BROWN'S CLOSE: Backpacking, and Other Burdens Part 1

My friend took me on my first overnight backpacking trip last month. Via the Crow Pass trail, we were due to leave Girdwood early in the morning on Saturday and arrive at the Eagle River Nature Center parking lot late Sunday afternoon. I looked forward to this trip for months. I created a curated playlist of songs about walking. I perused Fred Meyer’s selection of freeze-dried instant foods, all set to expire in 2067. I bought a bladder. On the morning of the trip, she left her car in Eagle River, and I drove us to Girdwood. We snapped a fresh face “beginning of the trail selfie” (a tradition according to my friend) and began tottering along with our walking poles. Upon reflection, this would become the “before” shot, to be compared later with the “after” shot, of what shape my body would be in after finishing the trip. The trail began with a 3,500-foot elevation gain. My friend sprang along the trail like a jackrabbit, and I soon lost sight of her. The backpack, taller than my entire torso, made it difficult to balance, and I hobbled along waiting to twist my ankle. The shoulder and chest straps were so tight my breathing was restricted. I’d brought a small portable speaker, currently and fittingly tuned to “Dead Man Walking.” The music broadcasted my presence to my intended audience (bears), and all other collateral damage (any living being). I rounded a corner and found a small group of fellow hikers looking at me bemusedly. “We heard you coming!” they called. “We wondered who was bringing the party!” In the far distance, I saw my friend waiting patiently at the summit. I trudged slowly towards her. After an eternity of crawling uphill – “My backpack….” I sputtered between gasps. “It really…hurts…. Is it supposed…to hurt…like this?” “Well, that’s backpacking!” she sang delightedly. For the first time, I considered the possibility that my friend might be a lunatic. She voluntarily put herself through this pain, multiple times per summer… for fun? She suggested we sit down and have lunch, and I ate three large pieces of cold pizza in quick succession. They were the last pieces of food I could eat that would have had to know the insides of a refrigerator. My friend announced she hates cold pizza. Confirmed, she was a lunatic. I struggled back into my pack, requiring her help because I couldn’t get one arm through the strap; instead, I was hopping around like a chicken. Seeing me struggle, she stared at me quizzically. Then, without warning, she grabbed the shoulder straps, pulled two cords, and they loosened. Relief shot through my chest and shoulders. I took my first real breaths of the day. And then we were off again. I felt lighter than air for about seven minutes before the pack began pulling into my shoulders again as the weight of gravity took hold. I would spend the next day and a half periodically loosening and tightening straps, depending which part of my back was seizing up in that particular moment. Crow Pass covers dramatically different terrain throughout its full twenty-one miles. Starting with the stark elevation gain, hikers pass through snow, down shale coated mountains, through grass so tall and thick you can’t see bears coming, over boulders, through forests, and, of course, crossing Eagle River. Trudging through snow, I started to worry that my newly acquired “backpacking sleeping bag,” rated down to 47 degrees Fahrenheit, was going to be warm enough. Contemplating this chilly prospect, my foot slipped, and with an “Ummm…” by way of announcement to my friend, I tipped over and rolled down the hill. What with the weight of the backpack, I began to roll faster and faster. Ever gaining speed, I hurtled towards the bottom of the mountain, and the large rock wall waiting for me there. Growing up in Fairbanks, I knew the best way to slow down after bailing out on sledding hills was to increase your surface area as much as possible. I spread out my arms and legs and hoped I would slow down. As I passively pondered what life would be like with a spinal injury, I felt my momentum stall, and I stopped sliding about 15 feet from the wall. I sat up, took off the backpack, and looked at my friend, far up the top of the mountain. I’d lost a walking pole and my hat somewhere along my slide. At a loss for anything else to say, I called up to her, “Um, can you get my hat? And I think I lost one of your poles.” She shook her head. “No, let’s keep going. You don’t need them.” This was a moment of ratification on my status as a material girl. I hate losing things. Loath to leave any belonging behind, I stood up, and started climbing back up the hill, justifying my actions to my friend. “I need the pole for balance!” By now, it was mid-afternoon, and my friend was definitely fidgeting because we still had not made it to Eagle River. She wanted to camp at the river that night, and cross first thing Sunday morning when the water was at its lowest. Pole collected, hat on head, and backpack grudgingly placed on, I continued down the mountain, away from the snow. I was thrilled the temperature was warming, and we were seemingly once more in summertime. That’s when my friend cheerily reminded me to crank up the tunes again; we were back in bear country. We entered some tall grass, positively obliterating any potential bears from view. Knowing we were trying to make it to the river, I did my best to pick up the pace, though the ground was covered with giant boulders. If you took your eyes off of your feet for even a second to study the bear infested tall grass, for example, you’d trip and hit your head. Feet burning with new blisters, and my pack once again feeling like the weight of the entire universe on my shoulders, I pouted silently, wondering how I was ever going to make it back to my car by this time tomorrow. Amongst these gloomy thoughts, there was a rustling in the tall grass ahead of us, and we both stopped and seized our bear spray. Two young men emerged, looking mildly amused as they took in the site of us brandishing our weapons. As we lowered our arms, they happily announced that a woman on this side of Eagle River had just been removed from the trail by ambulance helicopter; she’d broken her ankle. Realizing it would take more time to finish the journey with a broken ankle, I decided to just go ahead and continue at my poky pace. My friend must have decided the same thing, because both of us began walking at a noticeably more leisurely rate thereafter. We sat down in the forest to have dinner around five. My friend had a nifty propane heater and a pot, in which we boiled water. We dumped the water into our freeze-dried food bags, and stirred the contents. My dinner was, ostensibly, spaghetti and meatballs; her's beef stroganoff. I eyed both gloopy messes suspiciously. When she told me about the food, I ventured that I would just bring some protein bars, or something. Having largely lived off of Lean Cuisine in college, I’d long since sworn off instant food of any kind. I’d eaten my entire lifetime’s worth over a four-year period, and my allotment was completely used up. My friend, however, insisted I would want hot food and that I really should buy these unique items, guaranteed fresh for 46 years! I stirred my spaghetti with a grimace and took a salty bite. The spaghetti tasted exactly like Lean Cuisine. It did, however, put some pep back into my very tired steps. We cleaned up from our meal, leaving no trace as good backpackers should. Naturally, and just my luck, I was beginning to regret bringing the cold pizza, as the leavings in the bag were beginning to stink. We hopped along, revived from the sodium ladened slop, avoiding tree roots precariously popping up throughout the forest. My friend confirmed we were almost to Eagle River, so we hurried along, trying to finish the day’s journey. With a crack, my left ankle twisted out, and I went down with a yelp. Stay tuned for Part 2. Sarah Brown suffers in silence. Feel free to pester her on Twitter @BrownsClose1, or email her at [email protected]; she rarely fights back. “Close” is a British term for alley or cul-de-sac. For more of Sarah’s musings, visit Browns-Close.com.

