Alaskan Equipment Trader - July 2019

PAGE 1 • Alaskan Equipment Trader • www.alaskanequipmenttrader.com • JULY 2019

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PAGE 10 • Alaskan Equipment Trader • www.alaskanequipmenttrader.com • JULY 2019

B2B meetings give Alaska producers international exposure

By Elwood Brehmer Alaska Journal of Commerce

Canadian food brokers and marketers recently gave a handful of Alaska startups a taste of what it would take to go international with their products in a first of its kind trade mission.

Lyndsey Smith, a marketing coordinator with the state Division of Agriculture who helped organize the business-to-business meetings, said the goal of state officials is simply to help retail-ready Alaska food products gain exposure in a new market.

“We are helping build relationships for local Alaska and Made in Alaska businesses to be able to strengthen a secondary market,” Smith said.

The initial round of speed-dating style introductions took place the mornings of June 13-14 at the Grand View Inn in Wasilla. Brokers and marketers from across Canada discussed products, market opportunities and challenges with representatives from five Alaska brands in a series of half-hour, one-on-one meetings.

The seven-member Canadian contingent then spent the afternoons touring retailers and farms in Anchorage and the Mat-Su area.

Pola Schacter Ley of Vancouver said she came to the meetings with the hope of finding natural food products made from as many local ingredients as possible — and she found what she was looking for.

“We’re really focused on plant-based; we’re really focused on vegan, clean ingredients and simple and traditional,” said Schacter Ley. She is not opposed to working with meat or protein-based products; however, they require adhering to a much more complex set of regulations when being sent across the border, she noted.

A chef by trade, Schacter Ley said she enjoys working with food producers to find ways to tweak or add value to their products or develop new recipes with them.

“I’m open to innovative ideas, always,” she said.

Schacter Ley and her husband work with a variety of retailers from large “banner”

during the meetings would make the whole trip a success.

She and other brokers from New Brunswick and Alberta said they believe Alaskasourced products have a similar draw in Canada as they do elsewhere, despite the fact that the country and state share many features.

“Vancouver loves Alaska,” Schacter Ley said.

“It’s got that raw, rugged beauty and I think B.C. has a bit of that same vibe.”

Angele Miller, with Edmonton, Albertabased Abundant By Design Inc., said she believes many Canadian consumers are comfortable with the slightly higher price point that often comes with Alaska-sourced foods because Alaska is seen as “mysterious” and “pure and clean.”

“I think people will pay more for Alaska products than if it came from (the Lower 48),” Miller said.

A representative of Alaskan-owned and Fairbanks-based Mama Bears Kombucha discusses the prodBoth Miller and Schacter Ley were uct line with Neil Goldenberg of Global Grocer Distributing during a June 14 series of speed-dating style impressed by Heather’s Choice, an Anchormeetings between Alaskan business owners and Canadian brokers organized over two days in Wasilla by age-based dehydrated food startup — think the Alaska Division of Agriculture. (Photo/Courtesy/Alaska Division of Agriculture) backpacking meals with Alaska ingredients. stores to independent grocers, convenience to encourage innovative strategies to expand Sales representative Zach Menzel said all chains and food service providers. opportunities for Alaska’s agricultural busi- of the eight Heather’s Choice breakfast and The size of the producer company doesn’t nesses,” Agriculture Division Director David general meal options are hypoallergenic; matter as much as its backing, she said. Schade said. “Leveraging our partnership they’re free of gluten, dairy, soy and corn.

Companies need to be on a positive trajec- with WUSATA to help agribusinesses find The meals are based on Prince William tory and have substantial support to enter a new markets, including international mar- Sound sockeye, grass-fed bison from Delta new market. kets, is one of the many important services Junction and other Alaska-grown foods.

“If the company is small and they can’t we provide to private-sector businesses.”

The dehydrated meals have a shorter supply, let’s say a large banner store, that Similar meetings are in the works for shelf life than traditional freeze-dried camp doesn’t mean I’m not going to work with August to highlight the state’s booming foods, “but higher quality ingredients — them. We circle around them with indepen- peony and cut-flower industry. things a five-year-old could pronounce,” dents,” Schacter Ley said, adding that niche Schacter Ley recommended that the Menzel described. “There’s no preservaproducts are often a better in smaller retail- Alaska startups trying to enter a new mar- tives, no artificial ingredients, no flavoring ers willing to try new products. ket such as Canada find additional ways to agents, nothing like that. Everything is just Selling into large chains also comes with get their products in front of more sellers, whole food dehydrated in our kitchen in listing fees and other costs smaller stores such as committing to trade shows and using Anchorage.” don’t require, she noted. social media campaigns.

Heather’s Choice products are in about The meetings were set up through Alas“Nowadays you can’t just work with a 20 Western states and several Alaska outka’s membership in the Western United store. It takes a lot more,” she said. door retailers, despite the company being States Agriculture Trade Association, which The trade mission didn’t come with a big just five years old, according to Menzel. helped link the Canadian buyers and mar- set of expectations, either. Schacter Ley said “We’re just trying to aggressively grow keters with the nine Alaska companies look- she was happy providing advice and per- this thing,” he said. ing to grow. spective from another market for the Alaska Elwood Brehmer can be reached at elwood.

“We are excited to offer these meetings companies and making a single connection brehmer@alaskajournal.com.

Sullivan wants new icebreaker focused on Arctic, not McMurdo

By Elwood Brehmer Alaska Journal of Commerce

The U.S. Coast Guard is on track to have another icebreaker in five years, but how much time the vessel will spend in the Arctic is open question.

Currently, the country’s only heavy icebreaker — the 43 year-old Polar Star — does its work on the other end of the world, returning to its homeport of Seattle each summer for maintenance and repairs. It breaks ice and escorts supply vessels to access the National Science Foundation’s McMurdo Station research center in Antarctica.

