Alaska Business November 2020

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CONTENTS NOVEMBER 2020 | VOLUME 37 | NUMBER 11 | AKBIZMAG.COM

FE AT UR E S 10 TELECOM & TECH

Building Trust Through Transparency Blockchain technology provides practical applications for Alaska’s industries

By Tracy Barbour

18 ALASKA NATIVE Flexibility Is Everything

ANCs rely on diversification to drive growth, shareholder profitability

By Isaac Stone Simonelli

92 OIL & GAS

A Barrel and a Hard Place An overview of the state’s fiscal dilemma and the implications of Ballot Measure 1

By Danny Kreilkamp

98 CONSTRUCTION A Link in the Chain

Metal fabrication’s versatile role in the construction industry

By Vanessa Orr

108 INSURANCE Behind the Scenes

Inside the business of insurance

By Tracy Barbour

26 FISHERIES

Treading Water

Alaska’s fishing industry struggles through pandemic

Cape Fox Corporation

LaRece Egli & Nels Ure | LaRece Construction

By Isaac Stone Simonelli

QUICK READS 8 FROM THE EDITOR

114 I NSIDE ALASKA BUSINESS

118 ALASKA TRENDS

114 ECONOMIC INDICATORS

116 RIGHT MOVES

120 OFF THE CUFF

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. © 2020 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 $4.99 each; $5.99 for the July & December issues. Send subscription orders and address changes to circulation@akbizmag.com.

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4 | November 2020

Alaska Business www.akbizmag.com

CONTENTS NOVEMBER 2020 | VOLUME 37 | NUMBER 11 | AKBIZMAG.COM

N AT U R A L R E S O U R C E D E V E LO P M E N T S P E C I A L S E C T I O N 36 PANDEMIC, PRODUCTION, PROGRESS

56 DIVING INTO ALASKA AQUACULTURE

Checking in on Alaska’s operating mines

By Kathryn Mackenzie

An emerging industry provides sustainable food security and economic opportunity

40 THE LONG WINDING ROAD TO PEBBLE

By Amy Newman

Understanding the Pebble Mine permitting process

By Sam Friedman

50 IT’S NOT A MINE, IT’S A DISTRICT

A Q&A with Trilogy Metals about the future of Ambler Mining District

By Kathryn Mackenzie

64 BUDDING ENERGY

Alaska looks to biomass as alternative electricity source

By Vanessa Orr

76 LITIGATING AND LIAISING

Alaska’s highly specialized attorneys support natural resource projects every step of the way

By Tasha Anderson

82 RESOURCE RESISTANCE Outside interests wage constant battle against development projects

By Julie Stricker

88 MINING DIRECTORY 6 | November 2020

Galyna Andrushko | Envato Elements

ABOUT THE COVER Natural resource development and matters of sustainability aren’t always the wildly opposing concepts they’re often made out to be. The industry highlighted on this month’s cover of Alaska Business is a testament to this notion. Marine aquaculture, or farmed seafood, is the harvesting of plants and animals in aquatic environments— and it’s finally beginning to bloom.

According to a leading institute for applied research, Nofima, farming fish uses less greenhouse gas emissions than land-based farming practices. But it doesn’t stop there; aquaculture also means year-round jobs, food security, improved coastal resilience, and a vibrant cover for our November issue.

Photography from National Geographic Image Collection Alaska Business www.akbizmag.com

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FROM THE EDITOR

VOLUME 37, #11 EDITORIAL STAFF

Giving Thanks and Digging Deep I

t’s officially my favorite time of year. I know that far more people get excited about the Midnight Sun than the (what’s the opposite of a midnight sun?) long, cold days of winter. But come on, what’s not to love about the Northern Lights against a velvet-black night sky? Or a fresh blanket of untouched snow glistening in the noon sunrise? Year after year I find myself bedazzled by winter here and continue to be grateful that I get to experience all that Alaska has to offer by just stepping outside.

And over the past several months I’ve found myself revisiting again and again the idea of gratitude and resilience. To be resilient, by definition, requires a challenge to overcome—and right now we all face one of the most demanding, impactful challenges of our lifetime. As taxing as 2020 has been—and no doubt, it has been exhausting—I’m also deeply grateful to be here still, helping to support businesses in our communities with news and information about the industries important to you.

One of those industries is mining, featured prominently in this month’s Natural Resource Development special section. Accounting for some 9,400 jobs (direct and indirect) and more than $700 million in payroll taxes annually, mining is a key economic driver in Alaska. As the year progressed and COVID-19 made its way to even the most remote corners of the state, the mining industry, already known for stringent safety protocols, had to quickly put in place additional protective measures.

To keep their workers safe—and the seventy communities from which they travel and to where they will return—companies dug deep to find solutions. How well are their operations doing? Find out in this issue’s mining review. I think you’ll be pleasantly surprised. And what would a natural resource development special section be without a little drama? So this month we’re including a Pebble Mine update. You may not be as surprised by that story.

For our cover story we dive into the world of aquaculture and examine the vast range of markets out there for items cultivated from the sea. Pickled bull kelp anyone?

Sounds like a new holiday tradition in the making to me.

Managing Editor Kathryn Mackenzie 257-2907 editor@akbizmag.com

Associate/Web Editor Tasha Anderson 257-2902 tanderson@akbizmag.com

Digital and Social Media Specialist Arie Henry 257-2910 ahenry@akbizmag.com

Staff Writer Danny Kreilkamp danny@akbizmag.com

Art Director Monica Sterchi-Lowman 257-2916 design@akbizmag.com

Art Production Linda Shogren 257-2912 production@akbizmag.com

Photo Contributor Kerry Tasker

BUSINESS STAFF President Billie Martin VP & General Manager Jason Martin 257-2905 jason@akbizmag.com

VP Sales & Marketing Charles Bell 257-2909 cbell@akbizmag.com

Senior Account Manager Janis J. Plume 257-2917 janis@akbizmag.com

Advertising Account Manager Christine Merki 257-2911 cmerki@akbizmag.com

Accounting Manager Ana Lavagnino 257-2901 accounts@akbizmag.com

Customer Service Representative Emily Olsen 257-2914 emily@akbizmag.com

CONTACT

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Happy reading,

Send address changes to Alaska Business 501 W. Northern Lights Blvd. #100 Anchorage, AK 99503

Kathryn Mackenzie Managing Editor, Alaska Business

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8 | November 2020

Alaska Business www.akbizmag.com

LIVING UNITED AND THEN SOME. Thank you for everything.

Through 17 years leading United Way of Anchorage, Michele Brown created partnerships, inspired volunteers, and led initiatives to raise our graduation rates, house those experiencing homelessness, and provide health care to tens of thousands of our neighbors. With a spirit both humble and relentless, she took on some of our toughest challenges – and united us in the work. The board and staff at United Way of Anchorage and the entire community thank you, Michele, for what you did.

.

You made Anchorage better.

LiveUnitedANC.org

United Way of Anchorage

B

TELECOM & TECH

Building Trust Through Transparency Blockchain technology provides practical applications for Alaska’s industries

iLexx | Envatoelements

By Tracy Barbour

10 | November 2020

lockchain, an innovative virtual distributed ledger system, is one of today’s most cutting-edge technologies. The technology’s key ingredient is its element of traceability— and it is changing the way the world does business.

Many people are aware of blockchain as the technology that enables the existence of cryptocurrency, a form of digital asset which is secured by encryption, rendering it immune to counterfeiting. But blockchain can be applied to numerous applications including supply chain logistics, seafood, financial, healthcare, insurance, trucking, and oil and gas.

So far in Alaska, the seafood industry is delving into the use of blockchain technology in a variety of ways.

So, what exactly is blockchain?

At its most basic level, it is digital information (the block) stored in a public database (the chain).

Blockchain is an immutable ledger for recording transactions and tracking assets, and the technology exists as a shared database filled with entries that must be confirmed by peer-to-peer networks and encrypted. Because of this, it can create an indisputable, tamper-proof log of sensitive activities. This makes blockchain more than a technology.

As IBM describes it, blockchain is a “movement” that can help many industries redefine their most important relationships through trust, transparency, and collaboration.

Blockchain has the potential to vastly improve the current global supply chain, and Alaska will ride this wave and benefit, along with everyone else, according to Glen Kratochvil, a blockchain aficionado and owner of Alaska Computer Guy. His Anchorage IT support and computer services firm is among the few Alaska businesses that accept cryptocurrency as a form of payment.

Characterizing the importance of blockchain, Kratochvil says: “Thousands of years ago when human civilizations began trading with each other, all commerce was local, and trust was not an issue because the different participants knew each other. Today's global supply chain has dozens or hundreds of steps between producer and consumer, with raw materials being

Alaska Business www.akbizmag.com

sourced from different companies and suppliers around the world.

“Tracking each step as a product is transformed from raw material to finished good is a difficult and expensive process, rife with opportunities for fraud or manipulation of the data,” Kratochvil says. “It is currently tracked in many cases with legacy tracking systems, which make the data difficult to obtain, hard to monitor, and often impossible to verify. Improvements to this broken supply chain would benefit everyone by saving time, increasing trust, reducing cost, and lowering risk.”

According to Kratochvil, Alaska businesses are likely using blockchain without even knowing it because of changes and improvements that are quietly occurring behind-the-scenes in many different industries. For instance, Wells Fargo is partnering with others to develop a blockchain solution to more easily track and record mortgage payments. Walmart uses blockchain in parts of its supply chain tracking for food and produce. Popular money transmission service MoneyGram is using Ripple's blockchain to expedite payments and to reduce fees for national payments. And Microsoft, American Express, Walt Disney, Google, Bank of America, and several large insurance companies are also either researching or actively developing blockchain projects of their own.

“These products and services will continue to trickle down and impact businesses at the local level as they are brought to market or incorporated into everyday activities such as buying a vehicle or being prescribed medication,” he says.

Certified Quality Foods Explores Blockchain

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Juneau-based Certified Quality Foods is an example of how blockchain has positive implications for one of Alaska’s key industries. The company’s subsidiary, Seafood Analytics, has developed a Certified Quality Reader (CQR) that collects data that can be used in a blockchain to quantify the cellular health and freshness of fish and other protein foods. The handheld device employs bioelectrical impedance analysis to enable users to measure body composition, degradation, and other aspects of fish. www.akbizmag.com

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November 2020 | 11

Seafood Analytics’ certified quality reader.

Seafood Analytics

Seafood Analytics’ CQR allows participants in seafood supply chains to obtain more data about the freshness-related attributes of the seafood they are selling, handling, or buying. The CQR data can also provide key objective quality metrics for both chilled and previously frozen seafood at each point along the chain of custody. The sensor promotes the use of the highest standards, which can result in retailers and end customers receiving a longer-lasting, more nutritional seafood product.

The CQR unit can be a tremendous game-changer, according to Keith Cox, co-founder and chief science officer of Seafood Analytics. Trying to complete an organic electronic valuation on fish can be difficult, and measurements between different inspectors will vary. “Our device is an electronic measure, so if fifty inspectors have fifty units, they are all going to get the same number,” he says. “It provides consistency in speed, and the data is stored as an objective measurement— and it is stored forever.”

12 | November 2020

Chuck Anderson, vice president of Seafood Analytics, also has a strong appreciation for the realworld application of the CQR data.

As a former buyer and director for a supermarket chain for twenty years, he would purchase a variety of seafood from multiple suppliers in different locations. But it was difficult to judge product quality from all the disparate sources. “It was always very subjective,” he says.

However, Seafood Analytics’ CQR provides reliable measurements of the important attributes of fish—including the fat content, which is especially relevant with salmon and tuna. “I would have loved to have had this kind of data to tell me what my product looked like coming from different sources,” Anderson says.

Seafood Analytics has two types of CQR units: a standard device and a more durable, waterproof version designed especially for Alaska fishermen. The technology, which was developed in 2018, is now being adapted for real-life situations in Alaska. “This year, we had

eleven units being used in the Bristol Bay sockeye salmon season,” Anderson says. “This was their first year using it.”

In Alaska, Cox says, people are using the CQR to collect data at the tender and processor level. Users range from Alaska’s Own Seafood, a small community-supported fishery program, to larger companies like Trident Seafoods. In the future, fishermen who are producing the highest quality fish could leverage the CQR data and blockchain to maximize the financial compensation from their catch.

Its becoming increasingly evident that blockchain is a way to assign value to data. The data is inherently valuable to the person buying the fish, so they can correct the handling process and receive a better product, Cox says. The more value one can put on the data, the more valuable it becomes.

Blockchain can have a broad impact on Alaska’s fishing industry in a number of ways. “We want fishermen to have more money,” Cox says. “We want to better sustain our resources and wild caught fish, and we want to improve

Alaska Business www.akbizmag.com

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“Thousands of years ago when human civilizations began trading with each other, all commerce was local, and trust was not an issue because the different participants knew each other. Today's global supply chain has dozens or hundreds of steps between producer and consumer, with raw materials being sourced from different companies and suppliers around the world.”

Glen Kratochvil, Owner, Alaska Computer Guy

the quality. Blockchain can do all those things. Not only are the fish valuable, but the data from the fish is valuable, too. The data could be another source of revenue.”

Anderson also sees how the CQR data and blockchain can be instrumental in optimizing the wild fishery output.

Alaska has been catching 90 million 14 | November 2020

tonnes of wild fish per year, and that number is not going to increase substantially, he says. “In order to grow people’s livelihood, we have to help them make more from their pounds of fish,” he says. “Every year, we can share data with different researchers, and maybe they could learn things to manage the fisheries better.”

Blockchain is already having an impact on the business practices of the seafood industry in general, according to Anderson. He feels people have more acceptance and understanding that there needs to be sustainable and fully traceable seafood. He explains: “It starts with the chefs and retailers that are pushing this forward. They are demanding more transparency in the supply chain, and the blockchain is the ultimate tool for doing this with confidence. A lot of them want to do the right thing.”

Many retailers and restaurants are committed to sourcing sustainable options. For some companies, pressure comes from the corporate level from shareholders who want to know sourcing is being done sustainably, as well as from eco-conscious consumers.

“The certified quality reader is a step above; it allows them to not only trace it back to a boat but to the quality,” Anderson says. “The fact that we’re using blockchain and the traceability, it gives people more confidence.”

Fishcoin and Other Blockchain Applications As blockchain technologies develop, so does the data that is going into them, Cox says. He relishes the idea of entities collaborating and collecting data for stakeholders’ mutual benefit.

That’s why Certified Quality Foods is working in consultation with Eachmile Technologies, the Singapore-based company behind the Fishcoin project.

Fishcoin is a blockchain-based seafood traceability and data ecosystem designed specifically for the global seafood industry.

Certified Quality Foods wants to see how the CQR scores from a batch of seafood could accompany key data elements (KDEs) for traceability from that batch as it moves through the value chain, according to Alistair Douglas, founding partner of Eachmile Technologies. KDEs can include data

such as the name and country of a fishing vessel’s registration, evidence of authorization to fish or farm (license or permit), type of fishing gear being used, species name, and landing date. “This enhances the overall value of the data set to the buyers of the seafood,” says Douglas, who has been involved in the seafood industry as a researcher, trader, and auditor for almost twenty years.

Fishcoin transmits data based on blockchain technology, which also enables greater efficiency in the supply chain management of fisheries.

Eachmile Technologies developed Fishcoin to solve traceability challenges in the “first mile” for sustainable seafood production, and it believes the initiative can increase the stability and security of the seafood industry.

According to Eachmile Technologies, Fishcoin represents a stabilized “token” that incentivizes supply chain stakeholders to share data from the point of harvest to the point of consumption. The flow of tokens moves from buyers to sellers in supply chains, rewarding those who make the extra effort to capture and communicate data. This shifts the economic burden to downstream actors like hotels, restaurants, and retailers who benefit most from traceability. Unlike many blockchain initiatives, Fishcoin is not based on a central company or entity.

Instead, it is designed to be decentralized and incentivizes data capture so that an ecosystem of companies and thirdparty developers can benefit by adding value to the network.

Participation in Fishcoin is steadily expanding. Currently, Fishcoin’s website lists more than two dozen partners, including Bristol Bay salmon processor Northline Seafoods.

Douglas expects the use of Fishcoin to continue to grow in Alaska and elsewhere, given its potential benefits.

A key factor is that blockchain builds trust in the value chain in that the data, once entered, cannot be edited or manipulated. “It is like a testimony to your truth,” he says.

Another important factor is that the blockchain is time stamped. Douglas explains: “When combined with temperature data through the cold chain, the buyers can shift to evidencedbased, best before dates rather than

Alaska Business www.akbizmag.com

LEGAL SPEAK

Steps to Deter or Detect Business Fraud

By Debra Mason, CPA/CFF, CFE Thomas, Head & Greisen PC

D

o you know how susceptible your business is to fraud?

Unfortunately, fraud is alive and well. More than one organization has gone out of business due to fraud.

However, there are ways to deter fraud, and ways to detect fraud.

The Association of Certified Fraud Examiners (ACFE) does a survey about every two years. The information provides insight into how and why fraud is committed, as well as ways to prevent and detect fraud. I recommend reviewing the 2020 Report to the Nations (copyright 2020 by the Association of Certified Fraud Examiners, Inc.) https://www.acfe.com/fraud-resources. asp Not surprisingly, fraud caught sooner costs less money than fraud detected years later. More of the frauds were perpetrated by employees with one to five years of employment, but the largest amounts stolen were by those employed more than ten years. The top three control weaknesses that contribute to fraud are lack of internal controls, lack of management review, and override of existing internal controls.

Businesses are most vulnerable to asset misappropriation (theft or misuse of a company’s assets) and to corruption (bribery, kickbacks, and conflicts of interest). Businesses can reduce or avoid losses by recognizing the common warning signs of these types of fraud early. Common warning signs are rising expenses and/or declining revenue, abnormally high inventory shrinkage,

unfamiliar vendors, lack of timely bank reconciliations, and delayed monthly financial reporting.

Businesses can protect themselves by deterring fraud to the extent possible, and by detecting fraud as soon as possible.

Some deterrents and detection methods include: • Do background checks before hiring.

• Have a code of ethics that includes honesty.

• Have internal controls. Some examples are: • One employee should not be able to do all of these tasks: keep the books, collect funds, write checks, and reconcile the bank statement.

• Someone aside from the bookkeeper receives the bank statement unopened and reviews the statement and cancelled checks for unfamiliar payees, declining deposits, and unusual transactions.

• Restrict access to bank accounts, including signers, online access and blank paper checks.

