Movers and Shakers for Dec. 8

Coffman Engineers Inc. hired Senior Project Manager Jason Moncrieff to its Anchorage Project Management group. Moncrieff holds a bachelor’s degree in civil engineering from the University of Washington and a master’s degree in project management from George Washington University. Moncrieff is experienced managing both large- and small-scale multi-discipline projects for multiple client markets. Projects have included large scale drill site remediation, pipeline replacement, generator controls upgrades, erosion control, plant design and road design. Jason had the opportunity to design and manage many oil and gas development projects on the North Slope over the past 15 years. He is a licensed civil engineer in Alaska and a Project Management Professional. Coffman Engineers also announced that Zack Wright obtained American Petroleum Institute 653 Aboveground Storage Tank Inspector certification in September. Wright also holds a master’s and bachelor’s degree in mechanical engineering from the University of Alaska Fairbanks and is a NACE certified CP Technician. The API 653 certification allows Wright to perform and oversee tank inspection activities, including repair recommendations, oversight of non-destructive testing per applicable codes, and prepare inspection reports for clients. Wright has already put his certification to use by supporting Alyeska Pipeline Service Co. on both an ongoing API 653 tank inspection and future planning for four API 653 tank inspections. His certification also helped obtain new work with the North Slope Borough developing API 653 tank inspection, API 570 piping inspection, and CP Monitoring programs for their eight fuel storage tank farms as part of a three-year program.

FISH FACTOR: Halibut survey data released; Symphony winners announced

Lower catches for Pacific halibut are in the forecast for the foreseeable future. That was the message from the International Pacific Halibut Commission at its meeting last week in Seattle. The IPHC oversees halibut stock research and sets catch limits for nine fishing regions ranging from Northern California and British Columbia to the Bering Sea. There are fewer of the prized flatfish (down 4 percent), they weigh less (down 5 percent) and no big pulses appear to be coming into the stock was the grim summary of the 2019 halibut fishery and the results of summer long surveys at nearly 1,370 fishing stations, including 89 added to the Central Gulf of Alaska, the biggest halibut fishing hole. The numbers of spawning halibut also appeared to continue their decline over the past year, said IPHC lead scientist Ian Stewart. “This has been predicted for several years. This is projected to continue for all 2020 TCEYs greater than approximately 18.4 million pounds,” Stewart said. “It’s essentially the breakeven point over the next three years. So, we’re looking at a period of relatively low productivity for the Pacific halibut stock over the next three years.” TCEY, or total constant exploitation yield, is the amount of removals of halibut longer than 26 inches for commercial, recreational, sports charter, subsistence and bycatch in other fisheries. For 2019, the coastwide TCEY was 38.61 million pounds. Stewart added that more female fish are showing up in the stock and lower halibut yields will be necessary to “reduce higher fishing intensity.” “The primary driver behind that has been the addition of new information about the sex ratio of the commercial fishery catch that has indicated that we’ve probably been fishing this stock harder than we thought, historically,” he said. Fishing the stock harder includes the halibut taken as bycatch in other fisheries. “The non-directed discards, meaning bycatch, was up from a little over 6 million pounds to a little over 6.4 million pounds,” Stewart said. In the Bering Sea, for example, there is a fixed cap totaling 7.73 million pounds of halibut allowed to be taken as bycatch for trawlers, longliners and pot boats targeting other fish, with most going to trawlers. The cap stays the same, regardless of changes in the halibut stock. This year, after four years of analyses and deliberation, the North Pacific Fishery Management Council began moving towards a new “abundance based” management plan that would tie bycatch levels to the health of the halibut stock as determined by annual surveys. (Prior to that, the issue had not been discussed for 20 years.) Meanwhile, bycatch allowances, combined with new rules in setting halibut catch limits, could mean Bering Sea communities get squeezed out of the upcoming fishery. “Last year the IPHC agreed to two allocation decisions that this year may hamstring efforts to provide enough halibut for Area 4CDE (the central Bering Sea) to even go fishing,” said Peggy Parker, director of the Halibut Association of North America and contributor to SeafoodNews.com. “The first decision was to provide a fixed minimum of 1.65 million pounds to Area 2A (Washington, Oregon, and California). The second was a formula for the Canadian allocation that was designed to mitigate their current and future losses from the trawl bycatch in the Bering Sea. That bycatch increased this year, which threw last year’s projections off and will likely result in lower catches to that area next year,” Parker added. “Having fixed minimum allocations to Area 2A and 2B (British Columbia) will increase the difficulty in providing enough halibut to merit a fishery, in the eyes of quota holders, next year. It is a zero-sum game in the midst of a declining stock where Alaska becomes the only place with wiggle room.” It’s déjà vu for Jeff Kauffman of St. Paul, where emergency measures were implemented in 2015 to enable a halibut fishery to open in the region and fishermen’s catch limits were slashed to a half-million pounds. “There has been a de facto reallocation from the directed fisheries to the bycatch fisheries,” he said at the time. “Conservation of the stock is riding solely on the backs of the halibut fishermen.” The North Pacific council will set halibut bycatch limits for 2020 during its Dec. 2-10 meeting in Anchorage. The IPHC will reveal the catch limits for the halibut fishery during its annual meeting Feb. 3-7, also in Anchorage. Fish watch The Pacific halibut fishery ended on Nov. 14 amidst little fanfare. Most dock prices ticked up during the eight-month fishery, hovering in the $5 to $6 per pound range, likely due to bad weather hampering landings of competing halibut from Canada. “Their hurricanes and everything may have disrupted some of the fisheries there and allowed some of the product from Alaska to make it into those higher end East Coast markets. So we got a little better price,” said Doug Bowen of Alaska Boats and Permits at Homer. Better dock prices have not boosted the market for halibut quota shares, which are down by a third or more from sky high levels two years ago and appear to have stabilized. Shares in Southeast, for example, that topped $70 per pound are now in the $55 range or less. In the Central Gulf, halibut Individual Fishing Quotas, or IFQs, are at about $45 per pound. “For the last 15 years or so the resource has been in general decline. There have been some minor increases over the years, but mostly the trend has been downward,” Bowen said. “I think folks are kind of tired of buying something that gets cut the next year and is worth less. They’re buying an asset that’s declining in value. Many times over the last few years folks have thought that this must be the bottom and it would be a great time to buy: get in and ride it back up, and that hasn’t happened.” The 2019 Bristol Bay red king crab fishery ended last week with a catch of just less than 3.8 million pounds. Crabbers averaged 15.6 crabs per pot pull, the least since 2005, and down from 20 crab in the last two seasons. The crabs were hefty, weighing 7.14 pounds on average, the highest since 1973. That’s cause for concern, said Ethan Nichols, assistant area manager for the Bering Sea region for the Alaska Department of Fish and Game. “We’ve seen average weight increasing for several years now. We think we are fishing on the same group of adult male crab who are a year older and heavier,” he told KUCB in Unalaska, adding that not many small crabs are recruiting into the fishery. “If we had a better mix of small crab, we would see a lower average weight. What is coming in is mostly large older males.” Symphony of Seafood winners A fish and chips meal kit featuring Alaska cod was the fan favorite in the first round of the Alaska Symphony of Seafoods competition held during Pacific Marine Expo. The snappy kit by Alaskan Leader Seafoods won the coveted Seattle People’s Choice Award. “It’s really a lot of fun. You’ve got the French fries, the batter, the panko and the fish, which of course is Alaska cod,” said Keith Singleton, head of the value added division. In all, 20 new Alaska seafood products debuted at the Expo contest. The event, hosted for 27 years by the Alaska Fisheries Development Foundation, showcases a diverse array of innovative items and levels the playing field between major companies and small ‘mom and pops.’ Other first place winners selected by a panel of judges: In the retail category, it was Bullwhip Kelp Salsa by Juneau-based Barnacle Seafoods. Southern Style Alaska Wild Wings made from Alaska pollock by High Liner Foods of Canada took top honors in Food Service. In the Beyond the Plate Category, Juneau-based WILD by Nature’s Alaskan Fin Fish Earrings won first place. That category was added four years ago to open doors for new things made from seafood byproducts. “It can be anything,” said Julie Decker, AFDF executive director. “Things that are edible such as fish oil capsules, or nonedible things such as salmon leather wallets.” Pet treats from Drool Central, an Anchorage “mum and pup barkery,” could be among more winners to be announced on Feb. 24 at the annual Symphony of Seafood and UFA Legislative bash in Juneau. That and other entries such as kelp pickles, smoked octopus, and blueberry cured gravlax are vying for second and third place awards. The overall grand prize winner also will be named at the Juneau event. ^ Laine Welch lives in Kodiak. Visit www.alaskafishradio.com or contact [email protected] for information.