Feds to resume selling drilling rights as appeal unfolds

WASHINGTON — The Biden administration is appealing a federal judge’s ruling against its oil leasing moratorium and deepening government scrutiny of the activity it blames for fanning climate change, even as it promises to resume auctions. The moves, announced by the Interior Department in an emailed statement Aug. 16, mark the beginning of an open-ended analysis of the federal oil, gas and coal leasing programs that could span years, and lead to higher fees as well as new limits on development in sensitive areas. The agency said it would continue onshore and offshore oil and gas leasing as required by Louisiana-based U.S. District Judge Terry Doughty in June, while it challenges the decision before the 5th Circuit Court of Appeals: “Interior will continue to exercise the authority and discretion provided under the law to conduct leasing in a manner that takes into account the program’s many deficiencies.” The announcement comes ahead of a court deadline for the administration to explain how it was complying with the judge’s June 15 order that leasing should resume. The Interior Department has not yet issued public plans for new or rescheduled lease sales, amid mounting pressure from Congress and the oil industry. Administration officials were concerned that without taking action, top Interior officials could be held in contempt over the prolonged leasing pause, according to two people familiar with the plans who asked for anonymity to discuss internal deliberations. The move is a blow to environmental activists who had pressed Biden to permanently block oil and gas leasing on federal lands and waters, arguing that a warming world can’t afford to burn the fossil fuels they contain. “This is a setback in our work to #ActOnClimate,” the Sierra Club said on Twitter. “Fossil fuel extraction on public lands and waters make up a quarter of our domestic greenhouse gas emissions — at a time we must urgently move to cut emissions by at least half.” Still, Interior’s announcement did little to assuage oil and gas industry leaders who have accused the administration of dragging its feet in rescheduling a series of auctions postponed earlier this year. Advocates of offshore oil development have lobbied the administration to reschedule a planned March sale of drilling rights in the Gulf of Mexico, arguing that fewer greenhouse gases are emitted in the extraction of crude from U.S. waters. “It is past time for U.S. offshore leasing to resume,” said Erik Milito, head of the National Ocean Industries Association. “The administration should follow the plain letter of the law, and support high paying jobs and climate and emissions progress.” Federal lands and waters provide about a quarter of the nation’s crude production. But the oil, gas and coal extracted from that terrain is also responsible for about 24 percent of U.S. carbon dioxide emissions, according to a U.S. Geological Survey report. Even as the Interior Department said it was resuming leasing, the agency made clear it will pursue deep changes. “Federal onshore and offshore oil and gas leasing programs are responsible for significant greenhouse gas emissions and growing climate and community impacts,” the agency said. “Yet the current programs fail to adequately incorporate consideration of climate impacts into leasing decisions or reflect the social costs of greenhouse gas emissions, including, for example, in royalty rates.” And Rep. Raul Grijalva, a Democrat from Arizona who heads the House Natural Resources Committee, said he would push leasing reforms as part of the Democrats’ $3.5 trillion tax-and-spending plan. “Holding more lease sales under today’s outdated standards is economically wasteful and environmentally destructive, and everyone not sitting in a fossil fuel boardroom knows it,” he said. President Joe Biden ordered the leasing pause on Jan. 27, so Interior could conduct a “comprehensive review.” Now, the agency is embarking on a broader programmatic analysis of oil, gas and coal leasing it says is critical to address what changes “may be necessary to meet the president’s targets of cutting greenhouse gas emissions in half by 2030 and achieving net zero greenhouse gas emissions by 2050.” The move takes a cue from the Obama administration, which in 2016 initiated a broad environmental analysis of federal coal leasing, and halted the sale of new mining rights in the meantime. But the Biden administration has been under withering pressure to restart sales after the June 15 court order. A coalition of Louisiana and a dozen other states last week asked Doughty to compel the Biden administration to explain why it shouldn’t be held in contempt for violating his preliminary injunction against the moratorium, since no new sales had been scheduled, and Interior Secretary Deb Haaland told Congress last month the pause was “technically” still in place. A dozen oil industry trade groups, led by the American Petroleum Institute, on Aug. 16 filed a new lawsuit challenging the leasing pause, joining at least three other related cases proceeding in federal courts.

Minutes show Fed preparing for taper starting this year

WASHINGTON — Most Federal Reserve officials agreed last month they could start slowing the pace of bond purchases later this year, judging that enough progress had been made toward their inflation goal, while gains had been made toward their employment objective. “Various participants commented that economic and financial conditions would likely warrant a reduction in coming months,” minutes of the Federal Open Market Committee’s July 27-28 gathering, released Wednesday, said. “Several others indicated, however, that a reduction in the pace of asset purchases was more likely to become appropriate early next year.” The minutes also showed that most participants “judged that it could be appropriate to start reducing the pace of asset purchases this year.” U.S. central bankers next meet Sept. 21-22. While the record shows that they don’t yet have agreement on the timing or pace of tapering asset purchases, most had reached consensus on keeping the composition of any reduction in Treasury and mortgage-backed securities purchases proportional. “The FOMC minutes again reveal a wide spread of opinion on the question of the timing, speed and structure of the upcoming tapering,” Ian Shepherdson, chief economist at Pantheon Macroeconomics Ltd. said after the release. The minutes showed split views on the durability of faster inflation as well as on key areas of policy making. Inflation debate While the recent surge in consumer prices has grabbed policy makers’ attention and prompted wide agreement on pulling back on asset purchases, “several” meeting participants were still worried that inflation could slump back into the prepandemic trend of running less than the 2 percent target. On the labor front, officials saw progress; yet the late-July discussion also showed uncertainty over both near- and medium-term labor market slack, given the job destruction tied to the pandemic. Policy choices going forward are also likely to be influenced by new appointees to the Fed Board as the Biden administration moves to fill as many as four positions by early 2022. “Several participants emphasized that employment remained well below its prepandemic level and that a robust labor market, supported by a continuation of accommodative monetary policy, would allow further progress toward” labor-market goals, the minutes said. “Several participants also commented that price increases concentrated in a small number of categories were unlikely to change underlying inflation dynamics sufficiently to overcome the possibility of a persistent downward bias in inflation.” Stocks slide Treasuries advanced after the release, though remained down for the session, with 10-year yields at 1.28 percent on Aug.18 in New York, compared with about 1.29 percent before the release. The S&P 500 Index of equities slumped 0.8 percent. Fed policy makers have differed publicly in the weeks since the meeting over when the central bank should start tapering, with some, like Minneapolis Fed President Neel Kashkari, wanting to a see a “few more” strong jobs reports and others, such as Boston Fed President Eric Rosengren, saying he’s open to announcing plans for a reduction at the next meeting if employment figures come in well. “Many participants saw potential benefits” in ending the Fed’s bond buying before targets were hit for raising interest rates, the minutes showed. Policy makers also discussed the importance of disassociating moves on asset purchases from a decision on an eventual rate hike. St. Louis Fed President James Bullard said Aug. 18 that he would like to see the tapering of the asset-purchase program done by the first quarter of 2022 — a much faster pace than prior wind-downs. On the composition of bond-buying purchases, “most participants remarked that they saw benefits in reducing the pace of net purchases of Treasury securities and agency MBS proportionally.” The minutes indicate that officials still see room for labor-market improvement. Job gains have been strong, averaging 617,000 a month through July. The unemployment rate stood at 5.4 percent last month, but broader measures still show slack. The employment-to-population ratio for workers between 25 and 54 years old was 77.8 percent last month compared to 80.5 percent at the start of 2020, while Hispanic and Black unemployment rates remain high at 6.6 percent and 8.2 percent. The recovery has been strong with both supply and demand imbalances pushing prices higher. The Fed’s inflation indicator rose at a 4 percent pace for the 12 months ending June compared with the Fed’s 2 percent target. The minutes showed that “most participants” remarked that their standard for progress had been achieved with respect to the price stability goal. Fed officials cut their benchmark lending rate to zero in March 2020 and announced they would buy $200 billion of agency mortgage-backed securities and $500 billion of Treasuries to support market functioning. By December 2020, they realigned their guidance saying they would purchase $80 billion a month in Treasuries and $40 billion a month on mortgage securities “until substantial further progress has been made toward its maximum employment and price stability goals.” The asset purchases have lowered longer-term interest rates and helped fuel a rise in housing prices and other financial assets, with one-month gains in home price indices breaking records while stock indexes trade around record highs.