• Conduct or review bank statement reconciliations. Look for unusual items and items that remain on the reconciliation for long periods.

• Adequately secure inventory and supplies.

• Review backup documentation before approving or signing checks.

• Have a way for employees and customers to report suspicions anonymously.

• Perform periodic inventory observations and asset verifications.

Legal Speak is sponsored content that is provided by

• Watch for behavioral warning signs from employees such as living beyond their means, unusually close association with a particular vendor or customer, and unwillingness to share duties.

• Understand and verify the financial information reported to you. This can be as simple as understanding and reviewing the key indicators for your business.

• Do not rely on “trust”. “Trust” is not an internal control. By “trusting”, you are not protecting the employee or the business.

Instead, “trust” gives employees the opportunity to commit fraud.

Take steps to protect your business and your employees from fraud. It could save you money and many hours of frustration. It could also save your business.

Debra Mason, CPA/CFF, CFE Debra can be reached at (907) 272-1571

“Alaska has an advantage at the most difficult point in the value chain: the first mile. How it capitalizes on that with technologies like blockchain will be critical in order for its fishers to be identified, the qualities of seafood verified, and for the hard-working men and women of the industry be rewarded by the market.”

Alistair Douglas, Founding Partner Eachmile Technologies

risk-based use by dates, which forces the disposal of what could be perfectly good seafood. Indeed, 40 to 60 percent of our seafood is discarded, lost, or wasted through seafood supply chains according to the UN's FAO [Food and Agriculture Organization]. Less waste will enhance the businesses of the whole value chain and may benefit the consumers through lower prices.”

According to Douglas, traceability is one of the best use cases of blockchain technologies. The more it is used and the data is shared, the easier, faster, and cheaper the verification process should become. In addition, with data marketplaces incentivizing the placement of sensors in and around 16 | November 2020

seafood value chains, additional data may not only lead to a more efficient industry but also to additional revenue streams for those stakeholders.

While some companies in Alaska are experimenting with using blockchain, there are potential obstacles, Douglas says. “The challenges for traceability systems is the lack of interoperability [both syntactic and semantic] and the business model— be it on a blockchain or not,” he says.

“Data may be in different formats, a fisherman may be unwilling to pay for a digital system, the processor may not agree to transparency for fear of circumvention, et cetera. All these factors and more must be considered when applying a traceability system to a value chain.”

However, Douglas says, building trust in seafood supply chains is paramount, given that nearly one-third of the world's seafood catch is considered illegal, unreported, and unregulated. “But Alaska has an advantage at the most difficult point in the value chain: the first mile,” he says. “How it capitalizes on that with technologies like blockchain will be critical in order for its fishers to be identified, the qualities of seafood verified, and for the hard-working men and women of the industry be rewarded by the market,” he says.

In addition to being a Fishcoin partner, Northline Seafoods has used a blockchain-based solution called Wholechain. Last year, the company used the technology to trace 1 million pounds of Alaska sockeye salmon, according to Wholechain. The platform helped Northline Seafoods differentiate the unique quality attributes of its products in the marketplace.

Wholechain aims to benefit everyone in the supply chain, including producers, processors and distributors, brands, retailers, and other stakeholders. It provides an unchanging record of transactions along the supply chain from producer to seller. By using and sharing traceability data, the participants can enhance their own product insights and become vital links for traceable goods. And despite the complexities of Wholechain’s technical components, it offers companies like Northline Seafoods a user-friendly interface for tracing products from their source to their destination.

Enhancing Blockchain Adoption Although different industries are increasingly interested in adapting to blockchain technology, there are obstacles that make the process difficult. The technical intricacies and operational overhead involved in creating, configuring, and operating a blockchain, along with maintaining its infrastructure, can act as a barrier.

However, some major tech companies are offering a solution: blockchain-asa-service (BaaS). Amazon Managed Blockchain, for instance, enables users to easily create and manage scalable blockchain networks using open source frameworks. Microsoft makes BaaS available through Azure, and IBM offers it through the Bluemix cloud platform.

With BaaS, the external service provider sets up all the necessary blockchain technology and infrastructure for a fee. Once the technology has been created, the provider continues to handle the complicated back-end operations.

BaaS allows organizations to capitalize on cloud-based solutions to build, host, and operate their own blockchain apps and related functions on the blockchain while the cloud-based service provider keeps everything properly running.

At this stage of blockchain’s evolution, Kratochvil says he is excited to see the big names investing in advancing this technology and developing new and innovative uses for blockchain. “This is all still very new, and demand for knowledgeable blockchain developers is intense,” he says. “Large academic institutions and universities are pretty much all offering comprehensive blockchain education programs, and many of the transformational advances in blockchain will come as soon as some of the existing pilot projects are seen to be effective.”

Continuing, he says: “I look forward to the time, which I don't believe to be too far off, when blockchain will be improving people's health and increasing their safety. Saving consumers money, increasing people's quality of life, and providing transparency into the supply chain are also going to be some of the greatest benefits of blockchain adoption, in my opinion.”

Alaska Business www.akbizmag.com

A L A S K A N AT I V E

Flexibility Is Everything ANCs rely on diversification to drive growth, shareholder profitability

By Isaac Stone Simonelli

18 | November 2020

Alaska Business www.akbizmag.com

A

laska Native Corporations (ANCs) count on diversification among their holdings to provide meaningful dividends and services to their unique shareholders while also growing the corporation to serve future generations.

“Afognak, like other ANCSA village Corporations, is responsible for meeting economic, social, and cultural obligations to its shareholder owners—whose families live in or originate from the village of Port Lions or our ancestral village of Afognak,”

says Alisha Drabek, vice president of Afognak Native Corporation.

“Like many other Alaska Native communities, the village of Port Lions is physically remote and economically distressed. Standard publicly-traded American corporations are not owned in the same manner or responsible to a tribal community in the same way as ANCSA corporations.”

Afognak’s advocacy plan focuses on social responsibilities, including natural resource stewardship, cultural protections, economic development,

The original focus of Cape Fox Corporation's expansion into tourism was the Saxman Totem Park.

Cape Fox Corporation

www.akbizmag.com

Alaska Business

November 2020 | 19

Cape Fox Corporation has diversified its portfolio into cultural tourism.

Cape Fox Corporation

and community development efforts for the Afognak Alutiiq people, Drabek says.

To accomplish these goals, ANCs look for ways to grow and stabilize their business interests. For some, this means pivoting from traditional sectors— often resource extraction—to other, sometimes unexpected, opportunities.

Branching Out “Cape Fox was originally focused on the timber industry in Southeast Alaska,” Cape Fox Corporation CEO Chris Luchtefeld says. “As the company progressed and the timber industry was slowing, the corporation made the decision to enter into government contracting as a way to diversify the corporation.”

With its holdings of 23,000 acres of Native lands, Cape Fox pivoted from the slowing timber industry in Southeast 20 | November 2020

to government contracts and tourism.

Originally, the tourism business was focused on the Saxman Totem Park.

However, the corporation added the Cape Fox Lodge to its portfolio by the late ‘80s, Luchtefeld says.

While making significant headway with its federal government contracting subsidiary, Cape Fox continued to invest in local tourism ventures. Its holdings include the Cape Fox Village Store, Cape Fox Tours, the Heen Kahidi Dining Room inside its Cape Fox Lodge, Sweet Mermaids cafe, and George Inlet Cannery which offers “Taste of Alaska” tours.

The corporation saw year-overyear 2019 revenue growth of about 14 percent and is on target to see an additional 20 percent this year, Luchtefeld says, noting that it has been government contracting that has

remained a strong source of revenue for the corporation this year.

“We are primarily focused on professional and technical services in government contracting, which is very process and personnel intensive. We do not have a large amount of fixed assets, real estate, or other tangible assets on the government contracting side of the business,” Luchtefeld says.

“In contrast, the Alaska tourism side of the business is very different. It is more focused on assets, marketing, and creativity. Over the last few years, we have seen a shift in tastes and preferences among our local customers, cruise ship customers, and our fishing/hunting customers.

The shift has been toward unique, personal, and creative experiences, and we are doing our best to cater to those preferences through investing

Alaska Business www.akbizmag.com

in new properties and renovating the properties we currently operate.”

Though the pandemic has not had a significant impact on Cape Fox’s government contracting arm, the slowdown in the tourism industry has.

“While COVID-19 and the corresponding cruise industry shutdown has slowed the business this year, we are well positioned for a great 2021 season,” Luchtefeld says, noting that over the past two years the corporation has invested more than $4 million renovating the Cape Fox lodge, purchasing and renovating new restaurant properties, and introducing new, experience-based tours.

While Cape Fox plans to continue driving growth through government contracting sectors that are not as capital intensive, such as professional services and IT services, Afognak Native Corporation is growing beyond government contracting into commercial business.

“We certainly have witnessed, over the last couple of years, how heavily reliant we have been on government

“We have to go where the business is best suited for its profitability because the point of an ANC is to provide benefits to all of its shareholders. Shareholder employment is only one aspect of that.”

Alisha Drabek, Vice President, Afognak Native Corporation

contracting,” Drabek says. “It's always healthy to have diversification, so our board and senior management have been talking about diversification for many years.”

Strong Portfolio, Low Risk In June, Afognak acquired Alaskabased liquor retail store Brown Jug for $21.4 million. With twentyone locations in the state and 218 employees, the Brown Jug chain boasts $80 million in annual revenue, according to a news release.

“Adding retail sales will increase Afognak’s commercial operations revenue from 2 percent to 12 percent, which shifts government contracting from 98 to 88 percent going forward,” Drabek says. “This addition to our portfolio is a critically important diversification. Brown Jug is a financially low risk investment because the business is highly resistant to recession.”

Drabek explains that Afognak considers any acquisition based on the rate of return, risk tolerance, sales

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Alaska Business

www.doyon.com November 2020 | 21

“At the direction of our board, we are constantly considering investment opportunities in areas where we recognize promising rates of return with minimal or reduced risks.”

Jeevan Pokharel, COO Ukpeaġvik Iñupiat Corporation

price, asset valuation, and whether the industry is consistent with current core technologies and business expertise.

The Brown Jug acquisition offers additional value to the corporation by being Alaska-based. Prior to the purchase, only about 150 of the more than 4,500 Afognak family of companies’ employees were Alaskans; after the purchase this has increased to more than 350 Alaskabased employees.

“We certainly have recognized that there's an opportunity for our shareholders to have employment in our businesses,” Drabek says.

But many shareholders prefer to stay in Alaska, Drabek explains, and turn down opportunities to move to the Lower 48 for a career in government contracting within one of Afognak’s subsidiaries.

“We've had some move down to work within those businesses and find that that is just too big of a culture shock,” Drabek says. “And we have others who have been very successful and do work within Lower 48 operations.”

At the end of the day, Drabek says most shareholders want to live in Alaska, despite there being fewer opportunities for government contracting.

“We have to go where the business is best suited for its profitability because the point of an ANC is to provide benefits to all of its shareholders. Shareholder employment is only one aspect of that,” Drabek says, adding that the corporation has operations in more than twenty-five countries and territories worldwide.

Reaping the Benefits After struggling in 2017 and 2018 despite its diversified portfolio, leadership at Ukpeaġvik Iñupiat Corporation (UIC) also saw the need to further branch out, COO Jeevan Pokharel says.

This year, UIC year-over-year earnings growth is on track to increase by about 36 percent, while revenue is on its way to a 15 percent increase over the same period.

Pokharel also points toward UIC's recent push to diversify within the commercial sector, which comprises about 30 percent of its portfolio. He says he hopes to grow it to about 50 percent by 2030.

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Cape Fox Lodge in Ketchikan has recently been renovated.

Cape Fox Corporation

“To achieve this growth, we are strengthening and developing all of our business lines and overall operations,” Pokharel says. “Recent additions to our business lines

include a new heavy civil contracting arm in Alaska and the acquisition of a majority ownership in Johansen Construction Company, a Seattlebased construction company.”

The corporation is also expanding further into vertical government construction projects, Pokharel says.

“This is still very much an ongoing process and includes looking at all

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Cape Fox Corporation

“By diversifying the business into multiple business lines, we are able to weather downturns in individual businesses.

The COVID-19 outbreak this year is the perfect case study for why business diversity is important to the long-term health of the overall corporation.”

Chris Luchtefeld, CEO, Cape Fox Corporation

24 | November 2020

of our core strengths, our available resources and working to then develop, recognize, and act on opportunities for growth whenever and wherever possible,” Pokharel says.

“At the direction of our board, we are constantly considering investment opportunities in areas where we recognize promising rates of return with minimal or reduced risks.”

Pokharel says growing an ANC can be par ticularly challenging because not all of them are able to generate additional income through resource development.

“Still, for the last several years, UIC has been ranked in the top ten Alaskan-owned businesses and we intend to be within the top three by year 2030,” he says.

UIC’s leadership and direction are closely tied to traditional Iñupiat values, Pokharel says.

Among those attributes are many that probably don’t appear in standard American publicly-traded companies: humility, humor, spirituality, hunting traditions, and respect for nature, as well as love and respect for elders and one another.

“It's about the spirit of cooperation, first and foremost. Our respect for one another—that is paramount because that cooperation and respect leads to trust and leads to a healthy corporation,”

UIC CEO Delbert J. Rexford says.

Those values enhance UIC’s ability to meaningfully support its shareholders, Pokharel says.

“Like other ANCs, UIC is obviously committed and focused on improving our shareholders’ quality of life and providing meaningful dividends for all of our shareholders,” Pokharel says.

“To be able to achieve these goals, we need to be financially strong and generate profits that we can share with our shareholders.”

Luchtefeld also points out that Cape Fox’s primary mission is to “create a long term, sustainable source of employment, educational opportunity, and wealth for our shareholders.”

Like Drabek and Pokharel, Luchtefeld sees diversification as the key to accomplishing these goals.

“By diversifying the business into multiple business lines, we are able to weather downturns in individual businesses. The COVID outbreak this year is the perfect case study for why business diversity is important to the long-term health of the overall corporation,” Luchtefeld says. “Even with a major impact to our tourism business from COVID-19, we are still going to end the year with a solid profit and revenue growth of more than 20 percent this year due to the growth in other parts of our businesses.”

Alaska Business www.akbizmag.com

F

Providing innovative information and communication technology (ICT) solutions with unmatched service

or seventeen years, Leonardo DRS has consistently delivered costefficient, reliable, and scalable technology solutions throughout Alaska’s remote and challenging environments. The company primarily provides schools and health clinics with broadband services and optimized network applications such as video teleconferencing. It also offers highquality enterprise solutions, including managed services, technology support, cybersecurity, and 24x7x365 network operations.

Leonardo DRS operates and maintains resilient fiber optic, microwave, and satellite networks, including a 600-mile microwave network from Fairbanks to Allakaket. “We have served over 125 remote Alaska installations, from the Arctic Circle to the Southeast to the Aleutian Chain,” says Vickie Kelly, Business Development Manager, Alaska.

“We span the whole state.”

Leonardo DRS is a leading technology innovator and supplier of integrated products, services and support to military forces, intelligence agencies and defense contractors worldwide. The multi-billion-dollar, Arlington, Va.-based contractor facilitates mission-critical, classified programs, providing extremely secure communications, information assurance and network security.

“We bring that experience, depth of knowledge, and support into what we do in Alaska,” Kelly says.

PRIORITIZING AVAILABILITY AND RESPONSE In Alaska, Leonardo DRS distinguishes itself by the high availability of its broadband services and rapid response. The company never wants a customer to be without service—even if it means chartering a helicopter or plane to solve the problem. “Our group is passionate about the support they provide,” Kelly says.

The ability to react quickly is due to the size and resources of Leonardo DRS’ support group. Of the more than 6,000 employees at Leonardo DRS, the Global Enterprise Solutions business unit maintains a seven-person staff in Alaska and ten in Montana, that provide direct support to operations in Alaska. In addition, there are another 250 personnel in Dulles, Virginia that make up reachback support. It recently donated bandwidth to support rural schools during the coronavirus pandemic and helped the Tanana Chiefs Conference establish a wireless network for a COVID testing center. “Whenever there is a need, we try to respond very rapidly,” she says.

KEY TO SUCCESS Leonardo DRS’ accomplishments in Alaska are guided by its intentional approach to expanding. It’s about not trying to be all things to all people but looking at where the company can provide the best quality service and growth in that area.

Expanding its microwave network with two new towers in Indian Mountain and Allakaket is a prime example.

Other important success factors entail keeping current with technology and being vendor-agnostic, which enables Leonardo DRS to offer an array of solutions from diverse manufacturers. But perhaps the most essential components of the company’s performance are its long-time staff and their constant dedication. The Alaska support team encompasses program analysts, a program manager, and a senior network engineer with an impressive 29, 18, and 16 years, respectively, with the company. They, along with Kelly—a 32-year Alaska technology industry veteran—care deeply about being available for their customers.

Leonardo DRS also supports clients with a 24x7x365 help desk and two backup help centers. “We have three points of contact to ensure customers can reach someone any time should they need anything,” Kelly says.

For more information, contact

Vickie Kelly, Business Development Manager, Alaska 310 K St., Suite 200 Anchorage, Alaska 99501 (907) 231-5233 www.leonardodrs.com/ges

FISHERIES

Treading Water Alaska’s fishing industry struggles through pandemic

Bristol Bay Regional Seafood Development Association

By Isaac Stone Simonelli

26 | November 2020

Alaska Business www.akbizmag.com

T

hough Alaska seafood industry harvest numbers were not significantly impacted by the COVID-19 pandemic, there was a yearover-year decline in harvest value, according to a McDowell Group report.

The decline in value connected to the pandemic is primarily tied to operating and transportation costs and significant devastation to food service markets.

“In March, when the pandemic started to erupt in the US, the fishing industry realized immediately we were going to need to put safety precautions in place in order to have successful and safe seasons,” United Fishermen of Alaska (UFA) Executive Director Frances Leach says.

“With so many fishermen and processor workers flocking to Alaska during the summer, the potential for mass outbreaks coming from within the industry was high.”

Leach says UFA became a clearinghouse for COVID-19 updates as its team worked with processors, harvesters, medical experts, and the state to help the industry comply with Health Mandate 17, which focused on protective measures for independent commercial fishing vessels.

“We worked hard to keep the fleet up-to-date on what they needed to know, whether they were a member of UFA or not. Fishermen are known for keeping the best fishing spots to themselves and being elusive when it comes to giving up information,” Leach says. “The pandemic taught us there was no time for that—we needed to come together and share whatever information we could with each other.