Fed’s Powell sees steady growth, signals pause in rate cuts

WASHINGTON (AP) — Federal Reserve Chairman Jerome Powell said Nov. 13 that the Fed is likely to keep its benchmark short-term interest rate unchanged in the coming months, unless the economy shows signs of worsening. But for now, in testimony before a congressional panel, Powell expressed optimism about the U.S. economy and said he expects it will grow at a solid pace, though it still faces risks from slower growth overseas and trade tensions. “Looking ahead, my colleagues and I see a sustained expansion of economic activity, a strong labor market, and inflation near our symmetric 2 percent objective as most likely,” Powell said before Congress’ Joint Economic Committee. Fed policymakers are unlikely to cut rates, Powell said, unless the economy slows enough to cause them to make a “material reassessment” of their outlook. The Fed cut short-term rates last month for the third time this year, to a range of 1.5 percent to 1.75 percent. “It now looks increasingly likely that the Fed will move to the sidelines for an extended period,” said Andrew Hunter, an economist at Capital Economics, a forecasting firm. Still, when asked if he expected rates to remain unchanged over the next year, Powell said, “I wouldn’t say that at all.” Powell’s testimony came a day after President Donald Trump took credit for an “economic boom” and attacked the Fed for not cutting interest rates further. Powell and other Fed officials, however, argue that their rate cuts, by lowering borrowing costs on mortgages and other loans, have spurred home sales and boosted the economy. Powell was asked about negative interest rates, which Trump also called for Nov. 12, and responded that they “would certainly not be appropriate in the current environment.” Negative rates occur “at times when growth is quite low, and inflation is quite low, and you really don’t see that here,” Powell said. Other Fed officials have also questioned whether cutting rates below zero has actually succeeded in boosting growth in places like Europe and Japan, where central banks have pushed rates into negative territory. Despite Trump’s attacks, both Republican and Democratic lawmakers took a largely respectful approach to Powell. Several complimented him for the “Fed Listens” events the central bank has held around the country, which have sought input from a range of groups, including unions and nonprofits, on ways the Fed could update its monetary policy framework. Powell repeatedly demurred when Sen. Ted Cruz, R-Texas, pressed him on how higher tax rates would affect the economy, including wealth taxes that have been proposed by Democratic presidential candidates Elizabeth Warren and Bernie Sanders. But Powell did concede, under questioning from Cruz, that a ban on fracking would “not be a good thing for the economy.” Some Democrats have called for a fracking ban over environmental concerns about the controversial method for drilling for oil and gas. Recent data suggests that growth remains solid if not spectacular. The economy expanded at a 1.9 percent annual rate in the July-September quarter, down from 3.1 percent in the first three months of the year. The unemployment rate is near a 50-year low of 3.6 percent and hiring is strong enough to potentially push the rate even lower. Inflation, according to the Fed’s preferred gauge, is just 1.3 percent, though it has been held down in recent months by lower energy costs and most Fed officials expect it to move higher in the coming months. Yet Powell reiterated that higher tariffs from the Trump administration’s trade war with China and uncertainty over potential future duties have caused many businesses to delay or cut back on their spending on large equipment and buildings. That has slowed economic growth. Powell also urged Congress to lower the federal budget deficit so that lawmakers would have more flexibility to cut taxes or boost spending to counter a future recession. Other Fed officials have voiced similar concerns. Patrick Harker, president of the Federal Reserve Bank of Philadelphia, said Nov. 12 that the large deficit, and the constraints it imposes on Congress in the event of a recession, “is one of the things I do lose sleep over.” Powell also noted that with the Fed’s benchmark rate at historically low levels, the central bank is considering whether it needs new tools to help boost growth whenever the next downturn arrives. “Central banks around the world are going to have less room to cut in this new normal of low rates and low inflation,” he said. The Fed is exploring an alternative policy framework, Powell said, that it hopes will provide more flexibility. In typical recessions, the Fed cuts short-term rates by roughly 5 percentage points. Powell reiterated that the Fed believes the unemployment rate could fall further without necessarily pushing inflation higher, a view that suggests the central bank is a long way off from hiking rates. “The data is not sending any signal that the labor market is so hot or that inflation is moving up,” he said in response to a question from New York Rep. Carolyn Maloney, a Democrat and vice chair of the Joint Economic Committee. “What we have learned … is that the U.S. economy can operate at a much lower level of unemployment than many thought.” Historically, super-low unemployment has been seen as likely to push up inflation, as workers push for higher pay and companies offer greater salaries to find and keep workers. Most analysts forecast that the Fed will hold rates steady when it meets next month. But some economists expect growth will slow in the coming months and the Fed will likely have to cut again next year. ^ AP Economics Writer Martin Crutsinger contributed to this report.

ConocoPhillips seeking investors in North Slope projects

ConocoPhillips has a lot of work to do on the North Slope and company executives are looking for someone else to help pay for it. They announced during a Nov. 19 analyst and investor meeting that the Houston-based oil producer plans to sell up to a 25 percent stake in the producing fields and other projects the company operates in Alaska. A deal to sell part of its Alaska holdings is expected to take place next year, but it could be pushed to early 2021, according to ConocoPhillips Chief Operating Officer Matt Fox. Michael Hatfield, president of the company’s Alaska, Canada and Europe operations, said ConocoPhillips plans to spend approximately $25 billion in the state over the next decade. A large chunk of that investment is expected to go into the company’s Willow prospect in the eastern National Petroleum Reserve-Alaska, which will cost between $4 billion and $6 billion to fully develop and could produce more than 100,000 barrels of oil per day at its peak. “These investments increase production from our fields and more than mitigate the current decline through (the Trans-Alaska Pipeline System). In fact, as a result of these investments, we believe production through TAPS will increase,” Fox said. “This will create a very economically advantaged future for the state of Alaska.” ConocoPhillips Alaska Vice President Scott Jepsen said during the Resource Development Council for Alaska conference in Anchorage Nov. 20 that Willow is likely to require $2 billion to $3 billion of spending before the first oil is produced in the mid-2020s. However, appraisal drilling of the very large prospect last winter indicates all of that investment could generate an additional 50 million barrels of oil beyond initial estimates; the company now says Willow holds between 450 million and 800 million barrels. ConocoPhillips also began producing from its Greater Mooses Tooth-1 drill site in the NPR-A last fall and is in the midst of developing the similar, mid-sized Greater Mooses Tooth-2 oil project, which is expected to come on line in late 2021 at a cost of more than $1 billion. The search for a silent partner in its Alaska work is a reversal of recent moves ConocoPhillips has made to take more control of its North Slope assets. The company announced in a February 2018 earnings call that it had spent $400 million to buy out Anadarko Petroleum’s minority position in the Alpine field and large swaths of western North Slope exploration acreage. Anadarko for years held a 22 percent stake in Alpine and had similar interests in approximately 1.2 million acres of North Slope leases ConocoPhillips has gradually explored. ConocoPhillips currently holds 100 percent of those assets. About 75 percent of ConocoPhillips significant holdings of prospect acreage are still untested, according to Jepsen. The company additionally swapped North Slope and North Sea assets with BP last year in a pair of cash neutral deals that gave each producer a greater stake in the field it operates. ConocoPhillips took BP’s 39 percent share of the Kuparuk River field in exchange for giving up a portion of its interest in the BP-operated Clair oil field in the North Sea. The result is ConocoPhillips now holds a 93 percent stake in Kuparuk on top of the other Slope developments it owns outright. The decision to sell a minority position in its Alaska operations is consistent with ConocoPhillips policy of not investing 100 percent equity in large-scale projects, which is a common practice in the industry, Fox said. “We’re pretty confident we’ll have a lot of interest in Alaska. I think we’ve made the case there as one of the best exploration plays in the world just now; so I think we’re going to have significant interest there,” he said. Company executives also briefly discussed the Fair Share Act, an initiative to raise oil production taxes on the Prudhoe Bay, Kuparuk and Alpine fields by approximately $1 billion per year, according to sponsor estimates. Fox noted the initiative is not yet guaranteed to make it on 2020 ballots — the sponsors are currently attempting to gather the more than 28,000 signatures needed to get it on ballots next year — but said if it does make it on ballots that the company will “have a conversation with the people of Alaska about, does that make sense?” The Fair Share Act sponsors insist the measure is aimed at Alaska’s legacy fields, which they claim are currently among the most profitable oil fields in the world, to not deter investment in new fields. Fox said he believes Alaskans will reject the initiative if given a chance to vote on it, but if they don’t, the company will have to reevaluate its plans. “They will see what Michael (Hatfield) said was $25 billion of capital in this plan being invested across the three assets we’re involved in, plus about the same again in operating cost,” Fox said. “They’ll see that that’s going to turn around the production in Alaska and actually make it increase again. “So our sense is that once the whole dust has settled, then everybody understands what’s at stake, Alaskans will understand that short-term revenue gain is a risky proposition if you’re going to give up all this long-term potential.” Elwood Brehmer can be reached at [email protected]

GUEST COMMENTARY: Hilcorp proven to be loyal nonprofit supporter

In the coming months, Alaskans are preparing to bid farewell to BP. In times of transition, uncertainty and questions about the future are the norm. Alaska’s non-profits are most certainly wondering what level of commitment Hilcorp demonstrates to local nonprofit groups and charities. I can speak to the experience we at the American Cancer Society in Alaska have enjoyed in getting to know this company over the past several years. In short, Hilcorp has become a tremendous supporter of the work we do and a steadfast partner in the fight for a world without cancer. Hilcorp has sponsored multiple teams in the American Cancer Society’s Polar Bear Jump in Seward. Over the last three years, their involvement and fundraising has increased four-fold, and Hilcorp employees from across the country have traveled to Seward to participate in the event. Without exception, Hilcorp employees exceed their fundraising goals and are consistently open to sharing their personal stories of why the cause means so much to them. I’ve observed the culture at Hilcorp to be one that goes beyond camaraderie, particularly when it comes to their efforts in support of Alaskan cancer patients. Hilcorp fosters an environment of encouragement and a heartfelt attitude of “we’re all in this together.” Hilcorp has multiple teams registered for the 2020 jump, and we expect them to shatter fundraising records again next year. In addition to fundraising and sponsorships, Hilcorp also makes its best and brightest talent available. Over the years, we’ve seen nothing short of leadership, true commitment and old-fashioned hard work from Hilcorp volunteers at various events throughout the state. As a whole, nonprofit groups in Alaska are plentiful and tremendously dependent on corporate sponsorships and donations. That is why it is so important that all types of companies continue to support Alaska’s charitable organizations, enabling them to continue to do good work in our communities. Hilcorp has a loyal history of supporting the American Cancer Society in Alaska by way of sponsorship, employee fundraising and corporate matching. All revenue donated by Hilcorp and raised by Hilcorp employees for the American Cancer Society in Alaska goes toward lifesaving cancer research, prevention and screening outreach, as well as free programs and services for Alaskans facing cancer. It has been our experience that Hilcorp is a generous community partner when it comes to lending their time, talent and treasure for the causes they support. For anyone who has been personally affected by cancer, we owe them a debt of gratitude for their past, current and future efforts to finish cancer, once and for all. Charissa Habeger is the Director of Community Development for the American Cancer Society in Alaska. She has been with the organization since 2015 and is based in Anchorage.

