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CONTENTS JANUARY 2019 | VOLUME 35 | NUMBER 1 | AKBIZMAG.COM
FE AT U R E S
OIL & GAS SPECIAL SECTION
8 FINANCE
22 GMT1
Convenient and Brick-Free How technology changed banking By Tracy Barbour
14 ECONOMY
26 2018 IN REVIEW
ConocoPhillips Alaska’s Westward Expansion
New Finds, New Players, New Optimism
GMT1 marks first development on federal lands in NPR-A By Isaac Stone Simonelli
Light at the end of the recession
Hitting Bottom to Reach the Top
By O’Hara Shipe
Could 2019 mark Alaska’s economic turnaround?
32 ANIMAL OBSERVATION
By Isaac Stone Simonelli
40 ALASKA NATIVE
Observe and Protect
Course corrections for 2019
Wildlife observers in the oil and gas industry
By Julie Stricker
By Vanessa Orr
ANCSA Improvement Act
44 TRANSPORTATION The Electronic Logging Device Mandate
What it means for Alaskan truckers
JUNIOR ACHIEVEMENT SPECIAL SECTION
By Sam Friedman
60 GUEST AUTHORS
Junior Achievement Interviews Alaska Business
50 MINING
Mines on the Horizon Three mining prospects move closer to potential operation By Julie Stricker
By Ashley Jean Smith, Katelyn Smith, and Megan Smith
56 INTRODUCTION
The Alaska Business Hall of Fame 2019
62 BINKLEY
Junior Achievement of Alaska inducts four new laureates
2019 Junior Achievement Hall of Fame
58 HISTORY
By Tasha Anderson
Junior Achievement Turns 100
Laureate John Binkley
63 STRUTZ
100 Years. 100% Ready.
58 BOARD OF DIRECTORS
Junior Achievement of Alaska Statewide Board of Directors
64 YOSHIMURA 2019 Junior Achievement Hall of Fame Laureate Connie Yoshimura By Samantha Davenport
65 MORRISON 2019 Junior Achievement Hall of Fame Laureate Rick Morrison By Tasha Anderson
2019 Junior Achievement Hall of Fame
66 HALL OF FAME
Laureate Richard Strutz
1987-2018
By Arie Henry
Alaska Business Hall of Fame Past Laureates
68 DONORS 2019 Donors
2018-2019
ABOUT THE COVER We are privileged to introduce the world to Ashley Jean Smith (sitting), Briley Loncar (left), Katelyn Smith, and Megan Smith (right): four young women who are mere years away from taking Alaska’s business community by storm. All four young women participate in Junior Achievement, a program that educates and trains young people in business and the value of free enterprise. On January 24, Alaska Business is proud to once again partner with Junior
Achievement of Alaska to present the Alaska Business Hall of Fame, which celebrates business in the Last Frontier and honors individuals who have been building businesses—and communities—in Alaska for decades. Thank you Dr. Lilian Van Lith at Providence Health Center, Crystal Frost at Alaska Central Express, and Women in Aviation Alaska for providing the uniforms seen on the cover. Cover photo: © Matt Waliszek
DEPARTMENTS 6 FROM THE EDITOR 70 EAT, SHOP, PLAY, STAY 4 | January 2019
72 EVENTS CALENDAR 73 BUSINESS EVENTS
74 RIGHT MOVES
78 OFF THE CUFF
76 INSIDE ALASKA BUSINESS
80 ALASKA TRENDS
Alaska Business www.akbizmag.com
VOLUME 35, #1 Published by Alaska Business Publishing Co. Anchorage, Alaska
EDITORIAL STAFF Managing Editor
Kathryn Mackenzie 257-2907 editor@akbizmag.com Associate Editor
Tasha Anderson 257-2902 tanderson@akbizmag.com Digital and Social Media Specialist
Arie Henry 257-2906 ahenry@akbizmag.com Art Director
David Geiger 257-2916 design@akbizmag.com Art Production
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BUSINESS STAFF President
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ALASKA BUSINESS PUBLISHING CO., INC. Alaska Business (ISSN 8756-4092) is published monthly by Alaska Business Publishing Co., Inc., 501 W. Northern Lights Boulevard, Suite 100, Anchorage, Alaska 99503-2577; Telephone: (907) 276-4373; © 2019 Alaska Business Publishing Co. All rights reserved. No part of this publication may be reproduced without written permission from the publisher. Alaska Business accepts no responsibility for unsolicited materials; they will not be returned unless accompanied by a stamped, self addressed envelope. One-year subscription is $39.95 and includes twelve issues (print + digital) and the annual Power List. Single issues of the Power List are $15 each. Single issues of Alaska Business are $3.95 each; $4.95 for the October issue. Send subscription orders and address changes to circulation@akbizmag.com. To order back issues ($8.95 each including postage) visit www.akbizmag.com/store. AKBusinessMonth AKBusinessMonth alaska-business-monthly
6 | January 2019
FROM
THE
EDITOR
Welcome to 2019… Year of Recovery? W
e’ve finally reached 2019; the year that is supposed to mark a real reversal for Alaska’s economy. Talk of a 2019 turnaround was already weaving its way throughout the business community at this time last year, but some serious oil and gas investments combined with favorable legislative moves have turned talk into action and, we hope, results. We’re already seeing positive signals coming from the oil and gas sector. Alaska held a record-breaking land lease sale late in 2018, netting $28.1 million from oil and gas lease sales in the North Slope and the Beaufort Sea. A 2018 study from London-based global information provider, IHS Markit, reports that the North Slope is expected to emerge again as a major US energy source. “We expect development in the basin to continue to be driven by commercial masters ConocoPhillips and ExxonMobil [as well as] challengers Oil Search and Hilcorp,” says Kareemah Mohamed, associate director of plays and basins research at IHS Markit. ConocoPhillips, Brooks Range Petroleum, Oil Search, Hilcorp, and BP have each made moves recently that signal they are ready to begin investing, exploring, and developing again. Check out the 2019 Oil and Gas Forecast and 2019 Economic Forecast articles in this issue. A sign of any economy’s health is often the level of education attained by its workforce. Whether it’s oil and gas, healthcare, tourism, mining, or all of the above, the more one knows about his or her given career path, the better for everyone involved. Employers look for workers who are talented, dependable, and know what they’re doing on the job. Employees want to be fulfilled, make a decent paycheck, and have a healthy work/life balance. Junior Achievement (JA) is the conduit between education and career for many youngsters. JA fosters programs to teach kindergarten through grade twelve work-readiness, entrepreneurship, and financial literacy skills. The program also uses experiential learning to inspire students to dream big and reach their potential. The Alaska Business team was recently honored by a visit from three JA participants who spent the day interviewing each of us about our various jobs in publishing. It was a fantastic experience, and though they were here to learn from us, I walked away thinking more about my job and how I can do it better. As the workforce of today, it’s up to us to help tomorrow’s workforce answer and get started on the path toward the age-old question: “What do I want to be when I grow up?” Thank you to the Smith sisters for visiting us and gracing our cover dressed as your future selves. And to all of our readers… Happy New Year!
Kathryn Mackenzie Managing Editor, Alaska Business
As the workforce of today, it’s up to us to help tomorrow’s workforce answer and get started on the path toward the age-old question: “What do I want to be when I grow up?”
Alaska Business www.akbizmag.com
FINANCE
Convenient and Brick-Free How technology changed banking By Tracy Barbour
F
inancial institutions have been consistently building up their virtual banking services to better accommodate their customers. Virtual banking— often referred to as online banking or electronic banking—is essentially the equivalent of traditional banking over the internet. It allows customers to access their account digitally 24/7 to transfer funds, pay bills, and apply for loans from the comfort of their home, office, or anywhere, really. 8 | January 2019
And with the prevalence of smart devices, mobile banking is becoming an expected service among consumers.
A Hybrid Approach Most financial institutions in Alaska use a hybrid model that blends traditional store-front operations with virtual or online components. That’s exactly what’s happening at First National Bank Alaska. Generally, customers expect and are mi-
grating to digital service offerings. As a result, First National is investing in the “digital frontier,” says Phil Griffin, executive vice president and chief information officer. However, the bank is also focused on enhancing its branches. “Even in the digital world, customers are using more mobile devices than traditional PCs,” Griffin says. “So it is important to have mobile friendly digital offerings. Nevertheless, the brickand-mortar branch is still alive and well. As
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Denali State Bank’s main office in Fairbanks. Denali State Bank
an institution, we are evaluating different ways to enhance the branch experience.” Northrim Bank is taking a similar approach, augmenting its internet-based services in a number of ways. Examples include the enhancements made to its Business Online Banking product, the recent implementation of its Account Recon and Positive Pay product, and its Business Mobile app. However, it’s not entirely clear how customers are leveraging www.akbizmag.com
Alaska Business
January 2019 | 9
these options. “We don’t have good insight into whether our customers are working in virtual environments as our Business Online Banking services are compatible with both environments,” says Katie Bates, senior vice president and director of electronic channels. What is clear, Bates says, is that customers are steadily reaching for virtual services. Volumes in Northrim’s electronic channels continue to increase, and the bank is working hard to ensure its electronic products and services allow commercial customers to self-serve when that option is best for their business. “We continue to offer and expand our branch network to support customers, as there are some businesses that need and like personal attention,” she says. KeyBank is also making enhancements in several areas. In anticipation of evolving banking preferences, KeyBank expanded and improved its online and mobile banking capabilities over the past several years. According to Alaska Market Leader Lori McCaffrey, the bank is providing clients with an easy-to-use, secure way to manage their money—whether it’s by accessing their accounts via mobile or online, using Bill Pay or Zelle to schedule or make payments, or accessing the bank’s HelloWallet financial wellness tool. McCaffrey says KeyBank wants banking to be easy and for its clients to be able to bank when and how they choose. Offering a variety of banking methods makes this more feasible. “We don’t see online and mobile banking and brick-and-mortar banking to be mutually exclusive,” she says. “In fact, our financial wellness strategy combines the benefits of high tech—a digital personal finance management tool—with high touch, encouraging clients to visit a convenient branch to review their financial wellness plan with a banker.”
Denali State Bank is exprefer to conduct inquiries via panding some of its exista desktop computer and moing virtual banking services, bile device rather than in pertoo. The bank is currently son. “Because of this shift, we revamping its website to want to provide as many of the make it more user-friendly. same services that they’d reAnd next year it’s adding a ceive in person through elecconsumer loan product that tronic means,” he says. “Bankfeatures more automated ing shouldn’t be hard, and by Steve Lundgren, President and CEO, Denali State Bank processes. The bank’s mortremoving as much friction as gage and consumer loan possible and giving our memDenali State Bank applicants can already apply bers the tools to manage their online, but the upcoming enhancements finances from home or on the road, will make their experience even more con- we’re doing exactly that.” venient. “Most of our customers do not Denali Federal Credit Union, a division have to come to the bank for any reason of Nuvision Credit Union, has a comfor their loan,” says President and CEO parable perspective. Its members can Steve Lundgren. do virtually all of their banking online, Customers of Denali State Bank can whether it’s accessing their account, aptake advantage of online banking ser- plying for a loan, or depositing checks. vices in a number of other ways. They And if they have questions, they can can receive their statements electronical- message a member service represenly and view their balance online through tative through Denali’s secure app and the bank’s website or its mobile banking get specific account details and other app. They can also initiate payments and personal information. “They can pretmonitor account activities through the ty much do all of their banking needs secure app. “We continue to upgrade our through the app,” says Gracia O’Connell, mobile app about once a year,” Lundgren vice president of call center operations says. “It is fully functional.” and eServices. “Really, the focus is we want members to be able to use this for all of their banking needs.” Boosting Virtual Solutions Denali is also focused on mobile-first Credit Union 1 is continually evaluating and adding products to help customers— technology that allows members to referred to as members—easily manage have functionality across devices. “It can their accounts from a handy mobile be a primary experience on your mobile device. Its approach to growing its vir- device,” O’Connell says. Business owners can use Denali’s tual presence is to make the services it offers in-branch also available online. products to complete transactions “We’re always looking for ways to im- online—from wire transfers to remote prove members’ experience so that it’s deposit checks to ACH payroll—or consistent, reliable, and streamlined,” delegate them to a trusted third party. explains Vice President of E-Services For example, they could designate a CPA to handle all of their major business Tyler Hasbrouck. The credit union wants to meet mem- transactions virtually but maintain the bers where they want to be met, Has- ability to see everything that’s done. To facilitate online banking, Denali ofbrouck says. There has been a shift over the last couple of years where members fers a unified user experience. UUX, as
“Supplementary online services… carry a big potential to them, as opposed to spamming people with information that doesn’t apply to them or their situation.” —Tyler Hasbrouck, Vice President of E-Services, Credit Union 1
10 | January 2019
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Credit Union 1
display content to members that is uniquely relevant to
it’s called, allows members to have a very similar look to their online experience, whether they’re using a mobile phone or tablet. “When you do that, it gives the members a comfort level and an ease of using multiple platforms to get to where they need,” says Keith Fernandez, vice president of corporate communications and development. “The new UUX has been a key to us. About three years ago, we had about 29,000 members. Less than three years later, we now have about 41,000.”
Demand Drives Virtual Services
goals. “Supplementary online services such as these carry a big potential to display content to members that is uniquely relevant to them, as opposed to spamming people with information that doesn’t apply to them or their situation,” Hasbrouck says. “We want to be able to recognize our members’ individual needs and be there for them when they need us.”
Positive Impact Virtual services are having a positive impact on financial institutions and their customers. For example, at Credit Union 1
Denali State Bank Golden Heart branch. Denali State Bank
efficiencies are gained by having a robust platform that can provide members with extensive information and the ability to perform multiple types of
Financial institutions have various reasons for beefing up their virtual banking services. For example, Denali State Bank is driven by customer demand for online and mobile banking services. “We have a certain segment of our customer base that asks for those products and services,” Lundgren says. “In order to remain competitive, we want to offer them.” Offering virtual banking services allows Denali State Bank to cater to Alaska’s transient residents. Plus, new customers of the bank prefer these types of products and services. Denali Federal Credit Union agrees. With the transient nature of many Alaskans, the credit union’s membership base includes snow birds (who reside in the state half of the year), military personnel, and college students. Virtual services expand Denali’s ability to meet the needs of these and other members. “Providing our online banking service has greatly improved our ability to retain our membership,” O’Connell says. In addition, the credit union serves many members who live in remote areas and off the road system. Denali’s global network—which encompasses virtual services—is designed to cater to customers, regardless of their geographic location. “You have to be ready for what your member wants to do,” Fernandez says. “It’s the changing nature of business. It’s a different expectation among the consumers.” For Credit Union 1, offering virtual banking creates an opportunity to provide additional value. The credit union’s members value the ability to receive services that can’t easily be offered inbranch, such as easy access to their credit score and associated analysis, budgeting tools, and virtual savings www.akbizmag.com
Alaska Business
January 2019 | 11
transactions. However, most of these efficiencies, Hasbrouck says, are associated with time-savings rather than costsavings for the credit union and its members. He explains: “When more people use our mobile app to check their balances, it reduces the number of people who call in for their balances, which reduces wait time in our Member Service Center. When people decide to deposit their check through the app, it reduces in-branch transactions, which means we see fewer people waiting in line. And when members use our Secure Message Center to inquire on their account, it means less people sitting with Member Service Officers—and that translates to a shorter wait time in-branch.” Credit Union 1 has been seeing yearover-year decreases in branch transactions across its entire system, which Hasbrouck attributes to the expansion and popularity of online and mobile banking. However, there will always be a place for physical branch locations, he says, adding: “While we’re not quite at the point of repositioning personnel, we are using this transitional time to consider what we want our branches to look like in the future and how technology and our employees will play into this.” At Denali, virtual banking services have impacted the credit union’s physical footprint, resulting in a reduction of its branch network. Denali doubled its branch network between 2007 and 2017—going from ten to twenty branches—but did not come close to doubling its transactions. That’s partially because its services can be accessed online. Currently, the bank has fifteen branches. Certainly, online services increase cost efficiency because they help reduce the footprint and overhead of brick-andmortar establishments, O’Connell says. But she points out that Denali has not Denali’s unified user experience maintains a consistent appearance across platforms. Denali Federal Credit Union
12 | January 2019
“The new [unified user experience] has been a key to us. About three years ago, we had about 29,000 members. Less than three years later, we now have about 41,000.” —Keith Fernandez Vice President of Corporate Communications and Development Denali FCU
reduced employment opportunities by establishing online services. Instead, the credit union altered where and how team members provide their support. O’Connell says, “We have some team members who work from home, and that reduces the overhead of us having an office building or branch on the corner. We’re shifting costs, and we can take those resources and apply them to other places.” Online banking is also having a positive effect at Denali State Bank, which has been able to contain personnel costs. “Our overall transaction activity has increased, but our personnel costs have not increased at the same rate,” Lundgren says.
Inherent Challenges But there are intrinsic challenges to providing services electronically. When customers utilize financial services digitally, it reduces their face time with a banker and makes it more difficult to maintain a personal relationship. That’s an issue to Denali State Bank, which focuses on relationship banking. Lundgren says, “We like to see our customers, and we spend a lot of time and energy focusing on training our staff and supporting a culture of high customer service. It’s hard to have that face-to-face contact if we never get to talk to them if they do everything electronically.” There are some things that people still generally come into a branch for, such as customer service and problem resolution. “We still see people when they want to open an account with their child or want to set up an automatic transfer and aren’t sure how to do that,” Lundgren says. Reaching out to members through an online interaction is also a challenge for
Denali, Fernandez says. Having a “human connection” helps build trust and loyalty, but building a sense of loyalty in the virtual world requires a different approach. That’s why the credit union is expanding its focus to e-marketing to better connect with members virtually. Denali is incorporating a SMART emarketing solution to directly market products and services to meet their members’ needs. “We had a basic version of that with an older online system, but I think this new e-marketing system will be a tremendous boon to us,” he says. Credit Union 1 is concentrating more on social media, among other tactics, to better engage its electronic banking customers. A key part of Credit Union 1’s culture is community involvement and outreach. As such, it’s important for the credit union to be able to highlight its and its members’ activities in the community. But this personal element can sometimes be a challenge when there isn’t as much face-to-face time with members, says Hasbrouck. To minimize this disadvantage, the credit union has elevated its social media presence. “This allows us to connect on a more social level with our members, even when this connection is electronic rather than in-person,” he says. “Credit Union 1 has been repeatedly recognized by The Financial Brand as the ‘most social’ credit union in Alaska—a recognition that we’re proud to maintain as many of our member connections continue to shift to a virtual sphere.” Regardless of its inherent challenges, virtual banking has been and will continue to be important to consumers and businesses, Lundgren says. He adds: “Our perspective is that those online solutions are here to stay. They are going to continue to grow and evolve.”