We were all in a boat together, patching the holes so we could stay afloat and have a season. I was really proud of our industry and what we accomplished in such a short time.”

The Pandemic’s Impact The biggest impact on most harvesters was not costs related to COVID-19 safety precautions but the state of the market during the pandemic, Leach says. In general, fish prices were down while processing costs increased.

“Typically, in poor return years, fishermen can rely on a decent price for their product,” says Leach. “This year, there was hardly any fish, and they were getting paid peanuts for their product.” www.akbizmag.com

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“Alaska seafood processors have spent tens of millions of dollars implementing proactive health and safety protocols to ensure we are minimizing risks to Alaska communities, protecting our seasonal and resident workforce, and maintaining operations.”

Chris Barrows, President Pacific Seafood Processors Association

28 | November 2020

For some harvesters, the season was so bad that they quit mid-season to go back to their winter jobs early, Leach says.

Remaining in business during a pandemic comes with a set of unprecedented problems including the need to minimize this new risk and disruption in key markets for Alaska seafood on top of already significant pre-COVID-19 challenges.

Seafood processors operated in 2020 under a State of Alaska mandate specific to processing plants and processing vessels (Health Mandate 10, App. 1). “Minimizing the risk of COVID-19 transmission and outbreaks has certainly increased operating costs,” Pacific Seafood Processors Association President Chris Barrows says.

“Alaska seafood processors have spent tens of millions of dollars implementing proactive health and safety protocols to ensure we are minimizing risks to Alaska communities, protecting our seasonal and resident workforce, and maintaining operations.”

The costs Alaska seafood processing facilities face in managing

the pandemic are myriad, ranging from hiring medical companies to provide daily screening to modifying processing lines to secure proper social distancing, Barrows explains.

“Our members’ efforts have been science-driven, resulting in community and workforce protection plans that were reviewed and approved by the State of Alaska in April, shared with our community partners and local health organizations, and rereviewed by an additional team of University of Alaska epidemiologists in June,” Barrows says.

Pacific Seafood Processors Association member companies built their COVID-19 response plans around two core components: a robust entry program and aggressive plant-specific protocols. Plans had to evolve through the year as experts learned more about the virus.

Neither of those is a cheap process, Barrows says. Employees coming to Alaska went through a 14-day quarantine program with testing oftentimes both early and near the end of the period.

During this time, companies shouldered

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“We worked hard to keep the fleet up-to-date on what they needed to know, whether they were a member of UFA or not. Fishermen are known for keeping the best fishing spots to themselves and being elusive when it comes to giving up information. The pandemic taught us there was no time for that—we needed to come together and share whatever information we could with each other. We were all in a boat together, patching the holes so we could stay afloat and have a season. I was really proud of our industry and what we accomplished in such a short time.”

Frances Leach, Executive Director, United Fishermen of Alaska

the cost of hotels, food, and daily medical screening.

“In communities where it is possible to have a ‘closed campus,’ that tactic has been implemented and enforced to further reduce risk,” Barrows says, noting that the majority of shoreside processing plants in Alaska are in remote, isolated communities, but many have both a resident and nonresident workforce.

“Taken together, quarantines and in-plant protocols have been largely successful, to date, in preventing large scale outbreaks in our plants and, 30 | November 2020

equally important, minimizing risk to local communities and not stressing the local healthcare capacity.”

Barrows explains that representatives from the seafood processing industry have been holding weekly calls with the state’s public health officials and local community leaders. “Together we have partnered to implement stringent and effective protocols to minimize risk to our employees and transmission into surrounding communities, while still allowing vital food production to continue,” says Barrows.

The Price of Uncertainty Though no full account of the exact direct COVID-19 costs incurred by processors as of the end of August are available, McDowell Group estimates that at least $50 million has been spent between offshore and onshore facilities.

In addition to increased costs, the pandemic has also boosted uncertainty within the industry about being able to secure a sufficient workforce, Barrows says.

The Alaska seafood industry employs a significant number of people. About

Alaska Business www.akbizmag.com

58,700 workers were directly employed by the industry, earning nearly $1.7 billion in wages during the 2017-2018 period, according to the McDowell Group’s 2020 report The Economic Value of Alaska’s Seafood Industry.

“If you look at Bristol Bay, where the juvenile fish migrate out into the Bering Sea, they have continued to have strong returns, over 50 million sockeye, every year for the past six years. Whereas Southcentral Alaska, where the fish migrate out into the North Gulf of Alaska, where the warm water is more prevalent, we continue to see disrupted patterns in salmon productivity with smaller returns, smaller size of fish, younger fish [returning].”

Bert Lewis, Central Region Supervisor Alaska Department of Fish and Game

32 | November 2020

“An estimated 37,700 full-time equivalent jobs were supported in the state with wages of $2.1 billion, including multiplier impacts that result from the industry circulating money in Alaska’s economy,” the report states.

During that same period, the industry contributed $5.6 billion in economic output to Alaska’s economy, including multiplier effects.

Such multipliers can include anything from a captain hiring a diesel mechanic to fix their engine to a Bristol Bay processor chartering a flight to get workers into the region to all these stakeholders spending money on groceries and supplies for their households, says Dan Lesh, a senior analyst for McDowell Group.

“These added costs for health and safety purposes are significant and unique costs due directly to COVID-19, but they are necessary in order to operate and protect the food supply chain, the workforce, and Alaska communities,” Barrows says.

But the pandemic is only one of several factors that has affected the seafood industry this year, Lesh says.

“Non-COVID-19 factors include a weak salmon harvest, ocean changes due to climate change, and weakness in some markets, such as for salmon, going into this summer,” Lesh says.

Though the infamous 2015 warm water anomaly in the Gulf of Alaska, also known as “The Blob,” appears to have been an outlier, ocean temperatures in Alaska continue to be unusually warm.

How much the changes in water temperatures have disrupted the ocean’s food web isn’t clear, says Bert Lewis, the central region supervisor for the Division of Commercial Fisheries at the Alaska Department of Fish and Game.

“If you look at Bristol Bay, where the juvenile fish migrate out into the Bering Sea, they have continued to have strong returns, over 50 million sockeye, every year for the past six years,” Lewis says.

“Whereas Southcentral Alaska, where the fish migrate out into the North Gulf of Alaska, where the warm water is more prevalent, we continue to see disrupted patterns in salmon productivity with smaller returns, smaller size of fish, younger fish [returning].”

The trend of smaller and younger fish returning to streams and rivers

in Southcentral Alaska is seen across species, including Chinook, sockeye, and chum. Chinook salmon returns used to be dominated by fish that had spent four years in the ocean. Now, it’s mostly three-year fish with more twoyear fish also returning, resulting in smaller fish.

“Chinook salmon returns continue to be very weak. Salmon, in general, were under forecast and weak. However, there are some areas that did well, like Bristol Bay, again, which had another big year,” Lewis says.

Preliminary in-season harvest estimates for all salmon is slightly more than 113 million fish. Pink and sockeye catches led the charge with nearly 58 million fish and more than 45 million fish caught respectively. The Chinook harvest rate came in around 247,000 for the season.

“All indicators are that there's something in the marine environment driving these trends. It’s hard to pin down what it is. But if you look at the ocean temperatures related to climate change, and how it's probably disrupting the food web, that's the likely source but exactly what it is is unknown.”

Lewis was part of a team that recently published a scientific paper in Nature Communications titled Recent Declines in Salmon Body Size Impact Ecosystems and Fisheries.

“Alaska is widely considered a stronghold of intact, functioning salmon–people ecosystems, largely free of the factors that have severely depressed salmon abundances elsewhere, such as over-harvest, habitat-loss, net pen aquaculture [prohibited by law in Alaska], dams, and water diversion,” the report says.

“However, accumulating evidence from local and Indigenous knowledge suggests that adult salmon body sizes are decreasing, including in Alaska where salmon provide critical support for ecosystems and people.”

The paper notes that not only does the body size of salmon indicate its role in reproductive fitness, physiology, demography, and predator/prey dynamics but also significantly impacts the fishes’ economic value.

When compared to salmon maturing before 1990, the reduced size of returning Chinook salmon after 2010 resulted in a 21 percent drop in fisheries

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value and a 26 percent drop in meals for rural people, the paper explains.

“Downsizing of organisms is a global concern, and current trends may pose substantial risks for nature and people,” the paper states.

Commercial salmon fisheries in 2019 harvested slightly less than 207 million fish with an estimated preliminary ex-vessel value of approximately $658 million, according to an Alaska Department of Fish and Game report.

The ex-vessel value marked a 10 percent increase compared to 2018.

However, Alaska’s seafood industry goes well beyond salmon, which comprised about 37 percent of exvessel value for the 2017-2018 year, according to the McDowell Group study. Making up about 73 percent of the rest of the ex-vessel value were pollock, crab, Pacific cod, halibut, sablefish, and rockfish.

Barrows points out that the state's diversification of fisheries is essential to the overall success of the industry.

“All fisheries are important to the seafood processing industry in Alaska, because both the volume and diversity of species result in being able to serve many different markets and help keep businesses viable in the face of changing markets and natural fluctuations inherent in wild fisheries,” Barrows says.

“When one species’ harvest is down, you may rely on other species to fill in; when one market is poor, you try to move to other markets or put more effort into development of new markets.

In addition, every region in Alaska depends on different key species.

“Statewide, however, Alaska pollock and salmon comprise the majority of both volume and value. Pretty consistently, wild Alaska pollock, salmon, and various crab species combined make up 70 percent of the volume and a slightly higher percentage of value annually.”

With few exceptions, export prices for Alaska seafood are lower than in 2019, according to McDowell Group. The largest increase was a 14 percent jump for canned sockeye, while Pacific cod, sablefish, and sockeye prices fell by 9 percent, 14 percent, and 14 percent, respectively. However, the report does note that there is a trend toward increased exports later in the year, 34 | November 2020

which will require further assessment as 2020 comes to an end.

“Restaurant closures have obviously affected the foodservice market, leading both seafood consumers and purveyors to look at other ways to purchase, share, and enjoy seafood,” Alaska Seafood Marketing Institute Communications Director Ashley Heimbigner says.

“We need the state to recognize Alaska’s commercial fishing industry is Alaska’s number one direct private sector employer, employing over 60,000 people and paying $146 million in federal, state, and local taxes and fees, exporting over $3.4 billion in seafood.

We are important contributors to the State of Alaska.”

Frances Leach, Executive Director United Fishermen of Alaska

Heimbigner notes that the United States is seeing increased retail sales of frozen, canned, and even fresh seafood.

“Supply chains are shifting in some areas from food service to retail sales to meet the increased demand for frozen and shelf stable seafood. We continue to see a steady demand at retail as more and more consumers cook at home,” Heimbigner says. “However, the food service space is also now providing creative grab-and-go, take-out, and

outdoor dining options in response to the pandemic.”

Staying Afloat With the pandemic still wreaking havoc, the seafood industry isn’t in a position to relax.

“Continued vigilance and attention to detail in implementing health and safety protocols going forward will remain critically important,” Barrows says.

“The industry is taking these COVID-19 costs out of pocket at the same time we are facing severe disruption in key markets and multiple pre-COVID-19 cost burdens. The global pandemic has had serious impacts on markets and seafood trade, especially products destined for the food service industry.”

Despite the challenge faced by the industr y, Heimbigner says there “are strong oppor tunities” for Alaska seafood.

“Currently, we are watching dining and shopping trends and looking to work with new channels that seem likely to last beyond the pandemic,” Heimbigner says. “People around the world are looking for quality, value, nutrition, and traceability, all innate characteristics of Alaska’s seafood portfolio. The broad range of species and product forms— from fresh king crab to frozen Alaska pollock burgers—offers options for any budget or cooking ability and to meet diverse market preferences.”

Leach is adamant the industry must have higher fish returns and higher prices in 2021 to recover from the damages from the pandemic.

“We need financial assistance to make up for lost wages, which we are slowly getting,” she says.

To date, limited CARES Act funds (via PPP loans) have been accessible to the Alaska seafood processing industry, in contrast to other industries, Barrows says, adding that financial assistance is needed to manage extra costs incurred by operating through the pandemic.

“We need the state to recognize Alaska’s commercial fishing industry is Alaska’s number one direct private sector employer, employing over 60,000 people and paying $146 million in federal, state, and local taxes and fees, exporting over $3.4 billion in seafood. We are important contributors to the State of Alaska,” says Leach.

Alaska Business www.akbizmag.com

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Checking in on Alaska’s operating mines

By Kathryn Mackenzie

COVID-19 Mitigation In Southeast, Kensington Mine owner Coeur Alaska released a list of rigorous safety protocols with policies that include visitor pre-approval, quarantine requirements, social distancing, and a host of additional precautions for everyone coming to and from the Kensington site. Additionally, any employee with a temperature above 99.6°F will be denied access to the site.

Cineberg | iStock

NATURAL RESOURCE DEVELOPMENT

Pandemic, Production, Progress

T

he current state of Alaska’s mining sector could be summed up in three words: pandemic, production, and progress. Mining has been deemed an essential business activity here, meaning the state’s operating mines have been allowed to keep operating through the pandemic.

Unfortunately that doesn’t mean they’ve been untouched by the novel coronavirus. When cases of COVID-19 began popping up in even the most rural corners of the state, Alaska’s mining companies swiftly implemented new, stricter health guidelines to ensure exploration, development, and production activities could continue while also protecting the industry’s more than 2,600 full-time workers, their families, and communities.

36 | November 2020

Alaska Business www.akbizmag.com

www.akbizmag.com

employees worked hard to ensure a reliable source for heat and power was provided to the homes of Interior Alaska residents and businesses.”

Even while implementing stiffer safety protocols at its mine site, Pogo Mine owner Northern Star Resources donated more than $1.5 million to communities in Alaska, with a particular focus on the greater Fairbanks and Delta Junction regions.

And though the company (like so many others) saw an outbreak of COVID-19 at the Pogo mine during the second quarter, mine officials

and workers acted quickly to contain the cases and put in place additional safety precautions, all while improving quarter-over-quarter gold output.

For its part, the state stepped in to help out by suspending state-required payments until September 2021. The State of Alaska Department of Natural Resources Commissioner Corri A. Feige said in a September statement that “it is in the best interest of the state to grant affected persons a oneyear extension for payments required

by AS 38.05.210 and AS 38.05.211, and associated regulations.”

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Along with following recommended health and safety guidelines, Hecla, owner of Greens Creek, “took steps to de-risk all aspects of the business, which now puts us in a position to respond to COVID-19,” Hecla President and CEO Phillips S. Baker Jr. said in a release. The company proactively implemented a fourteen day quarantine for all employees coming to Admiralty Island in an effort to stop the virus from ever reaching the mine. The company also put in place a strict safety regime.

Red Dog Mine, located in Northwest Alaska and owned by Teck Resources, quickly established enhanced COVID-19 response measures after multiple employees and contractors tested positive for the virus. As of mid-September the company said all personnel at the mine site have been placed on Teck’s Worker Protection Program, meaning they must wear a KN95 mask, maintain social distancing, dine in their rooms, and are required to have two confirmed negative COVID-19 tests before departing the site. The company has also installed a "realtime" body temperature monitoring system including four thermal imaging cameras as a means of early symptom detection.

Meanwhile in Fairbanks at Kinross Gold’s Fort Knox mine, employees are being recognized for their efforts to curb COVID-19 through the Kinross “COVID Champions” program that launched in mid-May. Kinross implemented more than 140 employee suggestions at Fort Knox that encourage social distancing such as staggered shift start times; a reduction in the number of employees on buses with staggered seating; and replacing daily meetings with email updates, video calls, and radio dispatch, among other changes.

In Healy, Usibelli Coal Mine is working to maintain its stellar safety record by implementing many of the same safety measures as its fellow miners, saying of its COVID-19 response, “The flexibility and perseverance of UCM employees have allowed the coal mine to successfully operate as critical infrastructure in the state during the COVID-19 worldwide pandemic. Our

NATURAL RESOURCE DEVELOPMENT

Positive Results COVID-19 presents an untold number of challenges to every industry and has presented some opportunities too, especially for gold miners. Gold, which is largely considered to be a safe and (often countercyclical) investment, has seen record setting prices this year, helping offset some of the costs related to COVID-19.

At the Fort Knox gold mine, the Gilmore project continues to “progress well and is on schedule and on budget,” with the new Barnes Creek heap leach set for completion by the end of the year, Kinross reports in its second quarter results. The project is now approximately 80 percent complete with initial ore expected early next year. Kinross says stripping continued during the first quarter and supply procurement and delivery to the site are complete.

Kinross also announced plans to acquire a majority interest in the Peak Gold project from Royal Gold, Inc. for about $94 million. The Peak Gold project is expected to commence production in 2024 as an open-pit mine. It’s located about 250 miles southeast of the Fort Knox mine and has estimated measured and indicated mineral resources of approximately 1.2 million ounces of gold with a grade of 4.1 grams per tonne, and an estimated inferred resource of 116,000 ounces of gold with a grade of 2.7 grams per tonne.

Joining Kinross in the acquisition market in 2020 is Northern Star Resources, which announced it will acquire Saracen Mineral Holdings in a move that will create the world’s eighth largest gold miner. Both company boards say they back the $4.14 billion deal, set for a January 2021 vote.

Pogo Mine “delivered quarter-onquarter improvements throughout the year” despite experiencing an outbreak of more than three dozen positive COVID-19 cases, Northern Star Resources reports in its 2020 Annual Report. The mine produced 174,307 ounces of gold during its fiscal year and sold 173,036 ounces. The company expects to see up to a 25 percent negative impact at Pogo as long as COVID-19 remains at current levels in the United States.

38 | November 2020

And that is a statement echoed throughout the mining industry, not just in gold, and not just from certain companies. Every one of the six operating mines included here either experienced a COVID-19 outbreak, COVID-19-related shut downs, project and materials delays, or all of the above.

Alaska’s mining operations have responded by implementing effective safety precautions that allow them to keep operating and operating in the black. This bodes well for many exploration and development projects.

Despite that, Pogo’s quarterly production combined with soaring gold prices resulted in record cash flow for the year.

Coeur’s Kensington gold mine saw production dip slightly in the second quarter year-over-year to 33,058 ounces. This, however, was a modest quarter-over-quarter improvement driven largely by positive grade reconciliation from the Kensington Main deposit as well as an increase in throughput from the higher-grade Jualin deposit. Jualin accounted for about 16 percent of Kensington’s total second quarter production, increasing from approximately 8 percent the prior quarter. For the full year, Jualin is expected to account for up to 20 percent of Kensington’s total production. Coeur anticipates producing between 125,000 and 135,000 ounces of gold in 2020.