NSF spokesman Peter West said via email that the 399foot Polar Star typically starts the trip south shortly after Thanksgiving each year and returns around mid-March from the roughly 11,000-mile roundtrip voyage.

NSF officials anticipate the new 460-foot Polar-class icebreaker will take over the Polar Star’s Antarctic research duties once it is ready, according to West.

“By Presidential Memorandum, the NSF is empowered to reach out to other agencies for cost reimbursable services in support of the (U.S. Antarctic Program, or USAP),” he wrote.

“The USGS has the responsibility for the nation’s icebreaking and is committed to the McMurdo Station breakout mission on an annual basis for the foreseeable future.”

Sen. Dan Sullivan said in a meeting with the Journal and Anchorage Daily News on May 28 that the Antarctic policy will likely shift the future icebreaker away from the Arcticfocused missions it should be utilized for.

“I think we’re too focused on Antarctica and not focused

on our own sovereign interests here,” Sullivan said.

The policies directing Antarctic support from the Coast Guard are ones he hopes to change, Sullivan said.

“I write the Coast Guard bill. I chair that subcommittee; we’ll see,” he said.

On April 23 the Department of the Navy awarded a contract to Mississippi shipyard VT Halter Marine for building the vessels. The first is expected to be ready in 2024, and, if funded, the second coming a year later and a third to be delivered in 2027.

Sullivan chairs the Security Subcommittee of the Senate Commerce, Science and Transportation panel.

Coast Guard spokesman NyxoLyno Cangemi wrote in response to questions that the Polar Star escorted one cargo ship to the McMurdo Station last year and in 2020 there will be two cargo vessels and one tanker for the icebreaker to escort.

The Polar Star does not currently conduct Arctic missions.

Presidential Memorandum 6646 issued in 1982 by for-

mer President Ronald Reagan directs agencies to support the U.S. Antarctic Program, either directly or through logistics and transportation support.

The budget bill passed in February appropriated $655 million to fully-fund one Polar security cutter, or heavy icebreaker, and $20 million for long-lead item items to prepare for building a second.

On April 23 the Department of the Navy awarded a contract to Mississippi shipyard VT Halter Marine for building the vessels. The first is expected to be ready in 2024, and, if funded, the second coming a year later and a third to be delivered in 2027.

The 2018 National Defense Authorization Act approved construction of up to six heavy icebreakers, but Congress still has to appropriate the funding for building most of them.

Alaska’s congressional delegation and numerous Arctic policy experts have stressed the need for the U.S. to upgrade its icebreaking capability to keep up with many other countries — notably Russia and China — that are preparing to have a large presence in Arctic waters as sea ice continues to shrink each year.

Cangemi noted other laws compel the Coast Guard to generally support scientific research and the agency “is fully committed to supporting the USAP mission until directed otherwise. Diverting USCG resources, specifically, Polar Star, away from the Antarctic mission would require an order from the White House,” he wrote.

This year, the NSF reimbursed the Coast Guard $49,311 See Icebreaker, Page 12

JULY 2019 • www.alaskanequipmenttrader.com • Alaskan Equipment Trader PAGE 11

Igiugig:

Continued from Page 6 Pieces of Ocean Renewable Power Co.’s disassembled 35 kilowatt RivGen Power System are barged across Iliamna Lake earlier this month for installation and a year of tests in the Kvichak River near the Village of Igiugig. (Photo/Courtesy/Ocean Renewable Power Co.)

planet,” Murkowski said in a June 5 statement.

According to the FERC license, the single RivGen can produce power at an average annual cost of 78 cents per kilowatt-hour.

Company and village officials plan to install the RivGen soon and operate it for up to a year, ORPC project manager Monty Worthington said in an interview from Anchorage just a couple days before he was to leave the city for a summer of working on the system. The lengthy test should prove whether the system can handle its two biggest remaining challenges: big chunks of ice and tiny salmon.

Prior late-summer tests of a prototype bottom-dwelling generator indicated through five monitoring cameras that it can coexist with adult salmon and other fish, according to Worthington.

“A million-and-a-half sockeye went past the turbines and we saw no adverse impact,” he said.

Juvenile salmon, known as smolt, however, also pour out of Iliamna by the tens of millions each spring on their way to the ocean. The sheer numbers of them and the fact that they aren’t as adept as adults at avoiding hazards when in the strong main river current means how the smolt interact with the RivGen unit must be studied closely.

As it’s currently designed there is nothing to block fish or other objects from interacting with the RivGen. A large grate to deflect drifting wood or ice could be added, Worthington said, but a screen small enough to deflect smolt would almost certainly disrupt water flow and in-turn the efficiency of the unit.

The National Marine Fisheries Service recommended in comments to FERC that the twin-turbine generator be shut down for two weeks during the late May-early June peak of the smolt outmigration.

FERC officials are not requiring such a stipulation, but stressed in their order that the interaction be watched closely.

Worthington noted that like adult sockeye, the smolt usually stick closer to shore and the surface of the river when on the move. He also compared the leading edge of the five-foot diameter open turbine to a baseball bat, meaning any little

5G:

fish that swim through it wont get cut by the unit.

“They’re better at avoiding than we assume they are and also they just get pushed out of the way by the pressure wave on the front of these (turbines),” Worthington said.

Still, a biologist will be on-site continuously during the smolt season to monitor any impacts the RivGen might have on them.

“Certainly, if we find out that smolt are getting injured by our device we won’t be operating at that time of year; it’s a no-brainer,” he added.

ORPC officials also feel that they will be able to work around ice flows emitting from Iliamna Lake each spring, though the upcoming winter will be the first that the RivGen is in the water.

