates. The companies said at the time that the transactions generally amounted to cash-neutral asset swap. ConocoPhillips now holds 92 percent of Kuparuk; the legacy oil field produced 107,000 barrels per day during the 2019 state fiscal year, according to the Alaska Department of Revenue. Chairman and CEO Ryan Lance said in a formal statement that the third quarter results continue the company’s success since it reset its value proposition when oil prices bottomed out in 2016. “This business is all about having a sustainable strategy with consistent execution,” Lance said. “We believe ConocoPhillips offers both — a shareholder-friendly, returns-oriented value proposition and strong delivery on our commitments.” The net income totals were the product of nearly $10.1 billion in revenue during the quarter, which roughly matched the company’s third quarter 2018 revenue total when oil prices were markedly higher. The net income translated to quarterly earnings of $2.76 per share. ConocoPhillips stock closed trading Oct. 29 at $57.09 per share, up 2.5 percent for the day following the strong earnings report. ConocoPhillips also finalized its acquisition of the mid-sized Nuna prospect on the North Slope from small independent Caelus Energy in the third quarter. Company executives have described the Nuna deal as a roughly $100 million purchase. Now folded into the Kuparuk River Unit, ConocoPhillips Alaska leaders have said they expect Nuna to begin producing oil in 2022, with peak production hitting about 20,000 barrels per day. During the coming winter the company plans to drill seven more exploration and appraisal wells on its large lease holdings in the National Petroleum Reserve-Alaska, following up eight such wells the company drilled last winter in one of its busiest North Slope exploration seasons. ConocoPhillips is in the midst of constructing the Greater Mooses Tooth-2 oil project — peak production is pegged at up to 40,000 barrels per day — in the NPR-A as well as permitting its very large Willow prospect in the reserve. Willow is scheduled to come online in the 2025-26 timeframe with peak production estimates reaching 130,000 barrels per day. Elwood Brehmer can be reached at [email protected]

Board votes to keep Cook Inlet meeting in Anchorage

The tug of war over the location for the 2020 Upper Cook Inlet Board of Fisheries meeting seems to be over — with Anchorage as the winner. After going back and forth over the location for more than a year, the board members voted 4-3 Oct. 24 at their annual work session to keep the February 2020 Upper Cook Inlet meeting in Anchorage. They also voted unanimously to drop a policy previously adopted that recommended the board rotate the meeting every three years between the three major communities of the region: Palmer/Wasilla, Anchorage and Kenai/Soldotna. Board members Fritz Johnson, Gerad Godfrey and Marit Carlson-Van Dort voted against the motion to hold the meeting in Anchorage, with members Morisky, Israel Payton, John Jensen and John Wood voting in favor. Board members primarily cited cost and the neutrality of Anchorage as a meeting location for the decision at the work session. The board last met on the central Kenai Peninsula for a full meeting in 1999; it met there for a work session in 2016. At its annual work session in 2017, the board voted to hold the 2020 meeting in Anchorage; in March 2018, the members reconsidered and voted move it to Kenai/Soldtona. The board later revisited the decision in January 2019, but after objections from the stakeholders about a lack of fair notice, the Alaska State Ombudsman investigated and ruled that the board needed to do it again — this time with fair notice. The governments of the cities of Kenai and Soldotna and the Kenai Peninsula Borough offered in a joint letter to provide the board with free meeting space, with an eye toward making the decision based on cost easier. The area has enough restaurants, hotel rooms, transportation options and airplane service to meet the needs of the board, the city managers and borough mayor wrote in the joint letter. Multiple other commenters wrote that the cost for stakeholders coming from the Kenai Peninsula is higher than those who live in Anchorage or the Mat-Su, who can stay at home rather than in hotels. The board takes cost into consideration along with a menu of other