Dunleavy introduces $2,350 PFD in slow start to special session

The special legislative session billed for months by Gov. Mike Dunleavy and many legislators as the end to Alaska’s years of fundamental fiscal policy battles has started like most regular sessions do: very casually. Legislators spent the first week of the legislative session getting updates on the budget they passed less than two months ago in much the same fashion as they do shortly after they convene each January. However, the current special session is limited to 30 days, not the nearly four months lawmakers normally have to craft, debate and pass legislation, so the clock is truly ticking this time. Once again distracting legislators from the larger, existential fiscal issues of the role of the Permanent Fund in state government, including the future of the Permanent Fund dividend, what services the state should offer and whether or not Alaska should reinstate its first broad-based tax in more than four decades, is the size of this year’s PFD after Dunleavy vetoed the approximately $525 per person appropriation in the budget passed late last June. The fiscal year 2022 budget contained an appropriation for dividends of approximately $1,100 per eligible Alaskan but legislators failed to get three-quarter supermajority support from both chambers needed to draw from the dwindling Constitutional Budget Reserve Fund, which held just more than $1 billion as of July 31 and is the state’s primary savings account. Without the CBR votes, the PFD was cut to $525 because of budget language written by the conference committee. Dunleavy, who is pitching a plan to use half of available Permanent Fund earnings for PFDs starting at approximately $2,350, called the $525 dividends “a joke” shortly after vetoing them. Dunleavy submitted legislation to pay the larger dividend of $2,350 as well as fund popular scholarships and the state’s medical school partnership program with other western states known as WWAMI Aug. 19, the fourth day of the special session in Juneau. The scholarship and WWAMI funds were caught up in the failed CBR vote due to a once uncontroversial budget procedure known as the “reverse sweep,” which restores funds for many state programs that automatically transfer to the CBR on July 1, the start of each fiscal year. Because the governor called the special session, the Legislature can only work on the issues included in the governor’s proclamation. “Alaskans are still in recovery mode from the economic impacts of the pandemic. With this in mind, and following recent encouraging conversations with legislators, my administration put forth a vehicle for the Legislature to fund the PFD and student scholarships — two critical programs that directly impact Alaskans. We recognize there may be other appropriations the Legislature will consider as we work collaboratively to finalize the (fiscal year) ‘22 budget in this special session; but I am committed to ensuring Alaskans get a fair share of their resource wealth,” Dunleavy said, while invoking a phrase popularized by advocates for higher oil production taxes who are largely his political foes, in a statement from his office. Progress in the years of debates over the state’s fiscal policy has largely stalled since the Legislature passed Senate Bill 26 in 2018, which authorized a percent of market value draw on the Permanent Fund totaling about $3 billion per year and growing. It marked the first time the Fund had been used for anything other than paying dividends and operations at the Alaska Permanent Fund Corp. Since then, the larger fiscal policy issues have spilled over into the annual budget process with legislators routinely leveraging budget items to gain support for their view on taxes or the dividend. The special session Dunleavy called in June for legislators to discuss the future of the PFD was consumed with debates over the size of this year’s PFD that slowed the budget process to a crawl. Elwood Brehmer can be reached at [email protected]

Natural gas projects face new scrutiny from FERC

The rules have changed from a year ago. Between court orders and election-induced policy changes at the White House and Federal Energy Regulatory Commission, natural gas pipelines and liquefaction plants will need to pass stricter regulatory reviews of their greenhouse gas emissions. It’s still uncertain how FERC will determine which projects pass and which fail. The Department of Energy will do much the same for liquefied natural gas exports. In a victory for opponents of two proposed LNG export terminals at the Port of Brownsville, Texas, a federal appeals court on Aug. 3 ruled that FERC must further analyze each project’s potential impacts on climate change. The panel of the U.S. Court of Appeals for the D.C. Circuit was unanimous in its ruling that FERC violated the National Environmental Policy Act, or NEPA, with “deficient” environmental analyses. The court did not vacate FERC’s authorization of either project, but did direct the commission to try again and do a better job. “This decision clearly demonstrates that the commission has the authority and obligation to meaningfully analyze and consider the impacts from (greenhouse gas) emissions and impacts to environmental-justice communities,” FERC Chairman Richard Glick, who had dissented when the commission approved the projects in 2019, said in a statement after the court decision. The court ruled that the commission “had not adequately justified its finding that the projects are in the public interest under the Natural Gas Act,” FERC reported on its website. Also in August, the Environmental Protection Agency advised FERC to begin incorporating the social cost of carbon into its environmental reviews of natural gas infrastructure projects. The EPA said such work could help the commission put a dollar value on harm caused by project emissions. In addition, FERC should consider attaching conditions to its orders to reduce climate change impacts from gas projects, the environmental agency said. The commission this year has expanded its reviews with supplemental environmental reports to consider climate change impacts of gas projects, though commission staff has said in at least two reports that they are unable to calculate the lifetime impacts of emissions from gas production to consumption by end-users. “Commission staff conclude that construction and operation of the project would not result in significant environmental impacts, with the exception of climate-change impacts, where FERC staff is unable to determine significance,” a draft environmental review in June for a Louisiana gas pipeline said. Glick, who took over as FERC chairman in January, has pushed to include consideration of climate impacts in gas pipeline reviews. At a congressional hearing in July, he answered that federal courts on “numerous occasions” have told FERC that if environmental concerns are significant enough to outweigh benefits, and if those impacts could not be mitigated, then FERC could reject a project. “I think we will start to see greater accounting for greenhouse gas emissions in the FERC process,” Samuel Reynolds, an energy finance analyst at the Institute for Energy Economics and Financial Analysis, said at a conference hosted by the group in June. In March, the commission issued an order that said it will “consider all appropriate evidence regarding the significance of a project’s reasonably foreseeable GHG emissions and those emissions’ contribution to climate change.” That’s a big change from a year ago, said an analysis by law firm Jones Day. “This is a significant departure from FERC’s previous restrained stance on considering GHG emissions, in which it held that it was unable to make that assessment,” the firm said. “What this means for the natural gas industry is still unresolved.” A National Law Review report described the order as “a sea change” for FERC’s approach to emissions and its obligations under NEPA. “Additional changes to FERC’s approach are likely … but the order leaves little doubt that the GHG impacts of pipeline proposals will receive closer scrutiny from the commission than they have in the past,” the report said. Though court decisions in 2017 and 2019 directed FERC to pay attention to climate change impacts in its gas project reviews, “FERC continued to be restrained in its consideration of GHG emissions throughout the remainder of the Trump administration,” Jones Day said in its May analysis. That changed with the election, with a new majority on FERC and court rulings. “FERC will now consider a project’s GHG emissions … when determining whether a project is required by the public convenience or necessity,’” Jones Day said. “FERC views this analysis as part of its obligation under NEPA to take a ‘hard look’ at a project’s environmental impacts.” What the change means for the natural gas industry is uncertain. In its March order, expanding its review of climate change impacts, FERC was careful to note that “the evidence on which the commission relies to assess significance may evolve,” Jones Day said. At a July hearing of the U.S. House Energy and Commerce Committee’s energy subcommittee, Ohio Republican Rep. Bill Johnson asked Glick how FERC would consider climate change impacts from U.S. LNG exports, including the benefit that consuming nations might use cleaner-burning gas than dirtier fuels to generate electricity. “Courts have told us that’s for the Department of Energy, not FERC,” Glick responded. That’s exactly what is happening to the proposed Alaska LNG Project. The state corporation managing the project was told in late June that the U.S. Department of Energy has ordered a supplemental environmental review of the full lifecycle of greenhouse-gas emissions from production on the North Slope to consumption by overseas buyers. Referring to executive orders issued in the first week of the Biden administration, the department determined “it was appropriate to further evaluate the environmental impacts” of exporting LNG from the proposed Alaska project. In a footnote to its June 28 order, the department said it would consider emissions from the entire LNG supply chain, “from the ‘cradle’ when natural gas is extracted from the ground, to the ‘grave’ when electricity is used by the consumer.” Larry Persily is a former Alaska journalist, state and federal official who has long tracked oil and gas markets and projects worldwide. He can be reached at [email protected]