The Kvichak itself is a fairly quick, deep river near the outlet of the lake so it rarely freezes over and the large lake provides unusually stable flows when compared against other large Alaska rivers. Additionally, the chosen installation site is about 15 feet deep, Worthington said, so ice sheets should drift harmlessly over the 12-foot tall RivGen. The site is also immediately downriver from a large shoal that should deflect large chunks of ice.

Still, ever more common mid-winter thaws can send ice downriver at unpredictable times and ice jams in a shallow, braided section below the RivGen site could complicate matters, he acknowledged.

Keeping the unit in the water and operating year-round is paramount to maximizing the project’s efficiency and driving down its per-kilowatt cost.

“It’s a big experiment and we recognize (ice) is probably one of the riskier aspects of the project, but it’s also such an important one,” Worthington said.

If it is damaged ORPC will need to devise ways to protect it or pull it from the water easier, he said.

If the yearlong test proves successful, the plan is to install a second unit; combined, the two could produce up to 70 kilowatts of electricity and mostly get Igiugig off of dieselfired power. The village’s powerhouse has 40 kilowatts of generation capacity, according to the FERC license.

Village Administrator Hill said the village has plans to purchase large batteries for power storage and is also working with micro-grid developers to better integrate existing small wind turbines into their power system as well.

Completely shutting off diesel generation is rarely feasible, as it is needed to mitigate fluctuations in power from variable renewable sources and make up for sudden spikes in demand that — particularly in small isolated communities — can come from a single residence.

ORPC believes two fully operable RivGens with the requisite grid upgrades should allow Igiugig to limit its cumulative diesel generation to about four weeks per year, Worthington said.

The first unit and several years of shipping, testing and monitoring has been paid in part by federal Department of Energy grants totaling $2.3 million. Those grants required equal private matches for a total project cost of $4.6 million, according to Worthington, who acknowledged it’s a high price for a small village endeavor.

“I think they key is this is all a first-build,” he said. “A lot of our construction costs are easily double what even a second unit would be because to build the turbines we had to build molds for them and everything’s sort of like that.”

He estimated a second RivGen would cost about $1 million, with costs gradually shrinking for subsequent units.

The technology could also eventually be scaled and applied to other river villages and is very applicable to shallow tidal sites near costal communities, he added.

Even with another year or two of refinement, Igiugig’s hydrokinetic power project has already been years in the making.

ORPC officials first visited the village in 2011 after initially investigating the prospect of testing their technology at the community of Nenana on the banks of the Tanana River south of Fairbanks. Worthington said the appeal of Nenana was that it’s right on the Parks Highway, which would’ve allowed the company to avoid all of the logistical challenges inherent to working in remote Alaska.

However, the glacially muddied Tanana didn’t prove cooperative, he said. The dark water made it difficult to monitor fish, debris and even confirm the composition of the river bottom.

Meanwhile, Igiugig leaders were starting to seek renewable energy prospects of their own through Alaska Energy Authority programs.

“It was clear they really wanted to partner with technology providers to try to do this,” Worthington recalled. “It was an accepting community.”

Prototype tests in subsequent years led to development of the latest commercial RivGen model.

Hill said the work with ORPC has indeed been a long process, but one that’s necessary to pioneer new technology.

“We have a very active village and council — very progressive,” Hill said.

“Living next to this wonderful source of power that flows past us 24 hours a day…it’s pretty obvious that if we can harness some of that energy and not harm the salmon and some of the other fish in our area it’s definitely something worthwhile.”

Elwood Brehmer can be reached at elwood.brehmer@alaskajournal.com.

Continued from Page 9

“We live in a time of rapid acceleration where we are more connected than ever before, where things are moving more quickly than they ever have in the past. Unless we are on the cutting edge, we will be left behind,” Berkowitz said.

For the Municipality of Anchorage, a faster, higher-capacity mobile network will help the city better deploy resources, such as police, monitor more of its assets in real-time and generally operate more efficiently, according to Berkowitz.

“I know that GCI is one of our largest taxpayers; Ron reminds me of that periodically and I am sure that he’s going to appreciate the fact that with 5G we will be able to spend his tax dollars much more efficiently,” he quipped.

He said the network would have been immensely helpful while officials were responding to last November’s 7.1 magnitude earthquake.

AT&T, GCI’s primary mobile phone competitor, announced last year that Anchorage would be part of its 5G network rollout, which

was set to be deployed this year and next.

So far, the AT&T has updated its network to 5G Evolution in Anchorage, Bethel and Kusilvak in Western Alaska, which enables customers in those areas with 5G-enabled devices to access faster speeds, spokesman Brent Camara wrote in an email to the Journal.

“While we have not yet announced specific plans for 5G cities in Alaska, we continue investing in building the network our customers need today and preparing for the future,” he said.

Duncan said in a follow-up media briefing that only AT&T customers in Chicago and a handful of other Lower 48 cities are able to realize the benefits of the new networks.

He added that rates for GCI mobile data plans shouldn’t change with the deployment of the 5G network, but noted that more expensive, 5G-capable devices are required to harness the network’s capabilities.

Elwood Brehmer can be reached at elwood. brehmer@alaskajournal.com.

PAGE 12 • Alaskan Equipment Trader • www.alaskanequipmenttrader.com • JULY 2019

Icebreaker:

Continued from Page 10

For All Your

Lumber Needs

Northland Wood Is Now Stocking

In this Jan. 26, 2015 photo, the crew of the Coast Guard Cutter Polar Star opens a channel through the ice to the National Science Foundation’s McMurdo Station in Antarctica for the supply ship Ocean Giant. (AP Photo/Petty Officer 1st Class George Degener/U.S. Coast Guard)

Timbers • Hardwood Trailer Decking • Pallets • Crates

per day for use of the Polar Star. The Coast Guard was reimbursed nearly $33,000 per day for use of the medium-duty icebreaker Healy, which supports Arctic research, according to Cangemi.