variables, including internet access, adequate facility space, community relationship with the board and travel time for the board members and Alaska Department of Fish and Game staff, among other factors. However, because many Fish and Game commercial fisheries staff members live on the central Kenai Peninsula and the local governments offered meeting space for free, the cost differentials between the three locations were surprisingly similar, said Board of Fisheries Executive Director Glenn Haight. Board chairman Reed Morisky said he saw logistical issues with the area, including how spread out the area near the likely meeting space would be. Anchorage has more hotel rooms, restaurants and amenities within walking distance than Kenai/Soldotna does, he said. Johnson argued in favor of holding the meeting in Kenai/Soldotna, saying the board members get a valuable insight from being present in a community they may not when they don’t meet there, given that not all stakeholders have the money to travel to Anchorage for multiple days at a time. “I think over the years the board has been good at acknowledging that it’s important that we travel to the places that these industries are centered,” he said. “I think that by abandoning that notion, we may lose that connection with the stakeholders for whom this industry is their very backyard. And that would be a shame.” Morisky said sportfishermen and subsistence users are stakeholders in the Upper Cook Inlet fishery, too, many of whom live in the Anchorage area. One of the main contentions commenters asking the board to meet on the Kenai Peninsula have asserted is that the majority of people who attend the meetings, even in Anchorage, are from the Kenai Peninsula, and that Anchorage residents don’t attend as much even when the meetings are nearby. Morisky noted that even if people are not actively involved in the deliberations, they may still be following the decisions. “Just because people aren’t necessarily at meetings or don’t own a particular permit, it doesn’t mean they don’t have a common ownership in our resource,” he said. After the vote, ADFG Commissioner Doug Vincent-Lang said in response to Johnson’s comments that he was aware the board needed to stay connected to the fishing communities. “It’s a careful balancing act between cost and maintaining our (citizen advisory committee) system and maintaining the board structure,” he said. “To me, the clear mechanism that I want to do is make sure we continue a strong AC structure and we can bring those people into our meetings to engage no matter where they are. But I would hate to jeopardize that cost, in terms of our meeting locations.” At the same March 2018 meeting where the members voted to move the meeting to the Kenai Peninsula, the board accepted the policy that recommended rotation of the meetings between the three major communities. Former board member Al Cain, who proposed the idea, said it was meant to take the politics out of choosing the meeting location every three years. At the time, it passed narrowly. Board member Jensen said at the work session Oct. 24 that he didn’t think the rotational policy was fair and supported repealing it. “I don’t think it’s our purview to hold the future boards’ feet to the fire as far as meetings go,” Jensen said. “I’m not really supportive of this policy; I don’t even think we can do it. I don’t think it’s within our authority to tell a board 10 years from now where they’re going to have their meeting.” Board member Payton agreed, noting that he had been the one absent when the policy passed. The policy didn’t tie the board members’ hands — it was only a recommendation — but the public might not see it that way in the future, he said. “It’s what the board decided at the time that was just for all stakeholders, and I think the board should continue to have that flexibility and wisdom to decide what’s just for everyone and decide where we want to hold our meeting,” he said. Johnson reminded the board they had passed this a year ago to avoid some of the conflict and politics from the decision, and member Wood suggested approaching the local governments in the various communities to see if they had suggestions for how to alternate the location for the meeting. Ultimately, the board voted unanimously to discontinue the policy. ^ Elizabeth Earl can be reached at [email protected]