Movers and Shakers for Aug. 29

Chad Padgett was named the new state director for Sen. Dan Sullivan in his Alaska office. Padgett comes to Sullivan’s office from the Bureau of Land Management Alaska. As the career senior executive for BLM in Alaska, Padgett was responsible for the management of 72 million acres of federal lands in Alaska ranging from recreational lands to sole responsibility for the National Petroleum Reserve in Alaska. Prior to joining BLM Alaska, Padgett spent 10 years serving as state director for the Office of Congressman Don Young. He graduated from Seward High School and attended Boise State University, earning a degree in political science and international relations before returning to Alaska in 1994. Noelle Dersé is the newest grants administrator for Alaska Staff Development Network, a statewide partnership administered by the Alaska Council of School Administrators that provides research-based professional development for Alaska’s teachers, school administrators and all education leaders. Dersé previously worked for the Juneau School District as their family engagement specialist, most recently coordinating the remote learning efforts for students and families without internet access. Dersé has a background in public education and government. She holds a bachelor’s degree from Boston University and a master of arts in communications from the University of Washington. Dominique Johnson recently joined the Alaska Council of School Administrators as their new Public Information officer. He has a background in communications with a bachelor’s degree from Northern Arizona University. Johnson has worked in public radio as evening news host and in operations at KNAU in Flagstaff, Arizona and at KTOO in Juneau. For the last five years he served as the Director of Communications at the Archdiocese of Anchorage-Juneau. During his time at the archdiocese Johnson was the editor of two monthly newspaper publications, webmaster and media liaison for the organization. Maj. Virginia R. Brickner assumed duties as deputy commander of the U.S. Army Corps of Engineers-Alaska District in July. She most recently served as the group engineer for the 1st Special Forces Group (Airborne) at Joint Base Lewis-McChord, Wash., from 2018-21. Brickner enlisted in the Army in 2001 and served as a medium helicopter repairer until being accepted into the Green to Gold Active-Duty Commissioning Program in 2005. Brickner received an MBA from Missouri University of Science and Technology in 2016. In 2007, she earned a bachelor’s degree in political science from Austin Peay State University in Tennessee, where Brickner also received her commission into the U.S. Army Corps of Engineers. Her military education includes the Army Engineer Officer Basic Course, Army Engineer Officer Career Course and Army Command and General Staff College. Her awards and decorations include the Bronze Star Medal, Army Meritorious Service Medal with two oak leaf clusters, Army Commendation Medal with three oak leaf clusters, Army Achievement Medal with two oak leaf clusters, Army Basic Aircrewman Badge, Army Basic Parachutist Badge, Army Air Assault Badge as well as the Bronze de Fleury Medal.