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ECONOMY
Hitting Bottom to Reach the Top Could 2019 mark Alaska’s economic turnaround? By Isaac Stone Simonelli
C
autious optimism surrounds forecasts for Alaska’s economy in 2019 as many predict the state’s recession will finally bottom out—making Alaska one of the last energydependent states to begin recovery since oil prices tumbled about three years ago. Economists and business leaders take into consideration a number of factors when assessing economic health including unemployment rates, workforce demands in specific fields, the potential for the Alaska Legislature to approve a strong capital budget, and whether companies are 14 | January 2019
signaling they might be ready to make major investments. “I think that many are hoping for a recovery in 2019, but a lot of the thinking has been based on the idea that the
Alaska Legislature— no longer facing immediate election —will be able to come to an agreement with respect to a long-term solution for funding state government. In addition, the higher oil prices through the end of October have been adding to predictions of a recovery,” says Marcus Hartley, president and principal economist for Northern Economics. “The percent drop in oil prices since the
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Construction accounting beginning of November may dampen some optimism.” He continues, “If a capital budget is approved with meaningful amounts of funding, the construction and professional services sectors that have been really feeling the pinch from the lack of state government funding are likely to begin to start hiring more employees.” Mouhcine Guettabi, an associate professor of economics at the Institute of Social and Economic Research, agrees that at least some of the expected economic turnaround is dependent upon legislative choices. “The capital budget has been bare-bones for four years, which has affected the construction industry www.akbizmag.com
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“We’re seeing an increase in GDP for the first time in a long time for Anchorage: 4.2 percent for 2017, which is a positive sign.” —Bill Popp President and CEO, AEDC
and, of course, has meant deferring maintenance and investing in infrastructure,” Guettabi says. “A healthy capital budget is certainly good for the future of the state and will be a catalyst in stabilizing the state’s economic condition. Construction
16 | January 2019
as of June 2018 is only 86 percent of what it was in June 2014.” Between 2014 and 2017 the construction sector lost 2,178 jobs, roughly 13 percent its workforce. Even with many industry insiders expressing optimism
about the economy in the coming years, employment in this sector is expected to grow at a slightly slower pace than the rest of the economy, adding about 700 jobs by 2026, according to the October Alaska Economic Trends released by the Alaska Department of Labor and Workforce Development. “We have had more than thirty straight months of job losses dating back to October 2015. The rate of job loss has, however, slowed. I anticipate that the recession [job losses] will end in the next six to eight months. A recovery is an entirely different question as we have lost between 12,500 and 13,000 jobs, and I do not anticipate that we will recover them for quite some time,” Guettabi says. Guettabi uses a large-scale econometric model that relies on historical relationships to make predictions. However, more than 80,000 employees work in government—federal, state, and local—which means that a sizeable portion of employment is dependent on legislative decisions that can be difficult to predict. Additionally, basic sectors (such as fishing) are dependent on world markets, rendering them difficult to forecast. Nonetheless, Paul Martz, an economist with the Department of Labor and Workforce Development, also sees positive signs in the economy. “Although the state remains in a protracted recession with job losses continuing in 2018, we project Alaska will add roughly 17,000 jobs from 2016 to 2026, for 5.1 percent growth. Oil prices have rebounded since the plunge that began in late 2014, but the recession’s lingering effects will dampen some industries’ growth over the decade,” Martz writes in the October Alaska Economic Trends. Martz notes that the state is “set to slowly climb out of the recession” with projected growth averaging about 1,700 jobs per year, with the healthcare industry creating the most jobs. Healthcare is expected to add 10,134 jobs by
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2026, and the next closest industry is hospitality and food services, which is anticipated to add 2,782 jobs. Though mining, which in this instance includes oil and gas, is only expected to add 112 jobs by 2026, oil and gas companies are signaling large investments in the state, making them a significant source of optimism for economists looking at what 2019 holds. “You don’t bank on price; the oil industry doesn’t bank on price in their planning. When we look at what’s going on, we look at the committed announcements in investment by the companies and what does that mean in the aggregate,” says Bill Popp, president and CEO of the Anchorage Economic Development Corporation. “We’ve got ConocoPhillips making significant announcements, as well as Brooks Range Petroleum, Oil Search, and Hilcorp. BP has just talked about getting to engage with some new seismic within the Greater Prudhoe Bay unit and some other investment that they are considering. Those are some positive signs,” he says. A report released in 2018 from IHS Markit, a London-based global informa-
“As Alaska climbs out of only the third recession in the state’s history, oil and gas can continue to play a role in a strong economy. When the oil and gas industry is strong and investing, it has a direct and indirect impact on the economy.” —Kara Moriarty President and CEO, AOGA
tion provider, says that the North Slope is poised to re-emerge as a major source of US energy production. “We expect development in the basin to continue to be driven by commercial masters ConocoPhillips and ExxonMobil [as well as] challengers Oil Search and Hilcorp,” says Kareemah Mohamed, associate director of plays and basins research at IHS Markit. “We anticipate increased bidding activity and farm-ins as established operators expand their presence and new entrants seek to gain early mover advantage by leveraging
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low acreage prices to enter newly opened areas.” Not including oil from the Arctic National Wildlife Refuge, North Slope oil output could increase 40 percent over eight years, IHS Markit reports. “As Alaska climbs out of only the third recession in the state’s history, oil and gas can continue to play a role in a strong economy. When the oil and gas industry is strong and investing, it has a direct and indirect impact on the economy,” says Alaska Oil & Gas Association President and CEO Kara
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January 2019 | 17
Moriarty. “Over one-third of all jobs and one-third of all wages are attributed to the industry. No other industry sector comes close to that type of economic multiplier.” However, Steve Colt, professor of economics at Alaska Pacific University, is less optimistic about the state of the economy. “I am skeptical because the current economy was built on high-priced oil and unsustainable state spending. The economy probably needs to be smaller to be sustainable. By 2019 previous capital budget appropriations will be largely spent,” Colt says, noting that
Governor Mike Dunleavy’s proposal for deep cuts to the state budget in an effort to balance the budget would stop any recovery before it gets going. “It is more likely that the legislature will rely on dwindling savings one final time.” Though oil and gas investment is expected to play a large role in keeping the economy from falling any further, legislative choices will continue to play a significant role in a potential recovery. “And government is an important part of business decision making in terms of willingness to invest… there are certain services a business needs and there
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needs to be an indication that those services are going to be in place,” Popp says. Looking specifically at Anchorage’s economy, which accounts for roughly half of the $50 billion of economic activity in the state, Popp says there are incremental changes that have been taking place over the last several months that signal the recession is in fact close to bottoming out. “We’ve been seeing declining job losses, particularly in the Anchorage market, which is what we focus on. And we’re seeing other forms of activity that are giving us signs,” Popp says. “We’re also seeing an increase in GDP for the first time in a long time for Anchorage: 4.2 percent for 2017, which is a positive sign.” Popp points out that Alaska is out of practice when it comes to handling a recession. “We haven’t had one since the 1980s. We’ve had industry downturns, but we’ve not had a full-blown recession since the great recession of the 1980s,” he says. “And recessions are a necessary evil in any economy because they happen whether you want them to or not. We’ve been lucky to go nearly three decades without one—it’s almost unheard of to have 2 percent growth per year over that time frame.” Since crashing oil prices instigated this recession, Anchorage lost about 5,500 tracked jobs. However, trending lower oil prices weren’t bad for all market segments in the Last Frontier. Those able to take advantage of lower fuel prices found opportunities for growth. “The airport was a big opportunity for Anchorage in the fact that there was significant growth in volume and jobs at the airport related to air cargo,” Popp says. “The airport sees more business when oil prices are down in the sense that air cargo becomes cheaper because it’s less expensive to transport things by airplanes that use a lot of jet fuel.” Another industry that benefits from lower oil prices is tourism, which accounts for 10 percent of jobs in the Anchorage area. Tourism has seen significant growth over the last few years. “In that regard, we’ve seen some good positive signs compared to where we were in the 1980s; in a lot of ways these [industries] have helped us mitigate the impact of the recession,” Popp says.
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“I think that many are hoping for a recovery in 2019, but a lot of the thinking has been based on the idea that the Alaska Legislature—no longer facing immediate election—will be able to come to an agreement with respect to a long-term solution for funding state government.” —Marcus Hartley President, Northern Economics
“Having said that, we’ve got a ways to go, and we’ve got more things to do to reinvest in ourselves. “For generations to come, Alaska is going to be a resource extraction state. That can be resources from energy to
minerals to even tourism, because tourism, in a lot of ways, is a resource extraction industry in the fact that we’re exporting our environment to visitors. We also have seafood, another key element in this.”
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in 2014. Out of those, North Dakota and Alaska are the only two that continue to be in recession. Alaska’s struggle to shake off this recession is tied to both private sector and government reliance on oil, Guettabi explains in the report. “The ones that don’t have a lot of oil revenue dependence seem to recover a little bit faster because they only had that private channel dependence, and their budgets weren’t struggling as much as ours,” Guettabi says. “All the indicator variables we evaluate point to Alaska being in the tail end of the recession, but the recovery of the jobs lost will be elusive as both the oil sector and the government sector are considerably smaller than they were four years ago. The future of Alaska’s economic development will rest on the success of the traditional basic sectors, the pursuit of new opportunities, and on whether the state can address its leaky bucket by ensuring that more of the value generated in Alaska stays in state.” Guettabi points out that leveraging the state’s strengths and retaining more money through localizing the supply chain and investment in workforce development is the way forward.
Others Optimistic About 2019 “While Alaskans have tepid feelings about the current state of the economy, optimism about the future is growing,” states a news release from the Department of Commerce, Community, and Economic Development. “The Alaska Confidence Index readings have been up and down on a quarter-to-quarter basis this year, but the overall trend has been positive since the first quarter of 2017. While it is still unclear when and how the economy might return to where it was in 2015, rising economic confidence is one signal that the recession might be ending.” Britteny Cioni-Haywood, director of the Division of Economic Development, explains that though economists don’t use the Alaska Confidence Index in their predictions, it is used to measure the general population’s confidence in the health of the state and local economies, their personal financial situation, and expectations for the future. “This index, just like ones used nationally, takes a temperature of how people are feeling about the economy,” CioniHaywood says. “When the economy is strong or strengthening, confidence in-
“I anticipate that the recession [job losses] will end in the next six to eight months. A recovery is an entirely different question as we have lost between 12,500 and 13,000 jobs, and I do not anticipate that we will recover them for quite some time.” —Mouhcine Guettabi Associate Professor of Economics ISER
creases, and just the opposite [occurs] during downturns.” Even if Alaska does emerge from recession in 2019, it doesn’t mean the state will immediately begin experiencing economic growth. “It’s going to take a little while for investment to be deployed, hiring to start to ramp up, construction numbers to start to increase, investment numbers starting to increase—that takes a while,” Popp says. “The one thing about the bottom of a recession that often gets overlooked is that it is a buying opportunity for businesses.” Popp points out that the bottom is when land, building, and construction costs are at their cheapest. “And if there are companies wondering when is the time to invest, I would be urging them to look at their plans, dust them off, and start to take a look at the numbers. Think about whether now is the right time to get out and start investing,” Popp says. “Often businesses miss the bottom of the cycle.”
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OIL & GAS SPECIAL SECTION | GMT1
ConocoPhillips Alaska’s Westward Expansion GMT1 marks first development on federal lands in NPR-A By Isaac Stone Simonelli
G
reater Mooses Tooth 1 (GMT1) yielded first oil in October. Relying on new oil drilling technology, it is the most recently developed production site for ConocoPhillips on the North Slope as the company continues its methodical westward expansion into the National Petroleum Reserve-Alaska (NPR-A) along a geological formation known as the Barrow Arch. “This is another milestone for development in the NPR-A,” says Joe Marushack, president of ConocoPhillips Alaska. “The GMT1 team successfully and safely executed this project in an environmentally responsible manner. We appreciate the collaboration with stakeholders from Kuukpik Corporation, the community of 22 | January 2019
Nuiqsut, the North Slope Borough, and ASRC that made it possible.” The permitting process for GMT1 began in 2013; the Bureau of Land Management (BLM) issued a permit to drill in October 2015. Funding was approved later that year and construction began in 2017, continuing through the winter of 2018. GMT1 is the first drill site on federal leases within the NPR-A. BLM, ASRC, and Kuukpik Corporation share land and mineral rights for the project, according to a ConocoPhillips release. GMT1 has an 11.8-acre drilling pad, a 7.6-mile road, and pipeline facilities connected to Colville River Unit infrastructure. Initially nine wells were drilled at the site, though GMT1 has capacity for up to thirty-three wells, with peak gross production estimated at 25,000 to 30,000 barrels of oil per day. However, the development of GMT1, which has opened the door for tapping oil reserves at Greater Mooses Tooth 2 (GMT2), hinged on the development and implementation of new steerable drilling liner technology.
“That is essentially the technology that we helped develop. This is the first development that has used this in the development phase,” says Shon Robinson, manager of drilling and wells at ConocoPhillips Alaska. “It was paramount that we have it, and it has worked fantastically. We’ve drilled four wells with essentially no problems. “We’re not the only operators that have used this system. We’re just the first one where we depended on the technology to work or it would have cost significantly more money to complete the development.” During the exploration drilling phase of GMT1, it became apparent that ConocoP hillips would face challenges not yet encountered on the remote North Slope. The geological bedding, rather than laying relatively flat, was jumbled, making it unstable. It’s thought that a highenergy landslide caused enormous chunks of earth to break up and turn, with some ending up positioned nearly perpendicular to their original orientation. Over time, everything around these
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OIL & GAS SPECIAL SECTION | GMT1 Aerial view of ConocoPhillips Alaska’s Greater Mooses Tooth 1, which produced first oil in October. ConocoPhillips
chunks of earth filled in, burying them— but not stabilizing them. “When they started drilling two exploration wells, both had problems, but one had severe problems,” Robinson explains. “We happened to intersect one of those pieces of earth that had been rotated, let’s say roughly 90 degrees. So, the stresses in the earth in those circumstances have changed drastically and we were not successful keeping that well hole open because when the earth is on its side, it’s just not stable.” Traditional drilling on the North Slope sees a drill bit boring to a certain depth before it’s removed and a metal lining is run to the bottom of the hole. Once the steel casing is run to the bottom, cement is pumped down the inside of the steel tube, out the bottom, and back up the annular space between the steel and formation. The cement combined with steel creates a stable well. As drilling progresses deeper, the process is repeated using smaller bits and steel tubes, nesting the cylinders until the desired depth is reached. However, at GMT1, the unstable earth masses would fall in before the team www.akbizmag.com
Without the infrastructure built during the development of ConocoPhillips Alaska’s CD5 site, which provides capacity to run everything back to the Alpine processing facility, GTM1 would have never gotten off the ground. had a chance to install the steel casing. “We had similar issues with the second well,” Robinson says. “But we also saw there was oil worth chasing, and we knew it was going to be challenging from a drilling perspective.” The steerable drilling liner developed with Baker Hughes—a full stream provider of integrated oilfield products, services, and digital solutions—allowed ConocoPhillips to drill and run the casing down at the same time. Once at the target depth, workers are able to release the drilling gear and pull it Alaska Business
back out, while leaving the casing in place. Though ConocoPhillips needed to rely on the new, more expensive method of drilling at GMT1, the company managed to come in about $175 million under their initial estimate for the cost of development. When the original budget was drawn up prior to the oil price downturn several years ago, it carried a $900 million price tag for the development of GMT1, chasing an estimated $1 billion in gross. “So, we had to sharpen our pencils and the project manager basically said, ‘We have to execute that project really January 2019 | 23
OIL & GAS SPECIAL SECTION | GMT1
successfully to try and keep costs down.’ The construction and logistics work had to be almost perfect,” says Natalie Lowman, director of communications for ConocoPhillips Alaska. “And then, the costs actually went down for labor and materials by the time we were under construction. Everybody took a haircut when oil prices went to the $30s and $40s. So, basically, we were managing the project more efficiently and implementing more successful drilling techniques.” The project ended up coming in at about $725 million. However, without the infrastructure built during the development of ConocoPhillips Alaska’s CD5 site, which provides capacity to run everything back to the Alpine processing facility, GMT1 would have never gotten off the ground. “After finishing the wells at GMT1 in 2019, we’re turning our focus on CD5, to which it’s connected,” Lowman says. “CD5 has been extremely prolific, way above what we anticipated in production. So, we want to capitalize on how well it’s doing and we announced funding for ten additional wells there in 2017.” While GMT1 was the first development
24 | January 2019
“We plan to continue to strive to safely unlock the energy potential of this world-class oil province for years to come and play an active role in Alaska’s economic future.” —Ryan Lance, Chairman and CEO, ConocoPhillips
on federal lands in the NPR-A, CD5 was the first on Alaska Native lands. Expected peak gross production from CD5 was 16,000 barrels of oil per day, but as of mid-2018 the field was producing about 37,000 barrels of oil per day. “Cost efficiencies from advances in drilling and operational practices will require the right kind of operator expertise,” says Kareemah Mohamed, associate director of plays and basins research at IHS Markit. “For example, ConocoPhillips has employed learnings from its Lower 48 unconventional assets to lateral drilling in their Alaska North Slope CD5 development located in the NPR-A.” In April, ConocoPhillips set three drilling
records at CD5: the North American record for longest horizontal lateral at 21,748 feet and Alaska records for total combined lateral length at 34,211 feet and total combined footage for a well at 42,993 feet. Extending past CD5 and GMT1, Conoco P hillips is looking to move forward with the development of GMT2, following a Record of Decision issued by BLM on October 15. With a first oil target in the fourth quarter of 2021, the company is tagging more than $1 billion in costs. GMT2 is slated to host forty-eight wells, with thirty-six initial wells being drilled. Peak estimated monthly production is set at 35,000 to 40,000 barrels per day— more than GMT1. “We see a lot of prospectivity out there [west]. Other companies have a different focus on the kind of work they want to do. But we’ve seen a lot of success out there. We’ve announced a new, very significant discovery in Willow,” Lowman says. “As we build out these drill sites like GMT1, they’re all going to be connected as we move west into the Willow development.” ConocoPhillips announced in July that four exploration/appraisal wells drilled in its Willow prospect increased its earlier estimate of 300 million barrels of oil equivalent of gross resource to 400 million to 750 million barrels of oil equivalent. “Preliminarily, the company estimates first oil can be achieved by 2024-2025 for approximately $2 billion to $3 billion spent over the course of four to five years after final investment decision [in Greater Willow Area],” according to a ConocoPhillips’ release. “Once first oil is achieved, the company anticipates ramping quickly to full production. Thereafter, the company estimates that an additional $2 billion to $3 billion of cumulative drilling capital will be executed over multiple years to maintain production at this facility.” “We expect development in the basin
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OIL & GAS SPECIAL SECTION | GMT1
to continue to be driven by commercial masters ConocoPhillips and ExxonMobil, but also by challengers Oil Search and Hilcorp,” Mohamed says. “We anticipate increased bidding activity and farm-ins as established operators expand their presence and new entrants seek to gain early mover advantage by leveraging low acreage prices to enter newly opened areas.” At a Resource Development Council meeting in October, Marushack said that ConocoPhillips Alaska’s future outlook is strong. In 2013, the outlook was a steady decline in production to about 100 million barrels of oil per day by 2028. However, a number of factors, including various technological advancements such as those put in place at GMT1, have flipped the trend. The company now estimates that number will climb to well over 300 million barrels of oil per day by 2028. Other factors that Marushack said are having a significant impact on the economic turnaround are Senate Bill 21, which improved fiscal framework; comprehensive efforts to capture value from legacy fields and infrastructure; a renewed focus on exploration yielding early success; and that a company-wide focus on lowering the cost of supply has made Alaska competitive within the portfolio. The oil production levels at GMT1 make it a profitable stepping stone in ConocoPhillips’ westward expansion, bringing more jobs to the North Slope as estimates predict a 40 percent increase in oil production from the region over the next eight years. “We believe that the company’s Alaska plan aligns with our disciplined, returns-focused strategy, supports Alaska’s economy, and creates significant value for shareholders,” Ryan Lance, Conoco Phillips chairman and CEO, says in a release. “Alaska provides competitive investment opportunities and will generate profitable growth from diversified investments with significant exploration upside… Our shareholders realize the advantages of ANS-priced oil, competitive cash and earnings margins from our operations, and our years of expertise and sound stewardship. We plan to continue to strive to safely unlock the energy potential of this world-class oil province for years to come and play an active role in Alaska’s economic future.”
OIL & GAS SPECIAL SECTION | 2018 IN REVIEW
TAPS pump station 3. Alyeska Pipeline Service Company
New Finds, New Players, New Optimism Light at the end of the recession
I
By O’Hara Shipe
n January 2018, the Anchorage Economic Development Corporation (AEDC) projected that after an enduring economic recession, things were beginning to look up for the oil and gas sector. One year later, it appears AEDC’s forecasts were correct. Bolstered by new legislation, new discoveries, and increased levels of production, 2018 was a fairly fruitful year for the oil and gas industry. 26 | January 2019
1002 Opens in ANWR Optimism regarding Alaska’s slow crawl out of recession began at the end of 2017 with the federal government’s decision to open the 1002 Area of the Arctic National Wildlife Refuge (ANWR) to oil and gas leasing. The decision— included as a provision in the passage of the federal tax overhaul bill—was a major milestone in Alaska’s long history of oil exploration. “This is a watershed moment for Alaska and all of America,” US Senator Lisa Murkowski remarked in a December 2017 press release. “We have fought to open the 1002 Area for a very long time, and now our day has finally arrived.”