GUEST COMMENTARY: If we build it, will the projects come?

Remember the 1989 movie “Field of Dreams”? An Iowa farmer, played by Kevin Costner, hears a voice urging him to build a baseball diamond in his corn field. “If you build it, he will come,” the voice told Costner’s character. “He” was the ghost of famous player “Shoeless” Joe Jackson. Slightly changed, “if you build it, they will come,” has since entered our political vocabulary, usually referring to big projects — roads, railroads or ports — aimed at fostering economic development. The idea is that infrastructure should spur development. But not always. There’s the “white elephant” risk, where there could be big cash outlay to build something but then nothing happens. A fierce debate has developed around an effort by the state’s development finance corporation, the Alaska Industrial Development and Export Authority, over AIDEA’s facilitating a possible 211-mile industrial road from the existing Dalton Highway to the Ambler Mining District in the western Brooks Range, an area where mineral discoveries have been made. “Build it and they will come” in this case means new mines, and jobs. Building regional industrial infrastructure is exactly what the state development authority does. AIDEA has had several successes and some projects where the jury is still out. In this case, critics are questioning why the state should spend millions of dollars — $19 million — planning a road that may never be built, because construction of mines it will serve is not yet confirmed. It’s important to realize, however, that this road, which would cost about $450 million, will not be built unless there are contracts signed with mining companies to pay for it through guaranteed toll — or use — payments. That won’t happen until a decision is made to actually build a mine. The anchor project, the mining project furthest along, is Trilogy Metals’ “Arctic” high-grade copper discovery. AIDEA is modeling the project on its industrial road and port built in 1989 for the Red Dog Mine, which is on lands owned by NANA Regional Corp. of Kotzebue. The mining company, Cominco (now Teck), agreed to pay AIDEA for use of the road and port, and all would agree the project has been an outstanding success. Red Dog infrastructure has been profitable for the state authority, which invested $265 million in construction and has earned, through tolls, $475 million since 1989. Most important, the mine and the infrastructure created a solid private economy for the Northwest Arctic, an area formerly economically depressed. But it was also nip-and-tuck for Red Dog for a while. Zinc prices dropped in 1989 just as the mine was starting up, and they stayed down for years. Zinc has been stronger recently. Copper markets can be volatile, too. A worst case, critics argue, would be for AIDEA to build the road and have the mines not be economically successful, leaving the state stuck with an unused road. That risk is there, and it’s important to have companies with deep pockets signing firm contracts. Meanwhile, many Alaskans who love wild country don’t like this road. If it results in one or more mines being built, which is AIDEA’s goal, it would create a lot of jobs, but also change the wilderness character of this remote region. That’s the trade-off — jobs against preservation of wild places. Even at Red Dog, AIDEA’s investment wasn’t just about one mine. The area has lots of zinc and there will eventually be other mines. Alaska Native residents of nearby small villages have a different worry. Their concern is that the road would ultimately become a public highway, not industrial-only, that would open access to sport hunters from outside the region. This could put pressure on local subsistence resources. It’s a reasonable concern, given some past history. In 1977, the state of Alaska promised the North Slope Borough, after the pipeline was built, that the Dalton Highway would be an industrial-only road. It wasn’t long until political pressures from sporting groups caused the road to be made public, although the horrors of outside hunters decimating the local game never materialized. AIDEA says that because it would own this road, it can legally enforce an industrial-use-only policy, although local residents would use the road to haul in fuel and freight. It is true that the legal framework is different than that of the Dalton Highway, which was built with state general funds. The Ambler road would be funded by AIDEA bonds, which can have covenants written into them. But despite that assurance, no one can promise that the road would always be industrial. The state will decide that, and governors, Legislatures and laws change. Politics can change things. Red Dog and the Ambler discoveries are cases where mining companies asked the state, through AIDEA, for help in building regional infrastructure. Financially, the mine pays for the infrastructure through the tolls for use. If a company has very strong balance sheet and can finance both mine development and infrastructure, it might be better off doing the entire project itself, without the state. That’s because the mining company then owns and controls the infrastructure. Some companies prefer to build and own their own roads. When the state offered to help Japanese-owned Sumitomo Metals build a 50-mile road from the Richardson Highway near Delta to its Pogo gold mine, the company said, “No thanks.” It built the road itself mainly so that it could control it. Access is effectively limited on this road. There are cases, however, where a medium-sized mining company doesn’t have deep enough pockets to finance both the mine and the infrastructure, and that’s where AIDEA steps in, because the state authority is financially strong. This was the case for Cominco, the mining company that built Red Dog. An investment like this can be a win for the state because the infrastructure continues to make money long after bonds for construction are paid for. AIDEA earns an ongoing 6.5 percent return on its Red Dog investment. In sum, it’s a mixed bag. There’s a big upside — a lot of well-paying jobs and economic diversification for the state. But there are risks, too. Tim Bradner is copublisher of the Alaska Economic Report and Alaska Legislative Digest.

Opposite forecasts for SE pinks, Bristol Bay reds; Cook Inlet busts

Biologists are forecasting another weak pink salmon year for Southeast and another strong sockeye salmon run for Bristol Bay coming in the 2020 season. The forecasts for Southeast Alaska and for Bristol Bay, released in late November, continue the trends of the past few years in both areas. In Southeast, biologists are forecasting about 12 million fish to be harvested, with a range of 7 million to 19 million fish. That’s in the second-lowest forecast percentile, or just more than 20 percent of the fishery’s historic volume. A harvest of 12 million would be about a third of the region’s recent 10-year average harvest, according to the forecast. The forecast number, produced by the National Oceanic and Atmospheric Administration’s Auke Bay Lab in Juneau in collaboration with the Alaska Department of Fish and Game and the Southeast regional hatcheries, is calculated from surveys of juvenile pink salmon in June and July in northern Southeast Alaska waters. The survey data from 2019 turned up the third-lowest index in the last 23 years, according to the forecast. “The low juvenile abundance index in 2019 was not unexpected. Pink salmon escapements in the parent year (2018) were very poor throughout northern Southeast Alaska inside waters and the escapement goal was not met in that subregion, which may have resulted in below optimal egg deposition,” the forecast states. “Escapement and harvest of pink salmon in the Northern Southeast Inside subregion have been very poor since 2012 and the 2020 forecast indicates this pattern is likely to continue.” Though escapement goals were met in the Southern Southeast and the Northern Southeast Outside regions in 2018, harvests were poor there as well. The reason for the low abundance in the 2019 survey isn’t clear, but it could be due to poor freshwater survival conditions or poorer marine conditions, leading to higher mortality, the forecast states. Drought conditions also lasted from 2018 into spring 2019 in Southeast. The juveniles caught in the survey were all large and healthy-looking, the forecast states, but so were the juveniles from 2014-16, when the returns were also less than average. The summer’s unusually warm and dry conditions may also have an effect, as well as the anomalously high sea surface temperatures in the Gulf of Alaska. “The impact of warm sea surface temperatures on the survival of pink salmon that went to sea in 2019 is unknown and adds uncertainty,” the forecast states. Southeast Alaska has had a series of poor pink salmon harvests for the past few years. In 2019, fishermen landed an estimate 21.1 million pink salmon for a total ex-vessel value of $23.7 million, according to a preliminary season summary from Fish and Game. The fish weighed an average of 3.68 pounds. Pink salmon are Southeast’s major volume fishery, but the fish are worth significantly less than other salmon fisheries. Chum, which are significantly larger, came in at an average weight of 7.99 pounds in Southeast. A total of 8.4 million of them landed came to about $37.5 million in ex-vessel value, according to ADFG. The total salmon ex-vessel value of $101 million in 2019 in Southeast was about $32 million less than the total 2018 value, with the shortfall mostly in chums. Bristol Bay Bristol Bay, on the other hand, is predicted to see another better than-average run. The forecast of 48.95 million sockeye is about 6 percent better than the recent 10-year average. If the prediction comes true, it would be yet another big year for Bristol Bay, which has broken harvest and value records for sockeye two years running. The 2018 season brought an estimated 62.5 million sockeye home to the rivers of Bristol Bay; the 2019 season brought more than 50 million. A run of 48.95 million sockeye would allow for a harvest of 36.9 million fish, with 34.56 million in the bay and 2.35 million in the South Peninsula fisheries, according to the forecast. As always, biologists warn caution when reading forecasts, as they may not be accurate, particularly for individual rivers. “Forecasting future salmon returns is inherently difficult and uncertain,” the forecast states. “We have used similar methods since 2001 to produce the Bristol Bay sockeye salmon forecast which have performed well when applied to Bristol Bay as a whole.” Another bust year for Cook Inlet Upper Cook Inlet’s salmon fishermen had another disappointing season, with only 2.1 million salmon landed. That’s about 37 percent less than the recent 10-year average. That brought in a total of about $18 million in ex-vessel value, which is about 40 percent less than the recent 10-year average in the fishery, according to ADFG season summary released Nov. 25. It’s better than the 2018 season, when fishermen in the area only landed about 1.3 million salmon total, about 815,000 of which were sockeye. The sockeye showed up erratically late in 2018, throwing management procedures for a loop and frustrating fishermen. This year, the fish were an estimated two days late, but both the Kasilof River and Kenai River sockeye salmon escapement goals were exceeded in part because of restrictions on commercial fishermen due to weak Kenai River late-run king salmon numbers. The sockeye salmon harvest of about 1.7 million was the second-smallest in the last decade, according to the season summary. ^ Elizabeth Earl can be reached at [email protected]