Alaska Airlines turning purchase into profits

Alaska Airlines’ parent company is starting to see the benefits of the $4 billion deal it made three years ago to purchase West Coast rival Virgin America. Executives for Seattle-based Alaska Air Group Inc. reported a $322 million third quarter profit on Oct. 24, a 48 percent improvement over the $217 million the company netted a year prior. The third quarter net income came on the back of nearly $2.4 billion in operating revenue, which was up 8 percent year-over-year. Alaska Air Group also operates regional carrier Horizon Air. CEO Brad Tilden highlighted numerous positives for the company so far in 2019 but he started an Oct. 24 earnings call by offering condolences to the passengers and their families impacted by the Oct. 17 crash of a Peninsula Airways plane that overran the runway in Unalaska while attempting to land in high winds. The crash killed one passenger and injured several others. PenAir is a code share partner with Alaska Airlines, which marketed the flight. “This is a somber reminder to me and the rest of our leadership team of the grave responsibility we should and of the continued need for us to underscore the importance of safety with our people and our partners at every opportunity and to back up this understanding with our actions every day,” Tilden said. To the quarterly results, Tilden emphasized the company’s focus on customer service is a foundational element of its strong recent financial performance. “We can’t thank our employees enough for their skill and dedication in serving our guests,” he said. The $322 million profit translated to earnings per share of $2.60. Alaska Air Group stock ended trading Oct. 25 at $71.57 per share, up nearly 4.1 percent from its Oct. 24 close following the post-trading release of the earnings report. The 8 percent revenue growth was on a system-wide passenger capacity increase of just 3.4 percent. Tilden noted that Horizon increased its capacity 24 percent year-over-year during the quarter through new aircraft but still managed to drop its per unit non-fuel expenses. The quarterly profit was aided in part by a 5 percent reduction in fuel costs, which make up approximately one-quarter of the company’s operating expenses. However, the fuel savings was overcome by an 11 percent increase in wage and benefits costs, which account for nearly one-third of operating costs. The wage cost increases included $24 million in signing bonuses related to contracts ratified during the quarter for ramp, passenger service and clerical employees represented by the International Association of Machinists and mechanics in the Aircraft Mechanics Fraternal Association, Chief Financial Operator Brandon Pedersen said. For the full year, per unit costs excluding fuel are expected to increase 2.2 percent on 2.1 percent capacity growth. “Normally we would celebrate unit cost declines, not increases, but given the step change increase in labor costs we’ve had this year and the very low growth relative to our recent history we’re pleased with the result,” Pedersen said. “It demonstrates what we can achieve with a back-to-basics approach to cost execution with a sharp focus on productivity and operating our business with a low overhead mindset.” He noted that 2020 costs will likely rise based on more major aircraft maintenance scheduled for next year as well as costs associated with starting to return leased Airbus aircraft formerly flown by Virgin America. Alaska Airlines had long flown the reliable and efficient Boeing 737 exclusively before taking on Virgin America’s fleet. Alaska does not currently have any of the grounded 737-MAX aircraft, but it is scheduled to take delivery of three in the coming months. Looking ahead, Tilden said full-year margins are expected to be in the 11-12 percent range, up from less than 9 percent in 2018. “We’re encouraged by our progress but we’re not at our destination,” he said, adding the long-term goal is to generate returns in the 13-15 percent range. The quarterly numbers were also buoyed by a load factor, or number of available seat miles sold, of 85.8 percent, a 0.9 percent year-over-year increase. According to Tilden, it marked the highest companywide quarterly load factor in five years for Air Group airlines. Chief Commercial Officer Andrew Harrison said the third quarter revenue per available seat mile of 13.6 cents was the best in three years. The company is enjoying growth in the number of Alaska Airlines mileage plan members and credit card holders, according to Harrison. That nearly one-third of new credit card memberships are from California — Virgin America’s primary market — is particularly encouraging, he said. Alaska announced Oct. 2 that its mileage partnership with American Airlines would be drastically reduced early next year, a move some analysts said is aimed at getting more passengers on its own planes as the airlines’ network grows. Nearly half of all Alaska passengers are loyalty members, Harrison said further. “Our value proposition hinges on offering low fares while providing award-winning service, generous rewards, and a premium product and our people are delivering on this,” he said. The fuller flights have helped the company mitigate per unit costs and drive up overall profits. As of Sept. 30, Alaska Air Group had a 12-month adjusted net income of $709 million — a 30 percent improvement over the prior 12-month period, according to Tilden — that it translated into $695 million of free cash flow. Alaska Air Group held $1.6 billion in cash at the end of the quarter and had generated nearly $1.5 billion in cash from operations so far in 2019, Pedersen said. Of that, approximately $525 million went to capital expenses, leaving about $950 million in free cash flow year-to-date, which is a $460 million improvement over 2018, according to Pedersen. Much of that cash is being used to pay down the debt incurred to buy Virgin America in 2016. The Air Group executives said deleveraging their balance sheet has been their primary objective with available funds and they expect the company will have repaid about 75 percent of the $2 billion it borrowed to acquire the San Francisco-based carrier. Alaska Air Group’s debt-to-capitalization ratio stood at 42 percent at the end of the quarter. Company leaders have a long-term goal of a 40 percent dept-to-cap ratio. “Strengthening our fortress balance sheet positions us to be flexible and opportunistic and make the best strategic and capital allocations in the future,” Tilden said. Pedersen often further detail, saying the company has refinanced more than 75 percent of its debt to be “fixed at historically low interest rates.” Air Group debt carried a weighted average interest rate of 3.2 percent at the end of the quarter, according to Pedersen. Additionally, Alaska Air Group made a $65 million voluntary payment towards its defined benefit pension plans, which are now 80 percent funded and increased its 2019 share repurchase allocation from $50 million to $75 million based on its strong cash balances, Pedersen added. With its quarterly dividend the company expects to return $248 million, or about a quarter of its free cash flow, to shareholders this year, he said. Elwood Brehmer can be reached at [email protected]