Her sentiment was echoed by US Representative Don Young, who noted that he has advocated opening ANWR for the last thirty-seven years. Although the 1002 Area is just one ten-thousandth of all of ANWR’s total acreage, it has the potential to bring an estimated 10.4 billion barrels of oil to market. According to Alaska Oil and Gas Association (AOGA) President and CEO Kara Moriarty, production is about ten to fifteen years away. However, in April 2018, the Bureau of Land Management said that it was beginning to prepare an environmental impact statement (EIS) for a leasing program in the 1002 Area.
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OIL & GAS SPECIAL SECTION | 2018 IN REVIEW
A Tale of Two Port MacKenzies Choosing the ideal site for the Alaska LNG terminal proved controversial in 2018. Federal law requires that an EIS consider not only the applicant’s preferred construction plans but also any economical or environmentally-friendly alternatives. Determining the best terminal location is key for Alaska LNG to move forward. With so much at stake, it is of little surprise that discussions between the Federal Energy Regulatory Commission (FERC), the Alaska Gasline Development Corporation (AGDC), the Matanuska-Susitna Borough, and the Kenai Peninsula Borough went back and forth all year. In 2017, FERC ordered AGDC to evaluate Port MacKenzie in the Mat-Su Borough as an alternative location for the terminal of the Alaska LNG pipeline. AGDC complied, but in January 2018 the borough filed a complaint with FERC noting that AGDC had misidentified Port MacKenzie and subsequently evaluated the wrong location. AGDC turned its efforts toward the evaluation of the correction location of Port MacKenzie, and after several months of additional analysis, AGDC deemed the correct location inadequate, asserting again that Nikiski was best suited for the terminal. Not surprisingly, the Mat-Su Borough disagreed with AGDC’s assessment. The Mat-Su Borough argued that AGDC presented “numerous factual errors and willfully misleading statements” to federal regulators and failed to perform “a good faith and unbiased analysis” of borough land at Port MacKenzie. AGDC responded by calling the Mat-Su Borough’s claim “baseless.” On November 20, AGDC reaffirmed its initial filing, citing several geographic impairments of Port MacKenzie. First, Port MacKenzie’s existing deep-water dock would need to be removed to make room for significant expansion of the barge dock. Second, the port’s haul road would need to be widened from 45 feet to 150 feet to
Ariel view of ConocoPhillips Alaska’s Kuparuk operations. ConocoPhillips
accommodate large-scale construction components. Third, the road would also need to be reduced to a maximum of a 3 percent grade. As the bluff at Port MacKenzie is higher than the proposed Nikiski site, the expansion would require a significant increase to the cut and fill required to build the road. For now, AGDC continues to work toward making its pitch to potential investors in early 2019. If all goes according to plan, AGDC hopes to begin construction in 2020 in Nikiski with liquefied natural gas (LNG) production estimated to begin in 2024.
Changes to the ‘Sliding Scale’ Tax Credit For much of the first half of 2018, the uncertainty of Alaska’s fiscal policy was an area of contention for those in the oil and gas industry. On June 7, Hilcorp, ExxonMobil, and SAExploration filed a lawsuit against the state Department of Revenue over what they asserted was a change in tax policy that could cost companies tens of millions of dollars. The dispute centered on a Senate Bill 21
provision that has been referred to as a “sliding scale” tax credit. The provision enabled companies to apply the tax credit to each barrel of oil production with the value increasing as oil prices sink. When Senate Bill 21 was signed into law, it dictated that the sliding scale could not be used to reduce a company’s taxes below a set minimum. During the first few years of the law, some companies were able to pay less than the minimum required through a loophole in the law’s language. In 2017, the loophole was closed via an advisory bulletin and it caused a ruckus within the industry. SAExploration—a non-producing oil exploration company—had planned to sell its tax credits to another company that would then use SAExploration’s credits to reduce its tax bill. But the state’s tax bulletin now bars that practice, which has “drastically reduced” the value of SAExploration’s credits, the complaint states. As of the writing of this article, a decision had not been reached by the state’s Superior Court.
More proof of growing exploration and development interest in Alaska was evidenced by a record-shattering annual North Slope oil and gas lease sale in November. The state received a total of $28.1 million from 159 bids for areas in the North Slope, Beaufort Sea, and North Slope Foothills. 28 | January 2019
Alaska Business www.akbizmag.com
Record-breaking Lease Sales More proof of increasing exploration and development interest in Alaska was evidenced by a record-shattering annual North Slope oil and gas lease sale in November. The state received a total of
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Aerial view of BP Alaska’s Prudhoe Bay operations. BP
$28.1 million from 159 bids for areas in the North Slope, Beaufort Sea, and North Slope Foothills. The previous year’s sale was the third largest ranked by bonus bid amount and bid per acre since 1998, when areawide oil and gas leasing began. 2018’s sale exceeded both marks, with total bid amounts increasing from $27.3 million in 2017 to $28.1 million in 2018, while the bid per acre amount leaped from $110 per acre to $121 per acre.
Alyeska Pipeline Service Company In a September letter to state officials, Alyeska Pipeline Service Company Pres-
Alaska Business
ident Tom Barrett announced that the company would be “realigning into three divisions: operations and maintenance; engineering and risk; and chief financial officer.” As a result, many jobs would be directly or indirectly impacted, including a reduction of the Trans Alaska Pipeline System (TAPS) workforce by 10 percent. The move, according to Barrett, is an effort to simplify operations. After launching an initiative in 2017 to understand the necessary actions needed to keep TAPS technically and economically viable, Alyeska presented a strategy that was endorsed by TAPS owners.
January 2019 | 29
OIL & GAS SPECIAL SECTION | 2018 IN REVIEW
Pushing Fiscal Policy Forward After years of paying only partial tax credits to developers, the state owed various companies about $900 million in tax credits. Talks of future investment were contingent on a solution being found to address the debt while financing the state government’s operating budget. The solution seemed to be House Bill 331, which would allow the state to sell bonds to pay off the tax credits in a lump sum. The bill passed the Alaska House in early May and the Senate at the end of an extended legislative session in June. However, the sales were halted soon after the legislation passed due to a lawsuit filed that argues against the bill’s constitutionality. A ruling on the case was anticipated to be made in November but as of midDecember, the state’s motion to dismiss the suit has not been addressed by the state’s Superior Court.
OIL & GAS SPECIAL SECTION | 2018 IN REVIEW
“As we move implementation forward, we will apply sound personnel processes designed to provide fairness, respect, and support for affected employees,” Barrett assured officials.
Hilcorp The US Department of the Interior’s Bureau of Ocean Energy Management issued conditional approval to Hilcorp Alaska for its Liberty Project oil and gas development and production plan in 2018. The project (co-funded by Hilcorp, BP, and ASRC Exploration) has the potential to be the first oil and gas production facility in federal waters off Alaska. The largest undeveloped, light-oil reservoir on the North Slope, the Liberty Project predicts to unearth an estimated 80 million to 150 million barrels of recoverable oil. Peak production of between 60,000 and 70,000 barrels per day is projected within two years of initial production, and the field has a life expectancy of fifteen to twenty years. The proposed nine-acre artificial gravel island would be housed in the shallow waters of the Beaufort Sea, about 20 miles east of Prudhoe Bay. A buried subsea pipeline would carry sales-grade crude oil to shore, to connect with the existing Badami pipeline. According to Liberty Project Manager Mike Dunn, construction of the artificial
For many, optimism regarding Alaska’s slow crawl out of recession began at the end of 2017 with the federal government’s decision to open the 1002 Area of the Arctic National Wildlife Refuge to oil and gas leasing. 30 | January 2019
Aerial view of ConocoPhillips Alaska’s Alpine operations. ConocoPhillips
island is set to take place in 2020 and 2021. Construction of the subsea pipeline is projected to begin in the winter of 2021, and Hilcorp plans to move the various modules to the island during the following summer, with the drilling rig being moved within that same summer timeframe. Startup of the facilities is planned for May 2023.
BP In May 2018, AGDC entered into a Cooperation Agreement with BP to collaborate in the development of the financial and tolling structure to advance the Alaska LNG project. BP will contribute staff, resources, and selection of third-party contractors to assist in developing a commercial structure for the project to enable project financing. The agreement was punctuated in September with a “historic milestone,” a sales agreement between BP and AGDC in which an estimated 30 trillion cubic feet of gas from Prudhoe Bay would travel through an 800-mile pipeline to Nikiski, where it would be turned into LNG at a plant before being shipped overseas. However, many are quick to caution against unwarranted optimism as it will take several additional gas sales agreements to realize the LNG project. According to AOGA President and CEO Kara Moriarty, this initial agreement is only one piece of a much larger puzzle. While BP remains the sole operator in the Prudhoe Bay oilfield, in July the company agreed to sell its 39.2 percent stake in the Kuparuk River Unit to ConocoPhillips in exchange for an increased share in the Clair field, which is part of BP’s North Sea operations in Scottish territorial waters.
ConocoPhillips The transaction was one of several that established ConocoPhillips as the single
working interest owner in the Kuparuk River Unit, and in addition, ConocoPhillips purchased Anadarko Petroleum Corporation’s assets in the Colville River and Greater Mooses Tooth (GMT) units for $400 million earlier in the year. The Kuparuk transactions were just a portion of an aggressive exploration pursuit made by ConocoPhillips in 2018. In April, the company announced it had achieved a North American drilling record and two State of Alaska drilling records at drill site CD5 in the Colville River Unit on Alaska’s North Slope. With the help of the Doyon 19 drilling rig, ConocoPhillips drilled the longest horizontal lateral at 21,748 feet to claim the North American drilling record. Their two Alaska records were set with a total combined lateral length of 34,211 feet and total combined footage for a well at 42,993 feet. At the time of the records, CD5 was exceeding its original production target of 16,000 barrels per day.
Oil Search | Repsol | Armstrong Oil Search, based out of Papua, New Guinea, purchased $400 million of Alaska assets from Armstrong. Included in those assets were a 25.5 percent interest in the Pikka Unit and adjacent exploration acreage as well as a 37.5 percent interest in the Horseshoe Block. The sites contain the Nanushuk field, thought to be one of the largest onshore conventional oil discoveries made in the United States in the last three decades. Oil Search’s analysis suggests that the Nanushuk field and satellite fields contain approximately 500 million barrels of recoverable oil. Repsol, their joint venture partner, estimates that there are more than 1 billion barrels. For 2019, Oil Search plans to conduct further appraisal drilling to confirm the size of the resource.
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OIL & GAS SPECIAL SECTION | ANIMAL OBSERVATION
Observe and Protect A derrick barge used during pipeline remediation. Observers monitor the exclusion zone for protected species during surveys. AIS
Wildlife observers in the oil and gas industry
A
By Vanessa Orr
s they look to develop Alaska’s resources, oil and gas companies, as well as the state and federal agencies that regulate them, have to strike a delicate balance between meeting the needs of those in the business of fossil fuels and protecting the fish and animals that could be negatively affected by exploration and ongoing operations. For this reason, oil and gas companies employ a number of people—ranging from offshore marine mammal observers to onshore environmental scientists—to study the environment at potential exploration sites, document animal interactions, perform ongoing field studies, and mitigate adverse effects that might be caused by human activity.
32 | January 2019
Offshore Observation “One characteristic shared among all observers is their passion for the marine environment; they take their jobs very seriously,” says Luke Szymanski, vice president of marine scientific services company AIS. “They help the oil and gas companies understand and meet permit requirements while at the same time helping the government agencies meet their mandates for protecting our natural resources. Having unbiased third parties conduct compliance monitoring is essential to assuring the public that mitigation plans are implemented appropriately.” Established in 1988, AIS is primarily engaged in offshore data collection on commercial and recreational fisheries and protected species monitoring during at-sea commercial operations. The company has offices in Alaska, Washington State, New Jersey, and Massachusetts and has provided protected species monitoring on the LNG pipeline project in Cook Inlet and in the Gulf of Mexico following the Deepwater Horizon oil spill.
AIS monitors for protected species during geophysical and geotechnical surveys as well as during offshore construction of wind turbines. In the case of the Deepwater Horizon spill, the company was instrumental in making sure that sensitive marine wildlife such as sea turtles weren’t harmed while BP was burning or skimming the spilled oil. “Our role was to observe for marine wildlife before the oil was ignited to make sure that the area was clear,” says Szymanski. “We were also on hand to document any marine wildlife interactions and to continue to observe the area while it was burning. While we were put in place by the federal government, we were actually paid by BP; in most of the work for the oil and gas industry, we are employed by private companies.” In typical oil and gas operations, the role AIS and companies like it play is to monitor, develop, and carry out mitigation plans. “In the case of an incidental harassment authorization, where the mitigation plan includes an exclusion
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OIL & GAS SPECIAL SECTION | ANIMAL OBSERVATION
“One characteristic shared among all [wildlife] observers is their passion for the marine environment; they take their jobs very seriously.” —Luke Szymanski, Vice President, AIS
zone, we monitor to make sure that animals do not enter that zone, and if they do, we mitigate the issue by having the company shut down their equipment when it is safe to do so,” says Szymanski. He adds that AIS also takes a proactive role in oil spill response and preparedness, participating in regional oil spill contingency planning exercises by providing estimates on staff capacity during periodic drills. “By employing a large cadre of fulltime field personnel experienced in at-sea data collection, we are prepared to respond to emergencies anywhere in the United States,” Szymanski says.
When Are Observers Required? The Marine Mammal Protection Act (MMPA) was designed to prevent marine mammal species and population stocks from declining to an unsustainable point and is implemented by NOAA Fisheries, which is responsible for the protection of whales, dolphins, porpoises, seals, and sea lions; the US Fish and Wildlife Service, which is responsible for the protection of walrus, manatees, sea otters, and polar bears; and the Marine Mammal Commission, which provides independent, science-based oversight of domestic and international policies and actions of federal agencies addressing human impacts on marine mammals and their ecosystems. The act prohibits the “take” (take in the context of MMPA includes when an animal is harassed, fed, hunted, captured, collected, or killed) of marine mammals without a permit; however, with authorization, take of these animals is permitted www.akbizmag.com
AIS monitors an exclusion zone for protected species during a survey. AIS
when it is incidental to otherwise legal activities, such as construction projects, scientific research projects, oil and gas development, and military exercises, provided certain findings are anticipated. When an incidental take authorization is issued under MMPA, NOAA Fisheries requires that a trained, independent, third-party protected species observer be utilized. “Separately, under the Endangered Species Act, the federal government acts as the consulting agency when an action may affect listed species,” explains NOAA Fisheries Senior Biologist Ben Laws. “NOAA and the US Fish and Wildlife Service split the regulatory requirements in these situations.” According to Laws, there are two general purposes behind the observer role: the first is mitigation monitoring, which is real-time observation to determine Alaska Business
when and if mitigation implementation is required, and the second is prescribed monitoring, which is required to understand the level of take that occurs. “For example, in mitigation monitoring, there may be a seismic survey going on with an established exclusion zone,” says Laws. “Observers monitor marine mammals’ distance from the vessel, and if the animals come within that distance, they shut down the sound source.” Prescribed monitoring contributes to the understanding of individual marine mammal’s responses to stressors, such as the noise that takes place during a seismic survey, as well as the effects on marine mammals’ habitat and the effectiveness of mitigation and monitoring. “By increasing our knowledge regarding the direct or indirect effects that certain actions have on marine mammals, it can help us analyze the efficacy of the January 2019 | 33
OIL & GAS SPECIAL SECTION | ANIMAL OBSERVATION An AIS observer. AIS
mitigation efforts as well as help us better protect these animals in the future,” says Laws.
A Challenging Field There are many facets to an observer’s role, not the least of which is the protection of fish stocks and marine mammals. In addition to keeping species safe, these stewards of the environment must also provide important data that can be used to inform current and future development while still balancing the needs of the industries that employ them. Saltwater Inc. is headquartered in Anchorage and has spent the past thirty years collecting data on fisheries in the Pacific and Atlantic Oceans (including the Gulf of Mexico) for government agencies, research organizations, and fishermen. The company also provides objective observers on ships, platforms, and onshore locations for clients (including oil and gas and construction 34 | January 2019
firms), observing for protected species including cetaceans—whales, dolphins, and porpoises—as well as seals, sea lions, walrus, polar bears, sea otters, sea turtles, and, in southern climates, manatees. “We’ve always done a lot of work for the oil and gas industry, but after the BP spill, the field changed dramatically,” explains Mithriel MacKay, director of research and education for Saltwater. “A lot of exploration closed down, and the observer industry took a dive. It is now recovering, and our job as Saltwater marine biologists is to serve as the reporting mechanism, or the eyes and ears of federal agencies, to keep track of compliance and permitting. “Our goal is mitigation; every job we’re on is designed to allow companies to perform their work while following the Marine Mammal Protection Act and Endangered Species Act.” She gives the example of ships towing air cannons, which release huge booms
at regular intervals that reverberate through the ocean substrate to detect oil and gas deposits. “A lot of this sound travels through the water, and in addition to their hearing, marine mammal body cavities respond to sound, which can have an adverse effect,” says MacKay. “We make sure that no animals are in the area at the time that the sound is put into the water.” While asking companies to delay activities—or even to shut them down— might seem to create a contentious environment, MacKay says that their staff’s ability to explain how compliance actually supports the industry is appreciated by their clients. “One of the values of having a highly experienced, educated team is that we can offer suggestions that they may not have thought of,” she says. “For example, we’ve suggested mitigation using a sound bubble during construction of platforms, which is basically a giant hose that surrounds the work area with a bubble
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OIL & GAS SPECIAL SECTION | ANIMAL OBSERVATION
An AIS observer working on the Chelsea River dredging project. AIS
“Having unbiased third parties conduct compliance monitoring is essential to assuring the public that mitigation plans are implemented appropriately.” —Luke Szymanski Vice President AIS
36 | January 2019
curtain. The curtain dampens sound, so it protects the animals by keeping sound closer to the source.” As observers and scientists have become more common on jobs, MacKay says that they are becoming more accepted. “I think that it used to be a less cooperative relationship, but it is definitely changing for the better,” she says. “I’m fifty-six, and when I started companies were not always on board with what we were doing. “It’s like wearing a seatbelt,” she adds. “The younger generation doesn’t think twice about it, because it’s always been that way. To them, we’ve always been there. They grasp that we’re actually there in support of the project—not to shut them down.”
Training and Technology It’s not always easy to spot marine mammals, which is where technology comes into play.
“We use passive acoustic monitoring, using hydrophones to listen for vocalization of target species,” says MacKay, adding that this is often used when observers can’t see the animals or when they’re working overnight. “We also use night-vision or infrared goggles, field guides, and reticle binoculars that have range finder scales built into them so that you can calculate the distance to accurately say how far the animal is from the target source.” All of the information that Saltwater gathers is compiled into a technical report that is shared with the client and NOAA Fisheries. An observer’s qualifications may differ, depending on what the job requires. “[NOAA Fisheries] is in the process of creating standardized requirements, but a lot of very experienced people are likely to be grandfathered in,” says MacKay. “All personnel must be approved by [NOAA
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direct or indirect effects that certain actions have on marine mammals, it can help us analyze the efficacy of the mitigation efforts as well as help us better protect these animals in the future.” —Ben Laws Senior Biologist NOAA Fisheries
Fisheries] for many positions as protected species observers on a particular project, as well as pass a training course to meet standards for oil, gas, and seismic work.” Saltwater’s team of professional biologists log about 30,000 sea days each year and are required to have at least a bachelor’s degree as well as job-specific training. They also participate in Basic Offshore Safety and Induction and Emergency Training, or BOSIET. Saltwater works with the Marine and Coastal
Ecology Research Center, which provides an approved training program, allowing Saltwater biologists to be vetted by experienced faculty before joining the protected species observer team. “AIS observers typically possess a [bachelor of science] or higher in marine biology or a related field and have demonstrated experience working at sea and possess the ability to accurately identify marine species,” says Szymanski. “All observers undergo marine safety training, and in some regions they are
Onshore Exploration While observers and marine biologists are conducting work offshore, oil and gas companies that work onshore also hire scientific firms to ensure that they are working in an environmentally sound manner. ConocoPhillips, for example, hires experts including fish biologists and caribou biologists to study potential exploration sites as well as to provide ongoing scientific studies documenting certain species. “In the National Petroleum ReserveAlaska, the Bureau of Land Management dictates that certain studies need to be performed,” explains Robyn McGhee, senior environmental coordinator at ConocoPhillips. “For example, they require that a lessee conduct three years of yellow-billed loon surveys prior to project approval, as well as three years of fish abundance and distribution surveys. “Other times, a project may require a study in order to support permitting from regulatory agencies, such as when
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OIL & GAS SPECIAL SECTION | ANIMAL OBSERVATION
“By increasing our knowledge regarding the
required to complete the BOSIET training. Additionally we develop a training program for each project that highlights the species of concern in each area.”