BP hands off keys for Prudhoe Bay to Hilcorp

Hilcorp won’t officially take over the driver’s seat at Prudhoe Bay for at least a few months, but BP Alaska President Janet Weiss offered up the keys to the iconic oil field Nov. 20. Weiss and Hilcorp Alaska Senior Vice President David Wilkins spoke together at the Resource Development Council for Alaska annual conference in Anchorage. It marked some of the first public statements Hilcorp executives in Alaska have made since the Aug. 27 announcement that the large Houston-based independent producer had agreed to purchase all of BP’s assets in the state for $5.6 billion. Weiss stressed a message of gratitude from BP to Alaskans, noting that she and her husband plan to stay in Alaska when the deal is finalized, likely in the middle of next year. BP opened its first office in Anchorage 60 years ago and just a couple months after statehood, according to company executives. The London-based oil and gas giant has operated the Prudhoe Bay field since 2000. “Alaska has helped make BP, big BP and BP Alaska. We would not be the company we are today without Alaska,” Weiss said. “Truly, thank you, Alaska. You made us far better and you made our lives far richer.” Having regularly talked about “40 more” since the 40th anniversary of the start of oil production at Prudhoe Bay in 2017, she said the sale to Hilcorp as proof BP leaders “deeply believe in (the) 40 more” mantra. “Hilcorp is an expert in mature fields; it’s what they do. They’re fantastic at adding decades to mature fields. They unleash the ideas of their people and bring creativity to the fore,” Weiss said. Cumulatively, more than 13 billion barrels of oil have been pulled out of Prudhoe with about 2 billion more available for the taking, making it the most prolific oilfield in the country’s history, according to BP. “It’s one of the great fields across the planet. With Hilcorp at the reins I believe there’s far more than 2 billion left to go and far, far more than 40 more (years),” Weiss said. Hilcorp has been credited with stabilizing natural gas production in Cook Inlet since it purchased Marathon’s and Chevron’s assets there in 2012. At the time, some Southcentral utility managers were discussing the viability of importing natural gas from Canada to prevent power shortages in the region. Since then, utilities have been able to secure long-term gas supply contracts, mostly with Hilcorp. The company has also had similar success in its oil work on the North Slope, but the production turnarounds have also come with a string of regulatory violations and other operating incidents. Most notable among those was a prolonged early 2017 natural gas pipeline leak beneath the waters of central Cook Inlet. The leak drew widespread criticism for how the company handles the often aging assets it buys, but did not result in significant regulatory action. On the flipside, Hilcorp was lauded last year when the company completed a $90 million project to transform a cross-Inlet gas pipeline to an oil carrier, which ultimately reduced Cook Inlet tanker traffic and allowed the company to close the Drift River oil tank farm on the western shores of Cook Inlet. The pipeline project was long-sought by environmental observers who worried the tank farm’s location near the base of Mount Redoubt, an active volcano, could eventually lead to a spill during an eruption. Hilcorp and BP made their first Alaska deal in 2014 for $1.25 billion when Hilcorp purchased BP’s offshore Endicott and Northstar oil fields. That deal also gave Hilcorp its 50 percent operator roles in the Milne Point field and the prospective Liberty project, which had been solely owned by BP. Hilcorp’s Wilkins noted that Nov. 25 marked the fifth anniversary of the company taking over at Milne Point, where it has turned oil production around. When BP handed Hilcorp the keys to Milne Point the Prudhoe Bay satellite field was producing about 19,900 barrels of oil per day. Today, after $640 million of investment, Milne Point is producing about 33,000 barrels of oil per day. That investment included drilling 50 wells and adding the first drilling pad — dubbed Moose Pad — to the Milne Point field since 2002, according to Wilkins. “We did it in half the time of pads built on the North Slope and for about one-third of the cost,” he said of Moose Pad. The company is also working on projects testing polymer flooding of reservoirs to recover viscous heavy oil that is prominent across much of the Slope but historically has been difficult to produce economically. Wilkins attributed the success at Milne Point to some of Hilcorp’s core business principles. “We drove responsibility down to the lowest level. Everybody contributed. Everybody owned it,” Wilkins said. “We found ways to get over obstacles and get it done.” He added that the company’s success is largely dependent upon its partnerships with “smart organizations,” such as the University of Alaska. Hilcorp is currently spending about $3 million on university grants and research to advance environmental studies and industrial technologies, according to Wilkins. And while Hilcorp is often credited for rejuvenating tired oil and gas fields, BP has been lauded since the deal was announced for its decades of philanthropic work across Alaska. BP Alaska Vice President Damian Bilbao told Alaska Chamber members in late October that the company would continue to honor its charitable commitments in the state through 2020. Wilkins also emphasized Hilcorp’s giving plan, which starts with the company giving each employee up to $2,500 to donate to 501(c) charities. The company then matches each donation up to $2,000 for a total contribution of up to $4,500 per employee. He said the total giving so far in 2019 is about $2.4 million. “Our philosophy is we bring people and money back to our communities,” he said. Hilcorp currently has more than 500 employees in Alaska, with approximatley 90 percent residents. The company’s immediate focus has been figuring out the future for each of BP’s roughly 1,600 Alaska employees, according to Wilkins. Company officials have conducted almost 2,000 interviews over the past month and are close to extending offers to the BP employees that want to make the transition to Hilcorp. In the 2014 deal, Hilcorp added about 200 of the 475 BP employees that had been working on the related fields and projects, BP said at the time. “BP’s excellent, qualified workforce will be key to the operation of Prudhoe Bay into the future and we will look forward to onboarding the vast majority of the folks that are interested in coming onboard,” Wilkins said. Bilbao said that impacted employees will know their future by Dec. 20 and BP will likely begin any necessary layoffs on Feb. 20. “One of our biggest challenges in this process is that most of them don’t want to go anywhere else,” Bilbao said of BP Alaska employees, a development that has surprised corporate leaders in Houston and London. “As much as we’ve tried to find jobs for them elsewhere (in the company), they don’t want to go.” Sale details Despite going all-in on Alaska, Hilcorp executives — led by founder and CEO Jeffrey Hildebrand — did not spend as much time examining what they bought as some outside observers might expect. According to Bilbao, the $5.6 billion deal was negotiated over six to seven weeks and Hilcorp officials received about four hours of briefings specifically on Prudhoe Bay. Last winter, BP conducted the first 3-D seismic shoot of the entire Prudhoe Bay field, which was seen by some industry observers as a sort of sales pitch to potential buyers. However, seeing the seismic data was not a part of Hilcorp’s deliberations, Bilbao said. “(The deal) was centered around cash flow modeling and cash flow risk. That’s typically how you do a deal like this. You don’t really get into the details,” Bilbao said. “I can tell you that Hilcorp was incredibly excited about the opportunity that Prudhoe Bay still represents.” As for BP, selling off its portion of Alaska is a means to pay for other new assets after spending upwards of $67 billion over the past decade on cleanup and settlements related to the Deepwater Horizon oil spill. Last year BP bought roughly $10 billion of Lower 48 oil assets from Australian resources giant BHP. Company leaders held a desire to pay for those acquisitions with cash, not debt, leading them to evaluate which assets were best suited to sell off, Bilbao explained. Fortuitously for BP, it already had an existing partner with the requisite cash and expertise to put a deal together. “They’ve shown at Milne Point that they can take a field we operate, reduce the complexity and bring new pads online for lower dollars per barrel that we would’ve,” he said. Alaska accounts for about 3 percent of BP’s global portfolio and is outside of the areas where it holds most of its upstream assets — the Gulf of Mexico, the North and Caspian Sea regions and Angola. Some of Alaska’s unavoidable costs, combined with the state’s continued debates over oil tax policy, led BP to sell Alaska, according to Bilbao. “It’s an expensive place to operate and that’s not just the field, it’s also the cost of moving (oil) to market across the pipe and the ships and it’s an unstable fiscal environment, which factors into the way you look at your growth capital investment options,” he said. He further acknowledged that Alaska operations have had a hard time attracting internal investment capital for several years and getting the $2 billion or so needed for a new drill site within Prudhoe would have been a struggle as well, he said. One of the few Alaska-centric things BP is not yet selling to Hilcorp, at least at this point, is Alaska Tanker Co. The fleet of four, 1.3 million barrel-capacity, double-hulled tankers operate almost exclusively between Valdez and West Coast refinery markets. “What I’ve told people is we will soon have four tankers and no crude and they’ll have a lot of crude and no tankers. So I’m guessing we’re going to have to figure out a way to resolve that, but that is not part of this deal,” Bilbao quipped. ^ Elwood Brehmer can be reached at [email protected]