Treadwell-led group pairs with ExxonMobil on LNG from Point Thomson

Former Alaska Lt. Gov. Mead Treadwell is spearheading a new effort to sell North Slope natural gas with an offshore Arctic LNG plant and icebreaking tankers. Treadwell is CEO and chairman of the firm Qilak LNG. Leaders of the Anchorage-based startup announced Wednesday morning that they have a conceptual “heads of agreement” with ExxonMobil to purchase gas from the major producer’s Point Thomson field on the eastern North Slope for 20 years. The estimated $5 billion Qilak project would require building a gas treatment plant at Point Thomson to remove carbon dioxide and other impurities from the gas before it would be piped to a mobile LNG plant located six to 10 miles offshore. The plant would be served year-round by icebreaking LNG tankers that would take their cargoes to power plants in Asia. Treadwell said he has already been in discussions with buyers representing about 10 million tons of demand per year. The concept is a scaled-down version of Russia’s $21 billion Arctic LNG 2 project, according to Qilak representatives. The LNG plant would literally sit offshore in waters 13 to 16 meters deep meaning the project would not require costly ocean dredging. Qilak President and Chief Operating Officer David Clarke said the mobile LNG plant would store liquefied gas in underwater tanks beneath the deck of the plant and the whole facility would be sunk on the ocean floor. The project could eventually incorporate gas from Prudhoe Bay if the owners there, led by incoming operator Hilcorp Energy — which also acquired BP’s roughly one-third share in Point Thomson — elect to sell gas, Clarke added. Qilak expects to start a detailed feasibility study of its LNG project plan early next year. They are currently shooting for a final investment decision in 2021 or 2022 that could lead to a 2025 startup. The Point Thomson gas field, operated by ExxonMobil, holds approximately 8 trillion cubic feet of natural gas. “ExxonMobil sees the development of the Qilak LNG-1 project as an opportunity to develop Alaska’s gas resources,” ExxonMobil Alaska President Darlene Gates said in a statement released by Qilak. “As the largest holder of discovered gas resources on the North Slope, ExxonMobil has been working for decades to tackle the challenges of bringing Alaska’s gas to market.” Qilak is an Inupiat word for the environment and was suggested by a North Slope whaler, according to information provided by the company. The project concept has been in the works for about three years, according to Treadwell, who said the work is being funded by Lloyds Energy of Dubai. He emphasized that shipping from the North Slope is only about 40 miles farther to Asian markets than from Cook Inlet, which would be the endpoint for the Alaska LNG Project. Shipping LNG directly off the Slope has been considered several times before but sea ice and other factors challenged the economics the concept. “Markets have changed, technology has changed and ice conditions have changed,” Treadwell said. He also stressed that project officials would work with shippers and North Slope communities to schedule shipments and set ship routes around marine mammal subsistence harvests. He added that the tankers — powered by LNG with LNG cargoes — also limit environmental risks. “We are not moving oil through the Arctic Ocean,” Treadwell said. With a startup production rate of about 4 million tons of LNG per year, the project would be about one-fourth the size of the roughly $40 billion Alaska LNG Project that the Alaska Gasline Development Corp. is permitting through the Federal Energy Regulatory Commission. Under Gov. Michael J. Dunleavy’s administration AGDC has downsized and stopped seeking gas customers; instead, the state-owned agency hopes to turn the project over to private investors if it is deemed economic after ongoing analysis. What the Qilak project wouldn’t have, though, is an 800-plus mile gas pipeline bisecting the state. The estimated $10 billion gas pipeline portion of the Alaska LNG Project has long been viewed as the major economic hurdle to selling the state’s massive North Slope gas resources in the Point Thomson and Prudhoe Bay fields. But the line would also be the source of cleaner, lower-cost energy for communities along the route — notably the Fairbanks area — that largely rely on fuel oil for power generation and home heating. Alaska LNG advocates have also touted that project as a way to get lower-cost energy to the numerous Interior mine prospects that often have challenging economics largely due to the high cost of feedstock diesel used to power remote operations. The Qilak project was announced at a press conference at the downtown Anchorage offices of the national law firm Holland and Hart, which now employs former Gov. Sean Parnell, whom Treadwell served with as lieutenant governor from 2010 to 2014. It was Parnell’s administration that put together the initial Alaska LNG venture with BP, ConocoPhillips and ExxonMobil as equity partners along with the state. Treadwell said the project could possibly deliver LNG to Western Alaska communities as the tankers pass through the Bering Sea, but that would require lightering to smaller tankers or barges. The tankers would be too large to serve small ports and harbors and because there are no U.S.-made icebreaking LNG tankers, the Jones Act would prohibit from calling on Alaska ports unless a federal waiver was granted, acknowledged Clarke, a former executive with BP. Treadwell added that some amounts of LNG could potentially be trucked off the North Slope to reach road-accessible communities as well. “I promised the governor this morning that we would do anything we could to get gas to Alaskans,” he said. Dunleavy’s spokesman Jeff Turner wrote in an emailed statement that, “Gov. Dunleavy encourages and supports all business concepts that can successfully monetize the trillions of cubic feet of natural gas at Point Thomson and other areas on the North Slope.” Interim AGDC President Joe Dubler said in an interview that although Qilak’s plans would likely take part of the gas once intended for the Alaska LNG Project his agency is working on, he thinks any way to finally sell North Slope gas — a long-held dream of several generations of Alaskans — would be good for the state. “I’m an Alaskan and any project that can monetize North Slope gas is a good deal for me; that’s where I’m at. If (Alaska LNG) isn’t it, whatever one comes down that is it will have my support,” Dubler said. “We can cross the energy bridge for the whole state when we get there. Without a project that produces natural gas in marketable quantities that you can sell it doesn’t do any good to talk about anything else.” Qilak’s high-level agreement with ExxonMobil does not interfere with a binding gas sales precedent agreement AGDC signed with the producer in September 2018 for its share of Point Thomson and Prudhoe Bay gas because the preliminary AGDC-ExxonMobil deal was allowed to expire earlier this year, according to Dubler. He said the state corporation did not renew the agreement signed under the Walker administration because it was done prematurely and before other key elements of Alaska LNG had been settled. The Qilak project wouldn’t necessarily preclude Alaska LNG from utilizing gas from Prudhoe or other discoveries, Treadwell noted as well. Elwood Brehmer can be reached at [email protected]