OIL & GAS SPECIAL SECTION | ANIMAL OBSERVATION
“One of the values of having a highly experienced, educated team is that we can offer suggestions [to clients] that they may not have thought of. For example, we’ve suggested mitigation using a sound bubble during construction of platforms, which is basically a giant hose that surrounds the work area with a bubble curtain. The curtain dampens sound, so it protects the animals by keeping sound closer to the source.” —Mithriel MacKay Director of Research and Education Saltwater
a company wants to build an ice road on land using freshwater from nearby lakes,” she continues. “To do this, you need to establish what fish are present in that lake for subsequent permitting of water withdrawal.” ConocoPhillips hires independent, third-party scientific firms to perform these studies—often the same firms contracted by state agencies and the federal government.
“We may use these firms prior to starting a project when we want to have good baseline data prior to construction or development or while the project is underway,” McGhee says. “For example, the fish abundance and distribution survey results tell our engineers whether we need to build a bridge or a culvert to allow for fish passage. Subsequent permits oftentimes have a stipulation attached that requires further study
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A L A S K A N AT I V E
ANCSA Improvement Act Course corrections for 2019 By Julie Stricker
L
ast year was a big one for politics. The midterm elections garnered headlines across the nation and statewide, with big turnouts and tight races. For example, the race for House District 1 ended with a vote of 2,663 to 2,662. That one vote gave Republican Bart LeBon—who called the race and subsequent recount “one for the books”—the win and the Republican party control of the state’s House. Republicans also have a majority in the state’s Senate and, following another tight race, Alaska has a Republican governor. The race for governor was no less exciting. Republican Mike Dunleavy won the governor’s seat with about 51 percent of the vote compared to Democrat Mark Begich, who lost by a slim margin, garnering about 45 percent of the vote. But the election is now in the rearview mirror, and the state’s Native corporations are looking toward 2019 for change. Charlene Ostbloom, vice president of communications for Fairbanks-based Doyon, Limited, says the corporation plans to “focus on building a relationship with the new administration and legis-
lators” in Alaska. But those relationships extend beyond Alaska’s governing bodies: because these corporations were formed under ANCSA, changes—or a lack thereof—to that piece of legislation have significant effects on Alaska Native operations.
ANCSA Improvement Act Nationally, several corporations were keeping a close eye on a Senate bill (S.1481—ANCSA Improvement Act of 2017) co-sponsored by Senators Lisa Murkowski and Dan Sullivan that would update certain provisions of ANCSA. “ANCSA was intended to be a living measure that would change as the needs of Alaska Natives changed,” Murkowski said in a statement. “Over the years, Congress has amended the act more than forty times, and this package contains the latest series of common-sense solutions to real issues that have arisen with it. The bills we introduced will help ensure the federal government lives up to its promises to Alaska Natives, and I am eager to work with Senator Sullivan and the rest of my colleagues to advance it.”
“ANCSA was intended to be a living measure that would change as the needs of Alaska Natives changed.” —US Senator Lisa Murkowski
40 | January 2019
ANCSA was written to settle aboriginal land claims and allow construction of the trans-Alaska pipeline. Under the legislation, Alaska Natives received 44 million acres of land and $962 million, creating twelve regional corporations and more than 200 village corporations in the state “to provide a continuing stream of income to help improve the lives of Alaska Natives,” Murkowski states. A 13th corporation was later created for Alaska Natives living outside the state. The 13th Regional Corporation differed from the Alaska-based regional corporations because, while it received $54 million when it was created, it was not granted any land when it was incorporated and was not eligible for the revenue-sharing provisions under ANCSA. A series of failed investments and poor management in the early 2000s doomed the corporation. It last held an annual meeting in 2007. For the next several years, shareholders tried to jump-start the corporation, working on a volunteer basis and lobbying for a land allocation of up to 1.2 million acres. All failed, and the corporation was dissolved in 2014. Despite this, various efforts, such as a Facebook page, have kept shareholders’ hopes up that the corporation would one day come back to life. One of the fourteen specific provisions of the ANCSA Improvement Act would provide a process for the approximately 5,500 shareholders of the 13th to reconstitute the corporation. Other provisions deal with land access and allocations.
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Alaska’s congressional delegation is heavily invested in the legislation. When he unveiled the bills, Sullivan noted that ANCSA has been amended many times. The ANCSA Improvement Act is only the latest iteration, Sullivan says, and “is needed to assist in the resolution of issues specific to many communities in Alaska. This bill is a combination of many small efforts and aims to resolve many local issues, some of which have been around since the initial passage of ANCSA.” The bill includes measures that would: allow Ukpeaġvik Iñupiat Corporation, based in Utqiaġvik, to obtain gravel from under its holdings inside a local gas field; grant Shishmaref an easement across the Bering Land Bridge National Preserve to reach a gravel source at Ear Mountain needed to control erosion;
and study the effect that federal land acquisitions have had on Chugach Alaska Corporation’s ability to develop its subsurface estate in Prince William Sound, as well as options for potential land exchanges. Other provisions address technical and financial issues affecting the corporations.
Interior and North Slope Doyon’s Ostbloom says the corporation is hoping the bill will allow the residents of Canyon Village to receive the land selections they were promised under ANCSA but were denied due to later federal land withdrawals. The villagers selected land on the banks of the Porcupine River in 1976. In 1983, Kian Tr’ee, the village corporation for Canyon Village, was certified. However, villagers were later told their selections were ineligible due to land
Sea. Its land selections would be from the coastal plain of the refuge, which is thought to be petroleum-rich. Arctic Slope Regional Corporation would own the subsurface rights.
Southeast In Southeast Alaska, the picture is more complicated. Five communities—Ketchikan, Wrangell, Petersburg, Tenakee, and Haines—were left out of full participation in ANCSA in 1971, although their Native populations fit the criteria to create urban corporations. Alaska Natives in these communities were allowed to join the Sealaska regional corporation but could not create village or urban corporations. These “landless” communities are seeking to correct that omission. Young introduced legislation in the US House in 2015, HR 2386, or the Unrecognized Southeast Alaska Native
“This bill is a combination of many small efforts and aims to resolve many local issues, some of which have been around since the initial passage of ANCSA.” —US Senator Dan Sullivan
ensure Shee Atiká in Southeast Alaska can maximize shareholder compensation for land sales it has initiated with the federal government; create a mechanism for Sealaska to exchange its subsurface estate at Cube Cove, located within the Admiralty Island National Monument, to the Forest Service in exchange for other lands; provide CIRI with land selection options; allow Kaktovik to select its remaining lands; Canyon Village to select lands at its original location; and Nagamut to select lands closer to residents’ traditional hunting sites or settle their land claims; authorize urban corporations for five Southeast communities: Ketchikan, Wrangell, Petersburg, Tenakee, and Haines; allow Alaska Natives who served in Vietnam to select land allotments; 42 | January 2019
withdrawals for the Rampart Dam project. By the time the dam project was withdrawn, the Alaska National Interest Lands Conservation Act had been passed, which established the Alaska National Wildlife Reservation on the lands Kian Tr’ee had selected. Doyon continued to work to get legislation passed to correct those errors. Two provisions in the ANCSA Improvement Act, as well as House Bill 231, introduced by Representative Don Young, specifically direct the secretary of the Interior to convey 6,400 acres to the corporation. Doyon would receive the subsurface rights. “The original lands selected by Canyon Village in 1976 remain, to this day, of significant cultural and historical relevance,” Doyon says. “They are important to the original founders and to the descendants, who now with this legislation have a hope for the future of their village.” On the North Slope, the village of Kaktovik sits on an island sandwiched between the 1002 area in the Arctic National Wildlife Refuge and the Beaufort
Communities Recognition and Compensation Act. The ANCSA Improvement Act has a similar goal. It would award each community 23,040 acres (one township), says Jaeleen Kookesh, Sealaska vice president and general counsel. Sealaska is based in Juneau and is the regional corporation for the Southeast Alaska region. “That’s just over 100,000 additional acres that would go into private Native ownership for economic development, cultural purposes, and just to ensure some Native land goes back into Native hands,” she says. In Southeast land selections are further complicated by extensive federal land holdings in the Tongass National Forest, which includes 17 million of the 22 million acres in the region. Glacier Bay National Park, Mount St. Elias National Park, Misty Fiords National Monument, and Admiralty Island National Monument are all also located in the region. Sealaska owns about 1.5 percent of the region, Kookesh says. Land selections currently
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are not allowed within those federal holdings. “It’s very unfortunate,” she says. “Native people from Southeast should be able to select their allotment from Southeast, but so far some of the conservation interests and the interests that want federal land to stay in federal ownership have been successful in ensuring that no selections come out of the Tongass. But we’ll continue to push on that issue and ensure that our Southeast veterans are treated fairly.” About 4,000 Alaska Natives lived in the five “landless” communities when ANCSA was passed. They, or their heirs, would directly benefit if the landless legislation is passed, but the effects would be felt throughout the region, Kookesh says. “Sealaska, as the regional corporation, would own the subsurface under these new corporations, so it would benefit all of our 22,000 shareholders,” Kookesh says. The “landless” portion of the bill is one of the “oldest issues out there,” Kookesh says, noting that the five Southeast communities have been fighting for inclusion in ANCSA since 1971.
However, conservation groups have been highly critical of the effort to create the five urban corporations in Southeast. Robert Dewey, vice president of government relations and external affairs for the Defenders of Wildlife, called the act a “massive public lands giveaway.” One provision that is of particular interest to Sealaska is a land exchange on Admiralty Island. Shee Atiká, the village corporation for Sitka, owned land at Cube Cove within the Admiralty Island National Monument, land it sold to the federal government in June 2018. Since Sealaska owns the subsurface, the sale creates a split estate, Kookesh says. “The federal government owns the surface estate and we own the subsurface underneath the federal government,” she says. “We and the federal government don’t like those situations. In the past we have had land exchanges or efforts to deal with split estates so that we each own the full fee title of the land.” There’s an additional benefit to the land exchange: it would allow the Admiralty Island National Monument
to consolidate its holdings, which would help efforts to manage the wilderness in the monument. Another provision that affects Alaska Natives statewide is the Alaska Native Veteran Allotment Equity Act. It would allow veterans who served in Vietnam but missed the original ANCSA deadline to apply for 160-acre Native allotments. A 1998 act sought to clarify which lands were eligible for selection, but its complexity hindered the results. Only 432 Alaska Natives received land, 13 percent of those who served during the war. Kookesh notes that Sullivan, also a veteran, has been helpful with the veterans’ allotment issue. Despite their efforts, passage of the bill in its entirety is unlikely before this Congress ends, Kookesh says. The senators strategically wrote the bill so that each individual measure could be considered separately, but as federal land ownership issues in Southeast Alaska are controversial, the bills will likely have to be refiled when the new Congress is in session. The Alaska Native corporations will be keeping a close watch.
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Alaska Business
January 2019 | 43
The Electronic Logging Device Mandate
T R A N S P O R TAT I O N
44 | January 2019
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What it means for Alaskan truckers By Sam Friedman
I
t’s been looming on the horizon for years, and now it’s here: the federal mandate for long-haul truck drivers to use equipment called Electronic
Logging Devices (ELD) to track the number of hours they work. The mandate comes from a major federal transportation funding bill passed in 2012. Its intent was to reduce truck accidents by holding drivers to restrictions on the number of hours they drive, which in Alaska is a maximum of fifteen driving hours per day and twenty working hours. The new rule has been described as both a major cultural transAn ELD in the cab of a truck at the Carlile Transportation Services service shop in Fairbanks. © Sam Friedman | Alaska Business
formation in the trucking industry and as a relatively minor change in record keeping. It’s a big transformation because many truck drivers pride themselves on their independence. Truck drivers in the 49th State have to be especially independent because of the size and remoteness of the state, and truck drivers here have special driving-hour rules that allow them to drive longer days than truckers in the rest of the country. With the mandate, drivers are always being observed and can have their decisions to rest or continue driving second-guessed because they must carry a device that connects to the truck engine and determines if the truck is in motion. But the mandate can also be seen as a small adjustment because it doesn’t change the underlying rules behind the driving hours, which remain the same as paper logbook days. As the mandate has gone from concept to law, driver attitudes in Alaska have generally moved from suspicion to acceptance and even to appreciation for the new hour-logging machines, says Aves Thompson, executive director of the Alaska Trucking Association, an organization that’s always supported the new ELD rules. “Most of the drivers initially were skeptical, but now after using them for a while, you can’t take them away from them if you wanted to. They’ve become accustomed to it and they like it,” Thompson says. A big reason the devices have become popular with drivers is that the automatic system protects them from having their
A computer display shows the location of the Carlile Transportation Services fleet. The location information comes from each truck’s Electronic Logging Device. © Sam Friedman | Alaska Business
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Alaska Business
January 2019 | 45
safety records dinged for paperwork errors. In the paper log days, half the violations were this type of “form and manner” violations, Thompson says. “That could mean, instead of putting ‘Anchorage, Alaska,’ you only wrote ‘Anchorage.’ That was a violation,” Thompson says. “With the electronic log books, half the Hours of Service violations are gone.”
Enforcement The federal deadline to stop using paper logs and start using ELDs or an AOBRD, an older kind of electronic recording device, was more than a year ago in December 2017. But in practice Alaskan truck drivers haven’t yet faced tickets for failing to have the devices, says Thompson. That’s because although it’s a federal rule, it’s enforced at the state level by the Commercial Vehicle Enforcement division at the state Department of Transportation. As of this fall, the state hadn’t yet adopted the federal regulation, but it was expected to happen by this month. “Coming soon, to an inspector near you,” Thompson says. The next deadline facing the industry is December 16, 2019, when the federal government’s ELD rules will further tighten, requiring the grandfathered-in AOBRD users to also switch to ELDs. ELD rules apply to many, but not all, commercial trucks. One of the main exceptions is for short-haul drivers who operate within a 100-mile radius (a 150 mile-radius for non-CDL drivers). These drivers did not previously have to keep paper hour logs and therefore don’t have to comply with new ELD rules.
What Is an ELD? From the outside of a tractor trailer parked at the Carlile Transportation Systems maintenance shop in Fairbanks, the only sign that it is equipped with an ELD are the antennae mounted on the back of the cab and a sticker from device-maker PeopleNet on the passenger side door. “Driver using electronic logs,” the sticker reads. One of the antennae is for satellite communication, which allows the ELD to transmit data even in places where there is no cell phone reception—such as along the Dalton Highway. 46 | January 2019
“Most of the drivers initially were skeptical, but now after using them for a while, you can’t take them away from them if you wanted to.” —Aves Thompson Executive Director Alaska Trucking Association
Inside the truck’s cab, a small touchscreen wired into the cab’s dashboard displays and transmits information about the truck’s speed, location, and the number of hours the driver has been operating. PeopleNet, the device manufacturer, compiles the information from the fleet’s ELDs on a web application map. The map displays truck silhouettes at the location of each truck in the fleet. On a Monday morning this winter, the map showed fifty-six trucks in Anchorage, forty-two in Fairbanks, four southbound on the Dalton Highway, and others on the Kenai Peninsula and the Alaska and Richardson Highways. Based in Anchorage, and part of the Washington-based Saltchuk family of companies, Carlile carries about one-third of Alaska’s intrastate freight with its fleet of 175 trucks, says Jeremy Miller, Carlile’s vice president of trucking operations. Carlile hasn’t had to do anything recently to get ready for ELD enforcement because the company has been preparing for the new rule for years. It completed installing ELDs in its fleet in 2015. “We knew that at some point or fashion the regulation was going to be put in effect, and with the size of our fleet, we did not want to wait until the last minute,” Miller says. “We wanted to be on the front end of getting it done.” There was some “fear of change” when Carlile introduced the devices, but
A Carlile mechanic holds up a newer-model ELD made by PeopleNet. The company is in the process of updating its ELDs with the newer model. © Sam Friedman | Alaska Business
ELDs are now popular with the drivers. The drivers complain if a device goes down and they have to revert to using paper logs, Miller says. At Kenai-based trucking business Weaver Brothers, ELDs were installed more recently than at Carlile: June 2018. The company didn’t switch sooner because Samsara, their ELD provider, didn’t yet have software made for Alaska’s unique truck driver hour rules, says operations manager Nathan Clingman. Weaver Brothers operates a fleet of 125 trucks. Most of the company’s work is short haul, but it nonetheless had the devices installed across the fleet. Weaver Brothers trucks don’t transmit data by
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satellite, but this feature isn’t as important because the company seldom makes trips up the Dalton Highway. When their trucks lack a cell phone signal, the ELDs continue recording and transmit the data when they reacquire cell phone reception. When the ELDs were installed a few months ago, most younger drivers embraced the technology, but some older drivers were skeptical, says Clingman. In the following months, the older drivers started to come around. “We’ve come a long ways. I was just talking to a driver—he’s an older gentleman—and he said ‘I wouldn’t want to go back to paper. It’s easy; I don’t have www.akbizmag.com
“We knew that at some point or fashion the regulation was going to be put in effect, and with the size of our fleet, we did not want to wait until the last minute. We wanted to be on the front end of getting it done.” —Jeremy Miller Vice President of Trucking Operations Carlile
Alaska Business
January 2019 | 47
A sticker on the door of a truck at the Carlile Transportation Services service shop in Fairbanks shows that the truck is equipped with ELD. © Sam Friedman | Alaska Business
to worry about it. It does the work for me,’” Clingman recalls.
It’s Never All Easy In other parts of the country ELD rules are already being enforced. To study how it’s affecting the market, Ohio-based
shipping company Zipline Logistics conducted two surveys about the ELD mandate with 150 trucking companies. In the most recent survey, titled “ELD Mandate Impacts,” which took place in October, 60 percent of fleets reported that the ELD mandate has improved safety.
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Another earlier survey titled “Electronic Logging Device Survey 2018” told a different story. The Missouri-based Owner-Operator Independent Drivers Association, which conducted the survey, has consistently opposed the ELD mandate and has sued the federal government
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“We’ve come a long ways. I was just talking to a driver—he’s an older gentleman—and he said ‘I wouldn’t want to go back to paper.’” —Nathan Clingman Operations Manager Weaver Brothers
to stop it. The owner-operated trucking group reported it took an online survey of 2,000 drivers in January. Asked how the ELD rules have affected fatigue, more than 70 percent of drivers reported it increased fatigued driving and less than 5 percent reported it caused decreased fatigue. In addition to the safety issue, the Zipline Logistics survey asked trucking companies about how ELDs have affected shipping rates. About half the companies blamed increasing shipping rates on the mandate (a smaller percentage than in an earlier survey in March), but the companies identified a driver shortage as the biggest factor in increasing shipping rates, not the ELD mandate. The companies in the Zipline survey also reported that the ELD mandate is transforming the way they choose customers. With the electronic shift clock automatically ticking once drivers begin their day, trucking companies reported getting more impatient when serving clients that are slow to load or unload cargo. Some 77 percent of the companies reported becoming more selective in the companies they are willing to serve. In Alaska, it’s too soon to know how the ELD mandate will affect the industry. The mandate was created to improve safety, but if it also forces companies to get truckers on their way more efficiently, that’s a bonus consequence, says Thompson. “This has been a problem for years,” he says. “This could be a good thing. It will increase communication between drivers and shippers.” www.akbizmag.com
WE ARE INVESTING IN THE FUTURE. LIVE UNITED “Education is the essential building block for a healthy economy and prosperous future. Helping families thrive is the first step to insuring that students succeed in school and in life. We are proud to partner with United Way of Anchorage in the fight for the health, education and financial stability of every person in our community.” Jason Metrokin, President & CEO Bristol Bay Native Corporation Aleesha Towns-Bain, Executive Director BBNC Education Foundation Alaska Business
United Way of Anchorage
January 2019 | 49
MINING
Mines on the Horizon
Three mining prospects move closer to potential operation By Julie Stricker
A
laska is home to world-class mineral resources, but developing them is a process that can take years, if not decades. And while there’s a light shining at the end of the tunnel for three major development prospects, there’s still a long, winding road ahead. However, with the right mine plan, investment, and timing, those
50 | January 2019
mines could dramatically reshape the economy in parts of rural Alaska for decades. “Mining continues to have a bright future in Alaska, with responsible mining and development occurring all around our great state,” says Marleanna Hall, executive director of the Resource Development Council for Alaska.