The Polar Star had a fire in its garbage incinerator while on the McMurdo support mission in February; the incident was contained and it is now back in Seattle for repairs.

The icebreakers are part of a larger nationwide effort to recapitalize the Coast Guard with new vessels and aircraft.

Sullivan noted that the Coast Guard is in the process of adding four medium-sized fast response cutters to Alaska bases — two in Kodiak, one in Seward and one in Sitka — in addition to the two already based in Ketchikan.

Additional patrol vessels will be stationed in Petersburg and Juneau as well, according to an April 2018 letter to Sullivan from former Coast Guard Commandant Adm. Paul Zukunft.

Elwood Brehmer can be reached at elwood.brehmer@alaskajournal.com.

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PAGE 2 • Alaskan Equipment Trader • www.alaskanequipmenttrader.com • JULY 2019

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JULY 2019 • www.alaskanequipmenttrader.com • Alaskan Equipment Trader PAGE 3

BP, ExxonMobil commit $10M apiece to Alaska LNG

By Elwood Brehmer Alaska Journal of Commerce

BP and ExxonMobil are contributing $10 million apiece to help get the $43 billion Alaska LNG Project get its federal construction authorization, Lt. Gov. Kevin Meyer said May 30.

Meyer made the announcement at the Alaska Oil and Gas Association’s annual conference in Anchorage.

The state-owned Alaska Gasline Development Corp. estimates it will take roughly $30 million to complete the environmental impact statement the Federal Energy Regulatory Commission is currently drafting.

FERC was scheduled to release a draft version of the Alaska LNG Project EIS in June; the agency pushed back from February earlier this year. AGDC officials said at a May 22 board meeting they expect the draft document to be roughly 4,000 pages.

The major producers signed a memorandum of understanding with AGDC in March to provide technical assistance on the project. They also signed separate confidential gas sales precedent agreements with AGDC last year that outline the terms — including price — under which they would sell gas from the Prudhoe Bay and Point Thomson North Slope fields into the project.

The state capital budget that passed the Senate in early May authorizes AGDC to accept up to $25 million from outside sources to support the Alaska LNG Project.

AGDC officials expect to have approximately $22 million remaining for the project at the end of the 2019 fiscal year, which is June 30.

Gov. Mike Dunleavy has stressed a desire to bring the producers back into the project after they stepped away in 2016 amid poor oil and gas market conditions.

The state has since focused on advancing the regulatory and marketing aspects of the project.

“All future decisions on Alaska LNG will be rooted in world-class LNG experience,” Meyer said.

The companies are also currently assisting AGDC in reevaluating the overall economics of the project and its $43 billion cost estimate amid new global LNG market conditions.

BP Alaska Vice President of Commercial Ventures Damian Bilbao said in an interview that the company continues to be excited about monetizing Alaska natural gas because the company’s share of North Slope reserves are still its “single largest undeveloped resource on the planet.”

On the $43 billion estimated cost of the project — a fig-

BP Alaska Vice President of Commercial Ventures Damian Bilbao testifies before the House Finance Committee on April 8, 2013, in Juneau. Bilbao said May 30 that BP believes there are ways to lower the costs and improve the economics for the Alaska LNG Project. (Photo/Becky Bohrer/Associated Press)

ure calculated in 2016 that includes $9 billion in contingencies — Bilbao said he believes there are avenues in supply procurement and other areas to bring the cost down.

Alaska LNG officials have always cited the cost of the 800-mile gas pipeline from the North Slope to the Kenai Peninsula as the main cost obstacle to developing the longsought project.

“Four years is a long time in this industry; it’s a technology-driven industry so our experts feel very confident that the number that was delivered at the end of (the preliminary design period), that $43-$44 billion — they can really look at some opportunities to bring that into the high 30s and we’re going to look at some opportunities to take that down even further,” he said.

As for North Slope oil, Assistant Secretary of the Interior Joe Balash, a former Alaska Department of Natural Resources commissioner, said during remarks at the confer-

ence that a draft environmental impact statement should be published by the end of summer for ConocoPhillips’ large Willow prospect in the National Petroleum Reserve-Alaska, with a final EIS coming in 2020. ConocoPhillips estimates Willow, with a cost of $4 billion to $6 billion, could produce more than 100,000 barrels of oil per day.

Balash also said the Bureau of Land Management, which he oversees, just completed consultation with Canadian officials over the potential impacts to the Porcupine caribou herd from possible oil and gas activity in the Arctic National Wildlife Refuge; the herd migrates across the border. A final EIS analyzing industry development in the ANWR coastal plain should be ready in August and a lease sale will follow towards the end of the year, according to Balash.

Elwood Brehmer can be reached at elwood.brehmer@ alaskajournal.com.

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PAGE 4 • Alaskan Equipment Trader • www.alaskanequipmenttrader.com • JULY 2019

By Annie Zak Anchorage Daily News

November quake sent ‘shiver’ through Anchorage housing market

Monica Anderson and her husband Keith were ready to close on the sale of their Anchorage home in early December of last year. In preparation, they had moved their family into a rental to make way for the new owner.

But then the Nov. 30 earthquake hit, separating the driveway from the garage, which sunk. Sunlight now slips through a crack in the garage walls. The would-be buyer backed out.

Now, the Andersons are facing foreclosure on their home. City property records show the assessed value of the property near Strawberry Road and Northwood Street has dropped from $408,300 in 2017 to $290,800 this year.