FISH FACTOR: Kelp harvest rules under review; salmon summaries roll out

As more Alaskans eye the lucrative opportunities in growing kelp, many others are heading to beaches at Lower Cook Inlet to commercially harvest the detached bunches that wash ashore. That practice is now getting a closer look by state managers and scientists and could result in new regulations by year’s end. Detached kelp harvests have occurred at Lower Cook Inlet under special permits since the 1970s but matters of who needs permits, for how much and for what purposes are not clearly defined. Currently, a special permit is needed for commercial takes. “A commissioner’s permit is needed that describes where and when harvests will occur and how much will be taken. It needs to be documented thoroughly to make sure they are not taking the wrong species, or not taking from below the high tide line,” said Glenn Hollowell, area manager for finfish at the Alaska Dept. of Fish and Game office in Homer. Owners of the Anchor Point Greenhouse, for example, take 6,000 to 7,000 pounds from local beaches each September and over four decades they’ve created a booming business for a potting soil blend that is sold statewide. In the past, the detached seaweed has been considered dead. More recently, it’s been discovered that many clumps continue to release live spores. Hollowell said that may mean it’s important to sustaining those kelp populations, and all that beached seaweed might also serve other purposes. “Whether this is for reproductive reasons, or to provide shelter and food for a variety of wild animals, as well as a carbon source. It does feed a lot of other ecological needs. And we’re just not certain that the wholesale removal of this stuff in large quantities might not have a negative impact on the ecosystem in general. So, we’re approaching this very cautiously,” he explained. The state Board of Fisheries will take up two detached and live kelp proposals at its Dec. 10-13 meeting in Seward. One (No. 21) submitted by Al Poindexter of the Anchor Point Greenhouse, aims to better identify the commercial harvest of detached kelp off of beaches. “First, Fish and Game does not know production rates of seaweed and what keeps it sustainable…Another issue is what is commercial or home use and what amounts are those?” Poindexter wrote. “For instance, I will collect 6 small pickups and it is called commercial, but my neighbor will collect 10 pickups for his berry patch and that is called home use. Another may just collect a bucket full for his flower patch. Who needs a permit and who doesn’t? And for what purpose? Does anyone get grandfathered in or who decides by what criteria, amounts, geographic area or timing? Parameters would be based on what data?” “At this time, I believe that out of all the folks who collect seaweed from the beach, I have been the only one who has been required to get a permit for this activity,” he concluded. Another proposal (No. 241) would allow for the personal use harvest of aquatic plants in the Cook Inlet area outside of subsistence areas, similar to rules the Fish Board created in Southeast Alaska last year. Researchers at the University of Alaska Fairbanks are working with ADFG to learn what happens when kelp is removed from areas and how such harvests affect rejuvenation. “The department wants to be very cautious as we start doing new things with it, to make sure that we don’t allow something we will later regret. It might cause damage to that kelp population, or to other species of invertebrates or vertebrates that utilize it such as birds and fish,” Hollowell said. The outcome of those projects, he added, will likely shape future regulations. Comments can be made to the Board of Fisheries through Nov. 25. Eating fish boosts IQ For centuries what’s been regarded as an old wives’ tale has claimed that fish is brain food. Now there’s more proof that eating seafood does indeed make you smarter. A report out last week by 13 leading dietary scientists declared that children whose mothers ate seafood during pregnancy gained an average 7.7 IQ points compared to children of moms who did not. The findings came after a review of 44 different studies since 2000 that included nearly 103,000 mother-offspring pairs and more than 25,000 children. The brain benefits began with just one serving of seafood per week during pregnancy, and the beneficial outcomes appeared on tests given as early as three days of age and as late as 17 years. Along with IQ, measures included verbal, visual and motor skill development. Four studies looked at hyperactivity and ADHD diagnoses and showed that kids of moms not eating seafood had nearly three times greater risk of hyperactivity. The findings follow a report this year from the American Academy of Pediatrics that said U.S. children are not eating enough seafood. Dr. Tom Brenna, a professor of pediatrics and nutrition at Dell Medical School at the University of Texas, said it’s the omega-3s in seafood that boost brain growth. “The brain and the retina in the eye are omega-3 organs,” he said. “You can say that as calcium is to the bones, omega 3 is to the brain.” Brenna agreed it’s been tough to get the message to a wider audience. “We don’t have a good a way of getting the word out. Maybe we should have a contest to find a nice tag line that would identify seafood in the same way as ‘Got Milk’ or ‘Beef, it’s what’s for dinner,’” he added in a phone conversation. The IQ boost from eating fish report comes as the U.S. is updating its dietary guidelines through 2025. The Dietary Guidelines Advisory Committee will meet five times through March 2020 and written comments are being accepted until the committee completes its work. Salmon summaries Prince William Sound’s salmon harvest this summer came in at nearly 58 million fish, of which almost 50 million were pinks. The estimated fishery value was $114 million, including hatchery sales, and paid out at $81,600 per permit on average for the fleet of 504 drift gillnetters; 238 seiners averaged $218,000 per permit. Revenue generated for hatchery operations was approximately $18.6 million. At Copper River, a catch of nearly 1.3 million sockeye salmon was 28 percent more than the previous 10-year average, and the average sockeye weight of 5.5 pounds was the largest in the last five years. Those are just a few of the details in season summaries that will continue to trickle in by region to the Alaska Department of Fish and Game. At Lower Cook Inlet the 2019 salmon catch totaled 2.4 million fish, of which nearly 2 million were pinks. The commercial harvest value of nearly $3.6 million was above the 10-year average of $2.4 million. At Norton Sound, 145 permits were fished this summer, the second highest since 1993, and the fishery value topped $2 million for the third year in a row. The region saw well above average runs of chums, pinks, sockeyes and coho salmon. The chum salmon harvest of 157,035 was the third highest in the last 35 years. At Alaska’s farthest north salmon fishery at Kotzebue the chum harvest topped 400,000 fish for only the tenth time ever for 93 participants. The value of more than $1.5 million was down a third from last year due to lower prices, but it was the fifth time since 1988 that it exceeded $1 million. Fishery managers at Bristol Bay were the first to come out with a season summary showing a preliminary fishery value at $306.5 million, an all-time record. A total take of 44.5 million salmon, of which 43 million were sockeyes, was the second largest in history since the 45.4 million fish taken in 1995. Salmon summaries from other regions will soon follow and yield the preliminary dockside value for the entire 2019 fishery. Laine Welch lives in Kodiak. Visit www.alaskafishradio.com or contact [email protected] for information.