Court case is final hope for Inlet drifters

Editor’s note: This is the third and final story exploring the Cook Inlet commercial salmon fishery. You can read part 1 here and part 2 here. A late-season bumper run of sockeye salmon has pushed the Kenai River to its highest escapement in more than a decade. Unfortunately for the commercial fishermen in Upper Cook Inlet, they have had to watch many of them go by. Over the course of the season, Alaska Department of Fish and Game biologists upgraded the estimate for the run’s escapement multiple times, upping the in-river bag limits for the sportfishery and opening some additional time for the drift gillnet fleet. With the setnet fleet out of the water after July 20 because of poor king salmon returns to the Kenai, controlling sockeye escapements to the Kenai and Kasilof fell on the drift fleet and on the in-river dipnet and sportfisheries. Both rivers are ending their seasons significantly greater than the upper end of their escapement goals. ADFG is projecting a final escapement in the Kasilof of 519,000 sockeye compared to the top end of the escapement goal of 320,000; the sustainable escapement goal for the Kenai River has a top end of 1.3 million and ADFG is projecting an in-river run of about 2.4 million sockeye. Unless something changes, the drift fleet is likely to lose a major chunk of their fishing area at the end of this year, too. The National Marine Fisheries Service is currently working its way through the regulations review process for a new fishery management plan amendment that will close the federal waters of Cook Inlet to salmon fishing. That section, known as the Exclusive Economic Zone or EEZ, covers the section of Cook Inlet that’s three nautical miles and farther offshore; drifters typically harvest half or more of their salmon from there during the season. “For most of the fleet, the EEZ is the preferred area for fishing,” said Erik Huebsch, a drifter and vice president of the United Cook Inlet Drift Association. “Without access to the EEZ, the drift fleet cannot harvest enough salmon to meet expenses and cannot afford to operate. “Without the drift fleet harvest, the seafood processing companies cannot afford to operate and will close their businesses. This is not speculation; this is exactly what has already been happening in the Cook Inlet salmon fishery.” NMFS opened public comment on the proposed regulations through July 5 this year. If the regulations are finalized and approved by the Secretary of Commerce, the EEZ could be closed by Dec. 31. The closure The fight over federal management of salmon in Cook Inlet goes back to 2012 and, some might argue, back to statehood itself. One of the reasons Alaskans voted to pursue statehood in 1959 was to gain more localized control over fisheries management, wresting control away from the out-of-state processing companies and federal government. Alaska has primary management control over fisheries in state freshwater and in marine waters out to three nautical miles offshore. After that, the federal government assumes primary management through the National Marine Fisheries Service. The North Pacific Fishery Management Council develops fishery management plans, or FMP, for the fisheries in Alaska and the West Coast for the federal government, and historically has delegated or shared some of that management with the state. Yukon River and Southeast salmon management, for example, are managed under federal authority of a treaty with Canada; Bering Sea crab fisheries are also jointly managed by the state and federal governments. In Cook Inlet, that historic but informal delegation of authority to the state included the management of salmon fisheries. In 2012, the council made that formal by excluding the federal waters of Cook Inlet from its FMP through an amendment that permanently delegated management to the state. The United Cook Inlet Drift Association, or UCIDA, sued and won at the 9th Circuit Court of Appeals in 2016, arguing that the federal government had to manage federal waters to comply with the Magnuson-Stevens Fishery Conservation and Management Act. The council again took up the debate in response to the court order, and in December 2020 voted to support an option for a new amendment that will include Cook Inlet into the Western area salmon FMP and will close the EEZ to commercial salmon fishing. NFMS approved the amendment on Aug. 12, according to a letter from Alaska Region administrator James Balsiger. The controversy UCIDA argues that the adoption of the new amendment to close the EEZ is illegal because of the State of Alaska’s actions. During the December 2020 meeting, Fish and Game Deputy Commissioner Rachel Baker told the council that the state would refused to accept delegation of authority with oversight from NMFS. In a November 2020 email obtained by UCIDA and submitted to the court, Fish and Game Commissioner Doug Vincent-Lang told Ben Stevens, former chief of staff to Gov. Mike Dunleavy, that UCIDA and others were “lobbying hard” to require annual federal review of state management of Cook Inlet fisheries to ensure compliance with federal laws. “John [Moller, former commercial fisheries advisor to Dunleavy] and I feel that opening our management to federal and outsider influence is the wrong choice, especially that it could potentially create a domino effect that would spread to other salmon fisheries across Alaska,” Vincent-Lang wrote. “It would shift the allocation fight into federal bodies which will lead to calls for sport and personal use representation on the Council and take time away for state issues of priority at the council.” UCIDA argues that this was in bad faith and undermined everything the stakeholders and NMFS had been trying to work on for several years. Among multiple briefs filed Aug. 20, Huebsch wrote in a declaration filed with the 9th Circuit Court on that the members of the Cook Inlet salmon FMP committee, which included stakeholders and NMFS representatives, worked on three options to integrate federal management into the Cook Inlet salmon fishery. “The Salmon Committee has significant interaction with NMFS and Council staff,” Huebsch wrote. “The Salmon Committee was never informed that the state would not accept a delegated program, or that Alternative 2 was infeasible. Had I been so informed, I would not have spent further time on Alternative 2, and instead would have worked on developing Alternative 3, which involves federal management of the fishery.” UCIDA argues that the state had been planning to refuse delegation of authority long before the meeting in December 2020 and did not disclose it publicly, tying the hands of the council on the preferred alternative of most of the stakeholders, which would have been delegated authority with federal oversight. The state argues that UCIDA’s requests — which involve federal oversight of salmon fisheries that reaches up into spawning beds and includes management of salmon escapement — are an overreach and undermine the state’s ability to manage its resources. Several other emails submitted by UCIDA to the court show correspondence between NOAA and Fish and Game about the state’s preference for Alternative 4 to close the EEZ and between Baker and council member Andy Mezirow when Mezirow asked for “rationale points” about why he supported the state’s position. Both are dated before the Dec. 7, 2020, council meeting. A Dec. 3, 2020, email from Baker to Vincent-Lang relayed the input from NOAA General Counsel that the “the main outstanding issue is the need to identify conservation benefits that outweigh costs of closing the EEZ to commercial fishing participants.” The consequences The closure is likely to result in the loss of most fishing opportunity for the drift fleet. Many say they won’t be able to afford the startup costs of fishing in the Inlet without the promise of the harvest in the EEZ, and the rest say that it may not be worth it because the processors may not be there to buy the fish even if they do. In the 2020 season, the average drifter in Cook Inlet made about $7,102, according to the Commercial Fisheries Entry Commission. That was the worst year in recent memory; a decade ago, in 2011, the average gross earnings were $65,753. “I fish the lower part of Cook Inlet, specifically the EEZ area set to be managed by closing these waters,” wrote Robert Wolfe, a drifter in Lower Cook Inlet. “If this action goes forward my business will have to shut down due to the distance I would have to travel to Where (???) [sic] the State of Alaska chooses where we will fish. At this point we in Cook Inlet have no idea how future fishery will be conducted next year.” There are currently two major processors with operations in Cook Inlet: Pacific Star Seafoods and Copper River Seafoods. Huebsch notes in his filing with the court that the loss of potentially 50 percent of the drift harvest is certain to affect their ability to make a profit in Cook Inlet for the season. The 2021 season highlights the effect of the management regime, he said, with the drifters restricted to the expanded corridors away from the federal waters and the setnetters closed. “This situation is untenable; processors are going bankrupt and commercial fishers face insolvency, all the while the state plugs the rivers with harvestable surplus salmon and NMFS and the Council do nothing,” he wrote. The City of Kenai and state Rep. Sarah Vance, R-Homer, both submitted comments on NOAA’s proposed rulemaking change this summer opposing the adoption of the closure. UCIDA is asking for the court to block the amendment or any other that would close the EEZ, order NMFS to prepare an FMP that addresses “the entire Cook Inlet salmon fishery, including state waters,” appoint a special master to oversee the proceedings and to award the organization all its legal fees. Elizabeth Earl can be reached at [email protected]