Congressional Democrats ask for investigation into Alaska use of forest grant

A pair of federal lawmakers are asking for an investigation into Alaska’s use of a U.S. Forest Service grant to analyze timber harvest prospects if the Roadless Rule is lifted from the Tongass National Forest, but Dunleavy administration officials insist the request is baseless political move. Michigan Democrat Sen. Debbie Stabenow and Arizona Democrat Rep. Raúl Grijalva sent a letter to U.S. Department of Agriculture Inspector General Phyllis Fong Nov. 18 urging her to investigate “the potential misuse” of a $2 million U.S. Forest Service wildfire assistance grant to the State of Alaska. The letter references a Sept. 24 Alaska Public Media news report that indicated at least some of the grant was used to offer input on the Forest Service’s work to develop an Alaska-specific Roadless Rule and not on fire suppression efforts. The IG has 60 days to respond to the letter. Grijalva chairs the House Natural Resources Committee and Stabenow is the ranking Democrat on the Senate Agriculture, Nutrition and Forestry Committee. Former Gov. Bill Walker requested the USDA and the Forest Service work on exempting the Tongass from the rule, which largely prohibited new road building in undeveloped national forest lands, after numerous failed attempts through the courts to get the state exempted or the rule repealed entirely . USDA officials announced Oct. 15 their preference to fully repeal the Roadless Rule from the nearly 17 million-acre Tongass ahead of the release of the draft environmental impact statement written for the work, which was published a few days later. A full exemption would open more of the 9.2 million acres currently classified as roadless to development activities, such as mining, logging, and energy development, all of which are made more economic with road access. A public comment period on the draft Alaska Roadless Rule EIS is open through Dec. 17. The Roadless Rule exemption would only apply to the Tongass; the Chugach National Forest in Southcentral Alaska historically has not been used for large-scale timber harvests. Local and national conservation groups as well as several Southeast Tribal organizations have said the land-use policy reversal ignores the economic transformation that has occurred in Southeast Alaska over the nearly 20 years since the Roadless Rule was put in place. They contend fishing and tourism — industries boosted by intact wild lands — have largely filled the void left by the region’s dwindling timber industry. The lawmakers’ letter notes Alaska’s request to modify an existing wildfire grant does not indicate the money would be used for fire suppression work. According to grant records, state Department of Natural Resources officials in August 2018 asked for $2 million to work on the Alaska-specific Roadless Rule in addition to $3 million requested earlier under a state fire assistance grant. The letter also questions whether awarding some of the grant money to the Alaska Forest Association, which supports a full repeal of the Roadless Rule, was appropriate given other stakeholders allegedly did not receive similar funding. They specifically asked the Inspector General’s Office to investigate whether using the $2 million on the Roadless Rule was appropriate for fire assistance grant program funding; whether any funding was available to other Tongass stakeholders; and if it is permissible for the a state to use Forest Service funds to help convince the USDA, of which the Forest Service is a subagency, to make a regulatory change requested by the state. “The Tongass is our largest National Forest and is essential to addressing the climate crisis. It is critical that we ensure this taxpayer funded grant was properly awarded and used,” Stabenow and Grijalva wrote. Gov. Michael J. Dunleavy issued a sharp response to the pair Nov. 20. “The grant was appropriate and legal; all the information anyone needs to reach the same conclusion is readily available to the public,” Dunleavy said in a prepared statement. “I respectfully suggest Congressman Grijalva and Sen. Stabenow do their homework before asking a federal agency to conduct a costly, time-consuming and ultimately pointless investigation into a grant that will provide essential information about lifting the Roadless Rule. Exempting the Tongass from the Roadless Rule will create new jobs and economic activity in a region hit hard by the misguided policies of a previous administration.” On March 14, Alaska Forest Association board of directors President Bert Burkhart signed a cooperative agreement with the Alaska Division of Forestry under which the state would provide up to $250,000 for the AFA to use in drafting an economic analysis of the amount of timber made available for harvest in each of the alternatives included in the Roadless Rule EIS, which was published approximately six months later. According to the agreement, the funding came from the 2018 Roadless Rule Modification to the Forestry Division’s Consolidated Payment Grant issued by the State and Private Forestry Organization of the Forest Service. Burkhart referred questions about the grant to DNR officials when contacted by the Journal at Local Manufacturing Inc., an Aberdeen, Wash., lumber mill. AFA Executive Director Owen Graham also declined to comment for this story. However, a source involved in the matter said Burkhart negotiated the agreement directly with DNR officials and contracted with Terra Verde Inc., a La Center, Wash., environmental services firm to conduct the actual timber analysis. A Terra Verde representative said he could not comment on the company’s work without prior consent from a client. DNR spokesman Dan Saddler wrote via email that Jim Eleazer, a state forester, negotiated the contract with representatives from the Forest Assocation. The Division of Forestry did not solicit proposals to conduct the timber analysis through a formal process, according to Saddler; the cooperative agreement cites a section of the Division of Forestry’s enabling statute that gives the DNR commissioner the ability to enter into contracts and agreements with subject matter experts. A Nov. 20 statement from DNR says that Forestry “in 2018 accepted a modification to an annual forest programs grant” from the Forest Service. Saddler wrote that the analysis being conducted by the Alaska Forest Association is technical in nature and requires interpretation of forest plan standards to determine how much timber would be available for harvest under the varying Alaksa-specific Roadless Rule environmental impact statement alternatives. "It must be stressed, AFA is not making any recommendations to the state on what alternative is the preferred; it is simply providing analysis of data concerning each specific alternative," Saddler wrote. "Simpluy put, the state asked a question: How much net positive timber will each alternative produce?" DNR officials denied a public records request for the materials produced by the Forest Association, citing deliberative process privilege. The work product will be used to inform the state's comments on the draft Alaska Roadless Rule EIS and disclosing it now "might hinder the candid decision making of a state agency," according to Saddler. As to whether other Tongass stakeholder groups got funding to help them participate in the process, DNR Commissioner Corri Feige said in the Nov. 20 statement that the Organized Village of Kake — a Tribal government that is a cooperating agency in the EIS process and has opposed repealing the Roadless Rule — received travel funds as part of the federal grant as well. Kake is a community of about 600 on Kupreanof Island in the central portion of the Tongass. Kake Council President Joel Jackson wrote in testimony for a Nov. 13 hearing of the House Natural Resources Subcommittee on National Parks, Forests and Public Lands that Southeast Alaska tribes “received no money to participate in the process as cooperating agencies, nor did they have their resources, expertise or staff time reimbursed.” “The process was designed to shut us out,” Jackson wrote in his committee testimony, adding that Kake has decided to withdraw as a cooperating agency in the Roadless Rule EIS as a result.   Elwood Brehmer can be reached at [email protected]

Movers and Shakers for Dec. 1

Coffman Engineers Inc. announced the promotion of Rob Wasserman, senior project manager in the Structural Engineering Department, to department manager for Anchorage’s new Project Management group. Wasserman is a licensed civil and structural engineer with nearly 13 years of experience. Over the past two years with Coffman, Wasserman has been actively involved in business development, project management, project engineering, client management, and structural design on multiple projects for our industrial oil and gas clients. He will be responsible for mentoring and providing leadership for the project management group as well as throughout our office. Coffman also added two new members to the Anchorage Electrical Engineering Instrumentation and Controls Department. Jason Vukovich is an instrumentation and controls designer with more than 10 years of engineering experience in Alaska. His project experience includes rail/truck racks, coker safety upgrade and remote un-heading, ethanol unloading and storage, refining unit sis upgrade and triconex installations, tank high level alarms, onsite small projects, and pipeline heating re-circulation. Prior to starting in the engineering and construction industry, Vukovich was a decorated officer of more than 10 years in the U.S. Army &U.S. Army Reserve. Vukovich holds a bachelor’s degree in sculptor from the University of Illinois. Ronald Pearson, PE, is a professional chemical engineer working in the Anchorage Electrical Engineering Department. Pearson holds a bachelor’s degree in chemical engineering with a minor in electrical engineering and mathematics from the Colorado School of Mines. Pearson has more than 13 years of engineering in the oil and gas industry. Pearson has extensive experience with both design of new and renovation of electrical systems for onshore and offshore oil and gas developments. Additional skills Pearson brings to Coffman are hydraulics, thermodynamics, heat transfer/exchanges, process modeling and simulation, piping and instrumentation design, utility design, and SCADA system development. The Alaska Supreme Court has appointed Stacey Marz of Anchorage as the new administrative director of the Alaska Court System, effective Nov. 23. She has worked for the court system for 16 years, dedicating her efforts to improve court operations to be more streamlined and to provide positive customer experiences. She has overseen the statewide operations of the Family Law Self-Help Center, a national model that provides direct assistance via the phone and website for people representing themselves in divorce and child custody cases to understand the court process and options for forms. Her work expanded to include self-help information for other civil and criminal case types, language access services, alternative dispute resolution programs, and access to justice initiatives. She has served on several Supreme Court Committees, including Civil Rules, Family Rules, Access to Justice, and the Elder Task Force. She was integral to the creation of WINGS (Working Interdisciplinary Network of Guardianship Stakeholders), an interdisciplinary stakeholder group to address guardianship issues. Marz is a fellow of the Institute for Court Management and received her undergraduate degree from the University of Florida and her law degree from the University of Oregon. Marz succeeds long time Administrative Director Christine Johnson, who is retiring after nearly 30 years of service to the court system, including 10 as director. Sabrewing Aircraft Company, Inc., a startup that has designed and is building an unmanned Vertical Take Off and Landing Group 5 regional cargo carrier drone, announced it has added Brigadier Gen. Anthony Tata, U.S. Army (ret.), and Mike Murkowski, retired senior vice president of South American Operations for Federal Express. Murkowski retired after more than 30 years of distinguished service. During his time at the helm of their South American operations, Murkowski oversaw one of the largest growth periods for both cargo and revenue. Murkowski has a bachelor’s degree in political science and government from Willamette University and a master’s degree in international business from the American Graduate School of Business. Among his many accomplishments during his 28 years in the Army, Tata was awarded the Combat Action Badge and Bronze Star. He is a graduate of U.S. Military Academy at West Point and the U.S. Army’s Ranger School. Anthony also served as Secretary of Transportation of North Carolina from 2013-15 under Pat McCory. Tata is CEO of Tata Leadership Group, LLC and also a bestselling novelist whose subject matter focuses on military life.