Estelle gold prospect grows with additional acrage

Another large-scale gold prospect is gaining momentum in Southcentral Alaska. Australia-based Nova Minerals Ltd. announced Oct. 8 that it has secured exploration rights to approximately 25,100 additional acres of state mining claims at its Estelle prospect that sits deep in the western portion of the Alaska Range. The acreage adds to the nearly 29,300 acres the company acquired in November 2017. Located about 110 miles northwest of Anchorage near the divide that separates the Western Alaska Kuskokwim drainage and the Susitna drainage of Southcentral, the Estelle gold prospect was drilled by Anchorage-based Millrock Resources early this decade. Millrock and Canadian Teck Resources ended a joint venture and quit the project in 2016. Nova Minerals drilled 18 boreholes at the Estelle property and re-entered historic drill sites over the summer, according to a late September investor presentation. Company leaders currently estimate the prospect holds 2.5 million ounces of inferred gold resources with smaller accumulations of copper and silver also present. Specifically, Nova Minerals estimates the explored areas of the property hold 181 million metric tonnes of ore averaging 0.43 grams per tonne of gold given a cut-off of 0.18 grams per tonne. However, Nova Minerals Managing Director Avi Kimelman said Oct. 8 that the area drilled last summer — on the northern end of the prospect acreage — accounts for just about 1 percent of the overall Estelle property. For comparison, the producing Pogo underground gold mine near Fairbanks has produced approximately 3.9 million ounces of gold since mining started there in 2006, according to operator North Star Resources Ltd. Nova Minerals is currently contemplating an open-pit mine at Estelle if the project is fully developed, according to company documents. The additional acreage Nova Minerals acquired surrounds the northern portion of the original property that was drilled this year. “The expansion of the Estelle project area reinforces Nova’s commitment to expand our resource ounces and fast-track development across the project area,” Kimelman said in a formal statement. “This will allow us to enact much broader exploration and a discovery vision via the exploration of what we believe to be a regionally significant land package in the world-class Tintina gold belt.” Nova Minerals publications regularly note the Estelle prospect’s location on the southwest edge of the massive Tintina gold belt, which cuts across Interior Alaska generally between the Alaska and Brooks mountain ranges and extends into the Yukon Territory. Estelle is also adjacent to other advanced gold exploration ventures, most notably GoldMining Inc.’s Whistler project, which holds significant indicated copper, gold and silver resources. According to a September investor presentation, Nova Minerals leaders plan to continue drilling in 2020 and eventually combine upwards of 25,000 meters of drill core results with additional resource evaluation data. They also note the Estelle prospect is accessible for drilling year-round — a rarity among remote Alaska mineral projects — via winter trails in the area. The company expects to publish a full resource evaluation of the Estelle prospect late next year, according to the Oct. 8 release. ^ Elwood Brehmer can be reached at [email protected]

Slow, steady recovery continues for economy

Alaska’s economy is growing but the state has a long way to go to return to pre-recession levels. The state’s has consistently had about 1,000 to 2,000 more jobs this year than in 2018. Preliminary Department of Labor employment figures for September show the state had 340,600 jobs, which is 1,900 more than a year prior. Employment peaked in September 2015 at 351,100 jobs. As the state is pulling out of a prolonged recession that started in late 2015, Alaska’s unemployment rate is as low as it’s ever been. The state’s seasonally adjusted unemployment rate was 6.2 percent in August and September — record lows according to the Department of Labor and Workforce Development. Improving the economy has been the primary mission the Dunleavy administration’s first year in office. Gov. Michael J. Dunleavy said there is still ample room for future economic growth but he’s encouraged about what the unemployment rate points to. “There is optimism in Alaska’s economy, and this is just another indicator that we are heading in the right direction,” Dunleavy said in an Oct. 21 statement. “Private investment is up, GDP is up, personal income is up, and unemployment is down — these all point to an improving economy.” The state’s gross economic production, also referred to as GDP, has been on the increase since bottoming out at $49.4 billion in 2016, according to the Federal Reserve Bank of St. Louis. It hit just more than $54 billion in 2018 for 9.3 percent growth over two years. Additionally, according to the federal Bureau of Economic Analysis, or BEA, Alaska’s GDP grew 3.9 percent from the fourth quarter of 2018 to the first quarter of 2019. Personal income in the state also grew 5.6 percent in the second quarter of the year, a BEA release states, which was greater than the national average of 5.4 percent. However, economists often note that GDP, particularly in Alaska can be a misleading statistic because the value of the state’s economic activity is closely tied to the price of oil and other market resources such as gold. The state’s recent GDP growth generally tracks with trends in oil prices over the past couple years, which bottomed out in early 2016. Department of Labor economist Neal Fried also highlighted that the job growth, while encouraging, is very small even in a state with a small workforce. “We’re talking about real small differences. It’s kind of amazing how small they are. The upside and downside are not very far apart,” Fried said in an interview. The recession petered out near the end of 2018 with monthly job losses of less than 1 percent year-over-year. On the flipside, the gains have been similarly small. Many economists in the state predicted the roughly $1.2 billion in state government budget cuts Dunleavy proposed early in the year would push Alaska back into recession but the state’s economy has continued to grow with the more moderate budget cuts of approximately $650 million instituted by the Legislature and governor. Alaska indeed enjoyed record-low unemployment in August, but year-over-year employment growth for the month was about 2,200, or 0.6 percent. Numerous sectors were still contracting in August, with manufacturing, financial activities, information, professional and business services and retail all losing at least 100 jobs during the month compared to August 2018. Those losses were overcome by gains of 500 to 600 jobs each in the closely tied mining, oil and gas and construction industries, according to Labor statistics. Month-to-month, the state actually lost approximately 2,400 jobs from July, highlighting the extremely seasonal nature Alaska’s economy — fishing and tourism in particular — even when it is growing. September’s employment growth of about 1,900 jobs was 0.5 percent year-over-year growth. It was again led by the mining, oil and gas and construction trades, with continued losses in retail and information and overall losses in state and local government totaling 500 positions, according to the Department of Labor. Fried also said Anchorage, the state’s economic center, has lagged behind the rest of Alaska. He attributed it in part to most of the new oil and gas jobs being in North Slope work, rather than office positions in the city. With that in mind, he also noted that those jobs still benefit Anchorage, as many Slope workers live and spend their money there. Fried also said the state’s unemployment rolls are almost certainly smaller due to the continued strong Lower 48 economy. The national unemployment rate fell to a 50-year low of 3.5 percent in September. “Fewer people are coming here looking for work; more people are being attracted elsewhere in the country because the job market is so good and that’s effectively kept our labor market pretty good,” he said. “It’s not a bad labor market in Alaska in spite of the fact that we have relatively soft growth.” Because of the remarkably low unemployment rate nationwide, which Fried characterized as “almost new territory” for the country — economists usually consider rates in the 5 percent range full employment — Alaska’s record-low unemployment rate is still the highest in the nation. “It’s amazing that you can say both of those things,” Fried said. Elwood Brehmer can be reached at [email protected]