Theirs is just one story of disruption in the Anchorage housing market following the 7.1 quake. There have not been staggering changes in the market for singlefamily homes, but the number of homes sold and the average sale price have dipped — though the degree to which that’s solely due to the earthquake is hard to pin down.

Homes in some neighborhoods have lingered on the market for longer than usual.

Inspections take more time, and buyers are extra cautious. Now, people in the real estate industry say things are picking up a bit after a slow winter.

Hundreds of homes and buildings suffered substantial damage from the quake.

The city marked some with red tags that warned the properties were unsafe to enter.

Others got yellow tags that restricted use.

Homeowners have grappled with how to pay for expensive repairs, especially after initial aid from the Federal Emergency Management Agency fell short for some. More recently, FEMA has upped such payments.

Vanessa Platter flipped houses in Eagle River for years, fixing them up and selling them off. She lost about $30,000 on the sale of a home she renovated and put on the market just before the earthquake hit, she said.

“A $400,000 home to sell is difficult as it is, but the earthquake just killed it,” Platter said. That wasn’t because of damage, she said — the property was still in good shape.

People just weren’t prioritizing home-hunting after the quake. After that financial loss, she doesn’t plan to continue flipping houses.

“I just can’t put my neck out anymore,” she said.

The Andersons are now living in a rental, which was supposed to be temporary while they took their time to buy a new home at their own pace. But now, Monica Anderson said, they plan to keep on renting.

“I think my husband and I are just so hurt by the situation, even though it’s absolutely out of our control,” she said. “The thought of purchasing a house anywhere in this town makes us very uneasy.”

The couple didn’t have earthquake insurance — most homeowners don’t, because of how pricey it can be — and were on the hook for about $150,000 to $200,000 worth of damage they couldn’t afford to fix even with some help from an online fundraiser.

First, they looked into filing for bankruptcy, but they didn’t qualify, Anderson said.

That left them with foreclosure.

[Months after November earthquake, Anchorage contractors still flooded with work] Mike McLane, an agent with Jack White

ABOVE: Vanessa Platter, an independent contractor who has been flipping homes the past eight years, said she had this Eagle River home a year, twice as long as normal, because of the market since the earthquake. RIGHT: Earthquake damage thwarted the sale of this Anchorage home. The owners are now in the process of foreclosing on it. (Photos/Bill Roth/Anchorage Daily News)

Real Estate, has seen plenty of homeowners who can’t afford to make repairs, which prevents them from selling.

The owner of one of his listings shaved $100,000 off the asking price at the end of May in an effort to sell it faster. The Zillow description for the three-bedroom Sheppard Drive home in Eagle River reads: “seller will make no repairs,” and notes that it has been yellow-tagged by the municipality.

Photos show a secluded home nestled in trees, with sweeping mountain views over the deck, now priced at $159,000.

At that property, a boulder “smashed in the back of the house,” McLane said. The septic system also needs updating, but that’s to comply with city code, not because of damage. Still, it adds on tens of thousands of extra dollars in cost.

The earthquake “put a shiver through the entire market,” said McLane.

The first quarter of this year was slow for Anchorage home sales compared to previous years, said Mark Masley, a Realtor at Keller Williams Realty and president of the Alaska Association of Realtors. But he’s noticed more activity lately.

“There’s starting to be quite a few buyers who are reentering the marketplace now,” he said. “We’re getting a lot more showings on listings, a lot more offers coming in.”

The number of single-family homes sold in the Municipality of Anchorage was down 6% between Dec. 1, 2018 and May 31 of this year when compared to the same period a year prior, according to data from the broker-owner cooperative Alaska Multiple Listing Service. The average sale price dipped 1%, and homes spent 5% more days on market.

“Is that a direct result of earthquake?

It’s really hard to tell,” said Ava Anderson,

incoming president of the Anchorage Board of Realtors.

The earthquake’s aftermath has complicated the process for some buyers and sellers, but it’s far from the only factor in recent months. A perfect storm has made for a softening market for Anchorage single-family homes, agents say: the quake, the federal government shutdown, and a state economy that’s just starting to show signs of a comeback after years of recession.

“And then, it just being winter” when the quake happened, said Platter. People worked to get their lives and houses back in order after she shaking stopped, but then there were all those aftershocks, too.

“It made people think way more than twice” about buying or selling homes, she said.

The earthquake’s impact on Platter’s house-flipping business also disrupted her own plans to buy a home. She had intended to use her profits for a down payment.

Instead, she’s now living in her camper trailer so she can pay off her debt faster.

But she still has plenty of work to do; she also owns a contracting business and is booked out more than a year, she said, working on fixing damage at other homes.

Buyers are still buying and sellers are still selling, said Anderson. But there’s nuance in the sales data.

“They’re still moving, but moving for less, and a longer market time,” Anderson said.

An inspection process that used to take maybe 10 to 14 days can now take an extra week, said Laura Temple, a broker at Signature Real Estate. She largely works in the Eagle River area. Only recently did it become easier to find a home inspector who isn’t backlogged, and contractors being booked out months also slows the process, Temple said.

Sellers also have to make decisions about when to do repairs, if at all.

“They don’t want to feel like, ‘Are we hiding it, or are we fixing it?’” said Temple.

“For the most part, I see buyers and sellers all really want to be open and honest.”

JULY 2019 • www.alaskanequipmenttrader.com • Alaskan Equipment Trader PAGE 5

Igiugig prepares to harness river in harmony with salmon

By Elwood Brehmer Alaska Journal of Commerce

A small Southwest Alaska village is trying to integrate the power of an iconic Alaska river into its electric grid without interfering with the millions of salmon that rely on the same water.

The Village of Igiugig and Maine-based Ocean Renewable Power Co. are in the midst of a years-long partnership to refine and eventually utilize the company’s RivGen Power System generator in the Kvichak River.