FISH FACTOR: Salmon permits fluctuating based on 2019 harvests

The value of Alaska salmon permits has ticked upwards in regions that experienced a good fishery this year while others have tanked. Not surprisingly, the record sockeye fishery at Bristol Bay has boosted sales of driftnet permits to nearly $200,000, up from the mid-$170,000 range prior to the 2019 season. Another strong run forecast of 48.9 million sockeyes for 2020 with a projected harvest of 36.9 million could increase the value even more, said Doug Bowen of Alaska Boats and Permits in Homer. What’s really raising eyebrows, Bowen said, is values for driftnet permits at Area M (False Pass) on the Alaska Peninsula where lots of people want in and not many want out. “We sold one at $235,000 which is amazing; $40,000 more than a Bay permit,” Bowen said. Listings by other brokers reflect the same trend with Area M seine permits also commanding more than $180,000. Wanting in are fishermen at Cook Inlet where another poor season has seen the value of driftnet permits plummet. “They got up as high as $40,000 before the season, we’ve sold a couple at $28,000 and they are down around $25,000 to $26,000,” Bowen said. “You have folks in Cook Inlet that have hung on for years and they’re trying to get out and go to Area M or Bristol Bay where they can hopefully make a living.” At Kodiak, which had a strong 2019 fishery, the value of seine permits value increased for the first time in many years from $30,000 to $40,000. The Kodiak fishery produced more than 36 million salmon, well better than the 10-year average of 21 million fish, of which nearly 33 million were pinks. The value to fishermen was nearly $46 million compared to the recent 10-year average of $38 million. A fleet of 176 seiners accounted for most of the harvest with each averaging $227,552 per permit, an increase of $80,000 versus 2018. Conversely, at Prince William Sound seine permit values remain lackluster in the $175,000 range with drifts upwards of $145,000. The estimated preliminary dockside value of the total salmon harvest was nearly $114 million, an increase of about $19 million from 2018. Contrary to expectations, Southeast Alaska had a disappointing salmon fishery that has put a downward press on permit prices. “With the preseason optimism there, the Southeast drift was around $90,000 to $92,000. We have one now at $87,000 so that’s a lower asking price than what the preseason sales were. But there is no action there,” Bowen said, adding that Southeast seine cards are holding at $230,000 also with little activity. Southeast’s 2019 salmon fishery was valued at less than $102 million compared to nearly $134 million in 2018. Meanwhile, the Panhandle is projected to see pink salmon numbers catches plummet next summer. State fishery managers are forecasting a 2020 catch of just 12 million pinks, one-third of the 10 year average, and down from 21 million taken in 2019. An advisory from the Alaska Department of Fish and Game stated: “It is possible that drought conditions present in Southeast Alaska from the parent year 2018 spawn through the spring of 2019 reduced spawning success or negatively impacted overwinter survival of developing juvenile salmon, but the exact reasons for the low juvenile abundance are not known.” It added: “Like many recent years, a potential source of uncertainty regarding the 2020 pink salmon return is the anomalously warm sea surface temperatures in the Gulf of Alaska in 2019. Compared to sea surface temperatures since 1997, when NOAA first started the Southeast Coastal Monitoring project, surface temperatures in the Gulf of Alaska in 2019, immediately offshore of Southeast Alaska, were the warmest of the time series in July, the 4th warmest in August, and 3rd warmest in September.” Uni undone Uni, or roe from sea urchins, is a popular delicacy with sushi lovers but it draws little interest by Alaska harvesters. Alaska has a red urchin fishery in Southeast with a harvest guideline of 3.5 million pounds, although that number is based on older stock surveys, said Phil Doherty, co-director of the Southeast Alaska Regional Dive Fisheries Association. “That’s a bit of a ghost guideline average level, because there aren’t that many sea urchins still here,” he said, adding that since the 1980s and ‘90s the bulk of the urchin beds have been wiped out by sea otters. “That’s the No. 1 factor in the lack of production in Southeast, and there’s nothing that’s going to happen here in the foreseeable future to change that,” he added. A second reason for the lack of interest, Doherty said, is the difficulty in getting the delicate uni from the softball sized urchins to Japanese markets in top condition. “The Japanese market is very particular on how seafood looks and it’s very difficult to crack open the urchins and get the roe out and pack it into special containers and get it onto the airlines and over to Japan, which is the main market,” he explained. For the most recent Southeast harvest of about 700,000 pounds of red urchins in 2015, a handful of divers got 49 cents a pound. Smaller, hockey puck sized green urchins found around Kodiak are preferred over the reds, but a lack of markets also has stalled fishing interest there. There’s been no urchin harvest since 2001, said Nat Nichols area manager for the Alaska Department of Fish and Game at Kodiak. “It’s not that the harvest stopped because we had concerns about the stock – it was largely market driven. I think the major barrier for even a small scale fishery is finding a market and getting them there in good condition,” he said. In the 1980s, landings of green urchins reached about 80,000 pounds; now the harvest limit is 55,000 pounds. Only one Kodiak permit was issued last year and this year by a diver collecting samples for potential buyers. Nichols said urchin uni is now more familiar to U.S. buyers and perhaps there might be interest from more local markets. “If you could develop a smaller local market, that would alleviate the issue of getting bigger loads of product sent out in good condition,” he said. “That might spur more participation.” Ocean awards The Alaska Sealife Center is accepting nominations through Dec. 10 to recognize those who have made special contributions to ocean sciences, education and management. Awards and cash prizes will be given in five categories, including for youths aged 12 to 19. Nominations can be made online at alaskasealife.org or by email at [email protected] Tongass correction In the comment period for the Draft Environmental Impact Statement and proposed rollback of the Tongass roadless rule, more than 80,000 comments have been received so far; not more than 140,000 as was previously stated. According to Paul Robbins, Jr., U.S. Forest Service/Tongass public affairs officer, those comments were from the scoping period last year and were not in reference to the current proposed rule. Comments are now being accepted online through Dec. 17, by email to [email protected]/ or by mail to the US Forest Service, Attn: Alaska Roadless Rule, P.O. Box 21628, Juneau, 99802. ^ Laine Welch lives in Kodiak. Visit www.alaskafishradio.com or contact [email protected] for information.