GUEST COMMENTARY: Respect Alaska Tribes’ rights on the Tongass question

The Central Council Tlingit and Haida Constitution declares as our peoples’ inherent right that our tribal government, “Protect, preserve and enhance Tlingit ‘Haa Aani’ and Haida ‘Íitl’ tlagáay’, our way of life, its ecosystems and resources, including the right to clean water and access to native foods and traditional practices through our inherent rights to traditional and customary hunting, fishing and gathering.” Tlingit and Haida works constructively with all elected officials of any political party without partisanship. We aim to be collaborative partners, working together in the best interest of Alaska — our homelands. Yet today we are challenged by our disagreement with Alaska elected officials that support the proposed full exemption of the Tongass National Forest from the Roadless Rule. Any elected official in Alaska who supports a full exemption is disregarding their constituents, undermining the public process, and ignoring the sovereign Tribal governments whose people have lived and depended on these lands and waters since time immemorial. The indigenous Tribal governments of Southeast Alaska know our traditional territory: we have lived, depended on, and stewarded these lands and waters since time immemorial. We know that the full exemption for development activities would forever harm our homelands. The Tongass National Forest is the United States’ largest national forest and the largest remaining temperate rainforest on earth. Some see it as a salmon forest, a timber forest, a vast wilderness to visit and explore. Indigenous people see it differently. The Tongass is the traditional homeland of the Tlingit, Haida and Tsimshian people, a lineage that stretches so deep in time, we call it immemorial. Our origin stories are derived from these lands. Our ancestors are buried here. Our songs and dances are created here. Our languages have always been spoken here. Who are we? Our people are professional athletes, entrepreneurs, artists, Hollywood actors, CEOs running corporations that have brought millions of dollars to our region, fashion designers, teachers, culture bearers, doting aunties, fishermen, and sovereign tribal governments. We are diverse peoples, but if there is one thread that unites the Tribes and people of Southeast Alaska, it is our relationship and connection to our sacred places known today as the Tongass. Our health and wellbeing, identity, and worldview are intricately woven into the fabric that is our homeland. Six federally recognized Tribal governments stepped forward to engage on the Roadless Rule proposals with the State of Alaska and consult with the U.S. Department of Agriculture; however, our tribes were treated as “cooperating agencies” instead of as sovereign Tribal governments exercising our inherent rights. Despite inappropriate treatment, these Tribes agreed to participate in order to be “at the table” instead of “on the menu.” In addition to answering our communities’ needs, and despite additional and significant impacts of government shutdowns and reduced program funding from our federal trustee, these Tribes satisfied arbitrary and expedited deadlines to meaningfully engage in with state and federal representatives. However, our pleas for respect and for justice have been ignored. Each of our Tribes have different needs and priorities. Some of our communities sought expanded protections to heal local lands after devastating logging practices. Others sought strategic adjustments to the Roadless Rule that would permit controls of local development. And not a single Tribal government engaged as a cooperating agency advocated for a full and complete exemption of the Roadless Rule. In a word, our Tribes are reasonable in being accountable to the unique needs of each of their communities. These cooperating Tribes cannot help but believe the entire process has repeatedly disrespected and ignored sovereign tribal nations and their tribal citizens. For example, the USDA compensated the Alaska Forest Association, a timber industry lobbying group, with $200,000 for their time and expertise in engaging in the Roadless process. The State of Alaska received $2 million. And yet, despite the Tribes’ traditional indigenous knowledge of their lands and waters, and despite their representation of the communities imbedded within the Tongass, our Tribes received no compensation. Our Tribal leaders have been repeatedly denied opportunities to engage face-to-face with U.S. Department of Agriculture Secretary Sonny Perdue, who will ultimately determine the fate of our homelands. Meanwhile, Secretary Purdue invited representatives of other governments, environmental non-profit organizations, and the timber industry to meet with key USDA officials in Washington, D.C. Our Tribal governments have repeatedly requested government-to-government consultation without success. Southeast Alaska Tribes believe the requisite environmental process has been arbitrarily and capriciously rushed to decision despite the magnitude of potential adverse impacts that lifting these protections could be expected to impose upon our homelands. Our Tribal governments concerns are shared by others. During the public scoping period last fall, the vast majority of written comments and public testimony, according to the administrative record of the U.S. Forest Service, favored no change to the Roadless Rule across the board. Sen. Lisa Murkowski and Gov. Michael J. Dunleavy support a full exemption of the Tongass from the Roadless Rule. We believe it is their obligation to respect the views of the first people of these lands, and their responsibility to develop compromises that are responsive to our needs. To do less is to undermine Tribal governments. We respect our federal and state elected officials and have successfully collaborated with them on numerous and often contentious matters. Yet we cannot compromise our homelands. As the original land managers of Southeast Alaska, we know that a blanket removal of protections for our remaining old growth is not a viable solution. A full removal of the Roadless Rule protections must be replaced with the opportunity for Tribal governments to meaningfully engage with state and federal government officials in the management of the lands we depend on. We acknowledge that compromise is necessary, and our desired outcomes are not unreasonable; however, no outcome is credible unless Tribal governments are respected as full partners in the decision-making process. ^ Richard Chalyee Éesh Peterson is president of Central Council of Tlingit and Haida Indian Tribes of Alaska.