FISH FACTOR: Bambino’s features Bristol Bay in latest offerings

Nutrition, Native ways and knowing where your fish comes from. That multi-message forms the nexus of a new partnership of the Bristol Bay Native Corp., salmon fishermen and Bambino’s Baby Food of Anchorage. Bambino’s launched the nation’s first subscription service with home delivery of frozen baby foods in 2015, and was the first to bring the frozen option to U.S. retail baby food aisles (devoid of seafood). Wild Alaska seafood has always been front and center on the Bambino menu since the launch of its baby-sized, star-shaped Hali-Halibut portions, sockeye salmon bisque and fillets in 2015. Sockeye salmon teething strips are the newest addition. Those items became an instant hit and are shipped to customers in U.S. and in Canada. Each outgoing box now contains recipes from the people of Bristol Bay, stories of how traditional foods are rooted in Alaskan culture and other information about the region provided by the new outreach network. “We’re looking forward to partnering with Bambino’s and (Bristol Bay Regional Seafood Development Association) to share the stories of why salmon is so crucial to our region and our shareholders,” said Jason Metrokin, president and CEO of Bristol Bay Native Corp. “Salmon is a fundamental part of our cultures and our values, from protecting the waters they spawn in to ensuring our shareholders are able to fill their freezers every year.” “We want to ensure that people everywhere and of all ages not only reap the nutritional benefits of Bristol Bay sockeye salmon but are also aware of the origin and sustainability of the region,” said Lilani Dunn, marketing director of BBRSDA, operated and funded by the fleet of nearly 1,800 driftnet fishermen by a 1 percent tax on their catches. “Bambino’s has really built up her business and her brand and it was no secret that her sockeye product was performing really well. And we saw a huge opportunity to tell our stories focusing on the Native families and culture of Bristol Bay and for ourselves in the marketing program,” Dunn said. “I feel very passionate, along with our partners, about the nutritional benefits of sockeye salmon, especially in young infants and toddlers.” “The beautiful nature of all of this is that we all care about our environment and the health and wellness of our families, and we all want to know where our food comes from,” said Bambino’s founder and CEO Zoi Maroudas. “It just brings a lot of depth to the Bristol Bay region to have the synergy between BBNC and ourselves and to work with an Alaska company,” added BBRSDA’s Dunn. “It’s definitely something special and I’m really excited for it.” Bambino’s was selected as Alaska Manufacturer of the Year in 2018. All of its products are produced in Anchorage and can be found at Carrs/Safeway and other grocers throughout Southcentral Alaska and on Amazon. Good news for Gulf sea creatures Results from the most detailed, long-term cruise by researchers at the University of Alaska Fairbanks showed the largest concentrations of phytoplankton ever seen in nearly 25 years of sampling in a vast portion of the Gulf of Alaska. Phytoplankton (microalgae) is the base of marine food webs and the massive bloom was spotted in May through September along the Seward Line, a transect of survey stations that begins at the mouth of Resurrection Bay and continues south to the outer edge of the continental shelf. A funding boost from the National Science Foundation added additional lines from the Copper River to beyond Middleton Island, and from Kodiak’s Albatross Bank to offshore waters. The researchers use chlorophyll, the green pigment found in plants, as an indicator of phytoplankton abundance, explained Russ Hopcroft, professor and Chair of the Department of Oceanography at UAF’s College of Fisheries and Ocean Sciences. “It is the peak production in this system that the whole biology of the Gulf kind of cascades off of, that big infusion of energy and matter into it,” Hopcroft said. “Normally the shelf kind of lights up in terms of algal concentration briefly and sporadically. But this past year, the whole shelf was lit up with high chlorophyll for several weeks continuously, which means that there should have been lots of food available for the things that feed upon the plankton, the fish that feed upon that and then the bigger fish, marine mammals and seabirds that use them. We’ve never seen this kind of concentration of the phytoplankton in the system.” “In the Gulf, because it’s such a seasonal environment, several of the main species rely on this bloom to grow rapidly and store fat up in their bodies, just like bears do. And then they descend deep in the ocean to wait for the following spring to start their life cycle when they lay eggs. And those babies swim up toward the surface and start the whole process over again.” Alaska’s cooler weather this spring and summer can lead to a prolonged bloom, and extra rain provides fresh water at the ocean surface that helps phytoplankton remain closer to the light and build up higher concentrations. Hopcroft said this year “looks like it should translate to a lot of energy into the system” and hopefully allow a few things to bounce back that were impacted by the extreme marine heatwave several years ago that caused, for example, Gulf cod stocks to collapse. “I think our expectation would be that the success of animals released into the Gulf system this year will be higher than what we’ve seen during some of these warmer periods,” he said. “One would hope that we would see that translate into recruitment of various types of fisheries in the next couple of years.” Fake fish update Long John Silver’s is the first major national seafood chain to put plant-based seafood analogs on its menu, and calls it the “next big wave” after seeing the success of plant-based burgers and chicken. Analogs are manufactured substances that are used in place of the real thing. Last month the company, operator of over 700 restaurants in the U.S., announced a partnership with Good Catch to test its plant-based Breaded Fish-Free Fillet and Breaded Crab-Free Cake at restaurants in California and Georgia. “Our plant-based options are slightly more expensive than the crab cakes and sustainably sourced wild-caught cod, pollock, and salmon that make up our core menu options,” LJS Chief Marketer Stephanie Mattingly told SeafoodSource, adding that the plant-based seafood market is projected to grow $1.3 billion over the next decade. Whole Foods Market, owned by Amazon, said that nearly half of U.S. consumers are looking for plant-based products, and fish alternatives are on its first ever list of trend predictions. One is Upton’s Naturals Banana Blossom, large, purple-skinned flowers that grow at the end of a banana bunch. Their neutral flavor and flaky texture make it an ideal fish substitute. Another predicted favorite is Good Catch Fish-Free Tuna made of a blend of peas, chickpeas, lentils, soy, fava beans and navy beans. Samuels and Son Seafood of Philadelphia is the first company to publicly admit that it is selling a genetically tweaked Atlantic salmon made by AquaBounty Technologies of Massachusetts. The wholesale restaurant supplier services several chains including McCormick and Schmicks, Morton’s Steakhouse and The Hard Rock Café. The fish, which grows roughly three times faster than normal salmon, is the first genetically modified animal to be approved by the federal government for human consumption. More than 80 food companies including Safeway,Kroger, Trader Joe’s and Whole Foods have said they will refuse to carry it. Federal labeling law “directs” companies to disclose genetically modified ingredients through use of a QR code, on-package wording, or a symbol. Mandatory compliance takes effect in January 2022, but the rules don’t apply to restaurants or providers of meals away from home. Laine Welch lives in Kodiak. Visit www.alaskafishradio.com or contact [email protected] for information.

Analysis suggests another billion-barrel North Slope prospect

A junior Australian outfit that has been exploring the North Slope for years has likely hit more than 1 billion barrels of oil in a formation that has quickly become the go-to target in the basin. 88 Energy has tapped into a reservoir estimated to hold more than 1.6 billion barrels of light oil with its Merlin-1 well drilled last winter in the southeast corner of the National Petroleum Reserve-Alaska, according to an independent analysis of the well conducted by Australian firm ERCE. Drilled last winter to a relatively shallow depth of 5,267 feet, the Merlin well intersected several oil-bearing sequences of Nanushuk sands, the long overlooked formation first identified in 2014 by the Repsol-Armstrong Energy partnership in the large Pikka project now being developed by Oil Search. The recoverable oil resource is currently estimated at 652 million barrels ConocoPhillips has also repeated the Nanushuk success in the NPR-A, as the formation is the basis for its now-stalled $6 billion Willow project and several other satellite prospects in the area. 88 Energy Director Ashley Gilbert said in an Aug. 16 statement that the company is thrilled by the results of the well warranting further seismic exploration as well as a nearby appraisal well on tap for next winter. 88 Energy officials have dubbed their work in the NPR-A Project Peregrine, which is located about 40 miles south of ConocoPhillips Willow prospect. The general location of the small explorer’s work in the NPR-A is representative of the mostly north-south trend of Nanushuk plays, according to North Slope oil experts. The latest announcement also builds on statements the company made in April, shortly after the drilling was complete but before a thorough analysis of the well samples could be conducted. “This is the best well we’ve drilled on the North Slope of Alaska to-date, with light oil detected in the Nanushuk across three separate horizons. Whilst we have a lot more work to do, the Merlin-1 well has confirmed an active petroleum system in the Peregrine acreage,” Gilbert said. 88 Energy holds more than 247,000 acres on the North Slope — including through its subsidiaries — mostly around the edges of other industry activity. The company has participated in drilling several exploration wells on the southern portion of the Slope in recent years with mixed results. The Merlin-1 well intersected 41 feet of net pay with light oil contacted across three sandstone intervals, according to the company. The target for appraisal well scheduled for early next year is likely to be drilled east of the first Merlin well where 88 Energy has identified the shelf break for the play and thicker and higher quality reservoirs are expected. Umiat While 88 Energy leaders are eager to better delineate their Peregrine prospect with another Merlin well next winter, they said in a statement earlier this month that Bureau of Land Management regulators had approved a request to defer drilling in the nearby long-dormant Umiat Unit. The 24-month drilling deferral approved by BLM officials who manage the NPR-A will allow 88 leaders to study ways to integrate development of the field with the Peregrine project and the company’s other Icewine and Yukon prospects to the east near the Dalton Highway, according to a company statement. It will also allow the company to utilize more data from the nearby Merlin well and consider a tie-in to ConocoPhillips Willow facilities — if and when they are developed — according to 88 leaders. The revised schedule calls for 88 to drill at least one well into the field by September 2023 instead of a deadline of Aug. 31, 2021, for the work. Adjacent to the southern edge of the Peregrine acreage, the Umiat prospect for decades has been known to hold oil but its extremely remote location far from other North Slope oil fields has hampered the economics of development. The Umiat leases that have changed hands were formally put in unit status in September 2019 at the request of former owners Malamute Energy and Renaissance Umiat, who sold it to 88 subsidiary Emerald House in January. Alaska Oil and Gas Conservation Commission officials on Aug. 19 issued a $40,000 civil fine to Emerald House for changing its work plan to plug and abandon the Umiat-18 well last spring. According to the AOGCC enforcement order, Emerald House leaders acknowledged to the state regulators that they deviated from the work plan approved by the three-member commission, but did so because of operational challenges due to the COVID-19 pandemic and communications challenges stemming from the remote location, among other unspecified problems. Emerald House leaders could not be reached in time for this story. Elwood Brehmer can be reached at [email protected]