Hecla has also benefited from rising precious metals prices with the company reporting that, despite the pandemic, the company had its second highest quarterly silver production since 2016 which, combined with higher prices, resulted in almost 25 percent more revenue compared to the prior year and generated about $27 million of free cash flow. Silver production increased 14 percent year-

over-year for the nine-month period ending September 30 to about 8.2 million ounces. Gold production at Greens Creek was down 7 percent during the same time frame to about 38,000 ounces. The mill operated at an average of 2,366 tons per day, which is slightly higher than the second quarter of 2019.

Unlike precious metals prices, the price of zinc dropped from more than $1 per pound heading into 2020 to $0.80 in late March and a year-to-date average through October of $0.97, according to US Zinc. A drop in zinc demand (and subsequently prices) combined with the same COVID-19 problems faced by the rest of the industry helped contribute to a roughly 47 percent reduction in zinc production at Red Dog mine during the second quarter to 83,900 tonnes compared to 158,000 tonnes in the second quarter of 2019.

Lead production was also down in the second quarter to 21,500 tonnes, a 26 percent drop compared to the same period in 2019.

As the state’s only operating coal mine, Usibelli Coal Mine (UCM) fuels more than 30 percent of the Interior’s electrical generation, according to the Resource Development Council.

UCM is a privately-held, familyowned business employing about 100 workers. Mine production averages between 1.2 million and 2 million tons of coal annually. UCM supplies coal to six Interior power plants and over the years has exported coal to Chile, South Korea, Japan, and additional Pacific Rim countries.

Positive Progress From a purely financial standpoint, COVID-19 has wreaked havoc on the economy and cost millions of jobs. Alaska’s mining operations have responded by implementing effective safety precautions that allow them to keep operating and operating in the black. This bodes well for the many exploration and development projects in the works. The Donlin Gold project; the Pebble Project; the Livengood gold project; the Upper Kobuk Mineral Project; the Palmer Project; and Graphite One Project are all in various stages of development and/ or permitting that continues to move forward, one EIS at a time.

Alaska Business www.akbizmag.com

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The Long Winding Road To Pebble Understanding the Pebble Mine permitting process

By Sam Friedman

40 | November 2020

Alaska Business www.akbizmag.com

letter as a reversal from USACE, which earlier had appeared to green-light the project. But then-CEO Tom Collier said it wasn’t a reversal. He said the requirements from the letter were not unforeseen and that the wetland mitigation requirements are achievable.

T

he Pebble Mine project has never been closer to becoming reality. A favorable Environmental Impact Statement (EIS) published in July was a key step in the project’s progression from concept to active mine.

But permitting a large, controversial project is seldom a linear process.

A few weeks after publication of the EIS, several new challenges for the project emerged that could further delay the mine or even completely sink the project’s viability.

First came a fresh wave of opposition to the mine from national figures.

Donald Trump Jr. voiced opposition to the project in an August 4 tweet.

The next week Fox News host Tucker Carlson devoted a segment to “the case against Alaska’s Pebble Mine.” In early August, Joe Biden announced his own opposition.

Then, on August 20, the US Army Corps of Engineers announced challenging wetland mitigation rules for Pebble that go beyond the usual requirements for Alaska mines.

Understanding the Permitting Process An EIS is the cornerstone of the federal permitting process, so the July EIS was a major milestone for the Pebble Mine project.

Widely seen as favorable to the project, the document made sweeping statements about the potential gold, copper, and molybdenum mine’s impact on salmon populations including that the mine "would not have measurable effects on the number of adult salmon” returning to the two watersheds around the mine site. www.akbizmag.com

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Opponents of the Pebble Mine have described the wetland mitigation

NATURAL RESOURCE DEVELOPMENT

While the Pebble Mine has always faced organized opposition from a variety of environmental groups, in August several influential conservative figures, including people close to the president, entered the fray in opposition to the mine.

42 | November 2020

But a month after publishing a favorable EIS, the US Army Corps of Engineers (USACE) sent mine developers a letter containing wetland mitigation requirements, including a directive that Pebble preserve wetlands within the same watershed as the mine to offset destroyed wetlands.

Other mining projects in Alaska have had the option of fulfilling this Clean Water Act mitigation requirement by restoring or preserving wetlands from other parts of the state. Especially in a state as large as Alaska, an inwatershed mitigation requirement severely narrows the available options for developers.

For Pebble, mitigating the mine inwatershed will likely involve securing land or a conservation easement from the state, which owns most land in the area, says Bob Loeffler, a consultant who previously worked as the director of the Alaska Division of Mining, Land and Water during the Tony Knowles and Frank Murkowski administrations.

Any deal with the state would require a public process and likely result in delays to Pebble’s federal permitting.

“The state cannot sell development rights to Pebble without preparing a best interest finding and requesting public comment. Pebble has made no application to the state, and the state has not started any process to grant these rights to Pebble,” Loeffler wrote in an August memo to his client, the Lake and Peninsula Borough Assembly.

“It is unclear how and when, or even if, the state may wish to do so. But if they do, it will require a public process.”

Opponents of Pebble Mine have described the wetland mitigation letter as a reversal from USACE, which earlier had appeared to greenlight the project. But then-CEO Tom Collier said it wasn’t a reversal.

[Editor’s note: Tom Collier resigned as Pebble’s CEO in late September; as of publication, previous Pebble CEO John Shively has been appointed interim CEO.] Prior to his resignation, Collier said the requirements from the letter were not unforeseen and that the wetland mitigation requirements are achievable.

Speaking at an Alaska Support Industry Alliance digital breakfast event

Alaska Business www.akbizmag.com

NATURAL RESOURCE DEVELOPMENT

A rendering of the proposed Pebble Mine site.

Pebble Limited Partnership

in early September, he said Pebble is complying with in-watershed mitigation requirements despite believing these rules go beyond what is required under the law.

“We’re not left with much of an option: we either comply with their

mitigation request or we refuse to, in which case the permit is denied and we have to go to court to overturn their decision,” he said.

At the early September event, Collier said Pebble’s wetland mitigation plan would be available within a few weeks.

Blueprint for a Smaller ‘Megaproject’ As evaluated in the July EIS, the Pebble Mine would include an open pit about one-third the size of Anchorage’s Kincaid Park with a depth ten times the height of the Hotel Captain Cook.

Our Environment

More than twenty years ago, Fort Knox gold mine began production just outside Fairbanks.

With hard work and a dedicated staff, Fort Knox has become one of Alaska’s most successful mines.

Fort Knox’s support for Friends of Creamer’s Field and the waterfowl refuge is a testament to the mine’s commitment to environmental stewardship. Creamer’s attracts visitors from around the world during the spring bird migration, local residents enjoy its quiet walking trails, and both children and adults benefit from Friends of Creamer’s Field’s many education programs that raise awareness of our natural environment. Learn more at friendsofcreamersfield.org. www.akbizmag.com

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As the project moves toward state permitting, the Pebble Partnership plans to emphasize the jobs and tax revenue the mine will bring, topics that are especially relevant during the recession but which the company didn’t always emphasize during the environmental review.

The mine project features two mine waste storage sites that are larger than the pit, an 82-mile access road with seventeen bridges, and a natural gas power plant fed by a pipeline that would run under Cook Inlet to the Kenai Peninsula.

While it’s a big project, it could have been bigger. And it may still grow into a much larger mine. The mine plan analyzed by USACE is a scaled-back version of the project that Northern

Dynasty initially pitched to investors.

This “right-sized” mine would process only 12 percent of the known deposit and would close after twenty years of operation. Additional mining would require additional permitting.

In what the Pebble Partnership describes as concessions to minimize the mine’s impact, the company’s current mine plan doesn’t involve processing materials with a toxic cyanide solution. The current mine

plan also focuses on the Koktuli River watershed, keeping mining out of a second watershed also known to contain valuable minerals.

But even the smaller mine proposal threatens the Bristol Bay salmon fishing industry and the subsistence fishing culture of the region’s largely Alaska Native population, say mine opponents.

One of the main criticisms of USACE’s work is that it chose not to model a mine tailings dam collapse like the one that occurred at the Mount Polley mine in British Columbia in 2014.

Another concern is that mine developers overstated their ability to treat all the water used by the mine before releasing it back into the environment.

As Bristol Bay Native Corporation (BBNC) said in its response to the EIS, treating this wastewater—39 million gallons of it per day—would require wastewater treatment facilities with more than half the capacity of the Municipality of Anchorage’s wastewater treatment.

BBNC describes Pebble’s plan to treat this water as a vague pipe dream:

At NANA, we advance responsible resource development and economic opportunity to improve the lives of our people. Our Iñupiaq values of hard work, cooperation and commitment guide our partnerships and principles, informing our business operations at every level, every day.

Together, let’s develop Alaska’s potential. nana.com

44 | November 2020

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$1 Per Share: A Good Investment?

Northern Dynasty Minerals—Pebble project’s 100 percent owner—is publicly traded on the New York and Toronto stock exchanges. Claim to the world’s largest undeveloped gold deposit is the company’s only mining prospect, so its share price over the last twenty years has closely tracked major developments in Pebble Mine’s permitting process.

As of publication, Northern Dynasty shares were trading at about $1 a share on the New York

Stock Exchange, and four of the five financial analysts who follow the company gave it a “buy” rating.

Founded in 1985, Northern Dynasty is part of Vancouver-based Hunter Dickinson Inc., a privately-owned affiliation of mining businesses. Each of the affiliated companies is associated with separate mining projects.

In 2001, Northern Dynasty began acquiring mining claims to the Pebble deposit, which was discovered upstream from Bristol Bay in 1988. The company accelerated research on the prospect and established partnerships with several large mining companies.

But none of the mine’s initial investors stayed with the project. Over the next three years Pebble partners Mitsubishi, Anglo American, and Rio Tinto departed the project, leaving the Pebble Partnership a partnership of one: Northern Dynasty.

Northern Dynasty’s share value hit a peak value about $20 in 2011 before the departure of the project’s partners, a valuation that’s the equivalent of a $5 share price today when accounting for dilution from the company issuing

more than 300 million new shares over the last decade.

Northern Dynasty’s stock price hit a ten-year low of $0.22 in January 2016 following EPA action that sought to pre-emptively block development of the mine. Share prices have never approached the heights achieved during the Anglo American partnership phase, but shares have twice crested over $1 per share, most recently following the July publication of the EIS.

Pebble Mine vs. 280 Characters from Donald Trump Jr. While Pebble Mine has always faced organized opposition from a variety of environmental groups, in August several influential conservative figures, including people close to the president, entered the fray.

Most notably, the president’s eldest son retweeted a message from Mike Pence’s former chief of staff urging the president to block the Pebble Mine. “As a sportsman who has spent plenty of time in the area, I agree 100 percent,” said Donald Trump Jr. in the tweet.

Thank You Thank you to our employees and contractors for remaining vigilant in their safety practices—for each other, Red Dog Operations, and their families at home.

Learn more at www.teck.com/reddog

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November 2020 | 45

NATURAL RESOURCE DEVELOPMENT

“Should PLP’s [Pebble Limited Partnership’s] water treatment approach fail, the resulting pollution would flow directly into Bristol Bay’s salmon-rich waters. Pebble’s uniquely sensitive location requires the highest level of precaution in mine design, especially including water treatment of these magnitudes,” states the regional Native corporation’s response to the EIS. “Yet, in a continuing theme, PLP only presented [USACE] with concept-level technology to treat massive amounts of water.”

NATURAL RESOURCE DEVELOPMENT

PMS

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A graphic from the Pebble Mine EIS shows the layout of the proposed project’s facilities.

USACE

“The headwaters of Bristol Bay and the surrounding fishery are too unique and fragile to take any chances with.”

In August, two days before USACE announced the wetland mitigation requirements, a Politico article forecast the new requirements for Pebble Mine. These soon-to-beannounced requirements were cast as a “surprise reversal” from the Trump administration intended to “block” construction of the mine because of the new conservative opposition.

Collier was adamant that the USACE letter was a regular part of the permitting process and not a quiet way for the White House to kill the project.

“A clear reading of the letter shows it is entirely unrelated to recent tweets about Pebble and one-sided news shows,” Collier said in a news release responding to the Politico story and other related coverage. “The White House had nothing to do with the letter, nor is it the show-stopper described by several in the news media over the weekend.”

46 | November 2020

If the Pebble project gets the federal signoff it seeks this fall, the next step is State of Alaska permitting, a process the project’s owners say will take three years.

While it was predicting the demise of the Pebble project, the Politico article— which was sourced to Republican billionaire donor Andy Sabin and unnamed sources—also predicted

federal regulatory action to block the mine would be followed by a direct comment against the mine from the president. That wasn’t the case.

In mid-September, the president tweeted that there will be “no politics” in the Pebble Mine review process.

Of course, politics is involved and Joe Biden wrote in August that Bristol Bay “is no place for a mine” and criticized the Trump administration for re-opening the issue after the Obama administration preemptively blocked the project.

Pebble’s owners say a Biden win wouldn’t be a dead-end for the project.

That’s based on the position that a federal Record of Decision on the mine’s EIS will lock-in federal policy this fall, making it difficult for a future administration to take actions that contradict the document.

What’s Next: State Permitting If the Pebble project gets the federal signoff it seeks this fall, the next step is State of Alaska permitting, a process

Alaska Business www.akbizmag.com

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NATURAL RESOURCE DEVELOPMENT

This map shows how the mine will be supplied with energy, including a natural gas pipeline across Cook Inlet and the "northern route" transportation corridor selected by USACE as the LEDPA, or the Least Environmentally Damaging Practicable Alternative.

USACE

the project’s owners say will take three years, so mine construction would begin in 2023.

Politics will also play a direct role in state permitting because the final project requires a sign-off from the state legislature. Alaska’s Democratic Party directly opposes construction of the mine as one of the planks in the party platform.

Meanwhile, the state Republican Party passed a resolution in August stating its support for the Pebble project “unequivocally.”

The Pebble project needs legislative approval because of 2014’s Ballot Measure 4. Known by proponents as “Bristol Bay Forever,” the ballot measure passed by a 65/34 percent vote, evidence of broad opposition—or at least skepticism—toward Pebble Mine among Alaskans at that time.

But Pebble’s backers point to a more recent voter initiative as evidence of an electorate that’s sympathetic to the Pebble project: the “no” campaign won the 2018 Stand for Salmon/Stand for 48 | November 2020

As evaluated in the July EIS, the Pebble Mine would include an open pit about one-third the size of Anchorage’s Kincaid Park with a depth ten times the height of the Hotel Captain Cook.

Alaska initiative by a similar margin to 2014’s Ballot Measure 4.

As the project moves toward state permitting, the Pebble Partnership

plans to emphasize the jobs and tax revenue the mine will bring with it, topics that are especially relevant during the recession but which the company didn’t always emphasize during the environmental review, Collier said.

The mine plan calls for employing about 2,000 people for construction and 850 during mine operations.

These numbers are eclipsed by the 12,000 fishing and fish processing jobs in Bristol Bay. But armed with July’s favorable EIS, Collier argued the case that new mining jobs can be created without risking established fishing jobs.

"We've been hesitant to discuss our positive economic impact because we didn't want people to think we were trying to buy off a negative impact on salmon," Collier said at the Alliance breakfast in September.

"Now it's time to talk about the economic benefits of this project.

And they're going to be substantial.”

Alaska Business www.akbizmag.com

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NATURAL RESOURCE DEVELOPMENT

It’s Not a Mine, It’s a District A Q&A with Trilogy Metals about the future of Ambler Mining District

By Kathryn Mackenzie

Alaska Business: Trilogy Metals is no stranger to Alaska or to Alaska Business; we've covered the company in the magazine multiple times, and we featured then-CEO Rick Van Nieuwenhuyse on the November 2018 cover. Today, we're excited to learn about what's happening with Trilogy Metals in Alaska and particularly with regard to your joint venture with South32. What can you tell us about Trilogy Metals and its history in Alaska going back to its spinoff from NOVAGOLD to today?

Tony Giardini: The company’s history in Alaska dates back well before the formation of NOVAGOLD, which subsequently became Trilogy. The vision that Rick [Van Nieuwenhuyse] had was really to establish a mining district. He was very aware of the exploration upside—and 50 | November 2020

I

t’s been a busy year for Trilogy Metals. The company is focused on exploring and developing its high-grade copper-zinc-lead-gold-silver-cobalt properties in the Ambler Mining District, but that’s not nearly all. Over the course of this year, Trilogy Metals completed the formation of its joint venture— Ambler Metals—with South32 Limited; filed the final EIS for the Ambler access road project; appointed Tony Giardini as its president and CEO; received the go-ahead to begin development of the Ambler access road; and put in place a new management team for Ambler Metals. All this while moving forward with development of the Arctic and Bornite deposits.

So it’s a small miracle that Giardini and Patrick Donnelly, vice president of corporate communications and development, had a spare second to sit down with Alaska Business to talk about mining in Alaska, Trilogy’s joint venture with South32, and the future of the Ambler Mining District.

[Editor’s Note: The following excerpts are from a video interview conducted earlier this year. They have been edited for style, length, and clarity. To watch this interview simply access the enhanced digital edition of this issue via akbizmag.com] considerable exploration upside— that existed in the district. And it was through his relentless pursuit of this that the company was able to initially get to those exploration areas in the Ambler district, but then also enter into an agreement with NANA that created an economic model that will benefit not just Trilogy shareholders but NANA and its shareholders and will lead to, not just one mine development, but a series of mine developments in the district.

AB: What exploration opportunities in Alaska is Trilogy Metals particularly excited about?

Giardini: Having been in the mining industry for about twenty-five years now, I've operated in a lot of different mining jurisdictions. And Alaska is right at the top in terms of tenure of security

once you operate there, but also an appreciation of the benefits mining can have, not just for the stakeholders but for the communities and for the people residing in the state. We feel that being in Alaska is exceedingly important for us. And the key, of course, with the Ambler Mining District is about infrastructure… [the Record of Decision issued in July] puts us into the next phase working with AIDEA [Alaska Industrial Development and Export Authority] to see the development of that road. And what that does is open the district as a whole. What excites us is that it's not just about Arctic or about Bornite, it's about a series of other opportunities within the district that would allow us to continue mining for years to come.

The road that is being built is expected to have a life of fifty years,

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“What excites us is that it's not just about Arctic or about Bornite, it's about a series of other opportunities within the district that would allow us to continue mining for years to come.”