The village of about 70 residents sits at the outlet of Iliamna Lake — Alaska’s largest — which feeds the Kvichak that flows another 50 or so miles before emptying into Bristol Bay. The clear waters of the system support some of the largest salmon runs on Earth. Somewhere between 3 million and 7 million sockeye and countless numbers of other salmon pass by Igiugig each year on their way upriver to spawning grounds in Iliamna’s myriad of tributaries.

However, the remote location that affords residents the opportunity to live in such a unique ecosystem also comes at a cost that many rural Alaskans are familiar with. Diesel fuel, which is the primary fuel source for power generation, averaged $5.85 cents per gallon last year in Igiugig, according figures compiled by the Alaska Energy Authority.

Acting Igiugig Administrator Karl Hill said that fuel is flown into the village in batches of about 3,000 gallons.

Those costs translate into residential electrical rates regularly in excess of 90 cents per kilowatt-hour, according to AEA, which the state then subsidizes through the Power Cost Equalization Program to a more manageable effective household rate of around 30 cents per kilowatt-hour. For comparison, recent electric rates in Anchorage were 18 to 20 cents per kilowatt-hour.

Power for businesses and most public buildings is not eligible for the PCE funding, which makes the cost of power a major impediment to economic growth across much of Alaska.

“We’re looking for any way we can to be more self-sufficient. To have the means to produce our own energy gives us that much more autonomy,” Hill said of the RivGen System.

Lockheed Martin crew members prepare a U.S. Air Force F-35A Lightning II multi-role fighter aircraft for testing Nov. 4, 2017, at Eielson Air Force Base Lockheed was testing the aircraft’s ability to taxi and land on icy runways to certify that it is capable of operating in severe cold weather conditions. Two squadrons of the fifth-generation fighters are scheduled to start arriving at Eielson in 2020. (Photo/Airman 1st Class Eric M. Fisher/U.S. Air Force)

A 35-kilowatt RivGen system, which is 12 feet tall and about 40 feet wide, landed in Igiugig June 6 after being barged across Cook Inlet from Homer to Williamsport, trucked 15 miles up the Williamsport Road to Pile Bay at the east end of Iliamna and finally loaded on a second barge for the final leg of the journey across the length of the massive lake.

That followed a May 23 order from the Federal Energy Regulatory Commission that approved a license for a pilot project to run two RivGen units in the Kvichak for 10 years.

Sen. Lisa Murkowski, who chairs the Senate Energy and Natural Resources Committee, has supported federal research and grant programs to advance small-scale renew-

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According to her office, the Igiugig Village Council is the first Tribal entity in the country to gain federal approval for an in-river power project.

“I am so pleased this project will be able to move forward, reducing local diesel consumption and energy prices.

Igiugig’s efforts are blazing a trail for marine renewable energy and microgrid solutions around the world — when we prove these technologies can work in rural Alaska, we are proving they can work just about anywhere else on the See Igiugig, Page 11

PAGE 6 • Alaskan Equipment Trader • www.alaskanequipmenttrader.com • JULY 2019

Alaska becomes a ‘First Frontier’ for 5G

By Elwood Brehmer Alaska Journal of Commerce

GCI is partnering with global telecom giant Ericsson to make Anchorage among the first cities worldwide to have a standards-based 5G data network.

The leaders of the Alaska- and Sweden-based companies made the announcement June 18 during a project unveiling at Alaska Pacific University.

The transformation to a 5G network will be “one of the biggest initiatives in GCI’s history,” CEO Ron Duncan said.

“The result will be a wireline-wireless experience that will provide our customers nearly ubiquitous data connectivity across the city,” Duncan said.

GCI has worked with Ericsson for roughly a decade; the companies also partnered on the recently completed TERRA project, which offers fiber-based high-speed broadband internet to more than 80 Western Alaska communities.

Ericsson CEO Börje Ekholm said GCI is joining “an elite group of operators” in being one of the first to launch a true 5G network.

“Maybe it’s time to rephrase and not call Alaska the Last Frontier, but the ‘First Frontier,’” Ekholm said.

The roughly $30 million project will increase Anchorage’s wireless data capacity by 10-fold and will make Anchorage the 22nd city worldwide to utilize Ericsson’s 5G technology, through GCI’s network, according to Duncan.

Ericsson is a telecommunications technology developer that sells network infrastructure and software to telecom retailers and others. About 40 percent of the world’s mobile phone traffic occurs through an Ericsson network, according to the company.

5G is a term used for the fifth generation of wireless networks.

The speed and capacity of 5G networks will make such data networks increasingly critical infrastructure, Ekholm said, comparing them to bridges, roads and airports, while acknowledging that it’s still unknown what uses others will come up with for the faster networks. He noted that developers did not consider mobile phone e-commerce or banking when building 4G networks.

Supporting artificial intelligence, autonomous cars and

At right, GCI co-founder and CEO Ron Duncan speaks alongside Ericsson CEO Börje Ekholm and Anchorage Mayor Ethan Berkowitz at a June 18 press conference to announce Alaska’s largest city will be among the first in the world to receive a full rollout of 5G data network next year. (Photo/Elwood Brehmer/Alaska Journal of Commerce)

“smart city” infrastructure were some of the things 5G networks could be utilized for, the men surmised.

“What we know is that 10-times speed, 10-times lower latency, 100-times more connected devices per surface area — we will offer a lot of innovation,” Ekholm said.

He estimated there will be roughly 1.9 billion 5G subscriptions globally by 2024.

Duncan said he expects the Anchorage project to be done by the end of next year, with the first 5G being available in parts of the city early next year.

The work will involve installing Ericsson’s standards-based 5G New Radio equipment and software at 82 cell tower sites across the city, according to GCI.