Revised management plan released for NPR-A

A huge chunk of Arctic Alaska is a big step closer to having a new land-use plan that could open millions of additional acres to oil and gas exploration. The Bureau of Land Management released the 485-page draft National Petroleum Reserve-Alaska Integrated Activity Plan Nov. 21 to resounding support from Alaska’s congressional delegation. BLM Alaska State Director Chad Padgett, who formerly served on Rep. Don Young’s staff, said in a prepared statement that revising the management provisions for the 23 million-acre federal reserve in the western Arctic is one of several actions the agency is taking to promote responsible energy development in the state. BLM is also leading the environmental impact statement review for the highly contentious Arctic National Wildlife Refuge coastal plain oil and gas leasing plan. “With advancements in technology and increased knowledge of the area, it was prudent to develop a new plan that provides greater economic development of our resources while still providing protections for important resources and subsistence access,” Padgett said. The existing NPR-A Integrated Activity Plan was finalized in early 2013 under the Obama administration and has been roundly criticized by development proponents for restricting industry access to large swaths of highly prospective oil acreage, some of which are currently deemed to be critical habitat for caribou and waterfowl populations that are important subsistence food sources for nearby village residents. Sen. Dan Sullivan said the draft NPR-A plan is “welcome progress towards evaluating how to best realize the potential of Alaska’s vast energy resources.” Sen. Lisa Murkowski stressed the options in the revised plan better align with the statutory purpose of the petroleum reserve, which was first designated by President Warren Harding in 1923 when it was controlled by the U.S. Navy. “We have recently learned a great deal about the abundant resources of the NPR-A, and updating the deeply flawed (2013 plan) to provide greater access is necessary to reflect our opportunities for responsible development,” Murkowski said in a formal statement. Today, about 52 percent, or 11.8 million acres of the NPR-A are open to industry. The vast majority of the acreage currently under lease is held by ConocoPhillips, which is in the environmental permitting process for its large Willow oil prospect in the northeast portion of the reserve and is also working on smaller projects in the area. Expected to cost between $4 billion to $6 billion to fully build out, the Willow project could produce upwards of 100,000 barrels of oil per day at its peak, according to the company. Former Interior Secretary Ryan Zinke first directed department agencies to reevaluate the reserve’s oil and gas potential as well as changes to the management plan in May 2017. State officials under both former Gov. Bill Walker and Gov. Michael J. Dunleavy’s administration have pushed Interior to revise the 2013 NPR-A plan and the state is also looking at ways to link several communities in the reserve with year-round road connections. In December 2017, the U.S. Geological Survey issued a resource assessment for the NPR-A in which the agency concluded the reserve and nearby state lands could hold some 8.7 billion barrels of technically recoverable, undiscovered oil, primarily based on the recent Nanushuk discoveries in the area. A 2010 NPR-A assessment projected a mean resource estimate for the reserve of just 896 million barrels. Interior officials announced BLM would begin analyzing changes to the NPR-A plan about a year ago. The first option to change management in the reserve, Alternative B, would actually cull the amount of leasable land by about 400,000 acres to 11.4 million acres, but it would provide for two north-south pipeline corridors through the 3.6 million-acre Teshekpuk Lake Special Area that could allow industry to transport oil and gas from offshore leases to the Trans-Alaska Pipeline System. Caelus Energy holds near shore State of Alaska leases in Smith Bay, just to the northwest of Teshekpuk Lake. The small Texas-based independent announced in 2016 that based on exploratory drilling it believes the Smith Bay prospect could hold as much as of 6 billion barrels of currently stranded oil. The area surrounding Teshekpuk Lake has been the primary focus of the land-use debate in the NPR-A, as it is important habitat for the Teshekpuk and Western Arctic caribou herds and a major breeding area for large populations of waterfowl in the summer. However, it is also considered one of the most highly prospective areas for oil and gas deposits largely based on the boom of recent Nanushuk formation oil discoveries — including ConocoPhillips’ Willow — in the region. BLM would also recommend 12 qualifying rivers in the NPR-A for inclusion in the Wild and Scenic River System under Alternative B. Alternative C would open an additional 5.3 million acres to exploration, thus making about 75 percent of the reserve open for leasing. It would also provide for one pipeline corridor through the Teshekpuk Lake Special Area. The third and final alternative considered to expand leasable acreage would make 18.3 million acres, or about 80 percent of the reserve, open for leasing and that would include the Teshekpuk Lake Special Area. Impacts to caribou calving and migratory bird habitat could be mitigated through the use of lease stipulations that would place restrictions on permanent facilities in certain areas limit the timing when exploration activity could occur as well, according to BLM. The draft plan also includes a “no action” alternative to maintain the status quo as required by the National Environmental Policy Act. Each of the alternatives to change land-use management in the reserve would eliminate the Colville River Special Area, which provides habitat protections over 2.4 million acres adjacent to the river. The Colville River makes up much of the eastern boundary of the NPR-A. The Wilderness Society Assistant Alaska Director David Krause said the conservation group will be fully engaged in the public EIS process primarily to ensure the Colville River and Teshekpuk Lake areas are protected. Krause said he’s not surprised by the main aspects of the alternatives after an initial review of the draft, but he emphasized that major changes to the current plan are likely to lead to more policy battles that won’t further industry’s interests either. “Ultimately, deconstructing the existing plan that is very science-based, I think, is going to create an environment of increased conflict and I think greater uncertainty for business,” he said. BLM recommended opening the entire 1.5 million-acre ANWR coastal plain to leasing in the final lease sale EIS the agency published in September for the area. Representatives for the Inupiat Community of the Arctic Slope, a regional tribal government, declined to comment on the draft NPR-A plan. A spokesman for the North Slope Borough said borough officials would focus on reviewing the document after the Thanksgiving holiday. A 60-day public comment period on the draft NPR-A Integrated Activity Plan runs through Jan. 21. Elwood Brehmer can be reached at [email protected]

Startup Week 2019: Upstart programs focus on growing entrepreneurial community

Accelerators, which provide seed investment, connections and mentorship to startup companies and entrepreneurs, have been popping up across the country in recent years. Alaska is no exception.  The University of Alaska Center for Economic Development is unveiling Upstart Alpha, a university-based entrepreneurship engine launching in January 2020. “A lot of the folks we expect to apply for our accelerator are really in the process of taking their first steps towards a startup, towards launching their first business,” Nolan Klouda, director of the Center for Economic Development said in a presentation at 1 Million Cups. “So we’ve tailored our program to that in order to bring them up rapidly, to a higher level of capacity — where they’re able to participate in our ecosystem and ideally, take those steps towards being funded or towards becoming self-sufficient and revenue positive.” Applicants do not have to be students of the University of Alaska to apply for the accelerator, though the program is student-focused. “We want startups to congeal and grow in their strength coming out of our accelerator and to enter our ecosystem, and we want them to become successful,” Klouda said. “But I think even more important than that is that we want to build entrepreneurs, whether or not the startup that they work on here is what they go with ultimately — is maybe not the most important issue — so much as that we helped entrepreneurs get their bearings and learn the tricks, learn how to do customer discovery, fail along the way, learn that failure is okay, and what lessons to take away from it and how to keep going.” Gretchen Fauske, associate director at the Center for Economic Development, says that across the country, rates of entrepreneurship among 20-somethings are declining, and Alaska is no exception. “Fortunately, because of our position at UAA and focus on early state entrepreneurial development, CED is well-positioned to reach young Alaskans with an interest in entrepreneurship,” Fauske said. “Our two new Upstart programs focus on connecting students or early-stage entrepreneurs to startup opportunities.” Fauske says with a focus on the lean launch method of build-test-learn and customer discovery, the program offers the opportunity to take an idea and transform it into a business. “We are really excited about these programs and bridging students and startups!” Fauske said. This fall, the Center for Economic Development got the ball rolling and launched Upstart Internships, which offers UAA students the opportunity to intern at CED, where they will be connected with local founders to experience what it means to work at a startup. Participating startups this fall include Alpine Fit, an apparel company; The Launch Company, which specializes in all rocket-launching needs; Gennaker Solutions, which specializes in developing autonomous drones; LegalVerse, a software as a service company providing innovative document management tools for lawyers; The Boardroom, a co-working space in downtown Anchorage; and Launch Alaska. Both Upstart Alpha and Upstart Internships will be running in the spring of 2020. To learn more about the Center for Economic Development’s programs, follow them on Facebook or visit their website. Samantha Davenport is the Startups Storyteller for the Center for Economic Development. Before joining CED, she was the executive editor of The Northern Light — UAA’s student-run newspaper — for 2.5 years. During her time at UAA, she completed internships at the Anchorage Daily News and Alaska Public Media. She graduated from UAA in December of 2018 with bachelor's degrees in journalism and political science. Sam is a member of the 1 Million Cups organizing committee. In addition to her work at CED, Samantha is an Anchorage-based freelance writer and managing editor of The Spenardian, an award-winning hyperlocal magazine about the neighborhood of Spenard. She previously served on the Spenard Community Council's executive board as treasurer.