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January 2019 | 51
“This election clearly demonstrated that most Alaskans support a fair process which allows Pebble and other development projects to participate in the rigorous federal and state permitting process— while electing a governor who believes the same.” —Tom Collier President and CEO, Pebble Limited Partnership
The three world-class prospects are the Donlin Gold prospect in Southwest Alaska, the Upper Kobuk Mineral Project in Northwest Alaska, and Pebble in the Bristol Bay region of the state. All three are near or in the permitting phase, a multiyear process in which various state and federal permits must be approved before construction and mining can begin.
Donlin Gold For each, however, the biggest hurdle is a lack of infrastructure. There are no roads, ports, or utilities within hundreds of miles of the potential mines. In fact, Barrick Gold and NovaGold Resources, which own Donlin Gold, say they haven’t reached a decision on whether to build the mine, despite receiving major permits in August 2018, including a joint Bureau of Land Management and US Army Corps of Engineers Federal Record of Decision. “The issuance of the Donlin Gold ROD and key project permits is a significant milestone for both partners,” says Rob Krcmarov, executive vice president of exploration and growth for Barrick. “Now, with key permits in hand, we can concentrate on further exploring ways of reducing initial capital and unlocking the value of
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this asset for all of our partners, in keeping with our deep commitment to community engagement and environmental stewardship.” Donlin is one of the richest undeveloped gold prospects in the world with 39 million ounces of gold grading to 2.24 grams per tonne, according to Barrick. It is expected to produce 1.1 million ounces of gold annually over its twentyseven year lifespan if and when production ramps up. Already, Donlin Gold has spent twenty years conducting environmental studies and developing engineering plans for the site. The permit announcement was a welcome step forward, says Hall. “As with all projects in Alaska, [Resource Development Council] advocates for a fair and timely, science-based permitting process,” she says. “We view two agencies working together as a move in the right direction, as Alaska is a resource development state.” Mining is a major economic driver for Alaska, generating about $2.5 billion in gross revenue in 2016. A mine, such as the Red Dog lead and zinc mine in Northwest Alaska, can dramatically reshape the economy of the region. Red Dog is operated by Teck Resources, which works closely with Kotzebuebased NANA Regional Corporation, the landowner. It employs about 600 workers, many of whom are NANA shareholders, and has contributed millions of dollars to the local economy in the form of wages, purchases, and payments in lieu of taxes to the Northwest Alaska Borough. That kind of partnership with Native corporations is a blueprint for similar projects around the world, including Donlin. Donlin is working in partnership with Calista Corporation and The Kuskokwim Corporation on its mine plan and employment opportunities. After residents expressed concern at the amount of diesel fuel that would need to be barged up the Kuskokwim River to operate an onsite 220-megawatt power plant at the mine, Donlin decided to build a 312mile pipeline to connect to natural gas in Cook Inlet to power the facility. When it turned out that part of that pipeline would affect the famed Iditarod National Historic Trail, Donlin re-routed part of the pipeline around the trail to mitigate its impacts. Donlin must still secure key state permits, such as one for a tailings dam and for
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water rights. It is also exploring partnerships with third parties for the ownership of the natural gas pipeline and power plant, which could cost $1 billion of the estimated $6 billion capital costs required for mine construction. Those costs include port facilities in Bethel—as well as on Crooked Creek near the mine site—a water treatment plant, housing, and an airstrip. According to NovaGold President and CEO Gregory Lang, the future is bright for Donlin. “We now have a unique project permitted for development in Alaska, one of the most business-friendly jurisdictions in the world, which welcomes socially and environmentally responsible mine development,” Lang says. “With its significant size, excellent grade, and outstanding exploration potential, we believe that Donlin Gold has the potential to become a pacesetter in the precious metals mining industry for decades to come.”
Pebble Mine While Donlin Gold has kept a relatively low profile in the news, another major prospect has generated headlines since it was first announced. The Pebble prospect is a
“With its significant size, excellent grade, and outstanding exploration potential, we believe that Donlin Gold has the potential to become a pacesetter in the precious metals mining industry for decades to come.” —Gregory Lang President and CEO NovaGold
copper, gold, and molybdenum deposit about 200 air miles west of Anchorage near Lake Iliamna. It is located near the headwaters of rivers that flow into Bristol Bay, one of the richest salmon fisheries in the world. Its location stalled potential development, but with certain restrictions lifted under the Trump Administration, the project is going forward, according to Tom Collier, president and CEO of Pebble Limited Partnership. He says Alaskans’
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Alaska Business
January 2019 | 53
defeat of Ballot Measure 1, which would have imposed restrictions on development, was a clear message of support. “For a long time, we have been told by Pebble opponents that everyone in Alaska is opposed to the project,” Collier says. “This election clearly demonstrated that most Alaskans support a fair process which allows Pebble and other development projects to participate in the rigorous federal and state permitting process—while electing a governor who believes the same.” The Pebble deposit includes an estimated 57 billion pounds of copper, 71 million ounces of gold, 3.4 billion pounds of molybdenum, and 345 million ounces of silver in the measured and indicated categories, with more inferred. Pebble’s permit application was accepted by the US Army Corps of Engineers, which started the project’s permitting process under the National Environmental Policy Act. The prospect has been radically retooled from earlier design proposals in response to criticism of its potential impact on Bristol Bay salmon populations. Under the new plans, the mine’s footprint has been reduced and additional environmental safeguards added.
54 | January 2019
“It’s full steam ahead on permitting the [Ambler Mining District Industrial Access Road].” —Rick Van Nieuwenhuyse President and CEO Trilogy Metals
“We are committed to designing a project that is responsive to Alaskan input and needs,” according to Pebble Partnership. “As such, we expect to enter permitting with a project that has a demonstrably smaller footprint than previously contemplated.” Pebble Partnership, wholly owned by Northern Dynasty, struck an agreement with landowner Alaska Peninsula Corporation in October to build a toll road to the Pebble mine site. The agreement also includes a profit-sharing
arrangement for the Alaska Peninsula Corporation shareholders. Pebble is expected to generate up to 1,000 jobs for Alaskans with an operating life of twenty years. Up to 75 million tons of material would be mined annually with 660,000 tons of copper/gold concentrate and 16,500 tons of molybdenum concentrate produced. The open-pit mine would be powered by a natural gas-fired power plant on site, with a pipeline to facilities at Anchor Point.
UKMP Farther north, Upper Kobuk Mineral Project (UKMP) in the Ambler Mining District in Northwest Alaska is looking promising, says Trilogy Metals President and CEO Rick Van Nieuwenhuyse. UKMP includes two major sites: the Arctic project and the Bornite project, both of which have some of the richest copper resources in the world, Van Nieuwenhuyse says. “We keep advancing,” he says. “At Arctic we are working on the feasibility study.” During the 2018 field season, Trilogy completed twenty-five drill holes and a number of test pits to gather geotechnical information for the mill, tailings, and development rock disposal sites. It also
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completed a number of drill holes to gather hydrological information, which, in combination with meteorological and stream run-off data, will be used to develop a detailed hydrology model for the basin, Van Nieuwenhuyse says. “In 2019, we will gather still more geotechnical, hydrological, and meteorological data to complete the feasibility study and ready the project for permitting,” he says. “We expect the US Army Corp of Engineers will be the lead federal agency as the only federal permit we need is a Wetlands Dredge and Fill 404 permit. All of the other permits will be issued by the State of Alaska.” State permits include air quality, water discharge, dam operation, and mine operation, he says. “We look forward to working with the state and federal agencies as we advance toward permitting the Arctic project,” he says. “Meanwhile, at Bornite, we keep exploring to see how big this deposit gets,” Van Nieuwenhuyse says. “During 2017 and 2018 we drilled about 19,000 meters [about 62,000 feet] in twenty-five holes. Once we get all the assays for this year’s drill program, we will update the resource at Bornite. We have already outlined 6 billion pounds of copper and 77 million pounds of cobalt—both metals are essential elements to build electric vehicles, battery storage, and to produce alternative energy [wind and solar in particular].” Trilogy spent about $17 million in 2018 on UKMP, about $11 million at Bornite and $6 million at Arctic. It expects a similar level of expenditure in 2019. So far, Trilogy has spent more than $120 million at the site. With resources that rich, Trilogy still faces a major hurdle: getting it to market. There are no roads anywhere near the Ambler region. A 221-mile road from the Dalton Highway west to the region, the Ambler Mining District Industrial Access Road, has seen slow progress. But with the election over and a new governor in office, Van Nieuwenhuyse expects that to change. “It’s full steam ahead on permitting the road,” he says. According to the Bureau of Land Management’s website, the draft EIS for the Ambler Access Road is scheduled to be complete in March. After a period of public comment, the final EIS is expected to be complete by the end of this year, with the record of decision shortly thereafter. www.akbizmag.com
Van Nieuwenhuyse has been involved in the Alaska mining industry for decades and was one of the principals in the exploration at Donlin Gold. He says the Alaska mining industry is in great shape. “Our five major mines are going strong with expansion projects underway at most operations,” he says. “We have a lot of exploration work going on statewide. The Australians have arrived in a big way—first with our partnership arrangement with Perth-based South32 and now this year Northern Star purchased the Pogo Mine from Sumitomo.
In addition, there are a half a dozen new Australian junior companies conducting exploration including PolarX, White Rock, and Riversdale. Meanwhile, Constantine has had another very successful year at the Palmer project near Haines. “So yeah, lots going on. Alaskans spoke strongly in support of resource development with a crushing defeat of the Ballot Initiative 1 and we have a governor who knows and also supports mining. So I think the stars are aligned to develop more mines in this great state. Let’s get busy!”
OUR HOME IS HERE. That’s why we support the Donlin Gold Project. Strict environmental regulations, good-paying jobs and cheaper energy brought by the project will allow us to grow healthy communities. Let’s live, work and thrive in our region. 907.275.2800 • #LiveThriveYK
Alaska Business
January 2019 | 55
JUNIOR ACHIEVEMENT SPECIAL SECTION | INTRODUCTION
The Alaska Business Hall of Fame 2019 F
Junior Achievement of Alaska inducts four new laureates
lora Teo, Junior Achievement of Alaska’s president, and Tom Redmond, Junior Achievement of Alaska board chair and director of human resources for SolstenXP, are pleased to extend an invitation to members of the Alaska business community to join the youth-education advocacy group for its 32nd Annual Alaska Business Hall of Fame, an event that celebrates the past, present, and future of business in Alaska. Through the Alaska Business Hall of Fame, Junior Achievement has been honoring outstanding individual leaders of Alaska business since 1987; the dinner and awards ceremony is one of the state’s most prestigious events, inducting laureates every January. Laureates are selected based on their direct impact in furthering the success of Alaska business, support for Junior Achievement’s mission and programs, and demonstrated commitment to the Alaska economy. In addition to recognizing Alaska’s business leaders and their contributions to the future, the Alaska Business Hall of Fame raises funds for Junior Achievement, which is dedicated to providing economic and entrepreneurial education for our youth. In Alaska, Junior Achievement has served students grades K-12 from Utqiaġvik to Ketchikan and all places in between since 1973. Today, Junior Achievement of Alaska provides educational opportunities to nearly 14,500 students annually in fifty-five communities. To meet the needs of the state, and as this vital program continues to grow, Junior Achievement partners the business community with educators to prepare young people for a global economy. Contributions to Junior Achievement of Alaska allow the organization to both continue this needed education as well as reach out to even more young Alaskans. Junior Achievement of Alaska is privileged to invite you to attend the 2019 Alaska Business Hall of Fame, presented by Alaska Business, which this year is honored to induct John Binkley, Alaska Cruise Association; Rick Morrison, Morrison Auto Group; Richard Strutz, Wells Fargo; and Connie Yoshimura, DWELL Realty—congratulations to all! General Mark Hamilton will again emcee the event, accompanied by several JA students. Learn more about the program and this year’s laureates along with past laureates, government officials, leaders of the business community, and other Junior Achievement supporters; in total, about 600 people passionate about Alaska’s future attend annually. For table reservations, or to inquire about the limited remaining sponsorship opportunities, call Junior Achievement of Alaska at 344-0101 or visit Alaska.ja.org. Tables of ten are $1,500, or individual reservations can be made for $150 per ticket. Junior Achievement of Alaska is a registered 501(c)(3), and the majority of the purchase may be tax deductible. The Alaska Business Hall of Fame will be held on Thursday, January 24, 2019, at the Dena’ina Civic and Convention Center. Doors open at 5:30 for a no-host reception, with the dinner and awards ceremony beginning at 6:30 p.m. The board, staff, and students of Junior Achievement of Alaska wish you the very best in 2019 and look forward to seeing you on January 24! 56 | January 2019
Flora Teo Junior Achievement
Tom Redmond Junior Achievement
Alaska Business www.akbizmag.com
JUNIOR ACHIEVEMENT SPECIAL SECTION | HISTORY & BOARD OF DIRECTORS
Junior Achievement Turns 100 100 Years. 100% Ready.
J
unior Achievement was founded in 1919 by Theodore Vail, president of American Telephone & Telegraph; Horace Moses, president of Strathmore Paper Co.; and Senator Murray Crane of Massachusetts. Together they discussed a problem facing all of their companies— they were constantly retraining employees on skills they felt they should already know. Moses was inspired by the 4H Club in his region—a hands-on experience for kids to learn about farm life straight from the farmers themselves. He wanted to start a similar program in which city kids would learn the essentials of business from those who worked in offices and factories throughout the city. Moses started Junior Achievement as an after-school program where kids met at a local site and started a company from scratch (similar to the “Company Program” today). In 1975, the organization entered the classroom with the introduction of Project Business for the middle grades. Over the last thirty-nine years, Junior Achievement has expanded its activities and broadened its scope to include inschool and after-school students. Through
Horace Moses, 1919 Junior Achievement
the years Junior Achievement has made several changes and today is the largest economic education program in the United States. Junior Achievement programs reach students from kindergarten through twelfth grade during school hours. Volunteers from local communities serve as role models and visit a
classroom up to eight times to present Junior Achievement programs. Junior Achievement provides training for all new volunteers and curriculum to teachers and schools at no cost to them. Locally, Junior Achievement of Alaska has been helping students better understand business and economics for forty-six years. Based in Anchorage with a staff of three, Junior Achievement of Alaska serves more than 14,500 students in fifty-five communities around the state. Many past Junior Achievement students have gone on to become successful professionals and continue to serve as classroom volunteers to help raise the next generation of business leaders.
Junior Achievement of Alaska Statewide Board of Directors 2018-2019
`` Chip Abolafia, Anchorage School District `` Logan Birch, Member, Alaska Growth Capital `` Ryan Cropper, Member, Able Body Shop `` Reed Christensen, Vice Chair, Dowland-Bach Corporation `` Travis Frisk, Member, Wells Fargo `` Ken Hanley, Member, First National Bank Alaska `` Heath Hilyard, Member, Office of Representative Cathy Tilton 58 | January 2019
`` Mark John, Member, Petro Star `` Krag Johnsen, Member, GCI `` Kristen Lewis, Secretary, Alaska National Insurance Co. `` Kurt Martens, Member, Leonard & Martens Investments `` Mark Mathis, Member, Arctic IT `` Bryan Powell, Member, KeyBank `` Erin Sage, Member, ExxonMobil `` Tom Redmond, Chair, SolstenXP `` John Sims, Member, Enstar Natural Gas `` Jana Smith, Member, Parker Smith & Feek
`` Mark Smith, Member, Retired USAF `` Beth Stuart, Member, KPMG `` Greg Stubbs, Member, Sullivan Arena `` Lynda Tarbath, Treasurer, GCI `` Shaun Tygart, Member `` Kevin Van Nortwick, Member, BDO USA `` Derrell Webb, Member, NANA Management Services `` Rick Whitbeck, Member, Stand for Alaska `` Derrick Yi, Member, ConocoPhillips Alaska
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JUNIOR ACHIEVEMENT SPECIAL SECTION | GUEST AUTHORS
Junior Achievement Interviews Alaska Business By Ashley Jean Smith, Katelyn Smith, and Megan Smith
Ashley Jean Smith © Matt Waliszek
60 | January 2019
Alaska Business www.akbizmag.com
Writers
JUNIOR ACHIEVEMENT SPECIAL SECTION | GUEST AUTHORS
O
n October 25, 2018, we visited the offices of Alaska Business. We were curious about how a magazine operates and what we would need to do to prepare ourselves for a future in journalism in Alaska. Our past experience in the Junior Achievement CEO Academy gave us first-hand knowledge and experience with business, and we wanted to know how what we learned is put into practice on a daily basis at a magazine. Our interview with Alaska Business was an eye-opening experience because we learned that it takes many amazing, talented people to run a great magazine.
Tasha Anderson is a writer for Alaska Business. We asked her to talk to us about some of the hardest stories she had to write. She told us that the toughest parts can be getting the information you need from people when they can’t give it to you, and that it is tough when writing about a subject that is emotional. Tasha told us that most of the stories that she writes about are based on companies and industries here in Alaska, and she gets to meet with all kinds of interesting people. We thought this job would be fun because you get to meet with interesting people and tell their stories. Briley Loncar
Introductions
The Future
During our visit we met with many different employees of Alaska Business. Before this experience, we did not understand the role of editor, creative director, customer service, sales, social media, or general manager. During our visit, each of these professionals took time to meet with us and discuss the different aspects of their jobs.
We asked Alaska Business Managing Editor Kathryn Mackenzie to talk to us about the future of the magazine and how they were adapting their business model to reflect current technology. She explained that their staff works hard to make sure that the magazine is always changing and renewing to connect with their readers. For instance, we learned that Alaska Business has rebranded. They have recently redesigned their website and the digital edition to make content even easier for readers to access and to include upgraded technology, including video ads. They utilize their online presence to keep their readers and followers up-to-date with current information and news affecting their businesses and industry. Alaska Business magazines are sold in stores and are also available directly to business professionals.
Editor Kathryn Mackenzie is the managing editor of Alaska Business. We learned from her that stories are planned a year in advance. Editors need to find stories that are interesting, appropriate, and current. Finding the right ideas can be tough, but there will always be something to say. We learned that you have to be able to work with deadlines, be a good communicator, and look for potential in both people and stories. We learned that you always need to be ready to change things up because everything is always in flux.
© Matt Waliszek
Katelyn Smith © Matt Waliszek
Summary of Our Experience The Junior Achievement interview experience gave us the opportunity to work with real-life professionals and talk to them about their jobs and the steps they took to get them where they are today. We realized that our experience in the JA CEO Academy helped prepare us for this experience by giving us a background in business. Our experience at Alaska Business showed us that working at a magazine is often fast-paced, people-oriented, exciting, and a lot of fun—especially with a boss like Jason [Editor’s Note: So, so true].