Tony Giardini, President/CEO, Trilogy Metals

AB: You mentioned earlier that the Ambler Mining District is located on lands owned by NANA Regional Corporation. Can you talk to us a little bit more about the partnership with NANA? Giardini: A portion of [the district] is on NANA lands… a deal that was negotiated where effectively we created a joint venture with NANA. We're very fortunate to have NANA as a partner and once we see the development of Arctic, NANA will make a decision as to whether they want to have a stake in the project directly or have a net profit interest to be equivalent to 15 percent. They have a long history of mining. Obviously, Red Dog [a zinc and lead mine owned

by Teck Resources and operated on NANA lands] has been an incredible success with NANA working with Teck.

We're very closely aligned with NANA and our expectation is that we'll be working hand-in-glove with the community in terms of looking at development opportunities. And the focus is not just on the economic return that NANA will receive but obviously on the employment and procurement opportunities that will exist in the district. The first step will be getting Arctic up and running. We're working very collaboratively with NANA and the community and their shareholders and will continue to do so as we transition into the joint venture.

AB: In July, Trilogy Metals received its Record of Decision from the US Bureau of Land Management for the Ambler Mining District industrial access road project. This www.akbizmag.com

Alaska Business

November 2020 | 51

NATURAL RESOURCE DEVELOPMENT

so we know that the economics of a road are effectively built on Arctic, Bornite, Sun, and Smucker coming into production. But we see more opportunity than that in terms of satellite deposits in the area.

And what excites us is the high, high grade nature of the deposits. The fact that it's an area that's typically been underexplored, that it is a combination of a variety of different metals, which actually is quite beneficial in terms of giving us opportunities to help fund the development of the area. Those are the key things that we're excited about as we look at the district as a whole.

NATURAL RESOURCE DEVELOPMENT

“When you look at the demand-supply fundamentals associated with copper, the world's going to need a lot more copper in the future. If you look at the electrification of the grid, if you look at infrastructure spending, if you look at electric vehicles—all of those things are going to require more copper.”

Tony Giardini, President/CEO, Trilogy Metals

means the company has been approved to develop a 211-mile gravel private access road into the Ambler Mining District. Patrick Donnelly, vice president of corporate communications and development explains what this phase means in terms of employment opportunities within the region.

Donnelly: If you look at the capital costs of the road, you’re looking at anywhere from $300 million to $400 million. The cost of the Arctic project is probably going to be close to $1 billion, and that's going to create hundreds and hundreds of jobs. The nice thing is these aren’t jobs where you need an advanced degree. We need drivers,

mechanics, people to build roads, that sort of thing. These are good, solid jobs that're going to give a real boost to the state of Alaska and in particular in an area that needs jobs badly. In the end, it's going to be thousands of jobs for people.

AB: Will you expand on your relationship with AIDEA a bit?

Giardini: We see AIDEA as one of the most critical partners and partnerships that we'll have. AIDEA’s mandate is to foster economic development in Alaska and look for opportunities to help fund infrastructure that would lead to employment and jobs and creation of tax revenues, ultimately for the state, but also for the residents in Alaska and NANA’s shareholders. So the focus with AIDEA is really on, ‘How do we get this road constructed into the Ambler Mining District and do it in a way that the cost of that road can be effectively amortized over a reasonable time period?’

I previously mentioned that the expected life of a road is fifty years and the economic case for building

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That is an agreement in principle that would look at a larger commitment down the road. AIDEA has about $35 million earmarked for engineering associated with the project, and they're looking for some sharing of those engineering expenditures… which is at this point is going to be Ambler Metals.

So we're in the process of looking at this initial million dollar agreement as a small step toward deciding how we're going to mobilize the $35 million from AIDEA and make contributions from the Ambler Metals-side, of which Trilogy is a part.

From engineering we would move into the actual construction of the road—a two-lane road of hardpacked gravel. It would be a private, industrial road. It would not be used for any other reason than getting access to the mining district. What neither AIDEA, nor ourselves, nor the community wants is that this becomes a road where you could have people go in either for recreation or for hunting and fishing. And that’s not what the intent is—this is really for industrial purposes only.

AB: You have mentioned Ambler Metals a couple of times; that's the name of the joint venture between Trilogy Metals and South32, correct?

Giardini: The way South32 initially came into the project was through committing to spend $30 million and then they had an ability to spend $145 million to create the JV. They exercised that option in late 2019 and the JV was created in January of this year. The new subsidiary is called Ambler Metals and it's owned jointly

by South32 and by Trilogy. [Ambler Metals] will be on the ground focused on the development, focused on the relationship with AIDEA and NANA and others. And Trilogy, of course, and South32 will continue to be involved as shareholders of Ambler Metals and working with those same parties in terms of managing our stakeholder relations and outreach.

AB: It’s known that Arctic is one of the highest-grade copper deposits known in the world with an average grade of 5 percent copper equivalent.

And the mine is expected to have a

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November 2020 | 53

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the road isn't just Arctic, it isn’t just about Bornite. It's also about Sun and Smucker, which are four of the known deposits that are well advanced in the area. AIDEA is looking at putting that road in place and putting a toll structure in that would recover that cost over a reasonable timeframe. That’s factoring in that there's not just going to be one mine, there'll be four mines. On a standalone basis, Arctic has a twelveyear mine life as it's contemplated and it wouldn't be able to bear the economic costs of the road on its own. So, it's going to need to factor in some of the other opportunities that already exist in the district.

There was an announcement by AIDEA of an agreement in principle to look at some of the initial funding for the next phase of the road development, which is focused on engineering. There's going to be some airborne surveys, et cetera, that are going to be run. And we're looking at a very modest initial investment of about $1 million, of which the Ambler Metals would fund half and AIDEA would fund the other $500,000.

NATURAL RESOURCE DEVELOPMENT

“The cost of the Arctic project is probably going to be close to $1 billion, and that's going to create hundreds and hundreds of jobs.

The nice thing is these aren’t jobs where you need an advanced degree. We need drivers, mechanics, people to build roads, that sort of thing.

These are good, solid jobs that're going to give a real boost to the state of Alaska and in particular in an area that needs jobs badly.”

Patrick Donnelly Vice President of Corporate Communications and Development Trilogy Metals

54 | November 2020

twelve-year mine life initially. Can you tell us about the proven and probable reserves for the different metals you’ ll be mining for there and what that translates to in dollars?

Giardini: The deposit is extremely high grade—the copper equivalent is north of 5 percent. There are 43 million tonnes of resource… its primarily a copper mine, but it has zinc, lead, gold, and silver credits. The economics based on the pre-feasibility study that was done a few years ago, and this was a Trilogy study, indicate that it has a net present value of $1.4 billion on an after tax basis and internal rate of return of 33 percent.

When you measure that against other copper deposits out there, what you’ve got is a great mix. You’ve got a very profitable mine because of that high grade and you’ve got low capital intensity. That means that initially we’re looking at about $800 million of initial capital, and that includes “sustaining capital” or capital that is spent as the mine is in production.

When you look at the amount of capital that has to be deployed per tonne of production, Arctic is on the low end of that scale. And that's an important consideration because that means the company and NANA, anyone who's involved, will see the actual capital cost recovered quite quickly. And the cash flow that is generated will start to be returned to shareholders and the community. The economics are quite compelling.

AB: How are you powering the area?

Giardini: Under the pre-feasibility study the power source was looking to be LNG… but there’s been a shift, and the consideration now is to look at diesel.

Even though you expect LNG to be more cost-effective, just given what’s been happening to the energy sector, when you look at the all-in cost of LNG—delivery, availability, et cetera— it’s actually more expensive than where diesel is today. And we’re looking at daily throughput of 10,000 tonnes per day, so the footprint at that site will not be huge, but we will need ample power generation to run the mills and to support the camp effectively.

Donnelly: What’s great about Arctic is the environmental footprint is tiny.

The area that could be disturbed is

less than 150 acres. It's a tiny postage stamp of land that's going to be impacted by the mine. Sot it's a win/ win. It's win/win for the environment.

It's a win/win for the people of the borough, and it's a win/win for Trilogy metals. You know, globally, it's getting more challenging to operate a mine.

You deal with more political issues, nationalization, and instability. And we're very, very fortunate that we're in a great place like Alaska. And the people of Alaska understand resources, understand mining. We don't take anything for granted about being in Alaska.

AB: This is a very exciting project and one we’ll be following closely here at the magazine. Any final thoughts?

Giardini: We think that the tone in Alaska is very positive with respect to the development of a project like Arctic. And just touching on what Pat said, the benefit of a project like Arctic is it’s a small footprint. There's prospectivity associated with it in terms of it being able to grow over time. And it's a high-grade deposit. And we have NANA as a partner, directly working with us to move this project forward and create economic opportunities and develop jobs in their community.

There are a lot of win/wins associated with this. We're going to use, for most part, infrastructure that already exists in the state. We're going to be good stewards of the environment.

We're very mindful of the fact that the communities where we operate are concerned about subsistence living.

And, finally, we've talked a lot about Arctic and we've talked about the projects, but we haven't really talked about the primary metal, which is copper. When you look at the demandsupply fundamentals associated with copper, the world's going to need a lot more copper in the future. If you look at the electrification of the grid, if you look at infrastructure spending, if you look at electric vehicles—all of those things are going to require more copper. We're seeing a dearth of quality copper projects, particularly in safe jurisdictions like Alaska. And we think that this this is a perfect type of development opportunity, not just for the state, but also in terms of a sustainable copper supply.

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NATURAL RESOURCE DEVELOPMENT

Diving into Alaska Aquaculture An emerging industry provides sustainable food security and economic opportunity

National Geographic Image Collection

By Amy Newman

56 | November 2020

Alaska Business www.akbizmag.com

“Farming is where you raise an organism from the very first seed to harvestable size in captivity in one place on a farm.

And so it’s like growing wheat or peas or anything else.”

Heather McCarty, Vice-chair, The Alaska Mariculture Task Force

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Development of Aquaculture in Alaska As an industry in Alaska, aquatic farming, or mariculture, is relatively new. The first fledgling oyster farms developed in the '70s, with interest in kelp farming kicking in around 2015, says Flip Pryor, aquaculture section chief with the Alaska Department of www.akbizmag.com

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A

quaculture is an industry Alaskans are probably familiar with, even if they’re unfamiliar with the term itself.

Broadly, aquaculture refers to the cultivation of numerous species of fish and aquatic plants, such as shellfish, algae, and finfish, as well as enhancement and restoration projects designed to increase wild populations of specific species, says Heather McCarty, vice-chair of the Alaska Mariculture Task Force. Cultivation can be at aquatic farms or, if aimed at restoration and enhancement, hatcheries.

Though the two seem similar, cultivation in hatcheries differs from that done on aquatic farms.

“The enhancement of the salmon—a lot of people call it ocean ranching— you basically grow the organism to a juvenile size and then you release them to the ocean,” McCarty explains.

“Farming is where you raise an organism from the very first seed to harvestable size in captivity in one place on a farm.

And so it’s like growing wheat or peas or anything else.”

As both a worldwide and statewide industry, aquaculture aims to counter the steady decline in fisheries and ocean populations by using the sea in the same way we farm the land.

“We are near the cap of what we can harvest from wild fisheries and wild populations, but we aren’t near the cap of what we can grow in the ocean,” says Melissa Good, mariculture specialist with the Alaska Sea Grant Marine Advisory Program.

In Alaska, most aquatic farms focus on oyster and kelp production (farming of finfish is prohibited in Alaska), says Riley Smith, development director for the Alaska Fisheries Development Foundation.

And the state has plans to grow the industry into a viable one that can serve as both a source of revenue and sustainable food.

NATURAL RESOURCE DEVELOPMENT

“There has been aquatic farming in Alaska for at least 1,000 years. If you look in Southeast Alaska, there is evidence of clam garden beds going back a very long time. There are traditional practices out there for aquatic farming. It’s not necessarily a new thing to do this in Alaska, but we’re certainly doing it in new ways.”

Melissa Good, Mariculture Specialist, Alaska Sea Grant Marine Advisory Program

Fish and Game’s (ADF&G) Division of Commercial Fisheries.

In actual practice, however, aquatic farming in Alaska dates back hundreds of years.

“There has been aquatic farming in Alaska for at least 1,000 years,” Good says. “If you look in Southeast Alaska, there is evidence of clam garden beds

going back a very long time. There are traditional practices out there for aquatic farming. It’s not necessarily a new thing to do this in Alaska, but we’re certainly doing it in new ways.”

Although interest in farming seaweed only began in the past decade, it has a long history of wild harvest in Alaska.

“Seaweed actually has been wild harvested for millennia in coastal Alaska, but only in 2014 did it market the first commercial seaweed,” Smith says. “And that really aligns with the mariculture industry.”

Despite Alaska’s history of aquatic farming and wild seaweed harvesting, Alaska’s first official step toward growing mariculture as an industry came in 1988, with the enactment of the Aquatic Farm Act, Pryor says.

The Act authorizes the commissioner of ADF&G to issue permits for the construction and operation of aquatic farms and hatcheries, the latter of which provide aquatic plant and shellfish seed stock to farms.

“The intent of the program is to create an industry that contributes to the economy, strengthens the competitiveness of Alaska seafood in the world marketplace, broadens the diversity of products, and provides yearround supplies of premium seafood,” he says.

Although current production focuses on Pacific oysters, blue mussels, and three species of seaweed—sugar, bull,

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of the Alaska Mariculture Development plan; NOAA funded the phased economic analysis that informed development of the plan, she adds.

“That plan is really what established a goal of $100 million [in growth] in twenty years in Alaska,” Bishop says.

Even in such a short time, the work is resulting in significant gains.

“We are starting to see some pretty significant growth,” she says. “From 2014 to 2018, we’ve had a 50 percent increase from total revenue in shellfish and aquatic plants.”

Increasing Revenue and Creating Jobs Mariculture can benefit Alaska in numerous ways, Smith says. Aquatic farms increase access to local foods, are compatible with the traditions, customs, and skills of Alaska’s rural communities, help improve local ecosystems, and can expand Alaska’s existing renewable seafood industry.

But its biggest, and perhaps most important, benefit is its potential to create jobs and grow the state’s economy.

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“Aquaculture can provide yearround, high-quality jobs and economic opportunities,” Bishop says. “It can help augment our seasonal tourism and commercial fisheries in Alaska, and I think there’s a lot of interest in that potential economic growth.”

The plan looks to grow the mariculture industry to $75 million in sales and 1,100 direct jobs, which would include approximately $38 million in direct wages. Oyster production, which currently accounts for more than 90 percent of all aquatic farm sales, continues to be the primary revenue source under the plan. The goal is to produce 45 million oysters, followed by 1.8 million blue mussels and 500,000 geoduck clams. Kelp production goals include an annual harvest of 19.2 million pounds of wet kelp, or 2.9 million pounds of dry.

Because of the higher start-up costs and the time it takes oysters to reach maturation, the state considers most oyster operations “hobby” or “lifestyle” farms. Though the market is smaller, from a financial standpoint this makes

November 2020 | 59

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and ribbon kelp—aquatic farms are also approved to cultivate other shellfish, including purple-hinged, rock, pink, and spiny scallops; sea urchins; sea cucumbers; and three-ribbed and giant kelp, according to an aquatic farming FAQ on the Alaska Department of Fish and Game website.

Earnest work to promote and grow mariculture as a viable industry only picked up speed in the last decade, with help from federal, state, and nonprofit entities.

As part of its broader goal of growing the US aquaculture industry, NOAA Fisheries has invested significantly in Alaska’s efforts over the past several years, both in terms of funding and developmental support, says Alicia Bishop, Alaska regional aquaculture coordinator with the National Marine Fisheries Service. A NOAA-funded grant helped the Alaska Fisheries Development Foundation kick off the Alaska Mariculture Initiative, aimed at accelerating mariculture development in Alaska. This led to the creation of the Alaska Mariculture Task Force under then-Governor Bill Walker and adoption

NATURAL RESOURCE DEVELOPMENT

Kelp farms are relatively new in Alaska and focus on growing and harvesting sugar, bull, and ribbon kelp.

Melissa Good

kelp farming an easier initial investment, Pryor says.

“The short growing season provides a quicker turnaround on investment than oysters, which can take several years to reach market size,” he says.

Kelp farming has the added benefit of aligning with the commercial fishing industry on several fronts, which ultimately might make it attractive as a supplemental income source for fishermen and rural communities that already harvest wild seaweed.

“Seaweed growing pairs well with being a salmon fisherman,” Good explains. “Salmon fisheries are during the summer months. If you want to be a seaweed farmer, you plant in the fall, tend during the winter, and harvest in the spring. So, the timeline matches up very well with someone who wants to go salmon fishing.”

Although large companies like Seattle-based Trident Seafoods have recently obtained preliminary 60 | November 2020

approval to open a kelp farm outside Kodiak, most of the interest in Alaska’s mariculture industry comes from “small mom and pop organizations or small tribal organizations that are trying to look for economic revenue for their community,” Good says.

A lot of that also has to do with the transferability of skills from commercial fishing to aquatic farming, particularly kelp farming.

“One of the things that has been really interesting anecdotally, on that employment front, is how fisherman can use their existing skillsets and oftentimes the same equipment and tools to start stepping into aquatic farming,” Bishop says.

From Sea to Market Increasing the production of shellfish and seafood is only half the battle when it comes to growing Alaska’s mariculture industry. The other half is finding a market for the products or, in

the case of seaweed, determining what those products should be.

While oysters have a longer lead time when it comes to market readiness, once they reach maturation, there’s a steady supply of buyers. Trevor Sande, owner of Hump Island Oyster Farm in Ketchikan, says he sells his oysters in a roughly one-third split to the cruise ship industry, seasonal restaurants throughout Southeast Alaska, and New Sagaya and 10th & M Seafoods in Anchorage.

Good says that most Alaska-grown oysters are consumed in-state, though the hope is for out-of-state demand to grow, much as it has for Alaska’s wild seafood.

Seaweed as a source of food in America doesn’t enjoy the same ready market, Smith says.

“In Asia of course, seaweed is fundamental to their market and their food cultures, and it’s just growing in America,” he says. Exploring and

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NATURAL RESOURCE DEVELOPMENT

Workers check an oyster float at Hump Island Oyster Company in Ketchikan.

Brittany Slick

“Aquaculture can provide year-round, highquality jobs and economic opportunities.

It can help augment our seasonal tourism and commercial fisheries in Alaska, and I think there’s a lot of interest in that potential economic growth.”