Those towers will work in conjunction with “microcells” — through wireline connections in buildings and elsewhere — across the city to fully form the new network, Duncan explained.

He said it’s unclear when the company might expand 5G coverage to other parts of the state.

Ekholm added partnering with GCI allows Ericsson to test its products in and get feedback from one of the northernmost markets in the world with a harsh climate.

Anchorage Mayor Ethan Berkowitz said GCI’s work will help make the city a more competitive place to attract new people and businesses and retain existing ones.

See 5G, Page 11

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Southeast metal prospect has major potential

By Elwood Brehmer Alaska Journal of Commerce

A Southeast Alaska multi-metal prospect has the potential to produce a big payback if developed into a mine largely due to its proximity to established infrastructure, according to an early evaluation of the project.

Constantine Metal Resources’ underground Palmer copper-zinc-precious metals prospect north of Haines could generate $266 million in after-tax cash flow despite a projected mine life of just 11 years based on the results of a preliminary economic assessment, or PEA, released by the company June 3.

The Palmer project is a joint venture between Vancouver-based Constantine as the majority and Dowa Holdings, a Japanese metal manufacturer.

The deposit is adjacent to the AlaskaCanada border and near the Haines Highway about 40 miles northwest of Haines along the Klehani River, which flows into the Chilkat River. It is on a mix of federal mining claims surrounded by land owned by the Alaska Mental Health Trust Authority, which is open for development.

If developed as currently envisioned, the Palmer project would be an underground mine that would process up to 3,500 metric tonnes of ore per day, or approximately 12.5 million metric tonnes over the life of the mine. From that, the mine would produce more than 1 billion pounds of zinc, 196 million pounds of copper, 18 million ounces of silver, 91,000 ounces of gold and nearly 2.9 million tonnes of barite, a common industrial mineral, according to Constantine.

The mine would cost $278 million to develop and require another $140 million

for sustaining capital and reclamation costs for an estimated all-in cost of $418 million.

Those costs translate to an operating-capital cost of approximately $65 per tonne with operating income of $92 per tonne of ore, according to the PEA figures.

Constantine CEO Garfield MacVeigh said in a corporate release that the PEA is a major milestone for the Palmer project and demonstrates “a high-quality project with strong economics and a progressive, environmentally conscious mine design.”

Advanced zinc-copper projects such as Palmer with favorable economics are scarce in North America, MacVeigh said.

“What sets the Palmer project apart from its peers is excellent access by paved allseason highway and secondary roads, close proximity to an existing Pacific port ore terminal, reasonable and manageable capital costs, significant district-scale upside for additional mineral resources, and a joint venture that includes a global leader in the zinc smelting business,” he said further.

Constantine expects the project would support about 260 full-time jobs during operation.

Constantine plans to truck copper and zinc concentrates to the Haines port, where the material would be barged about 15 miles to the deepwater ore terminal in nearby Skagway, which is owned by the Alaska Industrial Development and Export Authority.

The barite concentrate would be barged separately from Haines to a rail terminal in Prince Rupert, British Columbia, just south of Ketchikan. Barite is an important industrial mineral in drilling mud for oil and gas wells and has other applications in the medical field.

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The Palmer multi-metals deposit being evaluated by Vancouver-based Constantine and Dowa Holdings, a Japanese metal manufacturer, is adjacent to the Alaska-Canada border and near the Haines Highway about 40 miles northwest of Haines. (Map/Courtesy/Constantine Metal Resources)

use and not require additional refinement, according to Constantine.

The Palmer deposit currently consists of indicated resources of 539 million pounds of zinc at an average grade of 5.3 percent; 154 million pounds of copper at a 1.5 percent average grade; and 1.1 million tonnes of barite along with gold and silver resources.

Inferred resources include more than 1 billion pounds of zinc; 124 million pounds of copper; more than 2.6 million tonnes of barite. According to the PEA, zinc would account for 48 percent of the total value of all the concentrates produced from the Palmer project.

Constantine touts Palmer as an environmentally sound project largely due to a design that would eventually store potentially acidgenerating rock underground — backfilling mined ore — preventing exposure to rainwater and potential acid leaching.

Constantine estimates that 78 percent of the mine tailings would be used as backfill.

A portion of the potentially acid-generating waste rock would need to be stored above ground early in the mine’s life until space was available to begin the backfilling underground.

“Desulfurized tailings,” accounting for about

15 percent of the total processed material, would permanently be stored above ground, according to the company.

However, the Palmer project has detractors. The Chilkat Indian Village of Klukwan and several local conservation groups sued the Bureau of Land Management in December 2017 for not adequately considering the potential impacts of future mine development when approving exploration permits for the project. Alaska U.S. District Court Judge Timothy Burgess rejected the claims in a March 15 ruling that has since been appealed to the U.S. 9th Circuit Court of Appeals.

Southeast Alaska Conservation Council staff scientist Guy Archibald said in an interview that the group and others oppose the project because of its location — in the upper reaches of a salmon-bearing watershed — and the omnipresent potential for acid leaching from massive sulfide deposits such as Palmer.

Archibald said Constantine’s overall plan to permanently store potentially acidgenerating tailings underground is a better plan “on paper” than other traditional mine operations, but he also noted “that even the best laid plans quite often go awry.”

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Report: US needs more domestic sources for critical minerals

By Elwood Brehmer Alaska Journal of Commerce

Filling the country’s domestic deficit of numerous minerals and metals has been a priority of the Trump administration, which on June 4 released a plan for addressing what it considers to be a national security issue.

The Commerce Department report, entitled, “A Federal Strategy to Ensure Secure and Reliable Supplies of Critical Minerals” lays out the ways in which the administration believes the U.S. can improve domestic control over 31 of the 35 often hard to pronounce minerals designated as “critical” in a May 2018 Interior Department report.