GUEST COMMENTARY: Why I support Trump’s proposal to lift restrictions in the Tongass

News that President Trump might seek to exempt Alaska’s Tongass National Forest from the Clinton-era “roadless rule,” opening up more of the region to potential development, has met with the typical alarm from the president’s critics. So it’s time to set the record straight and explain why every statewide elected official in Alaska supports an exemption from the regulation. The Tongass, the largest national forest in the United States at 16.7 million acres, is larger than West Virginia. Located in Southeast Alaska, it is an archipelago and comprises more than 80 percent of the regional land base. It is overwhelmingly road-free, unlogged, rich in wildlife and, despite what you might have read, will remain so even if exempted from the Roadless Rule. That’s because protecting the unique roadless values within the Tongass has long been a priority in Southeast Alaska and nationally. Congress has enshrined many of those protections in law, designating 5.7 million acres of wilderness and another 728,000 acres that are managed in a roadless state to maintain wilderness characteristics. Sweeping stream buffers authorized under another measure protect fish and wildlife habitat. When combined with national monument and other natural-setting land-use designations, more than 13 million acres of the Tongass are already explicitly restricted from resource development or are required to be managed as roadless areas. That’s nearly 80 percent of the forest. It is also critical to understand that all of the designations listed above, and all of the protections they afford, will apply to the Tongass regardless of what happens with the Roadless Rule. Most would agree that prohibiting development on such vast expanses within a 16.7-million-acre forest demonstrates sufficient protection. That is why so many Alaskans believe the burdensome Roadless Rule is unnecessary, and why we are urging the U.S. Forest Service to restore balance in its management by exempting the Tongass from it. The regulation, implemented at the last minute by the Clinton administration, prevents road construction, road reconstruction and timber harvesting across millions of acres in the Tongass. Many Alaskans believe the Roadless Rule should never have been applied to our state because of the uncertainty and barriers it imposes. It works against common-sense projects such as renewable hydropower — raising costs, extending approval timelines and causing some projects to be nixed altogether. That’s a real problem for Southeast Alaska, where less than 1 percent of the land base is privately held. The region’s social and economic health is closely tied to resource-dependent industries, including fishing, forestry, mining and tourism. All of those depend on reasonable access to the Tongass, but over the years, that access has been significantly reduced. The result? While much of the United States is experiencing record-low unemployment, many communities in the Tongass are seeing fewer job opportunities, diminished incomes, high energy costs and even declining populations as residents look elsewhere for stable year-round work. The Roadless Rule has hurt the timber industry, which now consists of just a handful of small, family-owned forest products companies. It also affects mining, transportation, energy and more. But it is critical — and only fair — to acknowledge that lifting the Roadless Rule would not automatically result in the development of more of the forest. New projects in areas where development is allowed would still have to secure all relevant federal approvals, including compliance with the Tongass Land and Resource Management Plan, the National Environmental Policy Act and other applicable laws such as the Clean Water Act. The one-size-fits-all Roadless Rule is an unnecessary layer of paralyzing regulation that should never have been applied to Alaska. A full exemption from it has always been my preference, as well as the united preference of our state’s congressional delegation and that of Alaska’s governors, regardless of party. It will allow Alaskans to create needed opportunities for a sustainable year-round economy, while still being good stewards of our lands and waters. Lisa Murkowski is the senior senator from Alaska and the chair of the Energy and Natural Resources Committee.

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