Federal judge blocks Willow permits

The largest North Slope oil project in decades faces an uncertain future after a federal judge issued an order Aug. 18 throwing out the government’s environmental review of the planned work. U.S. District Court of Alaska Judge Sharon Gleason ruled in a 110-page order that Bureau of Land Management and U.S. Fish and Wildlife officials under the Trump administration failed to adequately account for foreign carbon emissions stemming from ConocoPhillips’ $6 billion Willow project and did not provide sufficient specificity regarding how the developments impacts to polar bears would be mitigated. The ruling stems from two similar but separate lawsuits filed late last year by state and national environmental groups and the Sovereign Inupiat for a Living Arctic, a North Slope Alaska Native organization, challenging the conclusions in the environmental impact statement, or EIS, for Willow that was approved last October. Gleason’s ruling applies to both lawsuits. “The permits and approvals granted to ConocoPhillips disregarded local health concerns, required public processes, and the law, and (Wednesday’s) court ruling corrects that. It would be unconscionable to allow Willow to move forward when its authorizations were founded on an illegal and deficient environmental analysis that fails to lay out and address impacts to wetlands, water, land, animals and people,” Bridget Psarianos, an attorney for the Anchorage-based nonprofit firm Trustees for Alaska that is representing the Sovereign Inupiat Alaska-based conservation groups in one of the lawsuits. The ruling was met with disdain by Alaska Republicans who see Willow, which is located in the federal National Petroleum Reserve-Alaska, as a hub development that would likely spur additional oil exploration and development in the mostly untapped western portion of the North Slope. Gov. Mike Dunleavy called it simply a “horrible decision” in a statement from his office. “Make no mistake, today’s ruling from a federal judge trying to shelve a major oil project on American soil does one thing: outsources production to dictatorships and terrorist organizations,” Dunleavy said. State administration officials and the members of Alaska’s all-Republican congressional delegation celebrated in late May when Interior Department leaders in the Biden administration decided to defend the Willow EIS after extensive lobbying from the Alaska officials. An Interior spokesperson wrote via email that the department is currently analyzing Gleason’s ruling to determine a path forward. ConocoPhillips Alaska spokeswoman Rebecca Boys wrote in an emailed response to questions that the company, which intervened on behalf of BLM in the suits, is also reviewing the ruling and its subsequent options. ConocoPhillips stock fell approximately 5 percent in the hours immediately following the court order. Regardless of what avenue the company and Interior leaders ultimately decide to take in response, it appears almost certain that Gleason’s decision will at least considerably slow the progress of the construction work on Willow that was otherwise on track to start in earnest this coming winter. As currently proposed, the Willow master development plan calls for the eventual construction of five drill sites stretching north-south over approximately 20 miles in the northeast corner of the federal petroleum reserve. ConocoPhillips also has two other nearby developments in the NPR-A but the Willow project would be several times larger than the single-drill site Greater Mooses Tooth-1 and 2 projects extending from the Alpine field. Full build-out of Willow is estimated at a cost of up to $6 billion, according to the company, with first oil expected during the 2025-26 winter prior to Wednesday’s ruling. The project’s oil production is expected to approach 160,000 barrels per day at its peak. Overall, the project is expected to produce about 590 million barrels over 30 years. Gleason initially ruled in February against a preliminary injunction motion attempting to stop ConocoPhillips from opening a gravel mine and building a 2.8-mile road from its smaller Greater Mooses Tooth-2 oil project, which is also under construction and is expected to start producing oil late this year, concluding the work was not likely to “irreparably injure” the population of south Beaufort Sea polar bears that are protected under the Endangered Species Act before she can rule on the broader merits of the combined lawsuits. However, the conservation and Alaska Native groups were successful in stopping the work with an appeal to the U.S. 9th Circuit Court of Appeals, which granted the injunction and sent the case back to Gleason. The 9th Circuit panel also disagreed with Gleason’s prior conclusion that the lawsuits were likely filed too late to be heard based on statutory limits in the 1976 Naval Petroleum Reserves Production Act. She deferred to the 9th Circuit decision regarding the time limit on legal challenges in Wednesday’s order, also determining that BLM officials did not sufficiently justify their rationale for not estimating the project’s likely contribution to foreign greenhouse gas emissions in-part due to another recent 9th Circuit decision that vacated another North Slope oil project approval by the Trump administration. In that instance, the 9th Circuit ruled that the Bureau of Ocean Energy Management’s approval for Hilcorp Energy’s offshore Liberty prospect was “counterintuitive,” in that the agency concluded that not developing the oil would result in more foreign greenhouse gas emissions. In that case, BOEM officials claimed they could not reasonably estimate the overall downstream emissions from the project because of a lack of reliable data. Gleason wrote that BLM largely relied on the same reasons of “a negligible impact and a purported lack of information on foreign energy consumption and emissions patterns” that the 9th Circuit rejected in the Liberty case for not conducting the emissions analysis. As for the polar bears, the EIS contains “a substantive discussion of the cumulative impacts on marine mammals, and specifically addresses polar bears,” according to Gleason, which supported the Fish and Wildlife Service’s biological opinion that Willow would be unlikely to adversely change critical bear habitat. Despite that, the agency’s insistence that any potential impacts to bear habitat would be mitigated with yet-to-be-determined measures falls short, she wrote, again, partly because of the Liberty decision. “In Liberty, the Ninth Circuit made clear that the (incidental take statement) must specify the mitigation measures, which is precisely what the (Endangered Species Act) and the applicable regulation regarding incidental take statements provides,” Gleason wrote. “The ITS cannot reference future unspecified measures to comply with that statutory directive.” Elwood Brehmer can be reached at [email protected]

Another special session underway without elusive fiscal plan

Gov. Mike Dunleavy called it “Groundhog Day” in an Aug. 16 briefing, while others might prefer “déjà vu all over again,” but the bottom line is the Alaska Legislature has convened for another special session in Juneau yet again with no clear path to solving the state’s persistent fiscal imbalance. On the same day that Dunleavy emphasized to reporters the ability of the Permanent Fund to provide for the state without the need of taxes, the Legislature’s bicameral Comprehensive Fiscal Plan Working Group unanimously recommended new revenue measures to generate between $500 million and $775 million per year. According to the group’s four-page report, members could not reach consensus on what specific type of tax they would be willing to see the state implement but they generally urged “adoption of a broad-based revenue measure, in addition to other revenue measures, as a part of a comprehensive solution.” Lawmakers serving on the special committee that uniquely gave each caucus equal representation also agreed that special fiscal measures relating to the Permanent Fund should also be part of the state’s eventual solution but were split on what it should be. A key component of Dunleavy’s plan to constitutionally direct half of the Permanent Fund’s annual available earnings of more than $3 billion towards dividends with the other half going to other state programs is a separate, one-time, $3 billion appropriation from the Fund to cover near-term budget shortfalls. Department of Revenue officials project annual deficits starting at $826 million next fiscal year that should decrease to less than $100 million by 2029 under the governor’s plan. Some work group members supported a single “bridge” appropriation from the Permanent Fund’s Earnings Reserve Account to cover the expected deficits, while others pushed for a “stair step” dividend that gradually grows to the full amount called for under a new, constitutionally guaranteed PFD, according to the report. Dunleavy stressed that the $3 billion bridge appropriation to the Constitutional Budget Reserve can be made now because of the gaudy returns achieved by Alaska Permanent Fund Corp. managers of late. The Fund had an unaudited value of $82.4 billion as of Aug. 13; it generated a return of 29.7 percent in state fiscal year 2021 that ended June 30. Revenue Commissioner Lucinda Mahoney previously told the working group that Dunleavy could support a broad sales tax if such a bill would get through the Legislature. “If this fund were still around $65 billion I think there would be more of a case (for taxes), but at $82 billion-plus, in Alaska’s time of need like we haven’t seen in decades, if forever, and all the needs that the people have, all the needs that businesses have, all the needs that government has, the solution’s contained right here,” Dunleavy said, referencing a chart showing the Permanent Fund’s growth over the past year. He told reporters Aug. 16 that his administration has presented numerous models of taxes to legislators in an effort to help them make decisions, but any tax bill that they approve will need corresponding assurances for limiting spending. “If it comes to my desk without an appropriation limit, a constitutional appropriation limit, I don’t see how it’s going to work,” Dunleavy said of prospective tax legislation. Enough legislators have consistently opposed the type of ad-hoc draw from the Fund that Dunleavy is proposing to make it unclear whether he could generate support for it with other concessions. Legislators have also generally acknowledged that there is not currently enough support for the 50-50 plan to get the two-thirds majority votes needed in both the House and the Senate to send a constitutional amendment to the voters. Legislative leaders vowed the working group’s recommendations — of which there are 12 — would directly translate to legislation in the special session; however, there are few recommendations specific enough to quickly convert to legislation that could be passed in the 30-day special session that is now underway. Additionally complicating matters is the unresolved issue of this year’s PFD, which currently doesn’t exist after Dunleavy vetoed the appropriation in the state budget for 2021 dividends of approximately $525, calling it “a joke” after signing the budget. A stalemate over the PFD pushed lawmakers to within days of a government shutdown before the budget passed with the $525 per person appropriation; a proposal for an $1,100 dividend failed when it didn’t garner the required three-quarters vote from both chambers of the Legislature after being tied spending from the Constitutional Budget Reserve. Dunleavy said his administration would submit a spending bill soon to deal with this year’s PFD. Elwood Brehmer can be reached at [email protected]