Interior’s critical minerals list notes that the country imports more than 50 percent of its supply of 31 minerals and relies completely on outside sources for 14 of those, including graphite and many minerals that are essential for modern energy storage and advanced technologies.

For several years, the U.S. imported all of its rare earth elements — used in very small quantities in many electronic devices from smartphones to components for fighter jets — until the Mountain Pass rare earths mine in southern California reopened last year.

The Interior Department also highlights the fact that China is the country’s primary source for many of the minerals it imports, which provides leverage to a government the administration is now at odds with over trade issues.

The reports were compiled following a December 2017 Executive Order signed by President Donald Trump directing the Agriculture, Commerce, Defense, Energy and Interior departments to prioritize addressing the nation’s critical mineral situation.

Among the priorities in the critical minerals strategy is a push for federal agencies to thoroughly assess the country’s resources for the various imported minerals and for specifically the Forest Service and the Bureau of Land Management to reform their land-use planning methods to protect access to those resources.

BLM oversees 245 million acres of federal land — about 10 percent of the country — and subsurface mineral rights to roughly 700 million acres. According to the bureau, BLM-controlled lands hold approximately 30 percent of the nation’s minerals. The Forest Service manages nearly 193 million acres.

The report states that many mineral deposits cannot be developed because of existing land withdrawals, reservations or other land-use restrictions. It notes that those designations can serve useful purposes for everything from wildlife protection to military use, but recommends the Forest Service and BLM coordinate with the U.S. Geological Survey along with state and Tribal governments and mining industry representatives to evaluate areas with use restrictions for mineral resources.

“Any (mineral resource) analysis performed should quantify and qualify the economic and national security implications of: reducing the size of an existing withdrawal, reducing the area affected by a land-use designation, changing planning allocations, or revoking an existing withdrawal,” the report states.

It further emphasizes a desire to prioritize reviews of withdrawn areas based on the potential for discoveries of critical minerals.

Sen. Lisa Murkowski, who chairs the Energy and Natural Resources Committee, said she welcomed the strategy report in a statement from her office.

Workers are seen at the site of the under construction Lynas rare earth plant in Gebeng, eastern Malaysia, on April 19, 2012. Rare earth minerals are crucial to high-tech manufacturing. (Photo/Lai Seng Sin/AP)

“(The report) provides clear direction on how to reduce our reliance on foreign minerals and thereby strengthen our economy and national security. I urge the administration to swiftly implement its recommendations, especially those that encourage domestic mineral production and continued research into processing technologies, and will continue my work to compliment these efforts with new legislative authorities,” she said.

In May, Murkowski co-sponsored the American Mineral Security Act along with Sen. Dan Sullivan, which, among other things, would require the Interior Department to update a list of critical minerals every three years.

The Mineral Security Act would also mandate nationwide assessments for the availability of each mineral on the critical list as well as direct Interior and Forest Service mineral project permitting reforms aimed at reducing the time to reach permit decisions and authorize research for critical mineral recycling or replacement materials.

While many policymakers and national security experts regularly raise concerns about the United States’ reliance on China for many of the minerals the country imports — such as graphite, rare earths, bismuth, barite and others — the strategy recommends strengthening trade ties with current geopolitical partners and allied countries that could be preferable sources for some minerals.

Bokan rare earths Alaska is rich in many minerals and a deposit near the southern tip of the state has the potential to be a significant domestic source of rare earth elements.

The Bokan Mountain rare earth underground mine prospect near tidewater on southern Prince of Wales Island holds more than 4.7 million metric tons of indicated rare earth ore, according to a 2015 resource assessment by Nova Scotia-based Ucore Rare Metals Inc., the company working on the project. That translates to approximately 63.5 million pounds of collective rare earth metals.

However, Ucore has shifted its attention away from advancing the mine since 2015 following a drastic fall in global rare earth prices. Instead, the company has focused on developing a small mineral processing facility in nearby Ketchikan by late 2020.

Ucore leaders have discussed the prospect of financing at least part of the estimated $25 million strategic minerals complex

through the state-owned Alaska Industrial Development and Export Authority. The Alaska Legislature in 2014 authorized AIDEA to issue up to $145 million in bonds to help finance the Bokan mine project, which the company estimated in 2013 would cost $221 million to develop.

Ucore CEO Jim McKenzie said recent U.S.-China trade tensions have highlighted the importance of addressing domestic mineral supply issues and have recently boosted prices particularly for heavy rare earth elements.

There are 17 minerals defined as rare

earth elements, but “heavy” rare earths — such as europium, terbium, and ytterbium with a greater atomic weight — are the most sought after and are used in products that rely on high-temperature magnets. More common lighter rare earths are used in a plethora of applications including LED displays.

Heavy rare earths account for roughly 40 percent of the mineralization at Bokan, according to Ucore.

“The Bokan deposit is unique in the U.S., with its unusual skew towards these valuable (heavy rare earth elements). Bokan is also unique in its ease of access, its limited projected development cost, and its significant financial backing by the State of Alaska,” McKenzie said in a formal statement. “We applaud the Trump administration for identifying these critical resources and streamlining their route to production.”

Ucore officials declined to comment on the progress of the Ketchikan processing facility because of Utah and Nova Scotia court battles the company is in with Utahbased IBC Advanced Technologies, a metal processing technology company Ucore had entered into a joint-venture agreement with.

The companies are now in litigation over that agreement.

Ucore Vice President Randy MacGillivray did write via email that the company completed drilling and resource assessment work in 2014 and is satisfied with the results of the 2013 preliminary economic assessment of the Bokan project. Once Ucore officials decide to move ahead with the mine, they expect it will require two-plus years of permitting before construction can begin, according to MacGillivray.

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