Megan Smith © Matt Waliszek
www.akbizmag.com
Alaska Business
January 2019 | 61
JUNIOR ACHIEVEMENT SPECIAL SECTION | BINKLEY
2019 Junior Achievement Hall of Fame Laureate John Binkley By Tasha Anderson
J
ohn Binkley has had long and varied involvement in different businesses in the Last Frontier. Of all his accomplishments, he says he’s most proud of the tug and barge business, Northwest Navigation, that he started in 1977 and operated with his wife until the late-1980s, when he sold it to Crowley Maritime. “We started it together as a young married couple on the lower Yukon River, in a part of Alaska where we weren’t known and our family wasn’t known. It was a transformational experience to get away from what was comfortable for us and start something new,” Binkley says. Binkley saw examples and learned lessons about business at home from a young age. And his family has a rich history in Alaska: his grandparents moved to Alaska during the gold rush to operate riverboats, and the family has been making positive contributions to the business community since. “I grew up in a small family business and learned a lot of these values as a child growing up. [We had] conversations around the kitchen table: talking about business, talking about civic affairs, what was going on in the community, how the banking system works, getting a loan as a family, building boats, operating our business. And our parents were very inclusive for my siblings and I growing up, so we were immersed in business,” he says. He and his wife have continued the tradition. “My wife and I have not only been married for forty-one years, we’ve been business partners for forty-one years,” Binkley explains. They have passed on the family passion for business and entrepreneurship to their own four children, who are now active in the Alaska community and, among other ventures, own the Anchorage Daily News. Binkley believes that free enterprise is the foundation of how this state and country thrive. “It’s important that young people understand how our economic system works. Hopefully that inspires them to participate and compete in our global economy.” To that end, he avidly supports Junior Achievement of Alaska’s 62 | January 2019
mission to educate youth about business and free enterprise so they can enter the workforce prepared for success. But the onus isn’t just on Junior Achievement or similar organizations; it takes a community to build a community, and business leaders and owners have a responsibility to provide opportunities to Alaska’s young people. Binkley takes responsibility to one’s community seriously, something that factored heavily in his decision to dedicate many years of his life to public service. While living in Bethel, he became involved in city politics and was elected to the city council before serving in the State House of Representatives and then the State Senate. “It was an incredible experience to get to know and understand rural Alaska, which is such an important part of our state… It was such a privilege, so humbling, to be able to serve in the legislature and represent [my constituents’] interests. It was one of the highlights of my life and something that I really enjoyed, and it inspired me to run for governor in 2006.” Although his bid for governor was ultimately unsuccessful, Binkley reflects on the experience fondly, in part because of how it led to opportunities for his family. When Binkley decided to run for governor, he stepped down from the family business. “Our oldest son took over, and he made it clear to me that if I was not successful in my run for governor, if I lost, I shouldn’t plan on coming back. So, when I did lose, I had to look for another job,” Binkley laughs. Shortly after taking over the business, Binkley’s son packed up Binkley’s office and delivered it to his house in boxes. “It was a way for him to graphically communicate to the employees that there had been a generational change and it was a permanent change. I couldn’t have been prouder of him. It was a sign to me that he had the leadership skills and qualities to be able to take over the family business.” Currently all three of Binkley’s sons work in the family business and his daughter is a petroleum engineer. “We are so proud of all our kids and their spouses; they are raising our nine
John Binkley CLIA Alaska
wonderful grandchildren and contributing to their communities and our state.” After the 2006 election, Binkley explored a new path and started the Alaska Cruise Association, which he has helmed for twelve years, representing the cruise lines that operate in Alaska and fortifying the industry. “We’ve taken it from a low of about 850,000 guests annually coming to Alaska on cruise ships to next year projecting over 1.3 million cruise guests,” Binkley says. He’s passionate about the tourism industry and its significant economic benefits, bringing billions of dollars to the state and providing more than 40,000 jobs. “Alaska is such a special place and the people are so great. Visitors are in awe of the beauty, wildlife, nature, and the cultures that we have in Alaska, but most importantly the people of Alaska are what really wow our visitors.” While many of Binkley’s endeavors will have positive, long-lasting impacts on the state, to him legacy is about those he loves. “Really it’s about family: the values, the ethics you’re able to instill in your kids that then filter down to your grandkids and future generations.”
Alaska Business www.akbizmag.com
Laureate Richard Strutz
R
By Arie Henry
ichard Strutz has always valued people over dollars. That mindset helped him work his way up through the ranks of the National Bank of Alaska (NBA), from teller to president. Another value that served him well during his career has been his continued optimism, which aided him as he led the bank through multiple situations fraught with uncertainty, including Alaska’s economic recession in the late 1980s, an eventual merger between NBA and Wells Fargo in 2001, and, as the Well Fargo Alaska Regional President, the recession of the late 2000s. His childhood and family ties served as the foundation for his principles—the Strutz family has been forging community ties in Alaska for more than one hundred years. Alaska Business: How did you get your start? Richard Strutz: My dad inspired me to apply for a job at the bank. I was working for the State of Alaska. As an eighteenyear-old kid, I was pretty happy; it was a great kid job. But it was a temporary job. You could only work for them six months, then you had to leave. So I needed a job. My dad said, “You know, I know these guys at National Bank of Alaska. I grew up with them. If they can succeed at the bank, you’ll do really well. You’ll be president!” So I went down and applied. My cousin worked for another bank and I went to work for National Bank of Alaska. I got the best bank—I didn’t know it at the time. When you’re a kid, you have no idea what’s a good bank and what’s a bad bank. But he had the coolest job: he got to drive around and hand out mail. I thought he got the way better job. Later I realized that wasn’t a good place to go into the bank—if you’re going to work in a bank you better get in the bank and work as a banker. In 1973, a guy that I worked with, whom I got along with really well, recommended me for the management training program at the bank. I said, “Okay I’ll try that.” Before I finished it, they had this assignment in Petersburg at a bank [NBA] had just bought. They said, “Why don’t you go there?” Being an Anchorage kid, I almost didn’t www.akbizmag.com
go. It was 2,500 people. It was optimistic side. I think as a leadone of those things where er you have to be optimistic. If you do it and you’re shocked. you show fear, the people who You’re really so glad that you work with you and for you will didn’t say no. So I stayed there magnify that behavior. And for three years, then came they’ll transmit that down to back to Anchorage. In fact I your customers and to people enjoyed it so much I almost working below them. didn’t want to come back [he Richard Strutz laughs]. It’s hard to believe, AB: Do you believe there is Wells Fargo but I think I got to know all value in educating young 2,500 people, at least the adults. people about free enterprise? [NBA] had me come back up and Strutz: The attitude towards business manage a branch, which was in the Sears isn’t as positive [in younger generations], Mall. I managed that for about eighteen and I think that’s a danger. Somebody months. Then I went into commercial real has to make money, somebody has to estate and did that for eighteen months. pay taxes, somebody has to innovate, Then I went into commercial loans, and and it’s a positive thing. Most business that’s when I really loved banking. I got people I know are very ethical and very to meet people and help them succeed. concerned about their customers. They That was my best job in the whole bank: enjoy what they’re doing and enjoy making loans and helping people in busi- interacting with people. If you don’t like ness succeed. I just can’t tell you how people, don’t go into business. much I enjoyed that. Then over time I got promoted, which was not as much fun AB: What career advice can you offer to but you get paid more [he laughs]. young people? Strutz: As a young person looking at a AB: After becoming president of NBA, future, remember: not everyone is going your company weathered a few storms. to college. Some people are going to As a leader, what does it take to make it work for businesses locally. And it’s kind through something like that? of up to your aptitude—do what you feel Strutz: In the [1980s oil] crisis, it was literally good about. People would ask me what showing people that we were going they should do. I’d tell them, “You should to make it. This was true in 2008, too. do the thing that you enjoy doing.” Be Especially in 2008, many people thought the best at that, not at something that’s the banks were going to get nationalized not fitted for you. You could be an and fail… We had to convince them that investment banker making $10 million we were going to succeed. Instead of wor- a year, but if you hate it, don’t do it. rying about failing, I said, “Let’s help our customers through this crisis.” In fact, AB: What do you hope for the future of some people from Wells Fargo came up [to Alaska? Alaska during the merger process] and I Strutz: I would like to see Alaska’s econsaid, “You just need to tell people you’re omy broaden. It’s always going to be going to succeed.” And the head of mar- heavily based on oil and mineral exketing for the whole bank asked, “Well traction, and I think we do a great job of what if we don’t?” I said, “If you fail, you fail. that. But I also think that we should try to I actually think we’ll succeed. But if you’re diversify a little bit. I’d love to see things wrong, you’re wrong. But so what? Is it go- with the gas pipeline succeed. I’ll be reing to be better that you tell everybody that ally optimistic: we are going to see a gas you might fail and they’re all depressed? pipeline. It will happen. Now that’s optimistic, right? People say, “You’ve been That won’t help us succeed, I know that.” I don’t think you should lie to people, but talking about that for thirty years, how there’s a whole spectrum of outcomes. can you possibly say that?” Well we’re There’s nothing wrong with choosing the thirty years closer! [he laughs] Alaska Business
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JUNIOR ACHIEVEMENT SPECIAL SECTION | STRUTZ
2019 Junior Achievement Hall of Fame
JUNIOR ACHIEVEMENT SPECIAL SECTION | YOSHIMURA
2019 Junior Achievement Hall of Fame Laureate Connie Yoshimura By Samantha Davenport
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rowing up, Connie Yoshimura had no role models to look up to—so she became her own. Yoshimura was born in Chicago but spent the first six years of her life in Decorah, Iowa, before moving to Webster City, Iowa, where she was raised by her maternal grandparents. Yoshimura is a third generation Japanese American. For Yoshimura, growing up as a biracial woman in a community like Webster City was extremely difficult. She was happy to go to college in a more inclusive community in Iowa City, Iowa. Yoshimura struggled with her identity, but it ultimately led her to where she is today: owner and broker of Dwell Realty, a real estate agency that employs thirty-eight people in Alaska. Much like with other parts of her life, selling real estate wasn’t easy, and Yoshimura hit her fair share of roadblocks. When she moved to Alaska, she had no family or friends in the state to network with, and the first home she stepped into was one she was showing to a client. “I didn’t have family or friends here. I was just brand new,” Yoshimura says. In her early days in real estate in the Last Frontier, Yoshimura’s last name registered as “funny” to some, and most brokers simply were not interested in hiring her. Eventually one saw her potential, and in her first months she sold two houses, proving her value in the industry. This and subsequent accomplishments led Yoshimura to take a leap of faith and open Dwell Realty in March of 2013. “Starting Dwell Realty was a risk, certainly,” says Yoshimura. “I had been in the business for many, many years, and I had owned a brokerage before I started Dwell Realty, and I was fortunate that I had a couple of clients—Hultquist Homes and John Hagmeier Homes—that I had been working with that… agreed to come with me.” Their willingness to continue their professional relationship with Yoshimura 64 | January 2019
Connie Yoshimura D&M Photo
undoubtedly had a lot to do with her obvious dedication to her field. “I believe in a meritocracy,” Yoshimura says. “Some people say that what they are going to put on my tombstone is ‘She worked,’ because I like to work. For me, work is a certain amount of freedom. I enjoy working and I enjoy meeting people.” And Yoshimura’s job takes a lot of work. Each client has different requirements, highly varying incomes, and a multitude of housing needs that take a diverse skillset to satisfy. One of the best ways to improve is to reflect, and Yoshimura says it’s important to learn from one’s own errors. Not all of her residential investments have been successful, but Yoshimura encourages those getting into the business to learn from their mistakes. “I don’t know that you can always avoid pitfalls,” Yoshimura says. “Even though you may have a good idea, there are other forces that you can’t control.” She also encourages business own-
ers and employers to consider how they can share their experience and educate those around them about the value of free enterprise, whether that’s through supporting ongoing education for their employees or reaching out into the community to educate youth about the positive role business can play. One of Yoshimura’s favorite aspects of her job is teaching, specifically educating new agents about how to sell real estate. One of the most fascinating parts of real estate is that almost every business needs a rented, leased, or purchased space in which to operate, and every Alaskan has one kind of housing need or another: CEOs and other executives are in the market for housing just like anyone else. Real estate agents and brokers cross paths with people working in all of Alaska’s industries. “Although you may not have the opportunity to work directly with the president of ConocoPhillips, for example, maybe you can list the house that he buys, or build the house that he wants to live in,” she says. Yoshimura has accomplished much in her life, both professionally and personally. Her greatest accomplishments, she says, actually have nothing to do with Dwell Realty. Yoshimura has lost one hundred pounds—twice—and recently celebrated her 25th anniversary with her husband. And Yoshimura isn’t slowing down. Her goals for the future are to take four vacations a year, one for every quarter, and to get back into an old passion: “Before I was a realtor, I was a poet,” she says. “My goal was to earn enough money so that I could quit real estate and write poems, and I guess that’s still my goal.” Yoshimura is optimistic about Alaska’s future. “I think Alaska is a great state, and I couldn’t do what I’ve been able to accomplish today in any other place,” Yoshimura says. “It has so much opportunity… I hope that opportunity continues for young people.”
Alaska Business www.akbizmag.com
Laureate Rick Morrison By Tasha Anderson
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AB: What can we do to prepare children to be successful in a global economy? Morrison: Education, education, education. And I’m also a believer that you don’t teach a style of business that is win/ lose. My goal may be to be competitive with you, and I may sell more than you do because either I have a better product or because I do things better. That’s okay. But if I do something to destroy you or hurt you in the process, that’s not okay. There’s a way you can do business where you can build and you can grow without hurting the other people around you.
ick Morrison entered the world of business at the tender age of five, when he went door to door charging a 5 cent “delivery fee” for free-sample bottles of Tang. “I learned about revenue sharing, because my mom took all my money,” Morrison laughs. From that point on business was an integral part of his life, from selling subscriptions to The Oregonian as a boy to being the sole owner of the Morrison Auto Group before selling the company to Kendall Auto Group in 2013. His youth taught him: “If I wanted something I had to go to work and get it, and I learned to never give up.” Rick Morrison
Alaska Business: What was your family life and upbringing like? Rick Morrison: My dad was a very hardworking guy. He was a grocery store manager and worked up through the ranks. I was in eighth grade when dad had a major stroke and never went back to work. Mom had to go to work, so basically from the time that I was in eighth grade all the way through high school, I kind of had to raise myself. When dad had a stroke, it took him two years to walk again. He lived for another nine years and died at forty-five years old. He never quit, and he never gave up, and it taught me if you want something, decide what you want, set your goals, and go after it. And, more importantly, help those around you because if you help those around you, you get to what you want faster. AB: Can you talk a little about ethics in business? Morrison: I bought a building and remodeled it, and the remodel cost was going to be about $3.5 million. I shook hands with the contractor. We signed the contract two weeks before the project was done. So we literally did a $3.5 million project on a handshake. I’m a real believer that your word is your bond… Sometimes you may say you’re going to do something and it costs you. Well, that’s the cost of being straight up. I have had multiple occasions where I www.akbizmag.com
© Rick Mallars | Upper 1 Studios
could have taken advantage of the situation, but I always chose the high road… I can walk any place in this town and hold my head high because I have never intentionally cheated anybody. I remember an old gentleman saying: in this business you can shear a sheep every year, but you can only skin him once. And it took me a little while to understand exactly what he was saying, but it’s basically take care of people and they’ll provide for you for a long time. But if you screw them, you’re done. AB: What is the most important message you have to share with today’s youth? Morrison: First, you’ve got to have some idea of things you want to do. You’ve got to dream. Most people spend more time planning a one-week vacation than they do planning their life. Set goals. Figure out what it’s going to take to achieve those goals, what obstacles are in the way, and how to overcome them. And then once you set a course, don’t ever give up. Second, believe in yourself. If you don’t believe in yourself, nobody else is going to believe in you. And the last thing is enjoy the ride. It’s not about the end goal. It’s about the journey. I didn’t always quite make it to the destination that I wanted, but there are things that I picked up and learned along the way. So enjoy the ride. Alaska Business
AB: What do you hope for the future for Alaska? Morrison: We have to grow or we go backwards. I believe that we can develop our natural resources in a responsible way. Locking up the state and doing nothing, I think, is wrong. For example, in Alaska there are fourteen national parks, and the smallest national park is larger than the sum total of all the national parks in the continental United States. Locking up the national parks and not allowing reasonable development, harvesting of trees or proper mining or dealing with the fish—we’re not using our resources responsibly. We can use those resources, be clean about it, be careful about it, and grow jobs and grow Alaska to be the greatest state in the nation, as I’ve always believed it is. AB: What would you like your legacy to be? Morrison: The legacy that I’d like to have is for people know that, one, I love the state. I came here in 1975, and the only regret I had is that I couldn’t come here earlier. When I’m on an airplane and I’m coming back in town, I still get goose bumps when we come in and land. Two, I’ve helped a lot of people in business; I’ve coached a lot of people… [and] I don’t need to be the guy out front. But if people know that I’ve been there and helped them move forward, that means a lot. You are successful in life when you help others find success. January 2019 | 65
JUNIOR ACHIEVEMENT SPECIAL SECTION | MORRISON
2019 Junior Achievement Hall of Fame
JUNIOR ACHIEVEMENT SPECIAL SECTION | HALL OF FAME
Alaska Business Hall of Fame Past Laureates 1987-2018 `` Don Abel Jr., 1996
`` Mark Eliason, 2013
`` Jacob Adams, 2002
`` Carl Erickson, 1999
`` Bill Allen, 1995
`` Arnold G. Espe, 2001
`` Bob & Betty Allen, 2001
`` Al Fleetwood, 2005
`` Will Anderson, 2012
`` Conrad Frank, 1999
`` Eleanor Andrews, 2001
`` Clyde Geraghty, 1999
`` Robert Atwood, 1988
`` Conrad Frank, 1999
`` The Bailey Family, 2010
`` Robert B. Gillam, 2018
`` Admiral Thomas Barrett, 2018
`` Clyde Geraghty, 1999
`` Bernard M. Behrends, 1987
`` Barnard J. Gottstein, 1989
`` Earl H. Beistline, 1998
`` The Green Family, 2012
`` Jim Binkley, 1989
`` Robert & Barbara Halcro, 2008
`` Bill Bishop, 1994
`` Ernie Hall, 2002
`` Jim Bowles, 2011
`` Lloyd Hames, 1998
`` Carl Brady, 1990
`` Jana Hayenga, 2015
`` Carl F. Brady Jr., 2004
`` Carl Heflinger, 1999
`` Alvin O. Bramstedt Sr., 1991
`` The Helmericks
`` Charles H. Brewster, 1999 `` Brice Family, 2011
Family, 2014 `` Michael Heney, 1995
`` W. Brindle, 1993
`` Willie Hensley, 2009
`` Margie Brown, 2009
`` Walter Hickel Sr., 1988
`` Edith Bullock, 1987
`` Walter Hickel Jr., 2014
`` Michael Burns, 2016
`` August Hiebert, 1989
`` Jim Campbell, 2006
`` Max Hodel, 2017
`` Larry Carr, 1988
`` Roy Huhndorf, 1992
`` Larry & Barbara Cash, 2017
`` Robert Jacobsen,
`` Richard Cattanach, 2008
2006
`` Frank Chapados, 1991
`` Jim Jansen, 2009
`` John B. “Jack” Coghill, 2006
`` Lynn Johnson, 2016
`` Jack J. Conway, 1995
`` John Kelsey, 1991
`` William A. Corbus, 1999
`` Bruce Kennedy, 2007
`` Ron Cosgrave, 2007
`` Clarence Kramer, 2008
`` D. H. Cuddy, 1993
`` Herbert Lang, 1994
`` Bob Dindinger, 2012
`` Marc Langland, 2001
`` Don Donatello, 1995
`` Austin Lathrop, 1988
`` The Doyle Family, 2014
`` Betsy Lawer, 2007
`` Ron Duncan, 2007
`` Pete Leathard, 2003
`` Oscar & Peggy Dyson, 1992
`` Oliver Leavitt, 2017
`` Ken Eichner, 1990
`` Dale & Carol Ann Lindsey, 1997
`` Andrew Eker, 2009
`` Suzanne (Sue) Linford, 2002
66 | January 2019
Alaska Business www.akbizmag.com
`` Governor Bill Sheffield, 2003
`` Joseph Usibelli Sr., 1988
`` Zachary Loussac, 1989
`` Merle (Mudhole) Smith, 1993
`` Joseph Usibelli Jr., 2013
`` Richard Lowell, 2005
`` Charles Snedden, 1989
`` Chris von Imhof, 2014
`` Byron Mallott, 2013
`` Senator Ted Stevens, 2010
`` Lowell Wakefield, 1990
`` Harvey Marlin, 1999
`` William G. Stroecker, 1997
`` Leo & Beverly Walsh, 1996
`` Carl Marrs, 2005
`` Bill & Lilian Stolt, 1998
`` Pat Walsh, 2008
`` Vern McCorkle, 2010
`` A. C. Swalling, 1987
`` Chuck West, 1991
`` Harry McDonald, 2011
`` Cliff Taro, 1992
`` Noel Wien, 1989
`` James A. Messer, 2000
`` Walter & Vivian Teeland, 1997
`` Richard A. Wien, 2003
`` Jason Metrokin, 2016
`` Morris Thompson, 2001
`` Lew Williams Jr., 1994
`` Jo Michalski, 2015
`` William J. Tobin, 2004
`` William Ransom Wood, 1996
`` The Miller Family, 2005
`` James Udelhoven, 2017
`` Robert Mitchell, 1999 `` William G. Moran Sr. & William G. Moran Jr., 2004 `` Mayor Rick Mystrom, 2013 `` Les Nerland, 1987 `` Matthew Nicolai, 2010 `` Milt Odom, 1992 `` The Odom Brothers, 2015 `` Pam Oldow, 1990 `Tennys ` Owens, 2005
`` E. Al Parrish, 2006 `` Sherron Perry, 2015 `` Robert Penney, 2018 `` Raymond Petersen, 1988 `` Martin Pihl, 2014 `` Dana Pruhs, 2015 `` Quinn Brothers, 2011 `` Elmer Rasmuson, 1987 `` Edward Rasmuson, 2000 `` Frank M. Reed Sr., 2000 `` Robert Reeve, 1987 `` C.E. “Chuck” Robinson, 2018 `` David Rose, 2003 Jim Sampson, 2008 Helvi Sandvik, 2006 Grace Berg Schaible, 2004 Leo & Agnes Schlotfeldt, 1993 Orin D. Seybert, 2006 www.akbizmag.com
Alaska Business
January 2019 | 67
JUNIOR ACHIEVEMENT SPECIAL SECTION | HALL OF FAME
`` Loren H. Lounsbury, 2002
JUNIOR ACHIEVEMENT SPECIAL SECTION | DONORS
2019 Donors Platinum Plus - $10,000+
`` John Hughes Foundation
`` Alyeska Pipeline Service Company
`` Alaska Airlines
`` Kendall Lexus of Alaska
`` Bristol Bay Native Corporation
`` Alaska Business
`` KeyBank
`` Enstar Natural Gas Company
`` Alaska National Insurance Company
`` Northern Lights Bingo
`` B.J. Gottstein Foundation
`` AT&T
`` Northwest Arctic Borough
`` Katmailand
`` BP
School District
`` Kinross
`` ConocoPhillips Alaska
`` Rasmuson Foundation
`` Leonard & Martens Investments
`` Denali Federal Credit Union,
`` C.E. “ChucK” Robinson Family
`` Linda Eliason
`` Saltchuk
`` Lynden
`` Wells Fargo
`` NANA Management Services
a division of Nuvision Credit Union `` ExxonMobil
`` Northrim
`` First National Bank Alaska `` GCI `` Bob Gillam 68 | January 2019
Platinum - $5,000+ `` Alaska Commercial Company
`` Odom Corporation `` Penco
Alaska Business www.akbizmag.com
`` Matson
`` Doug & Jana Smith
`` Tesoro
`` McKinley Capital Management
`` Dowland-Bach Corporation
`` Parker Smith & Feek
`` Doyon
Gold - $2,500+
`` Petro Star
`` Elizabeth Stuart
`` 3M Company
`` TOTE Maritime
`` Harry McDonald
`` Able Body Shop
`` Udelhoven Oilfield System Services
`` Holland America Line
`` Alaska Commercial Fishing and
`` Weaver Brothers
`` James Udelhoven `` Joe Everhart
Agriculture Bank
Silver - $1,000+
`` Alaska Communications
`` Kevin Van Nortwick
`` Alaska Growth Capital
`` Alaska Cruise Association
`` Adam & Kristen Lewis
`` Anchorage Daily News
`` Alaska Housing Finance Corporation
`` Logan & Heather Birch
`` Anchorage Economic Development
`` Alaska Railroad
`` Mark & Laurie John
`` Alaska Regional Hospital
`` Mark Smith
`` ASRC Energy Services
`` Alaska Sales & Service
`` Marsh USA
`` Avis Rent A Car
`` Alaska USA FCU
`` NANA Worley Parsons
`` ch2m
`` Arctic IT
`` Princess Tours
`` Calais Company
`` ASRC
`` RNV
`` Dowland-Bach Corporation
`` Baird
`` SolstenXP
`` FedEx
`` BDO USA
`` Taco Bell of Alaska
`` Janco Commercial Cleaning
`` Bill Odom
`` Talitha Birch Kindred
`` John C. Hughes Foundation
`` Larry & Barbara Cash
`` Tangerine Promotions
`` KPMG
`` David & Betsy Lawer
`` Tom Redmond
`` Mary Hughes & Andrew Eker
`` Delta Constructors
`` Usibelli Foundation
`` Matanuska Valley
`` Denali Foods
`` Weaver Brothers
Corporation
Federal Credit Union
`` Derrell Webb
CELEB RAT E the 32nd Annual Alaska Business Hall of Fame Laureates Dena’ina Civic & Convention Center Thursday, January 24, 2019 5:30 p.m. Reception Dinner/Ceremony 6:30 p.m.