Alicia Bishop, Alaska Regional Aquaculture Coordinator, The National Marine Fisheries Service

identifying alternate markets for seaweed, such as for use in animal feed or fertilizers, and the techniques to process it for those markets, is part of growing the industry.

But Alaska companies are working to create a food market for kelp products. Barnacle Foods, located in Juneau, supplements its wild harvest with kelp from local farms, says owner Lia Heifetz. This year’s harvest, for example, was about half wild, half farmed. The company’s product line has grown over the past four years to include several flavors of kelp pickles, a variety of salsas, hot sauce, and seasoning.

The familiarity of those products to a Western palate is by design.

“Our strategy is to use kelp in foods that are familiar to maybe a 62 | November 2020

typical American consumer,” she says. “ We’re continually innovating and working on adding products that can incorporate kelp in a really unique way and that will be familiar and approachable to a lot of different people.”

Future of Aquaculture One of the biggest indicators of Alaska’s mariculture potential is the “significant increase in applications for aquatic farms,” Smith says. The state received four applications for aquatic farms in 2016, compared to 17 in 2019.

“It’s really exciting to see the industry grow in this direction, with the mom and pop companies and the larger investors coming in.”

And as it grows, it may expand opportunities in other ways.

“Another thing the growing farming industry could support is ecotourism, and we are starting to see a tiny bit of ecotourism,” Good says. “The cruise ship industry really wants to see what a working oyster farm looks like.”

Sande turned to ecotourism during the 2019 cruise ship season to supplement his farm’s revenue, which he says roughly breaks even. He purchased a twenty-passenger vessel and several fourteen-passenger vans to transport cruise ship visitors from the dock to the farm and added a tasting room, letting visitors sample the farm’s oysters alongside a glass of wine and kelp products from Barnacle Foods.

Though COVID-19 scuttled his plans this summer, Sande says he believes he can grow a viable business combining ecotourism with the oyster farm.

“The tours showed great promise,” he says. “There’s the potential for $1 million in sales from the tourist component. In the end, we were hoping to have combined revenues in the $2.5 million gross sales range for mariculture and eco-tours.”

As the industry slowly grows, stakeholder sustainability efforts continue.

The Alaska Fisheries Development Foundation currently has eight open grants dedicated to mariculture, and project teams are working toward completing a variety of objectives, including market assessment, product development, and increasing hatchery capacity, Smith says.

Bishop says that NOAA Fisheries has hired an aquaculture lead at the Alaska Fisheries Science Center who will prioritize and promote marine aquaculture research. Alaska Sea Grant continues to help the industry with research and by supporting education and business planning for those interested in working in the industry, Good says.

That investment, combined with the grit and determination of Alaskans, makes the industry wellsuited for Alaska.

“It’s a hard livelihood, you’re working hard, and that’s something that Alaskans really grasp on to,” she says. “Working hard and really being the driver of your own destiny.”

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Budding Energy Alaska looks to biomass as alternative electricity source

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By Vanessa Orr

64 | November 2020

Alaska Business www.akbizmag.com

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“We used to pay $35,000 a month for electricity and now we’re paying less than $7,500 a month. And that’s not including offsetting 60,000 gallons of fuel for the complex.”

Scott MacManus, Superintendent, Alaska Gateway School District

Alaska Business

November 2020 | 65

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I

n a state rife with natural resources, it makes sense to try to find ways to use these resources to produce energy. And while Alaska always has been and likely will be heavily reliant on fossil fuels, biomass as an alternative resource is beginning to attract interest.

“Biomass generally refers to plant and animal matter or municipal waste used for energy, though most of the biomass projects in Alaska are thermal wood heat projects,” says Alaska Energy Authority (AEA) Executive Director Curtis Thayer, adding that most of the agency’s biomass work is based around these types of projects.

According to AEA records, community biomass projects date back to 1995, when they applied for funding opportunities through the US Department of Energy. The Alaska Legislature created the Renewable Energy Fund in 2008, which supports biomass projects statewide.

While some projects have been met with success—such as the largescale biodiesel refinery opened by Alaska Waste in 2010 that uses local restaurant vegetable oil waste to operate its fleet of sixty vehicles using 10 percent biodiesel—other projects have not fared as well. Despite the fact that Haines Borough used energy produced from biomass to heat its senior center successfully for years, a larger project designed to build a biomass boiler plant near the school and a second biomass system at the wastewater treatment plant did not come to fruition.

“That project did not proceed,” says Edward Coffland, Haines Borough’s director of public facilities. “There was never enough public support, the economics were marginal, and a ready, reliable supply of biomass was not available, so the grant money was returned.”

According to AEA, there are currently more than 170 prefeasibility biomass systems throughout the state and in excess of 50 operating systems. A wealth of different groups—from the State of Alaska and the US Forest Service (USFS) to the Denali Commission and local governments—are helping fund and support these systems from feasibility to construction through training and long-term operation.

NATURAL RESOURCE DEVELOPMENT The Galena Interior Learning Academy was heated using imported oil at roughly $6 per gallon, which cost the school a tremendous amount. As part of a biomass project, the school campus’ heating district was revamped, including the installation of a wood chip boiler, which utilizes local timber resources.

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Pros and Cons According to Thayer, there are many benefits to biomass use in Alaska, which is why it has garnered so much attention.

“When communities install these systems, they see direct cost savings from reduced diesel consumption.

These systems also help to keep money in the local community by providing

jobs to locals for maintenance, project management, wood harvesting, and stoking the boilers,” he says.

“Money in the local community doesn’t just mean jobs, but it also creates a positive feedback loop for the economy,” he adds. “Additionally, because most of the wood used for these systems is waste, it pairs nicely with wildfire mitigation efforts, helping to provide fire breaks while heating community buildings.”

The Tok Biomass Project is a prime example of a biomass project meeting a number of needs. With a Renewable Energy Fund grant from AEA, Tok School designed and constructed a biomass wood chip heating system in the fall of 2009, which began operation in 2010. In 2013, the boiler was modified to produce steam and a steam turbine was installed to provide electricity in addition to heat.

“Before we started this project, the trees that were cut down for wildfire mitigation had no commercial value, so they were burned, which required paying people to monitor the disposal of this biomass,” explains Scott

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“The Alaska Wood Energy Development Task Group has nearly twenty participants that represent agencies from government entities [including AEA] to private, nonprofit, and tribal groups all working together to promote biomass in Alaska,” says Thayer. He also explains that Alaskans’ interest in biomass is largely dependent on the price of fossil fuels and a community’s ability to have fuel delivered regularly.

“When the price of diesel is low, biomass projects often do not pencil out economically,” he adds. “Biomass utilization will likely depend on both diesel prices and government investment in these systems.”

NATURAL RESOURCE DEVELOPMENT

When a natural resource like wood is readily available, it can make sense for communities to invest in biomass projects.

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the wood; I talked to a lot of different experts and took trips to other states to see their working systems to understand procurement and how they got the woody mass,” MacManus says. “We’re still learning new things; the university did a study last fall about the moisture content of standing green forest trees after freeze up, so now we know to harvest material after freeze-up but before the deep snow, when trees are sitting around 20 percent moisture, which is the perfect level.”

He adds that it took a while to get the infrastructure into place—and to find the right price point.

“We tried contracting for wood at first, but sellers were trying to maximize profit and we were trying to maximize savings; we were at opposite ends of the spectrum,” he says. Though the school district was originally paying $55 to $60 a ton, by taking over most of the work, it is now able to get wood delivered to the school for a consistent $20 to $25 a ton.

With the ability to make its own electricity, the district is seeing impressive savings.

Alaska Business

“Biomass generally refers to plant and animal matter or municipal waste used for energy, though most of the biomass projects in Alaska are thermal wood heat projects.”

Curtis W. Thayer Executive Director Alaska Energy Authority

November 2020 | 69

NATURAL RESOURCE DEVELOPMENT

MacManus, superintendent of Alaska Gateway School District. “We came up with a way to use that waste that is not only more environmentally sound but is cheaper than the cost of disposal because it costs less to give the biomass to the school district to create heat and electricity for the Tok school complex than to destroy it.”

While the concept was originally met with some skepticism from government leaders, MacManus says the community quickly embraced the idea.

“We showed up at an economic development meeting with a projector and a screen, and our five-minute presentation turned into a half-hour conversation,” he says of pitching the idea with Tok area forester Jeff Hermanns. “It wasn’t a difficult sell when we mentioned job creation, wildfire mitigation, and heating the school more efficiently. We didn’t have to twist too many arms, except the state, but my background in commercial construction helped with that.”

As with every new technology, there was a learning curve. “Our biggest challenge was learning how to handle

NATURAL RESOURCE DEVELOPMENT

“In the right circumstances, I would absolutely recommend using biomass, but each situation is unique; it really depends on what biomass is available and what capacities an organization has. On the North Slope, woody biomass isn’t the best idea given that there are no trees up there. You have to be able to use what’s local; if the resource is available, it can solve several problems at the same time.”

Scott MacManus, Superintendent, Alaska Gateway School District

70 | November 2020

“At this point, we’re saving anywhere from $250,000 to $400,000 a year depending on how much electricity we can produce,” says MacManus. “With only the hydronic unit, we were looking at a 20- to 25-year payoff. But because we can produce electricity, it’s already paid itself off 10 years into operation.

“We used to pay $35,000 a month for electricity and now we’re paying less than $7,500 a month,” MacManus continues, adding that Tok has an exceedingly high cents-per-kilowatt rate. “And that’s not including offsetting 60,000 gallons of fuel for the complex.”

In addition to saving money, the project employs two full-time and one part-time worker in the plant.

With the money it’s saved, the school hired counselors, restarted its music program, and uses its electricity to heat a greenhouse that produces 20,000 pounds of fresh vegetables each year.

On Prince of Wales Island, the Southeast Island School District,

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During the 2017-2018 heating season, Galena Interior Learning Academy’s wood chip heating system displaced roughly 92,000 gallons of imported heating oil, worth roughly $554,760.

The community instead spent approximately $385,100 on locally harvested wood chips, which equates to an annual savings of $169,660.

AEA

in partnership with AEA, designed and constructed a cordwood boiler system for the Thorne Bay School.

The system was integrated with the existing hydronic heating system in the school and later expanded to heat a greenhouse. By using cordwood as heating fuel, the school district created local jobs and has started to develop a cordwood economy on the island.

According to a case study provided

by AEA, the project has resulted in offsetting 15,000 gallons of fuel for a savings of $36,000. It also created six part-time jobs.

While some may worry that biomass projects will cause the state to lose jobs in the fossil fuel industry, it in fact creates more jobs statewide.

“Biomass does not offset 100 percent of the diesel fuel or electricity used for a building, so although fuel consumption is reduced, those jobs are not lost,” explains Thayer, noting that biomass systems also lead to construction jobs, www.akbizmag.com

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NATURAL RESOURCE DEVELOPMENT

“Before we started this project, the trees that were cut down for wildfire mitigation had no commercial value, so they were burned, which required paying people to monitor the disposal of this biomass. We came up with a way to use that waste that is not only more environmentally sound, but is cheaper than the cost of disposal because it costs less to give the biomass to the school district to create heat and electricity for the Tok school complex than to destroy it.”

Scott MacManus, Superintendent Alaska Gateway School District

72 | November 2020

Biomass briquettes are created using sawmill waste compacted to create briquettes that burn longer and faster than log wood. There are systems to manufacture these briquettes in Craig, North Pole, and Gulkana.

AEA

maintenance positions, and wood handling positions.

He adds that some biomass boilers have the ability to create biochar (biological charcoal), which is gaining interest in the state as a carbon sink used for agricultural purposes for its ability to absorb net carbon from the atmosphere, lower the need for fertilizer, and slow water runoff.

“Because these systems can operate sustainably without outside fuel delivery, they also provide a sense of energy security and displacement of fossil fuels, which is important for rural communities that may be subject to delays in fuel delivery,” he says.

As with any energy source, there are some challenges. Biomass boilers result in fine particulates, which can impact air quality, though this is largely dependent on wood moisture content. Trees also release carbon when they are burned, though this would eventually happen naturally through the decaying process.

Additionally, due to the size of these systems, they are not subject to air quality permits by the US Environmental Protection Agency (EPA).

“Most of the communities with these systems do not have air quality issues and this is not a major concern,” says Thayer.

One of the biggest hurdles, according to those who have installed these types of systems, is finding an affordable, available, consistent source of biomass. The Ketchikan Airport is a perfect example.

In 2016, the airport installed a commercial-sized pellet boiler to heat its building. In addition to potential fuel cost savings, the price of the equipment was covered through grants, which made it an attractive option.

“I started looking at replacing the boiler system and sent out an RFP, and the bids I got were expensive,” says Airport Manager Mike Carney of prices starting in the $700,000 to $800,000 range. “I began looking at other options and going to biomass clinics and visiting biomass operations in town. I looked into grants, and the bottom line is that the airport wouldn’t be able to get a grant for anything to do with oil, but because AEA was pushing biomass we could get the $800,000 system for free.”

While the original plan was to work with a local company that would provide pellets for the furnace, after a couple of years that company was sold and the new owners chose to forego that line of business.

“We were stuck finding pellets from out of town and then the ferry stopped running, and we couldn’t get pellets out of Canada,” says Carney of one of the difficulties of supplying the boiler. “We now buy them from a local hardware store in Ketchikan that has them shipped up on the barge, and then we use our own delivery truck to take them to our silo. When we’re paying $350 a ton for pellets and people in Oregon or Washington are

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NATURAL RESOURCE DEVELOPMENT

On Prince of Wales Island, the Southeast Island School District, in partnership with AEA, designed and constructed a cordwood boiler system for the Thorne Bay School. By using cordwood as a heating fuel, the school district created local jobs and has started to develop a cordwood economy on the island.

Dan Bihns | AEA

“Because these systems can operate sustainably without outside fuel delivery, they also provide a sense of energy security and displacement of fossil fuels, which is important for rural communities that may be subject to delays in fuel delivery.”

Curtis W. Thayer, Executive Director, Alaska Energy Authority

paying $150 a ton, it’s unfortunate. It’s not a best-case scenario.

“If the USFS or the state or AEA could create a reliable storage facility so that someone could make money delivering to more than one person, the demand would go up and the price would go down,” he adds. “There needs to be a way to make supplying pellets locally profitable.”

While the biomass boiler originally saved the airport approximately 40 percent over the cost of oil, the cost of finding pellets has reduced that savings, as have dropping oil prices.

74 | November 2020

“We’re still saving some money, and we’re still dedicated to using the wood boiler, which runs all the time,” says Carney. “It’s still my preferred way to go. It operates flawlessly; when we had the old system, we spent a lot more time on maintenance than we do on this one. We just put it down once a year for cleaning, and we rarely have to replace parts; if we do, they are just small consumables.”

Case by Case The goal of using more biomass is compelling, however—as with any new

technology—there are still some kinks to work out.

“In the right circumstances, I would absolutely recommend using biomass, but each situation is unique; it really depends on what biomass is available and what capacities an organization has,” says MacManus. “On the North Slope, woody biomass isn’t the best idea given that there are no trees up there.

You have to be able to use what’s local; if the resource is available, it can solve several problems at the same time.”

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NATURAL RESOURCE DEVELOPMENT

Litigating and Liaising Alaska’s highly specialized attorneys support natural resource projects every step of the way

By Tasha Anderson

A

laska is a big place, and its natural resource development projects match that scale: world-class deposits, budgets in the billions, hundreds and thousands of jobs in the making, and associated lawsuits and legal issues introduced by parties nationwide.

In September, fifteen states sued the US Department of the Interior, Interior Secretary David Bernhardt (in his official capacity), and the Bureau of Land Management over the decision to allow drilling in the Arctic National Wildlife Refuge (ANWR), a decision Bernhardt announced in August.

According to the suit, the defendants “unlawfully authorized the Coastal Plain Oil and Gas Leasing Program, opening the unspoiled Coastal Plain of the Arctic National Wildlife Refuge to expansive oil and gas exploration and development based on inadequate environmental review and an unlawful Record of Decision.”

The suit asserts the decision to allow oil and gas exploration activities violated the National Environmental Policy Act, the National Wildlife Refuge System Administration Act, the Alaska National Interest Lands Conservation Act, the Administrative Procedure Act, and the Tax Cuts and Jobs Act of 2017.

In addition to these general, big picture problems, the states laid out their concerns individually.

A portion of Alaska’s exported oil is refined in Washington, which 76 | November 2020

“reasonably expects to receive oil extracted from the Arctic Refuge and to bear the impact of the oil transiting via Washington waterways and tidelands, emitting pollutants into Washington air during the refinery process, being distributed throughout and from the state as fuel, and contributing to the potential worker safety hazards associated with refinery operations.”

California also objected to additional oil production supplying its in-state refineries. “In 2019, California refineries processed more than 73 million barrels of Alaska crude oil, accounting for 11.9 percent of the refineries’ total production. Exposure to pollutants produced by these refineries—which include carbon monoxide, benzene, formaldehyde, and arsenic—can cause cancer, birth defects, and asthma, among other health impacts, especially in environmental justice communities that are disproportionately affected by industrial pollution. Refineries also produce high levels of greenhouse gases, thus further contributing to the climate harms caused by oil and gas extraction.”

Massachusetts, Connecticut, Delaware, Illinois, Maine, Maryland, Michigan, Minnesota, New Jersey, New York, Oregon, Rhode Island, and Vermont all made similar claims that the decision to allow exploration sets at risk the wellbeing of many species of migratory birds and in turn

endangers tourism-related activities in those states.

Oil and gas projects in less controversial areas still take significant time to develop, and with the approval for oil and gas exploration not even half a year old, any specific project in ANWR is hundreds of permits, thousands of man hours, millions of dollars, and billions of data points away.

Because of this, the suit by necessity argues that the process of approval was flawed, stating the defendants “unlawfully prioritized oil and gas development over the Refuge’s conservation purposes”; “failed to take a hard look” at the impact of greenhouse gas emissions and the impact on migratory birds; and “failed to consider a reasonable range of program alternatives including an alternative that serves the conservation purposes of the Arctic Refuge.”

In essence, the defendants weren’t careful and made a bad call about what might happen.

So in a familiar story for Alaska, this lawsuit is not about preventing a badly designed project—no one knows what any project would actually entail as none have been proposed or reviewed through any state or federal process— the lawsuit is about preventing any project from happening, no matter what it may be.