Startup Week 2019: Crushing the first phase of a startup lifecycle

Running one of the newer tractors in our operation — a 1973 Ford 1000 — I learned an important lesson working my first year in the hay fields. I was 14. My job was to rake the freshly cut hay into windrows so it could be “swept and stacked.” I needed to stay ahead of the stacking crew but they kept catching up to me. I was advised to “make each move count.” From that moment forward, I realized there was logic and strategy to making circles around the hayfield. If I wanted to stay ahead of the stackers, I had to avoid excess driving that didn’t get hay into windrows. “Make each move count” has since become one of my core professional values. The problem, however, with entrepreneurship it is difficult to see an efficient pattern in the hay. It is hard to know what actions give us the results we want. Perhaps this roadmap will save you from making as many mistakes! Step 1: Validate your idea As entrepreneurs, we get ideas that make us so excited, we can hardly sleep. We think we see the problem with clarity, but now comes time to see if the idea has bones to it. Ask yourself: what problem are you solving? To get at the root of this question, we need to know who your ideal customer is. Take me beyond demographics. What transformation does this person want? How bad is their problem? Have they tried alternatives? Why did those not work? Take action by preparing a questionnaire to guide your customer interviews. Reach out to prospective customers, or current ones, and ask for an interview. Ideally you can record it, with their permission of course, so you can listen later to the exact wording they used. Schedule about 20 interviews or until the answers you get from the questionnaire start to be the same. When responses are similar, you know you have struck a common chord. I too thought I was a stellar startup student and knew my customer, but the reality is that I had no clue. I paused long enough to schedule interviews with current and prospective customers. What gold they gave me. The interviews became addicting and I wanted more and more of them. My ideal customer offered up invaluable ideas and insights. Their feedback gave me perfect clarity on why my business was not taking off. Based on feedback from my customers I decided to completely scrap my online course that teaches people to be grant writers. I rebuilt the course, incorporating feedback every step of the way from my customer. Every good idea in my new online program came from them. The bottom line here is validate your idea. Do this through structured interviews but also through “incognito” interviews. You can gather a great deal of information asking prospective customers casual questions. The best resource for this is reading the Mom Test by Rob Fitzpatrck. When you ask the same question over and over, certain themes will emerge. When I asked my customer what they hoped to learn and gain from taking an online grant writing course, half the responses said they hoped to feel more confident. That was not the wording I expected. I also asked what their fears were about the course. They were concerned about having time and finding new grant opportunities. Fabulous. With that information in hand, I could improve my product promise. Step 2: Define your product promise To develop your product promise, answer this question: how does your solution solve your ideal customer’s problem and get them the specific results they want? Your product promise must be credible, specific and aspirational. Back your promise by results you have gotten for yourself or your clients. Be specific in how you are going to make your ideal customer feel. Describe what they will experience after having your product. Be aspirational by showing what is possible in the future. My course promise identifies common theme pain points and the results they get by taking action. Here is a template you can riff on: By (using this product), you will go from feeling (before) to feeling (after), and experience (specific results). Develop your own core promise and improve it as you gain momentum with more and more feedback from customers. Boiling into one sentence what results you will get for your customer is at the heart of why someone will choose to buy from you or not. Step 3: Understand the competitive landscape It is a lot easier to figure out how you fit into the market once you understand the competitive landscape. Draw out a matrix with X and Y axis that make sense for your business. Then place your competitors in each quadrant. By doing this exercise, I discovered that almost all grant writing educators assumed their product would be paid for by an organization. They priced themselves accordingly. What I discovered, however, was that almost no one serves the ambitious consumer willing to pay for their own education and self development. With this information in hand, I pivoted and now market my course direct to consumers. Step 4: Know your distribution and sales strategy How and where you will distribute your product cannot be an afterthought. When customers are interested in buying from you, how will you make it happen? How you distribute affects how you sell your product. I use Kajabi, an all-in-one software platform for creating and marketing online courses. As I build momentum, my sales strategy is “medium touch.” I am moving towards an automated sales model, but not too quickly. I need close feedback loops from my customer to keep optimizing the business. I have been hungry to scale as it is part of the startup life cycle most talked about. However, it just simply won’t happen until we take care of phase one, which is achieving product/market fit. Step 5: Understand your buyer’s journey How does your customer learn about you and decide if you can solve their problem? Who else is involved in decision making? The best way I have found to think about this is through Modern Publisher’s “Ascension Ladder.” I get my customer’s attention through search engine optimization on Google, in-person workshops, and as a guest on other people’s podcasts. Getting a customer’s attention is a death trap for entrepreneurs. Pick two to three high-impact activities for getting your customer’s attention and stick to that. Consistency wins. Not a little of this and a little of that. My customer considers my product by signing up for our free mini course on grant writing, listening to our free audiobook, or reading our weekly blog and newsletter. The low-price entry point for further considering us is through our book on How to Write a Grant: Become a Grant Writing Unicorn, a No. 1 bestseller on Amazon for nonprofit fundraising and grants. Finally, we give our leads an opportunity to purchase our online grant writing program a few times a year, marketed through webinars and in-person workshops. What is your buyer’s journey? How will you build trust with them? Getting clear on your ascension ladder makes it easier to focus your marketing energy. Step 6: Develop your product Interesting how I put this tip last, right? It may seem backwards but it is not. I built an online course over months and months and then tried to sell it. I did not know my customer. I did not know where to find them. I did not know how to communicate with them. By having redone this process, I now know my ideal customer and what she needs to make her big bold vision a reality. I soft launched the course by selling it to a group of 30 students. The course was available for purchase for one week. In that week I built the first of four modules. I took student feedback on each module before creating the next one. Of course I had an outline and poured a ton into each module, but I didn’t build each module until I could get customer feedback. Thank goodness, too! There were plenty of micro changes they wanted or small snags that they caught. Based on feedback from the soft launch team, I now have a course that is show-time ready! Step 7: Optimize forever and ever I wish someone had told me it would be this hard to get a product to market successfully! Of course, perhaps if they did, I wouldn’t have done it. Recognize that your success comes from making 1,000 micro improvements. Keep your customer feedback loops tight until you are totally confident you are ready for the stage of startup life where you can truly scale. Make each move count Consuming business education is easy. It gets hard when we put that knowledge to work. More now than ever, I am confident that the single thread that unites us —  whether you are a consultant, software engineer, or widget designer — is that customer feedback guides the way. They may not know exactly what a solution looks like, but they can shine a light on which direction you need to go to make it happen. Entrepreneurship life is hard. Fulfilling, but hard. We can spend time on an infinite amount of activities and tasks. In the mayhem, however, lies a pattern in the hay. It is invisible to nearly everyone else but you. Look for the pattern. Make your each move count. Achieve product/market fit. That is all that matters if you are in the first stage of startup life. Make. Each. Move. Count. Meredith Noble is an entrepreneur, community leader, and outdoor adventurer in Alaska. She is part of a new wave of pioneers at Geeks in the Woods building technology companies from remote yet connected properties. Meredith’s company teaches community changemakers how to write winning grants (www.learngrantwriting.org). When not working, Meredith is outside finding inspiration in her surroundings, biking, skiing, and exploring.

Movers and Shakers for Nov. 24

Federal Home Loan Bank of Des Moines recently appointed Rasmuson Foundation senior program officer Christopher Perez to its Affordable Housing Advisory Council representing Alaska. Perez begins his term on Jan. 1, 2020, and will serve as a member of the Advisory Council for three years. As part of the Advisory Council, Perez will advise the FHLB Des Moines Board of Directors on housing development and community lending needs throughout the bank’s district. Advisory Council members are selected for their successful experience serving housing and economic development agendas. In his role at the Rasmuson Foundation, Perez leads the housing and community economic development investments for Alaska’s largest private philanthropic organization. Perez has years of experience in affordable housing and manages more than $40 million in Foundation investments to support the development of affordable housing in Alaska. Under his leadership, the Rasmuson Foundation received the U.S. Department of Housing and Urban Development’s Secretary’s Award for Public-Philanthropic Partnerships. Perez holds a master of public administration in management and finance from New York University and a bachelor’s degree from Wesleyan University. He is also a certified low-income housing tax credit compliance professional. Fred Brown was elected president of the National Labor Alliance of Health Care Coalitions in early October. NLA is a non-profit national organization of management health and welfare coalitions representing purchasers of health services, that work together to increase value in care, services and benefits for participating members and coalitions. Brown said his focus will be in three areas: strengthening ties and communication with regional coalitions and members; providing efficiency and innovative coalition plan options and delivery leading to increased organizational savings and improved care; and increasing strategic engagement in public policy efforts. Brown serves as executive director of the Pacific Health Coalition, which started in Alaska. Under his leadership over the past decade, PHC’s membership and revenue have grown more than fourfold and the organization now includes member plans throughout the Pacific Northwest. Tom Marriage, a graduate of East Anchorage High School and Willamette University, has joined the Alaska magazine and The Milepost team as associate publisher. Marriage replaces outgoing Melissa Bradley and he is responsible for generating ad sales revenue in addition to audience growth across Alaska. Marriage is a longtime resident of Anchorage and brings a wealth of digital and social media experience from Alaska Dispatch Publishing and MSI Communications. Marriage most recently worked at Pursuit-The Alaska Collection as marketing and brand experience manager. First National Bank Alaska announced several recent hires and promotions. Jen Imus joined the Johansen Branch team. Imus started at the bank as the Interior relationship manager and was appointed vice president. In her role, she will help support business development and strengthen customer relationships in the Fairbanks region. Management Associate program graduate Lydia Sobek was promoted to Loan Officer I and will work in the Corporate Lending team’s newly created Tax Unit. In addition to commercial loans, Sobek will specialize in Low-Income Housing Tax credit loans, Historical Tax Credit loans and Dino Tax Credit loans. Business Support Specialist Fitime “Tinka” Nasufi was promoted to Branch Manager I Operations of the North Star Branch on Joint Base Elmendorf-Richardson. At North Star, Nasufi will be responsible for daily branch operations and building and maintaining customer relationships. Quinn Anderson was promoted to Loan Officer I and will help customers with their lending needs at the U-Med Branch. Anderson joined First National in 2014 and worked as a personal banker until beginning a loan officer apprenticeship in June 2018. Great Alaskan Holidays announced the hiring of Brittany Burns as its new creative coordinator and member of the Marketing Department. A lifelong resident of Alaska, Burns was born and raised in the North Slope village of Kaktovik before taking up residence in Anchorage. She has held previous positions in employee or freelance capacities with the Alaska Native Tribal Health Consortium, and the University of Alaska Anchorage. Her primary responsibilities have been, and will be, participating in continued development and outreach via social media, branding, graphical, and advertisement design and development, and corporate videography and photography. Burns has bachelor’s degrees in philosophy and history from the University of Alaska Anchorage, and a master’s degree in film studies from National University in LaJolla, Calif. She is currently working on her bachelor’s degreein digital marketing from the University of Alabama Birmingham. Calista Corp. announced the promotion of shareholder Tisha Neviq’aq Kuhns to vice president of land and natural resources. Kuhns is responsible for managing lands and resources to meet Calista’s goals for financial success and sustainable development. She provides technical advice on economic minerals, land use and stewardship, and coordination with industry and government agencies. Kuhns joined Calista in 2016 as a staff geologist after working with the Donlin Gold project for 12 years in geology and water quality baseline management. She is born and raised in Bethel and Homer. She earned her bachelor’s degree in geology from Southern Oregon University. Kuhns is also currently enrolled in Alaska Pacific University’s graduate-level Alaska Native Executive Leadership Program. Kuhns was also recently elected to serve on the Alaska Miners Association board of directors.

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