2019 Honorees
Connie Yoshimura, DWELL Realty John Binkley, Alaska Cruise Association Richard Strutz, Wells Fargo Rick Morrison, Morrison Auto Group
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Alaska Business
EMPOWER THE FUTURE® Learn more at alaska.ja.org January 2019 | 69
JUNIOR ACHIEVEMENT SPECIAL SECTION | DONORS
`` Ravn
EAT
SHOP
PLAY
STAY
LOCAL STYLE
Boutiques W elcome to 2019—and a new year full of potential. Speaking of potential, there’s no better time of year to fling open your closet doors, take stock, and (having cleared out the things you just don’t love anymore) realize something is missing: that easy dress for brunch on the weekend, those funky leggings you wear just anywhere, or that perfect blouse that you’ll wear and wear again as you work your way up the corporate ladder. Whatever that special piece is, there’s no better place to find it than one of Alaska’s boutiques, which feature a refreshing mix of unique fashion and local design.
ShuzyQ is locally owned and operated by Dawn and Shawna and is located at 11124 Old Seward Highway in Anchorage, close to South Restaurant and Coffeehouse. This boutique
offers a selection of shoes, handbags, and accessories for women and girls that run the gamut from every day wear to special event accessories. shuzyq.com Trickster Company has a physical location in Juneau at 224 Front Street and is owned by siblings Rico and Crystal, who “focus on the Northwest coast art and explore themes and issues in Native culture.” The store sells apparel, jewelry, paper, home goods, sports equipment, and fine art. trickstercompany.com Octopus Ink owner Shara is the designer, artist, and creator behind the shirts, skirts, sweatshirts, and other
clothing found at the boutique’s downtown Anchorage gallery located at 410 G Street. Octopus Ink also features jewelry and accessories designed and produced by other local Alaskan artisans. octopusink.com Bottoms Boutique is “below the waist fashion,” located at 325 W. 5th Avenue in downtown Anchorage. Avid shoppers can visit the store or browse online the boutique’s range of clothing, including jackets and cardigans, shoes and boots, dresses, tops, accessories and, of course, bottoms. bottomsboutique.com Infusion Boutique operates out of two locations in the Valley, one at 1733 E. Palmer
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Alaska Business www.akbizmag.com
Wasilla Highway in Wasilla and the other at 125 W. Evergreen Street in Palmer. The boutique’s mission is “to provide an eclectic mix of style. Trendy fashion mixed with great basics for a variety of people.” infusionboutique.com Circular opened its doors in 2007 and provides shoppers with “beautiful, unique, style-conscious, and eco-friendly fashion from around the world.” Circular is located at 320 W. 6th Avenue, Suite #132 in Anchorage. circularboutique.com Salmon Sisters, established in 2012, sells clothing and other items with original designs by two women “born and inspired by the wilderness of Alaska and the sustainable fisheries of the North Pacific.” While Salmon Sisters products are sold at stores through Alaska, the boutique operates two
gallery locations, one in Homer and one in Seward. aksalmonsisters.com AK Starfish Co. artist and founder Marci is a third generation Alaskan. Her first design, a starfish, “was inspired by the sea of starfish in Sadie Cove, Homer in the summer of 2003.” AK Starfish Co. has locations in Anchorage, Homer, and Seward and features hoodies, shirts, hats, pants and leggings, jewelry, and household accessories. akstarfish.com Crab Terror Island’s beautiful collection of shirts, hoodies, and other products are designed primarily by the company’s founder and owner, Sina. This “unique boutique for awesome women, by awesome women” also features jewelry, handbags, and other accessories produced by Alaskan artists. crabterrorisland.com
The Beauty Room, located at 1433 W. Northern Lights Boulevard in Anchorage, is a day spa and beauty boutique. In addition to make-up and haircare, it offers clothing and accessories, including tops, dresses, bottoms, jewelry, bags, scarfs, and shoes. beautyroom.net FisheWear’s mission is “to create comfortable, functional, and fashionable fish-inspired apparel and gear for women,” such as leggings, shell skirts, longsleeve tops, totes, dry bags, wading belts, nippers, and fly boxes. All of FisheWear’s products are available online, and the store’s headquarters are at 4011 Arctic Boulevard in Anchorage. fishewear.com Adonia is a clothing and accessories boutique located at 17034 N. Eagle River Loop Road in Eagle River. The company says, “Our mission
is to offer you clothes that make you look and feel amazing,” and the boutique offers sizes from XS to 3X. uradonia.com Shoefly, a shoe boutique located at 109 Seward Street in Juneau, is “owned and operated by Juneau women who love shoes beyond reason.” The store’s offerings include everything from rain boots to sparkly heels, as well as a daily chocolate happy hour. shoeflyalaska.com Second Run, which opened in 2004, is “upscale resale.” The consignment boutique is located at 720 D Street in Anchorage and provides to its shoppers hand-selected merchandize that includes “high-end designer labels and popular contemporary labels that reflect current trends for women.” secondrunalaska.com
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January 2019 | 71
EAT
SHOP ANCHORAGE
JAN Zoo Lights 1-31 Weekly from Thursday through Sunday from 5 p.m. to 8 p.m., head to the Alaska Zoo to visit the lighted parade of animals that take over the zoo each winter. They are big, bright, and beautiful. From front to back, the zoo is decorated with lighted animal displays— colorful, whimsical, and even animated. alaskazoo.org JAN Silent 12 Film Night:
PLAY
STAY
festival takes places on January 16. anchoragefolkfestival.org
JAN Great Alaska 18-19 Beer & Barley
Wine Festival The festival features more than two hundred beers and barley wines from more than fifty regional brewers. Admission to the Egan Center for the Festival, which runs from 6 p.m. to 10 p.m., includes a 6 ounce commemorative testing cup and thirty tickets for samples. auroraproductions.net
Keaton and Chaplin It’s an evening of Silent Film giants: Buster Keaton plays a bumbling villain who ends up in The Frozen North. From the frozen snow to the rising water, Keaton’s The Boat finds him and his family on a voyage in his homemade boat that proves to be one disaster after another. In Charlie Chaplin’s Shoulder Arms, it’s WWI and Chaplin is recruited to the army’s “awkward squad.” Silent Film Night takes place at the Alaska Center for the Performing Arts at 8 p.m. anchoragesymphony.org
JAN Anchorage Folk 16-28 Festival The Anchorage Folk Festival’s goal is to support, encourage, and promote music and dance through performance and education. Artists across town take to the stage at free concerts, and the festival also includes workshops, contests, classes, and dances. The kick-off party for the 30th anniversary of the
JAN Haggis Basher’s 26 Ball and Burns
Supper This supper is in honor of Scottish poet Robert Burns. The gala event starts at 6 p.m. and includes a four-course meal, a carafe of scotch at each table, Highland Pipers, and dancing, all at the Sheraton Anchorage. tarbas.org
FAIRBANKS
JAN Kid Fest 11-13 Shake off the winter blues by checking out Kid Fest, a three-day event packed with kid-friendly fun. Kids and parents alike will enjoy exciting games, inflatables, laser tag, mini golf, and great food at the Carlson Center from 5 p.m. to 9 p.m. on Friday and 9 a.m. to 9 p.m. on Saturday and Sunday. kidfestak.org JAN Annual Concerto 19 Competition In this annual event, local area
ANCHORAGE
JAN Family Skate 1/5-2/23 Series Every Saturday in January and February (weather and ice conditions permitting), enjoy free skating with warming barrels, hot chocolate, and music at Westchester Lagoon. A special skate assist device is available for kids new to skating. anchorage.net
72 | January 2019
EVENTS CALENDAR SEWARD
JAN Seward Polar Bear Jump 27 Starting at 12:30 p.m., individuals and teams dress in wacky costumes and jump into Resurrection Bay at the Seward Small Board Harbor. Jumpers are required to find sponsors, raising money for the Alaska Division of the American Cancer Society. seward.com
youth compete for a chance to perform a movement of a solo work with the Fairbanks Symphony Orchestra. Admission is free to the public for the competition, which takes place from 1 p.m. to 5 p.m. at the C.W. Davis Concert Hall. operafairbanks.org
JAN Museum of 26 the North
Open House The University of Alaska Museum of the North offers a free, behindthe-scenes look at how researchers make discoveries about the culture and environment of Alaska. The open house runs from Noon to 4 p.m. at the University of Alaska Fairbanks campus. uaf.edu/museum/
JUNEAU
JAN Douglas Island 5 Death Race This is a midwinter ultramarathon at the Historic Treadwell Mine in Juneau. The course will be open to participants to complete as many loops as possible between sunrise at 8:45 a.m. and sunset at 3:34 p.m. Participants should be prepared to run in sub-freezing temperatures and icy conditions with the possibility for significant wind-chill. There are two aid stations and a warming station on course; the fire will be kept roaring and the cider hot. traveljuneau.com
JAN Platypus-Con 25-27 The community comes together to play new and old board and card games. Demonstrations,
organized games, miniature painting, and a huge lending library for open tables will be provided at Centennial Hall. platypusgaming.org
PALMER
JAN Disney’s Newsies: 1/25-2/2 The Musical Playing at The Glenn Massay Theater, Disney’s Newsies, based on the 1992 motion picture, features a score by eight-time Academy Award winner Alan Menken and Jack Feldman and a book by four-time Tony Award winner Harvey Fierstein. Timely and fresh, the fictionalized adaptation of Newsies addresses age-old themes of social injustice, exploitative labor practices, and David versus Goliath struggles as the young learn to harness their power against a corrupt establishment. glennmassaytheater.com
WASILLA
JAN The Mousetrap 11-27 In this drama by Agatha Christie, a group of strangers is stranded in a country boarding house during a snow storm, one of whom is a murderer. Into their midst comes a policeman traveling on skis—he’s following clues from a recent murder in London, and soon after he arrives one of the guests is killed. To get to the rationale of the murderer’s pattern, the policeman probes the background of everyone present and rattles a lot of skeletons. valleyperformingarts.org
Alaska Business www.akbizmag.com
BUSINESS EVENTS JANUARY JANUARY 10-12
Alaska Wholesale Gift Show Dena’ina Center, Anchorage: This event provides an opportunity for small business owners/producers to grow their buyer base by meeting face to face with other business owners, buyers, and managers. Attendees have access to show specials on hotels, car rentals, travel concierges, and more. 10times.com/wholesale-alaskangift JANUARY 18
Meet Alaska Conference Dena’ina Center, Anchorage: Hosted by the Alliance, this is the largest one-day energy conference in Alaska and includes educational forums and a tradeshow. alaskaalliance.com
JANUARY 25-27
professional mapping community throughout the state. aksmc.org
Alaska RTI/MTSS Conference Dena’ina Center, Anchorage: Featured sessions include Mindset Mathematics, Student Engagement and Self-Efficacy, Computational Thinking and Computer Science in the Elementary Classroom, and Collaborative Leadership Collaborative. asdn.org/schoolyear-conferences-and-institutes JANUARY 28-FEBRUARY 1
Alaska Marine Science Symposium S cientists, researchers, and students f rom Alaska, the Pacific Northwest, and beyond converge to communicate research activities in Alaska’s marine regions. amss.nprb.org
Alaska Health Summit Hotel Captain Cook, Anchorage: The 2019 summit theme is “Diverse Stories Inspiring Community Action” and the conference will highlight diverse, positive stories of community action and change as well as share successful strategies, important lessons learned, evidence-based recommendations, and additional opportunities for continued work together. alaskapublichealth.org JANUARY 24
Junior Achievement of Alaska Awards Banquet Dena’ina Center, Anchorage: Four new Alaskans will be inducted into the Alaska Business Hall of Fame and recognized by their peers with this prestigious award. Attended by more than 400 business representations, the program consists of a networking reception, dinner, and awards ceremony. www.juniorachievement.org/web/ ja-alaska www.akbizmag.com
ASTE Annual Conference Hotel Captain Cook, Anchorage: This is the educational technology conference of the Alaska Society for Technology in Education. This year’s theme: Unplugged. aste.org FEBRUARY 25-27
Alaska Statewide Special Education Conference Hilton Anchorage: The Alaska Statewide Special Education Conference provides high quality professional development relevant to the cultural, rural, and remote characteristics of Alaska. assec.org FEBRUARY 26-28
The Wildlife Society Alaska Chapter Annual Meeting
FEBRUARY FEBRUARY 6-9
JANUARY 22-24
FEBRUARY 16-19
Anchorage AEYC Early Childhood Conference Hilton Anchorage: This year’s keynote speaker is Cate Heroman, author of Making & Tinkering with STEM, who will conduct workshops on Friday and Saturday. anchorageaeyc.org
Elizabeth Peratrovich Hall, Juneau: This annual meeting of the Alaska Chapter of The Wildlife Society brings together wildlife researchers, managers, educators, students, and administrators to attend workshops, presentations, and a banquet. twsalaskameeting.com
FEBRUARY 11-15
FEBRUARY 27-MARCH 2
Alaska Forum on the Environment
Alaska Anthropological Association Annual Meeting
Dena’ina Center, Anchorage: The Alaska Forum on the Environment is Alaska’s largest statewide gathering of environmental professionals from government agencies, nonprofit and for-profit businesses, community leaders, Alaskan youth, conservationists, biologists, and community elders. akforum.com
UAF Northwest, Nome: The annual meeting includes workshops, an evening reception for information and registration, paper presentations, an awards banquet, and keynote speakers Dr. Igor Krupnik and Bernadette Yaayuk Alvanna-Stimpfle. alaskaanthropology.org
FEBRUARY 13-15
Alaska Surveying & Mapping Conference Hilton Anchorage: The Alaska Surveying & Mapping Conference is a collection of the many groups and societies that make up the
FEBRUARY 28-MARCH 3
Alaska Library Association Annual Conference Juneau: AkLA is a nonprofit professional organization for
Alaska Business
employees, volunteers, and advocates at academic, public, school, and special libraries of all sizes in Alaska, as well as library products and services vendors. akla.org MARCH MARCH 7-8
Alaska Forest Association Spring Meeting Baranof Hotel, Juneau: The Alaska Forest Association can be characterized as a high-profile industry trade association. Its members hold in common general business interests in the timber industry of Alaska. akforest.org MARCH 23-24
AKANA Annual Meeting Embassy Suites, Anchorage: The annual meeting of the Alaska Association of Nurse Anesthetists is an opportunity for networking and education. alaskacrna.com MARCH 28-30
ComFish Alaska Kodiak: ComFish is the largest commercial fishing show in Alaska and the longest running fisheries trade show in the state, now in its 40th year, bringing together gear vendors, government agencies, and nonprofits involved in every aspect of commercial fishing. kodiakchamber.org/comfish APRIL APRIL 4-6
AKMGMA Annual Conference Alyeska Resort, Girdwood: The Alaska Medical Group Management Association is a professional organization comprised of group practice administrators, managers, health care executives, consultants and vendors located throughout Alaska. akmgma.org January 2019 | 73
RIGHT MOVES Aldrich Aldrich welcomed Lia Patton, CPA, to its Anchorage office. Patton brings with her nearly two decades of experience in audit and accounting and a Patton unique knowledge of the Alaska business community. She oversees state and federal single audits, as well as audits for Alaska Native corporations, nonprofit entities, and employee benefit plans.