This obviously isn’t the only lawsuit challenging resource development in Alaska—it isn’t even the only lawsuit

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When Final Permits Aren’t Final Not every development project in Alaska is challenged in a court of law, but such projects are relatively far and few between. “There are projects that happen on the North Slope that fall within the existing footprint up there that sometimes do not see lawsuits,” says Eric Fjelstad, who leads Perkins Coie’s Alaska environmental and resource practice and is a partner in the firm’s environment, energy and resources practice. “But when you get outside of that existing footprint, if you’re pushing west into NPR-A, if you’re pushing north into the offshore areas, if you’re pushing east into ANWR—that’s holy ground for people… Without getting into specific projects, some of them you can say with virtual 100 percent certainty that there will be litigation when the final permits are issued.”

Fjelstad has decades of experience working on exactly those types of

“There are projects that happen on the North Slope that fall within the existing footprint up there that sometimes do not see lawsuits. But when you get outside of that existing footprint, if you’re pushing west into NPR-A, if you’re pushing north into the offshore areas, if you’re pushing east into ANWR—that’s holy ground for people.”

Eric Fjelstad, Partner, Perkins Coie

projects in Alaska, joining Perkins Coie’s Anchorage office in 1999 and focusing today on projects connected to energy, mining, timber, and oil and gas.

“I tend to work on big projects; the ones you read about in the press are the ones I’m involved with, and they tend

to be hotly contested,” says Fjelstad.

“What happens in Alaska is it’s a real dichotomy: people feel passionately about developing Alaska resources and others feel equally passionate, maybe even stronger, about keeping Alaska in a ‘pristine state.’ Big projects bring those

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NATURAL RESOURCE DEVELOPMENT

against the federal government concerning exploration in ANWR. In terms of legal contentions against natural resource projects in Alaska, it’s just the tip of the proverbial iceberg.

NATURAL RESOURCE DEVELOPMENT

“With all the long lead times and large upfront costs for these companies to extract that mineral or oil and gas, it takes years of planning before even one drop of oil is produced. More often than not, I am working proactively with my clients, learning about their operations, learning about their strategic exploration and development objects, and getting in on the front-end of these things so that we can assure that they're complying with all the legal requirements, including regulatory restrictions, and protecting the environment from the get-go.”

Jill McLeod, Partner, Dorsey & Whitney

emotions and passions to the surface, and in our system there’s no easy way to resolve that. Should a project happen or not? That question gets resolved often through litigation.”

Fjelstad explains that litigation to halt a project’s development is most often brought against the agency that is issuing a permit or authorization and not the project’s owner/operator.

However, the outcome of such suits will obviously affect a project, so developers will generally “intervene” on the side of the agency to protect their investments and interests.

“The role of the intervener is typically to support the government’s positions, its briefs… A fair amount of what one would be doing in my space is providing information and supporting the government, but you also provide legal arguments.”

Fjelstad says he’s rarely seen arguing a case in a courtroom. “It’s specialized expertise; it’s hard to do that at the highest level if you’re doing 78 | November 2020

other things,” he explains. But he is regularly on litigation teams and plays a key role guiding a case’s strategy and management.

The Unique Frontier Much of Fjelstad’s work is done in collaboration with others; the many intricate details and wide array of legal skills required in natural resource litigation make providing legal services a team sport—one in which Perkins Coie is a major player.

“We have 1,100 lawyers across the firm,” Fjelstad says, noting that his group—environment, energy, and resources—is comprised of about eighty attorneys. “We have a deep bench, so we have the ability to marshal people: sometimes you just need more people to get the work done, but beyond that, sometimes you need specific expertise in sometimes idiosyncratic areas.”

And providing legal services for natural resource development in Alaska often requires incredibly specialized

knowledge. As Alaskans know, this place is special—and when it’s not, legislation is often passed until it is.

“We have a number of statutes that are really unique to Alaska,” Fjelstad says.

“The two that stand out the most are the Alaska Native Claims Settlement Act and the Alaska National Interest Lands Conservation Act. Both are unique to Alaska, and there’s a lot packed into those statutes; they’re highly relevant for many natural resource projects.

But even beyond that, there’s statutory language about the National Petroleum Reserve Alaska, and there’s everything that’s out there now with ANWR— there’s a variety of things that are in play in Alaska that you just don’t see in other parts of the country.”

For Fjelstad, this is the biggest draw to practicing in the 49th State. “One of the reasons I’m still really energized after twenty-six years is there’s a lot of passion around projects in Alaska,” he says. “Life’s short, and I’d rather work on things where there’s a lot of passion on both sides than a project where there isn’t, and Alaska has that in spades… We have a disproportionate number of projects that are just highly consequential—what I would call national class if not international class in scale. People care about them, people have very strong views. It just makes it fun.”

Beyond Litigation But litigation, like developing large projects, is a long process that takes place over time. To fill the gaps, Fjelstad supplements his litigation efforts with a variety of other legal services.

“I do a lot of work in the commercial space,” he says. Essentially, this work involves sorting out non-contentious agreements between parties: “Company A is doing something; Company B wants to get involved in the project, and there’s a deal that needs to happen.”

He also provides day-to-day legal counsel, which he says “can be really anything.” He might advise on compliance issues in the environmental stage of a permitting process, weigh in on business disputes, look at contract terms, or even help a client with issues that are somewhat political. “It’s the most demanding [part of his work]

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in the sense that the world moves pretty quickly and people want answers quickly.”

Litigation is highly visible and routinely reported on, which may lead many to conclude it’s the bulk of services that lawyers provide to companies involved in natural resource projects. “There is this view by the public that attorneys focus on litigation, and there’s this perception that all attorneys spend their day defending clients in court,” says Jill McLeod, a partner in Dorsey & Whitney’s Corporate Group and head of the firm’s Anchorage office.

“But in reality, most of my practice involves what I call ‘proactive legal services,’ which is preventative, collaborative, and completely nonadversarial… I would say that I’m a corporate transactional attorney… I predominantly work with clients to essentially identify and help them manage their legal risks before they become issues in an effort to actually prevent lawsuits.”

It turns out lawsuits are expensive, they take a long time, and—critically important—“they are plagued by the unknown,” McLeod says. “There are risks involved in litigation.”

When litigation can’t be avoided, McLeod serves in an advisory position, assisting a litigation team on a strategy regarding permitting or other challenges. She’s an expert in the area, as much of her day-to-day work includes helping clients obtain licenses and permits from appropriate local, state, and federal authorities and providing advice on compliance with legal requirements. She also regularly works with her clients on environmental compliance and resource protection statutes and assists with the environmental assessments and environmental impact statements that government agencies use to support permitting decisions.

That doesn’t mean that McLeod’s workload is free of disputes. “Generally the types of disputes that I manage go beyond permitting disputes or environmental legal challenges,” she says. “The disputes that I would generally be involved in relate to royalties, joint operating agreements between partners, lease disputes, disputes that arise between operators

NATURAL RESOURCE DEVELOPMENT

“We have a number of statutes that are really unique to Alaska. The two that stand out the most are the Alaska Native Claims Settlement Act and the Alaska National Interest Lands Conservation Act. Both are unique to Alaska, and there’s a lot packed into those statutes; they’re highly relevant for many natural resource projects. But even beyond that, there’s statutory language about the National Petroleum Reserve Alaska, and there’s everything that’s out there now with ANWR—there’s a variety of things that are in play in Alaska that you just don’t see in other parts of the country.”

Eric Fjelstad, Partner, Perkins Coie

and construction contractors… that’s where my role in dispute management and dispute resolution comes in.”

When McLeod’s clients need assistance beyond her specialties, or their disputes do move into a court setting, she relies on the extensive resources of her firm, Dorsey & Whitney, which has been providing legal services for more than 100 years and has attorneys in the United States, Canada, Europe, and the AsiaPacific region serving clients around the world.

“Because we have a multidisciplinary team of attorneys across the globe, there’s a platform there that I have access to, so I can help to guide the client through different issues and evolving areas of the law and 80 | November 2020

regulations our lawyers in other offices are tracking sometimes even more closely than I am because it's a federal regulatory requirement that they're dealing with daily. So we provide what I would say is a complete legal solution to our clients in the mining and the oil and gas industries.”

Knowing the Business McLeod’s entrance into the Alaska law scene was not with Dorsey & Whitney but as in-house counsel for ConocoPhillips, where she was able to gain insight into a spectrum of legal issues related to oil and gas projects.

“While working as in-house counsel for an oil company, you have a single client and therefore you're exposed to all the facets of the business operations, and

as a result you have the opportunity to handle just a myriad of legal issues for the company,” she says. “Leasing, permitting, drilling, exploration, development and production issues— you name it, I touched it.”

She worked for ConocoPhillips for nine years before transitioning to partner at Dorsey & Whitney, and since then has expanded her industry expertise from oil and gas to include mining.

“There’s a lot of overlap in the legal issues that these two industries face, so it’s been a nice segue for me to move into the mining law realm, as well. I enjoy it.”

It’s also a boon for the firm and its clients. “Dorsey & Whitney has a very large mining practice in the Lower 48; we have offices in Salt Lake City and Denver where we have a number of lawyers who specialize in mining law. When I joined the Dorsey & Whitney Anchorage office, although we had mining expertise in our other offices, there was no one in the Anchorage office who had a mining background. It was an easy transition into the mining law world to assist our existing clients (and new clients) from Anchorage with their legal issues in Alaska.”

McLeod likes to invest in her clients, which she has ample time to do because of the nature of natural resource development. “With all the long lead times and large up-front costs for these companies to extract that mineral or oil and gas, it takes years of planning before even one drop of oil is produced,” she says. “More often than not, I am working proactively with my clients, learning about their operations, learning about their strategic exploration and development objects, and getting in on the frontend of these things so that we can assure that they're complying with all the legal requirements, including regulatory restrictions, and protecting the environment from the get-go.

“That's what's so much fun about working in oil and gas: even as outside counsel, I've been able to play that in-house counsel type of role—while working with a company's in-house counsel or their business and commercial folks—so it's really great.”

Alaska Business www.akbizmag.com

Resource Resistance Outside interests wage a constant battle against development projects

By Julie Stricker

Aleutians East Borough

NATURAL RESOURCE DEVELOPMENT

I

82 | November 2020

n 1960, nearly 9 million acres in Alaska’s northeast corner was set aside as a protected wildlife refuge—the Arctic National Wildlife Refuge (ANWR).

Twenty years later, then-President Jimmy Carter expanded the refuge to 19.3 million acres, but set aside about 8 percent of ANWR for potential oil and gas development, called the 1002 area after a clause in the Alaska National Interest Lands Conservation Act (ANILCA). The exploration had to be authorized by Congress.

Since that time, ANWR exploration has been repeatedly brought up by Alaska’s congressional delegation but fails to pass. Lawsuits against drilling are filed by a range of organizations, including Earthjustice, National Resources Defense Council, and other environmental groups. Every move on ANWR makes national headlines. Bills from Lower 48 congressmen to return the 1002 area to wilderness status similarly fail.

Then in 2017, President Donald Trump signed the Tax Cuts and Jobs Act, which includes authorization for responsible development. But what looked like a long-fought victory for those seeking to develop the area hasn’t manifested.

Nearly three years later, development is dogged by lawsuits.

Why so much attention on an isolated, out-of-the-way, rarely visited sliver of Alaska’s Arctic? Through a Lower 48 lens, ANWR is often seen as a pristine slice of wilderness already being threatened by a warming climate.

Development opponents cite impacts on wildlife, the local environment, climate change, and the diminishment of wild areas. Several major banks have announced they will not fund drilling in ANWR. It’s a story that has played out all over Alaska for decades. Every major resource development or energy project in Alaska, and some smaller ones, are almost immediately hit with opposition from Outside organizations.

It’s not just ANWR; it’s the proposed road to the Ambler Mining District, it’s a gravel road to the Aleutian village of King Cove, it’s mines at Pebble and Donlin, coal in Chickaloon, and even the long-delayed North Slope natural gas development.

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She’s also keeping a close eye on Ballot Measure 2, which would open Alaska’s primaries and introduce ranked choice voting, not because of the topic but because of the measure’s backers.

“I’m talking about dark money coming into the state, and it comes in all different forms,” Logan says. “One of my biggest concerns with Ballot Measure 2 is seeing who one of their first funders was, a Murdoch person [Kathryn Murdoch, daughter-in-law of media mogul Rupert Murdoch] whose number one issue is climate

change. It’s really that ‘keep it in the ground’ strategy.”

Although the messaging has improved somewhat over the last year, Alaskans generally have not done a good job getting the message out that mining and development in the state is being done responsibly, she says.

“We all live here and work and play here in Alaska. We’re here for a reason. We love it. It’s beautiful and all the recreational opportunities.

Nobody who lives here and works here is going to do something that would hurt the environment.”

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Just Another Day In late August, Alaska Governor Mike Dunleavy wrote an opinion piece that was published in The Hill, noting that Outside interests have delayed development in Alaska for decades.

“Denying Alaska the ability to develop our natural resources certainly flies in the face of our rights,” Dunleavy writes.

“As a state whose admittance to the union was predicated on our ability to develop natural resources for the benefits of our people and our country, a future viability of Alaska has been thrown into question in only a few short decades after misled activism.

“The simple truth is that for every project of Alaska unceremoniously canceled by mob rule, those natural resources in question will continue to be sourced from foreign suppliers that generate harmful pollution and human suffering.”

Outside influence is pervasive in Alaska, says Rebecca Logan, CEO of the Alaska Support Industry Alliance.

“It’s frustrating… there are two stories that come to mind. Number one is the Sierra Club and Center for Biological Diversity tried to intervene in the FERC [Federal Energy Regulatory Commission] decision on the Alaska gas project,” she says.

Such actions are not unexpected; in fact, Logan says they’re so common they’re almost part of daily life in the industry.

“Where it’s really frustrating is when people in Congress from other states step in and start getting involved in those discussions on Pebble mine, on ANWR, on pretty much overall resource development,” Logan says.

“It’s like they’re trying to save us from ourselves, and certainly insinuating that the Alaskans who are up here working on these projects aren’t going to do it responsibly.”

But Logan says that in the ten years she’s been at the Alliance, this is the closest Alaska has come to developing the 1002 area.

“That’s why I think you see the intensity of the attacks increasing,” she says. “I can’t even remember so far how many bills we’ve had in the last year in the House to stop drilling in ANWR. They pass the House and they never make it to the Senate, but there have to have been at least ten this year.”

NATURAL RESOURCE DEVELOPMENT

The only way in and out of King Cove, located in the Aleutians East Borough, is by air or by boat.

Paul Dennler

Road to King Cove King Cove is a community of about 900 people in the Aleutians East Borough surrounded by soaring volcanoes and a deep-water harbor that is home to an important commercial fishery. It is also in the midst of a storm corridor, which frequently brings dense fog or high

winds that can cut off the community for days at a time.

The only way in and out of King Cove is by air or by boat. Weather conditions shut flying down to about 100 days a year, according to Greg Hennigh, King Cove's city administrator. It’s a twohour boat ride to Cold Bay, the nearest community with an all-weather airport.

People with medical emergencies must either wait and hope for the best or call in the Coast Guard for a risky medical evacuation.

Cold Bay has the third-largest airport in the state, a relic of World War II preparations in the Aleutians. But no road links the two communities, although King Cove has been trying to get one built for decades. King Cove community leader Della Trumble calls the road “a matter of life and death.”

Community leaders cite a number of fatal air crashes over the years, as well as risky medevacs in storms.

Hennigh says the community is looking at an 11-mile single lane gravel road with limited traffic. The US Fish and Wildlife Service says no go.

The problem is, any potential road would have to go through Izembek National Wildlife Refuge, which was designated as wilderness in 1980 under ANILCA. Izembek is an important stopover for Pacific brant, which fatten up on the refuge’s large beds of eelgrass before migration. It is also home to many other seabirds, caribou,

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Alaska Senator Lisa Murkowski and Interior Secretary Sally Jewell sit with King Cove schoolchildren during a 2013 visit.

Laura Tanis

“It should have been done a long time ago,” Trumble says. “It would have saved quite a bit of money.”

There are few roads already in the refuge, most of which date to World War II, Hennigh says. “If the war had lasted one year longer, there’d probably be a road all the way through.”

In 2013, Interior Secretary Sally Jewell accompanied Senator Lisa Murkowski to King Cove to listen to what the residents had to say about the road. Jewell heard stories from elders and children and then stood up and said: “‘I’ve listened to your stories, now I have to listen to the animals,’” Hennigh recalls. The whole community

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and bears. Environmental groups say there is potential for harm to the brant and other wildlife, as well as the possibility the road could be used for commercial purposes, resulting in more traffic.

Hennigh says such concerns are unfounded. “Our whole point is Izembek is a special place. We respect the wildlife. We don’t have a problem with the hunters that come out. All we’re saying is look at this from a balanced perspective.”

Arguments for the road have become politically charged, he says.

“We have been chasing this for many, many decades,” Hennigh says. “We’re not asking for much and there’s been a few times we thought, ‘Okay, we’re finally going to get it.’ To be honest, what happens in the November election could be another change.”

On the state level, officials have generally been supportive. Every governor for the past twenty-five years, with the exception of Tony Knowles, has supported the road, as has Alaska’s congressional delegation, Trumble says.

NATURAL RESOURCE DEVELOPMENT

King Cove in the distance.

Paul Dennier

was stunned—and years after the fact, residents still find the comment to be incredibly insulting, he says.

“When you go way back, we are the Aleut people of King Cove,” Trumble says. “We’ve lived here for thousands of years only to have access taken away…

It’s always been a part of who we are.”

Foundational Employment Resource development, including oil and gas, has been the bedrock for Alaska’s economy for more than a century and creates what Rick Whitbeck, Alaska state director of Power the Future, calls “foundational employment” opportunities, especially in rural communities.

“Think about the locations in Alaska that have benefited from responsible development,” he says. “They still have their subsistence lifestyle. They whale hunt. They berry pick. And yet they have first world technology to get the oil.”

Also, he says, look at Red Dog Mine in the Northwest Arctic Borough. The world-class zinc mine is owned in part by NANA Regional Corporation and employs hundreds of shareholders, as well as provides millions of dollars in payment in lieu of taxes just like the oil industry on the North Slope benefits Arctic Slope Regional Corporation shareholders.

Those benefits are spread to other Alaska Native corporations statewide under the 7(i) and 7(j) revenue sharing 86 | November 2020

provisions of the Alaska Native Claims Settlement Claims, Whitbeck says.

“Same thing will happen with Donlin,” he says. “Same thing will happen with Pebble where regional people are going to get employed. Hundreds, if not thousands, of them between those two projects. Those are success stories.”