Virtual business plan competitions overcome digital hurdles

Despite a year marred by lockdowns, travel bans, job losses and business closures, Alaska’s regional business plan competitions did not miss a beat. Entrepreneurs showed up to connect, learn, and hustle, and organizers got creative to adapt their programs to run in a virtual format. For the typical regional business plan competition, the training workshops take place in person in one of the regional hub communities. Participants learn about critical business topics like customer discovery, sustainable business models, and financial analysis. However, over the last eighteen months, public health restrictions have prevented traveling and gathering in person, so organizers of business plan competitions ran their interactive workshops in a virtual format. One organization that successfully transitioned its program online is Spruce Root. Spruce Root is a Native Community Development Financial Institution, or CDFI, in Southeast Alaska, which runs an annual business plan competition and training program called Path to Prosperity, or P2P. According to its Programs Manager, Ashley Snookes, “it’s so much more than just a business plan competition. It’s an opportunity to connect and get to know other entrepreneurs and to utilize one another’s shared knowledge and experiences to build better, more resilient businesses.” P2P’s “Business Boot Camp” was historically held in person in Juneau, with participants traveling from all around Southeast Alaska for an intensive, 3-day training, networking, and mentorship curriculum. Since gatherings were not possible last year, P2P organizers had to innovate to overcome challenges of creating the same collaborative environment in an online format. “I think one of the big challenges (with online training) was figuring out how we could create meaningful connections between individuals in a virtual setting,” Snookes said, “And we solved that by trying to have a really dynamic virtual experience.” Instead of long hours just on Zoom, organizers engaged participants in a variety of ways. Sometimes entrepreneurs would go for a walk and take a one-on-one phone call with another participant. Other times they would do virtual yoga together or tell funny stories. “I think we really stretched Zoom and virtual connecting to its limits,” added Snookes. “I think we really saw people connect because of it.” Building community online requires a lot of creativity, innovation, and willingness to connect in new ways. In Alaska, it also has the added challenge of operating in regions that are chronically underserved by the telecommunications industry. With prohibitively high internet costs for unreliable service, the virtual format was difficult for many participants, especially those who live in communities outside of regional hubs. Cindy Mittlestadt, who partnered with Spruce Root to launch the Path to Prosperity program in Bristol Bay through Bristol Bay Native Corp., cited internet connectivity as one of the major challenges to running a virtual Business Boot Camp. “Internet connectivity is always top of mind, and the biggest fear in hosting any events when we’re trying to connect businesses from all communities across Bristol Bay, so that was very much a challenge” Mittlestadt said. “I can tell you one business, (based outside a hub community) probably experienced a dropped line no less than 20 times an hour and very rarely could sustain the video component of boot camp.” Despite the hurdles, entrepreneurs persevered through every dropped line, lagged connection, and technology failure. They worked with competition organizers to come up with creative ways to participate in training and activities, even if the internet was down. Mittlestadt noted that being prepared in advance was key to overcoming connectivity challenges during business boot camp. Her advice to others organizing similar meetings is to “have good communication behind the scenes, create more space and pause for conversation or questions throughout the process, and be available pretty much ‘round the clock during the boot camp to really increase the level of support that you can do offline, in addition to what you can offer online.” Despite the drawbacks, the virtual format offered some advantages to participants. Both Snookes and Mittlestadt listed participants remaining with their families as a big advantage to virtual boot camp over in person. “People were able to (attend boot camp) and still have breakfast with their kids in the morning or be around their family and talk about what they were learning in the evening, and so I think that that was a real advantage,” Snookes said. Mittlestadt echoed her statement by saying “that connection to family, and knowing that they didn’t have to travel or have to leave their family for an extended period of time I think, is always a plus.” The remote format allowed for a much wider variety of guest speakers, mentors, and instructors, to participate in training sessions. For instance, Best in the West, the Yukon-Kuskokwim Delta region’s business plan competition, was able to host experts from across the state and beyond throughout its programming because of the virtual format. Participants learned about business lending from a loan expert in Anchorage, connected with a tech company in San Francisco to discuss affordable options for point-of-sales systems, and heard from a panel of entrepreneurs who built successful e-commerce businesses in Alaska and Hawaii. Ashleigh Delgado, one of the awardees of Best in the West this year, connected virtually with a mentor based almost 400 miles away. She recently opened Studio 1, a rejuvenating day spa offering a variety of beauty services in Bethel. Through the program, Delgado met virtually with a mentor, who is a longtime beauty professional and entrepreneur in Anchorage. “I connected with her and she really helped me with building my brand.” Delgado said. “She told me to describe my brand, and I told her it was a classy, sophisticated, salon. Very open, very trendy, very modern. And she told me that was my brand. That was a huge takeaway with what I got with my mentor.” The strengths and weaknesses of virtual gathering make the future of business boot camp a tough decision for organizers. For 2021, Spruce Root plans to once again offer its programs virtually, with hopes for in-person events in 2022. Best in the West is considering a hybrid option for workshops to keep both the social benefits of in person interaction and the networking opportunities outside of the region available online. However they proceed, Alaska’s regional business plan competitions have adapted, created, and innovated to facilitate the best experience they could for their regions’ entrepreneurs. “We have our largest number of applications that we’ve ever had to the program this year” said Snookes, “and I really attribute that to a lot of the changes that have happened in the economy and a readiness now for people to either launch or expand a business.” Julie Gardella is the Analyst and Program Specialist at the University of Alaska Center for Economic Development. She was the lead program partner for Best in the West 2021 and serves on the organizing committee of 1 Million Cups Anchorage. Gardella is passionate about equity and justice in businesses at any stage and size, and loves to work with entrepreneurs and see them succeed. Gardella is originally from Massachusetts, and moved to Alaska as part of the Alaska Fellows Program.

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