Iron Dog Iron Dog selected John Woodbury as its Executive Director. Woodbury is a lifelong Alaskan who has followed, reported on, or Woodbury participated in the race since its inception in 1984. Woodbury owns Alaska Adventure Media, which publishes Alaska SnowRider and Coast magazines, among other titles. To focus on Iron Dog executive director tasks, he has put those two publications on hiatus until May.
PND PND Engineers announced several new hires in its Anchorage office. Javed Miandad joins the Anchorage office as a Geotechnical Staff Engineer. He recently completed his master’s degree in Miandad geological engineering at the University of Alaska Fairbanks, where
he worked as a teaching assistant in the engineering geology and soil mechanics lab while conducting his master’s research on landslides in Interior Alaska. Miandad will oversee geotechnical efforts on projects and perform geotechnical exploration. Dominick Frank brings his geology background to PND’s geotechnical department. Frank received his bachelor’s degree in Frank geology from Fort Lewis College in Durango, Colorado. His background includes soils lab and hydrographic survey experience. He also has experience working for construction contractors and holds AK-CESCL, OSHA, and HAZWOPER certificates. Frank will be tasked with running PND’s AASHTOaccredited soils material lab and assisting with geotechnical tasks and other engineering fieldwork. Logan Imlach, EIT, was recently brought on as a Structural Staff Engineer. Imlach graduated from University of Alaska Anchorage with a bachelor’s Imlach degree in civil engineering. He has ten years of professional engineering experience, having previously worked as a construction project manager and as a project engineer. His primary responsibilities with PND include structural design for marine and oil and gas industry projects. Seth Anderson, PE, brings eight years of engineering experience to the Anchorage office. His background includes providing construction
support for several major construction projects throughout Alaska— including the Akutan Airport design-build—and working Anderson on civil projects in mining, power, and flood protection. Anderson’s primary responsibilities with PND include civil design projects including road improvement design and plans and water, sewer, and stormwater system design. Andrew Reeves brings fifteen years of IT experience to his position as a Systems Administrator for PND. He began his Reeves career as a computer repairman for a small family-owned shop. He later joined the US Marine Corps, serving for five years as a data systems and network specialist. At PND his responsibilities include maintaining all end-user hardware and software as well as network and server hardware and software. Aaron Unterreiner joined the Anchorage office as Marketing Coordinator. Unterreiner has a communications Unterreiner degree from Missouri State University and started his career in Durango, Colorado, where he worked at The Durango Herald. Most recently, he was a copyeditor and a page designer. Unterreiner will assist in the development of competitive proposals, provide editing support to all departments, help maintain PND’s online presence, and participate in all marketing activities.
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Real Alaskans. Real cargo. 74 | January 2019
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Alaska USA Alaska USA Federal Credit Union promoted Stephanie Maxwell to the position of Vice President, Digital Channels. Maxwell brings Maxwell a wealth of experience to the position, having started with Alaska USA as a teller and accepting positions of increased responsibility over her ten-year career with the credit union.
UA CED Center for Economic Development Associate Director Gretchen Fauske earned her Gallup Strengths Coaching certification in Fauske October. Strengths coaches use Gallup’s CliftonStrengths assessment to identify a client’s talents and work with them to leverage their strengths to overcome challenges and accomplish goals. More than 90 percent of the Fortune 500 companies use CliftonStrengths. Currently, Fauske is one of two Gallupcertified Strengths Coaches in Alaska.
Alyeska Resort Alyeska Resort promoted Garth McPhie to Mountain Services Manager/ Assistant Mountain General Manager. McPhie began his career with Alyeska in the Mountain Learning Center (MLC) in 1998. He has achieved the highest levels of certifications from the Professional Ski Instructors of America, is currently on the PSIA-NW Technical Team, holds a US Coast Guard issued 200 GT Master’s License, and earned a bachelor’s degree in philosophy from University of California, Davis.
Jodie McPhie has been promoted to Mountain Learning Center Director. After working with the Ski and Snowboard Schools of Aspen and the Coronet Peak Snowsports School in New Zealand, she began working with Alyeska’s MLC in 2007 as the Children’s Supervisor and has worked in many departments, including grounds as a master gardener, banquets, ticket office, and the Mountain Bike School.
Great Alaskan Holidays Great Alaskan Holidays selected Yedeeta Smith to join its team of Reservations Agents. Smith has a number of years of experience in Smith customer relations. In her role as a reservations agent, Smith has an active role booking motorhome rental reservations, maintaining effective client interactions within a fast paced environment, and helping to ensure smooth transitions for the Alaska traveler as they pick up and return their vehicles.
KPMG KPMG announced two new senior managers at its Anchorage office. Mike Fink was hired as an Audit Senior Manager. Fink brings fourteen years of accounting and advisory experience with a variety Fink of organizations, including telecommunications and Alaska Native corporations. He earned bachelor’s degrees in accounting and finance from the University of Alaska Fairbanks. Melissa Jay was promoted to Audit Senior Manager. Jay provides audit
and accounting advisory services to several types of clients including Alaska Native corporations, notfor-profit organizations, and Jay oilfield service companies. Jay is also active in recruiting, frequently attending events at the University of Alaska Anchorage. She joined KPMG in 2011 after earning a bachelor’s degree in accounting and in finance from the University of Alaska Anchorage and a master’s degree in accounting from the University of Utah.
Northrim Bank Northrim Bank hired a new Lending Branch Manager, Jason Gentry, AVP, at its branch in Ketchikan. Gentry joins Northrim Bank with more than six years in the financial industry and twenty-four years in customer service in Alaska. Gentry grew up in Utqiaġvik and attended the University of Alaska Fairbanks. He has received multiple awards from Carrs/Safeway for customer service and profitability and was a member of the Wells Fargo “All Star” commercial loan production club.
First National Bank Alaska Jennifer Matthews was appointed Senior Business Development Officer at First National Bank Alaska. In her more than thirteen years in banking, Matthews has made customers a priority by working to build strong relationships. In her new role, Matthews supports the Cash Management team in a greater capacity to help Alaska business customers by supplying them with banking services that allow them to work faster and more efficiently.
Nail guns. Air compressors. Generators. Whatever you need, we deliver. Connect with us / 800.727.2141 / www.nac.aero /
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Alaska Business
January 2019 | 75
INSIDE ALASKA BUSINESS
The Alaska Zoo welcomed Cranbeary—its newest polar bear—in late October from the Denver Zoo. Cranbeary arrived at the Alaska Zoo with her keepers, is in good health, and is quickly making herself right at home in her new digs. alaskazoo.org
Hilcorp Hilcorp completed its $90 million pipeline project that allows the company to transport oil across Cook Inlet via an underwater pipeline. Instead of being transported by crossinlet tankers, oil now traverses the inlet through an undersea pipeline that previously carried natural gas. The project required construction of approximately six miles of new pipe from the Tyonek Platform to the existing pipeline network. It also saves Hilcorp money: shipping oil by tanker across Cook Inlet costs approximately $3 per barrel while using the pipeline costs about $2 per barrel. The pipeline addresses environmental and spill concerns as well by eliminating spills/incidents involving tankers and because the Drift River oil terminal is no longer a necessary piece of infrastructure. hilcorp.com
Cook Inlet Housing Authority Cook Inlet Housing Authority opened two housing developments in the Muldoon area of Anchorage. Creekview Plaza II features eighteen one-bedroom apartments in a mixeduse building, with retail space at the 76 | January 2019
street level. Woven House offers independent senior rental housing to residents fifty-five years or older. These developments are the continuation of the Creekside Town Center concept to bring affordable, independent living opportunities to Muldoon, which began with the construction of Grass Creek Village in 2008. Completion of Creekview Plaza II and Woven House bring to 282 the number of rental housing apartments at Creekside Town Center. cookinlethousing.org
DOLWD The Alaska Department of Labor and Workforce Development announced the state’s minimum wage increased from $9.84 to $9.89 effective January 1. Alaska Statute 23.10.065(a) requires the Alaska minimum wage to be adjusted using the Consumer Price Index for urban consumers (CPI-U) in the Anchorage metropolitan area for the preceding calendar year. The Anchorage CPI-U increased 0.5 percent in 2016, rising from 217.830 to 218.873. labor.alaska.gov
Explore Fairbanks Beginning summer 2019, Fairbanks will be the destination for two new nonstop flights from the contiguous United States when United Airlines launches service to Denver and San Francisco. The San Francisco route will be in operation from June 6 to August 18, 2019. The Denver service will be in operation from June 7 to August 18. United Airlines has been offering nonstop summer seasonal service from Fairbanks to Chicago since 2013. Fairbanks is also served seasonally with direct flights to Minneapolis through Delta Airlines, and yearround with service to Seattle through both Delta and Alaska Airlines. explorefairbanks.com
Four Directions Outpatient Treatment Center Southcentral Foundation opened the newly expanded Four Directions
Outpatient Treatment Center located in the former Blood Bank of Alaska building at 4000 Laurel Street in Anchorage. The center provides substance abuse and dual diagnosis assessments, substance abuse and mental health counseling, and group counseling addressing a range of topics including alcohol and drug abuse, parenting, domestic violence, anger, relationships, anxiety and depression, life skills, and health and wellness. Four Directions serves Alaska Native and American Indian people. southcentralfoundation.com
Wealth DynamX
Wealth DynamX
© John Gomes
Alaska Zoo
Wealth DynamX opened its headquarters on 6th Avenue in Anchorage. Wealth DynamX works with local businesses to help increase the engagement level and financial literacy of a company’s employees so the company can increase its revenue and expand. The new headquarters will host courses, coaching sessions, tutoring on business and finances, and entrepreneurial events. wealthdynamx.com
AIDEA The Council of Development Finance Agencies (CDFA) announced the Alaska Industrial Development and Export Authority (AIDEA) as winner of the 2018 CDFA Distinguished Development Finance State Agency Award. The CDFA Excellence in Development Finance Awards recognizes outstanding development finance programs, agencies, leaders, projects, and success stories. aidea.org
Alaska Business www.akbizmag.com
AT A GLANCE What book is on your nightstand? Grit: The Power of Passion and Perseverance by Angela Duckworth. What movie do you recommend to everyone? I’m kind of a sucker for sports movies: I love Rudy. What’s the first thing you do after work? The absolutely first thing would be to hug my wife because that’s always comforting—finally, someone who loves me [he laughs]. If you couldn’t live in Alaska, where would you live? I love endurance sports and I like the mountains, so Park City, Utah. If you could domesticate a wild animal, what animal would it be? A giraffe: though impractical to keep around the house, I think they’re really elegant and beautiful.
78 | January 2019
Alaska Business www.akbizmag.com
OFF THE CUFF
Robert Brewster R
obert Brewster has been working in various capacities at The Alaska Club since 1988 and
AB: What’s your greatest extravagance? Brewster: Sports equipment. You put a lot of effort into sports; you may as well have the best tools.
today is the organization’s president and CEO. It wasn’t exactly his plan to go into the industry—he “quasi-stumbled” into a part-time job at a health club while earning his business degree from the University of Alaska Anchorage. Brewster
AB: What is your best attribute and your worst attribute? Brewster: My best attribute, if I can be forgiven for saying anything nice, is perseverance. That’s why I like the book Grit, because it says that’s a good trait [he laughs]. And then maybe my worst would be that I’m impatient. I can’t figure out why things don’t happen as fast as they should.
combined the two after graduation, setting the stage for a long career in fitness. Alaska Business: What do you do in your free time? Robert Brewster: I really enjoy mountain biking, crosscountry skiing, and running. When time allows, I like to get out and be active, often with my wife. AB: Is there a skill you’re currently developing or have always wanted to learn? Brewster: I would love to learn to play the guitar, maybe in retirement. AB: What is your go-to comfort food? Brewster: Mexican food, specifically from Beartooth Theatre Pub & Grill. AB: Other than your current career, if you were a child today, what would your dream job be? Brewster: I actually would like to have been a detective. AB: What’s your favorite way to exercise? Brewster: It would have to be what I call run/hikes in the mountains. Wherever I can run, I run, and as it gets steeper or rougher I might have to start hiking. It’s a good way to cover a lot of distance and see a lot of the mountains. AB: What’s the most daring thing you’ve ever done? Brewster: I was in a triathlon where I had to navigate the rapids in Eagle River—I had absolutely no experience kayaking at all. So my first time out I went through the Campground Rapids at Eagle River. I survived, barely. AB: Dead or alive, who would you like to most see perform live in concert? Brewster: AC/DC Images © Kerry Tasker
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Alaska Business
January 2019 | 79
ALASKA TRENDS
Alaska’s Schools Improve Graduation Rates One bright spot in Alaska’s education system is the ongoing trend that more students are graduating from high school and fewer students are dropping out. Since the 2010/2011 school year, the graduation rate for Alaska students has risen by 10.2 percent, and the dropout rate dropped from 4.7 percent in 2010/2011 to 3.5 percent in 2016/2017, the last year for which data is currently available. The total number of graduates increased by just more than 300 over the seven-year span, and the total number of students 71.8% 71.1% 68% 69.6% dropping out of high school Graduation Graduation Graduation Graduation Rate decreased by more than Rate Rate Rate 700 in the same 201020112012time period. 2011 2012 2013
2010-2017 Graduation Rates
75.6%* 76.1%** 78.2% Graduation Graduation Rate
Graduation Rate
Rate
20142015
20152016
20162017
2010-2017 Graduate Counts
8,064 7,989 Graduate Count
Graduate Count
20102011
20112012
7,861 Graduate Count
20122013
* 8,108** 8,385 7,668 8,253 Graduate Graduate Graduate Graduate Count
Count
Count
Count
20132014
20142015
20152016
20162017
A graduate is defined as a student who has received a regular diploma from a state or district approved education program, as evidenced by receipt of a secondary school diploma from school authorities. This does not include a student who receives a certificate of achievement or a GED. *The High School Graduation Qualifying Examination (HSGQE) was removed as a graduation requirement on July 1, 2014. The 2014-2015 cohort group is the first to be affected by this change. **A valid score on a College and Career Ready Assessment (CCRA) was removed as a graduation requirement on June 30, 2016. ALASKA TRENDS IS BROUGHT TO YOU BY AMERICAN MARINE/PENCO
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ANS Crude Oil Production 12/02/2018
01/01/2014 05/01/2011
There is often confusion between graduation rates and dropout rates. Dropout rates are event rates meaning they are calculated across a single year. The graduation rates are measures of cohort groups across four years.
09/01/2008 01/01/2006
ANS Production barrel per day 518,192 Dec. 2, 2018
05/01/2003 09/01/2000
0
400,000
800,000
1,200,000
SOURCE: Alaska Department of Revenue Tax Division
ANS West Coast Crude Oil Prices 11/29/2018
2010-2017 Dropout Rates
4.7%
Dropout Rate
4.8%
Dropout Rate
09/01/2008
4.0%
Dropout Rate
20102011
09/01/2012
20112012
20122013
4.0%
Dropout Rate
20132014
3.7%
3.9%
Dropout Rate
Dropout Rate
20142015
20152016
3.5%
09/01/2004
20162017
09/01/2000
ANS West Coast $ per barrel $60.46 Nov. 29, 2018
Dropout Rate $0
$20
$40
$60
$80 $100 $120 $140 $160
SOURCE: Alaska Department of Revenue Tax Division
2010-2017 Dropout Counts
2,779 2,830 Dropout Count
20102011
Dropout Count
Statewide Employment Figures 10/1976—10/2018 Seasonally Adjusted 10/01/2018
2,364 2,303
20112012
Dropout Count
Dropout Count
20122013
20132014
2,141 2,268 2,003 Dropout Dropout Count
Count
Dropout Count
20142015
20152016
20162017
A student is not considered a dropout if his or her departure was due to the completion of a state- or district-approved education program; transfer to a public school, private school, or state- or district-approved education program; temporary absence caused by suspension, illness, or medical condition; or death. Alaska Department of Education & Early Development Data Center
Labor Force 356,487 Oct. 2018 Employment 333,708 Oct. 2018 Unemployment 6.4% Oct. 2018
01/01/2010 05/01/2004 09/01/1998 01/01/1993 05/01/1987 09/01/1981 01/01/1976 0
100,000
200,000
300,000
400,000
SOURCE: Alaska Department of Labor and Workforce Development, Research & Analysis Section
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ADVERTISERS INDEX Alaska Dreams Inc............................................................ 29 alaskadreamsinc.com
New Horizons Telecom Inc........................................... 18 nhtiusa.com
Alaska Gasline Development Corp.............................. 27 agdc.us
Northern Air Cargo................................................... 74, 75 nac.aero
Alaska Native Tribal Health Consortium..................... 84 anthc.org
NU FLOW Alaska................................................................37 nuflowalaska.com
Alaska USA Federal Credit Union................................. 43 alaskausa.org
Odom Corporation.......................................................... 67 odomcorp.com
All American Oifield Services........................................ 38 allamericanoilfield.com
Oxford Assaying & Refining Inc.................................... 52 oxfordmetals.com
ALSCO.................................................................................. 25 alsco.com
Pacific Pile & Marine..........................................................77 pacificpile.com
Altman Rogers & Co...........................................................9 altrogco.com
Parker Smith & Feek..........................................................57 psfinc.com
American Heart Association...........................................17 www.heart.org
PenAir................................................................................... 54 penair.com
American Marine / Penco........................................80, 81 amarinecorp.com / penco.org
Port of Alaska......................................................................21 portofalaska.com
Avis Rent-A-Car..................................................................71 avisalaska.com
SeaTac Marine Services................................................... 48 seatacmarine.com
Calista Corp........................................................................ 55 calistacorp.com
Seawolf Sports Properties................................................. 7 goseawolves.com
Carlile Transportation Systems........................................3 carlile.biz
Span Alaska Transportation LLC................................... 19 spanalaska.com
Conrad-Houston Insurance Agency........................... 20 chialaska.com
Stellar Designs Inc............................................................ 70 stellar-designs.com
Construction Machinery Industrial.................................2 cmiak.com
T. Rowe Price..................................................................... 59 uacollegesavings.com
Cornerstone Advisors.......................................................13 buildbeyond.com
Tioga Air Heaters.............................................................. 24 www.tiogaairheaters.com
Doyon Limited................................................................... 16 doyon.com
UA Facilities & Land Management............................... 35 ualand.com
DRS Technologies.............................................................31 www.drs.com
United Way of Anchorage.............................................. 49 liveunitedanchorage.org
First National Bank Alaska.................................................5 fnbalaska.com
University of Washington.................................................11 foster.uw.edu
Jim Meinel CPA P.C...........................................................15 meinelcpa.com
Voice of the Arctic Inupiat.............................................. 41 voiceofthearcticinupiat.org
Judy Patrick Photography.............................................. 53 judypatrickphotography.com
Webb Chiropractic - Ideal Protein............................... 70 webbwellnesscenter.com
Junior Achievement of Alaska...................................... 69 juniorachievement.org/web/ja-alaska/
West-Mark Service Center............................................. 25 west-mark.com
Lynden Inc.......................................................................... 39 lynden.com
WesternAircraft.................................................................. 83 westair.com
NCB........................................................................................15 ncb.coop
Westmark Hotels - HAP Alaska........................................9 westmarkhotels.com
82 | January 2019
Alaska Business www.akbizmag.com
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