He then points to Healy and the Usibelli coal mine “Healy doesn’t exist without Usibelli,” Whitbeck says. “It may, but it certainly doesn’t thrive. That mine is 76 or 77 years old and has another 100 years of reserves. Our communities have been built up around resource development.

Anchorage is a prime example, Nome is a prime example, Fairbanks is a prime example, and they continue to thrive because of resource development.”

Opposition to development in Alaska comes in large part from environmental non-governmental organizations based in the Lower 48 such as the Sierra Club, World Wildlife Fund, and NRDC, he says.

“Sierra Club and NRDC are never going to allow any development in Alaska without fighting tooth and nail,” Whitbeck says. “I’ll call them rich wildlife-over-human-life donors, people who have never met a responsible development project that they’ll ever agree with.

“They’ve fought everything, from roads, railroads, Prudhoe, TAPS, hydro projects. They fight everything that has

even a hint of potential danger to the environment,” he added. “They’ll fight tooth and nail because they’d rather see Alaska as a national park, their private playground. They’ll never, ever allow Alaska to be fully developed under their watch, even though Alaska’s by far and away the most naturally resource-rich state in the country.”

10 Steps Forward, 100 Steps Back One of the things the COVID-19 pandemic has brought to light is just how much the United States relies on China for rare earth minerals, which are widely used in technology, Logan says. Alaska is considered highly prospective for rare earth minerals, according to the Alaska Department of Natural Resources, with Ucore Rare Metals working toward production of a deposit on Bokan Mountain on Prince of Wales Island.

“We still have a long way to go, but I feel like a discussion around rare earth minerals that developed because of COVID, that is going to provide a lot of momentum for mining in Alaska.”

Often progress on Alaska development projects seems like taking ten steps forward and a hundred steps back, Logan says. “But I think that we’ve made great progress on ANWR and we’ve made great progress on Pebble.

I never thought we’d be as far as we are with both of those.”

Alaska Business www.akbizmag.com

Content with Intention

A

s an unconventional, full-service marketing agency, ARM Creative excels at providing strategic solutions that generate value and results.

The Anchorage firm offers a solid mix of creative development, content creation, and campaign management services to businesses statewide. But the company’s real forte is employing programmatic advertising [digital] to help clients effectively target audiences in real time. “Programmatic takes the guess work out of advertising and provides success metrics that you can use to make strategic business decisions,” says CEO Zach Aregood.

ARM Creative specializes in crafting content in house rather than outsourcing content production. Today, brands need to push out a lot of information, and having an internal videography and content team allows the agency to better meet their needs. “We can create content on demand, which saves our clients time and money,” Aregood says.

FOCUS ON EDUCATION AND COLLABORATION ARM Creative places a strong emphasis on educating itself, its clients, and the market about the intricacies of content creation and digital marketing.

That’s why it offers a State of the Industry (SOTI) event series that anyone—even competitors—can attend to enhance their knowledge. “It’s our way of leaving the market better than we found it,” Aregood says.

Left to right: Samuel Rice, Chief Creative Officer, Zachary Aregood, CEO, Deanna Miller, Director of Client Experience

The SOTI seminars are also designed to bring agencies together for networking and collaboration. “There’s enough money out there for everybody,” he says. “It can be positive for everybody if we put our heads together and try to collaborate.”

SUCCESSFUL COMPANY CULTURE ARM Creative has experienced tremendous success since its 2018 inception, growing 500 percent by 2019. Its expanding client roster reflects major brands: Alyeska Tire, which has eight locations, Alcan Electrical and Engineering, The Alaska Club, Bristol Bay Native Corporation, Sealaska Corporation, United Way of Anchorage, Kaladi Brothers Coffee, and Scan Home.

“We let our work speak for itself and try to do the best we can every day,” Aregood says.

Aregood attributes the success of ARM Creative to its employees’ extensive experience, diverse expertise, and positive perspective. Their noncomplacent attitude makes them yespeople who tenaciously pursue results.

Aregood explains: “We are firm believers that there’s always a way to make something happen. We want to be at the top of our game, bring new things to the market, and make sure our clients have the most exciting, fun and profitable service from us.”

In fact, excitement and fun are key elements of ARM Creative’s successful

AlaskaBusiness Profile

culture. The agency has a laid-back, fun work atmosphere that is also fastpaced and focused on high quality.

These qualities have helped foster close client relationships that often result in hugs at the end of the day. ARM Creative also maintains an inclusive environment where employees are comfortable sharing ideas and excited to come to work. “We genuinely love what we do, and we don’t view it as a job,” Aregood says.

Consequently, ARM Creative’s team sincerely cares about helping clients— even if it means referring them to another agency that might be a better fit. “When they’re winning, we win,” Aregood explains. “When they lose, we lose. We want to see businesses do well.”

For more information, contact Zach Aregood, CEO ARM Creative 2263 Spenard Road, Unit A Anchorage, AK 99503 (907) 441-9772 www.arm-creative.com

©Kerry Tasker Photography

ARM CREATIVE

MINING DIRECTORY

Galyna Andrushko | Envato Elements

Mining Directory

88 | November 2020

Alaska Business www.akbizmag.com

RAMZI FAWAZ, PRES./CEO 1941 Sanduri Ave. Fairbanks, AK 99701 amblermetals.com info@amblermetals.com 907-452-1941 The company is focused on exploring and developing its sizable holdings in the Ambler Mining District in Alaska.

The most advanced projects in this prospective district are Arctic and Bornite.

Mining District: Ambler Mining Commodities: Copper, zinc, lead, gold, silver, and cobalt Year Founded |Year Established in Alaska: 2020 | 2020 Worldwide | Alaska Employees: 90 | 90

BERING SHAI ROCK & GRAVEL DIANE J. SHAISHNIKOFF, OWNER/MGR. PO Box 196 Unalaska, AK 99685 beringshairock@gmail.com 907-581-1409 City of Unalaska aggregate contract, Senior Center concrete aggregate for walkways. Armor Stone for erosion control.

Mining District: Aleutian Chain Mining Commodities: Spec rock, rip rap, armor stone, gravel Year Founded |Year Established in Alaska: 2004 | 2004 Worldwide | Alaska Employees: 8 | 8

Extensive Inventory, Statewide Delivery.

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SWPPP and Erosion Control Dust and Ice Control Asphalt Maintenance Geotextiles ADA Tiles Drilling Fluids 10788 E. Grandview Road, Palmer (907) 357-1147 I www.nssalaska.com

COEUR ALASKA MARK KIESSLING, GM 3031 Clinton Dr., Ste. 202 Juneau, AK 99801 907-523-3300 Coeur Alaska proposed an amendment to its Plan of Operations to increase tailings and waste rock storage currently being analyzed in a Supplemental Environmental Impact Statement by the USFS. Mining District: Juneau Mining Commodities: Gold Year Founded |Year Established in Alaska: 1987 | 1987 Worldwide | Alaska Employees: 2,000 | 386

COLASKA JON FUGLESTAD, PRES. 4000 Old Seward Hwy., Ste. 101 Anchorage, AK 99503 colaska.com info@colaska.com 907-273-1000 Continued gravel mining in Northern Region, Central Region, and Southeast.

Mine development and contract mining.

Mining District: Southeast Mining Commodities: Other Year Founded |Year Established in Alaska: 1999 | 1999 Worldwide | Alaska Employees: 58,000 | 800 www.akbizmag.com

W E ’ R E P RO D U C I N G F O R J U N E AU Mining really matters to communities like Juneau, where Hecla Greens Creek is the #1 private employer, #1 highest wage payer and #1 property taxpayer.

We’re working hard for Juneau…and Alaska.

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Alaska Business

November 2020 | 89

MINING DIRECTORY

AMBLER METALS

MINING DIRECTORY

GBA ASSAYING AND REFINING LEE W. ST PIERRE, OWNER/CEO 915 30th Ave., Ste. 111 Fairbanks, AK 99701 gbarefining.com leestpierre@gbarefining.com 907-479-4653 Looking for better ways to deal with black sands, fire assay.

Mining District: Alaska Mining Commodities: Gold nuggets, gold, silver, platinum and palladium bullion and coins; placer gold, dory bars.

Year Founded |Year Established in Alaska: 2009 | 2009 Worldwide | Alaska Employees: 5 | 5

GRANT LAKE CORPORATION PAUL T. TORGERSON, CEO/PRES. 5223 E. 24th Ave., #14 Anchorage, AK 99508 grantlakecorporation.com ann.ellis@grantlakecorp.com 907-521-6480 Grant Lake is developing nine lode and placer mining properties totaling five square miles.

Mining District: Yentna and Hope Mining Commodities: Gold, platinum, silver, copper, precious and semi-precious gemstones Year Founded |Year Established in Alaska: 1985 | 1985 Worldwide | Alaska Employees: 4 | 4

within its existing boundary. This will result in minimal environmental impact but will add about a decade to the mine’s life.

Mining District: Admiralty Mining District Mining Commodities: Silver, zinc, lead and gold Year Founded |Year Established in Alaska: 1989 | 1989 Worldwide | Alaska Employees: 1,400 | 440

HOPE MINING CO. AL JOHNSON, PRES. PO Box 101827 Anchorage, AK 99510 Hopemlnlng.com info@hopemining.com 907-274-1906 Placer mining on the Kenai Peninsula.

Mining District: Seward Mining Commodities: Placer gold, silver Year Founded |Year Established in Alaska: 1923 | 1923 Worldwide | Alaska Employees: 5 board members | 5 board members

KINROSS FORT KNOX JEREMY BRANS, GM PO Box 73726 Fairbanks, AK 99707 kinross.com 907-490-2218 We were the recipients of the prestigious Sentinels of Safety Award in 2019.

Mining District: Fairbanks Mining Commodities: Gold Year Founded |Year Established in Alaska: 1996 | 1996 Worldwide | Alaska Employees: 9,500 | 645

GRAPHITE ONE ANTHONY HUSTON, PRES./CEO PO Box 240781 Anchorage, AK 99524-0781 graphiteoneinc.com sfoo@graphiteoneinc.com 907-632-3493 Graphite One Inc. plans an integrated project and supply chain to extract flake graphite for electric vehicle batteries from its proposed Graphite Creek mine 40 miles north of Nome, Alaska.

Mining District: Cape Nome Mining Commodities: Graphite Year Founded |Year Established in Alaska: 2007 | 2010 Worldwide | Alaska Employees: 16 | 2

HECLA GREENS CREEK MINING CO. BRIAN ERICKSON, VP/GM PO Box 32199 Juneau, AK 99803 greenscreek.com hgcmcinformation@hecla-mining.com 907-523-1410 Greens Creek will begin the NEPA process to expand its tailings facility 90 | November 2020

MILLROCK EXPLORATION CORP. GREG BEISCHER, PRES./CEO 5631 Silverado Way, Ste. F-200 Anchorage, AK 99518 millrockresources.com info@millrockresources.com 907-677-7479 64North, Liberty Bell, Chisna, Treasure Creek, Ester Dome, Apex El Nido, Batamote.

Mining District: Alaska and Mexico Mining Commodities: Base metals, gold, precious metals Year Founded |Year Established in Alaska: 2008 | 2008 Worldwide | Alaska Employees: 25 | 15

NORTHERN STAR RESOURCES LIMITED (POGO MINE)

Mining District: Goodpaster Mining Commodities: Gold Year Founded |Year Established in Alaska: 2000 | 2018 Worldwide | Alaska Employees: 1,740 | 465

NYAC MINING CO./ NYAC GOLD/NYACAU MIKE JAMES, PRES. 1634 W. 13th Ave. Anchorage, AK 99501 mjames@nyacak.com 907-279-6094 Placer mine at Nyac.

Mining District: Southwestern and Northern Alaska Mining Commodities: Gold Year Founded |Year Established in Alaska: 1972 | 1972 Worldwide | Alaska Employees: 31 | 31

OXFORD ASSAYING & REFINING CORP. GENE E POOL, VP/CEO 3406 Arctic Blvd.

Anchorage, AK 99503 oxfordmetals.com gene@oxfordmetals.com 907-561-5237 Celebrating 40 years, Oxford provides the service, value, honesty, and integrity that Alaskans have counted on for generations. We offer refining and bullion services in Anchorage, Fairbanks, and Nome.

Mining District: Alaska Mining Commodities: Gold, silver Year Founded |Year Established in Alaska: 1980 | 1980 Worldwide | Alaska Employees: 5 | 4

PEBBLE LIMITED PARTNERSHIP JOHN SHIVELY, INTERIM CEO 3201 C St., Ste. 505 Anchorage, AK 99503 pebblepartnership.com 907-339-2600 Nearing the completion of federal permitting.

Mining District: Southwest Alaska-Iliamna Mining Commodities: Copper, molybdenum, gold, silver Year Founded |Year Established in Alaska: 2007 | 2007 Worldwide | Alaska Employees: 16 | 15

JIM COXON, GM

TECK ALASKA INCORPORATED—RED DOG MINE

PO Box 145 Delta Junction, AK 99737 nsrltd.com 907-895-2841

2525 C St., Ste. 310 Anchorage, AK 99503 teck.com/reddog

LES YESNIK, GM

Alaska Business www.akbizmag.com

TOWER HILL MINES KARL L HANNEMAN, CEO 506 Gaffney Rd., Ste. 200 Fairbanks, AK 99701 ithmines.com info@ithmines.com 907-328-2800 Finalize metallurgical program; commence project optimization with Whittle and BBA; finalize pre-feasibility detail on optimized project and publish NI 43-101 study in the second half of 2021.

Mining District: Livengood, Fairbanks Mining Commodities: Gold Year Founded |Year Established in Alaska: 2006 | 2006 Worldwide | Alaska Employees: 4 | 4

USIBELLI COAL MINE JOSEPH E. USIBELLI JR., PRES./CEO

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100 Cushman St., Ste. 210 Fairbanks, AK 99701 usibelli.com info@usibelli.com 907-452-2625 The mine is expected to produce approximately 1 million tons of coal for Interior Alaska in 2020. In August, UCM received CORESafety certification from the National Mining Association.

Mining District: Healy Mining Commodities: Coal Year Founded |Year Established in Alaska: 1943 | 1943 Worldwide | Alaska Employees: 175 | 140

WHITE ROCK MINERALS MATT GILL, MD/CEO 9360 Glacier Highway, Ste. 202 Juneau, AK 99801 whiterockminerals.com.au mgill@whiterockminerals.com.au +61 437 315 901 Exploration on our Red Mountain VMS and gold project, Bonnifield District (south of Fairbanks and east of Healy).

Mining District: Bonnifield Mining Commodities: Zinc, silver, lead, gold Year Founded |Year Established in Alaska: 2010 | 2016 Worldwide | Alaska Employees: 8 | ~24 contractors and consultants

www.akbizmag.com

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MINING DIRECTORY

907-754-6170 Value improvement project-increased milling capacity. Water management improvements.

Mining District: Noatak Mining Commodities: Base metals, lead, zinc Year Founded |Year Established in Alaska: 1986 | 1986 Worldwide | Alaska Employees: 550 | 550

OIL & GAS

A Barrel and a Hard Place An overview of the state’s fiscal dilemma and the implications of Ballot Measure 1

By Danny Kreilkamp

92 | November 2020

Alaska Business www.akbizmag.com

I

f there was one takeaway from the Anchorage Economic Development Corporation’s (AEDC) latest installment of its Outlook Report, it would be a theme of uncertainty.

As Alaskans, uncertainty is something we should be pretty comfortable with by now; our economy has witnessed, and firmly situated itself around, the rise and fall of oil prices since the first major commercial development on the Swanson River in 1957.

While any sort of economic prediction contains its share of variability and a certain degree of doubt, AEDC’s verdict on the role that the oil and gas industry will play in overcoming our recession is especially unclear—and understandably so.

The recent plummet in the price of oil, currently hovering around $40 per barrel, means that the portion of state revenue captured by the tax it collects on the industry— accounting in previous years for as much as 90 percent of the state’s Unrestricted General Fund—will be insufficient alone to continue funding state services. And with additional uncertainty regarding the potential implications of Ballot Measure 1 lingering around the corner, Alaska finds itself in a tricky situation.

Providing unparalleled support to Alaska’s oil and gas industry

Fiscal Fiasco Economist Mouhcine Guettabi helps break down the state’s fiscal dilemma.

“Obviously, the state economy was in a recession for three years before moving into positive territory in 2019,” says the UAA associate professor, referencing the recession that followed a dramatic and drawn out drop in oil prices and resulted in the loss of roughly 12,000 Alaska jobs. Despite a positive turn for the economy in 2019, state budget deficits continue and have been impacted again, in part, by lower oil prices at the onset of COVID-19.

Guettabi says the state has options to cover the deficit.

One of them is to overdraw from the permanent fund savings account—not exactly the sustainable solution Jay Hammond envisioned when developing the social wealth fund back in ‘76. But while this solution would give the state some time—perhaps a few years or so until www.akbizmag.com

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“There are no cash credits remaining in the State of Alaska—period. The per barrel credit is part of the tax calculation, it is not a cash payment. In this price environment, there are no per barrel credits because they only apply when we’re in a net production tax system, not when we’re in the gross production tax system.”

Kara Moriarty, President/CEO, AOGA

the remaining $11 billion savings reser ve runs dr y— Guettabi believes this would simply be “kicking the can down the road,” and the state would still have to hope for a miraculous increase in oil prices in the near future.

Guettabi says another option is to do what Governor Mike Dunleavy tried

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to do last year: implement drastic cuts to bring down expenses in line with revenues. Or, Guettabi continues, the state can increase revenues.

“When we say revenues, we mean income tax, sales tax, potentially an oil tax or some combination of those,” he says. “It seems as though some combination of all of those things

would need to be done in order to balance the budget, not just for a year but for multiple years.”

How exactly the state goes about such a balancing act remains to be seen, but there are other workings at play that may seriously influence the process. Ballot Measure 1 aims to change the state’s oil tax structure for the eighth time in nearly twice as many years.

Taxes and More Taxes Kara Moriarty is the Alaska Oil and Gas Association’s (AOGA) president and CEO. With fifteen years of experience in the industry, and nearly a decade’s worth in her current role, Moriarty is well versed in the different ways Alaska brings in revenue from the oil and gas industry. According to Moriarty, the industry provides state and local governments with four main revenue streams.

The royalties paid by the companies leasing state land is one way. And an important thing to note, Moriarty says, is that 25 percent of all royalty payments are required to be deposited into the

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permanent fund, which remains the largest cash contribution to the savings account each year.

“The industry pays a royalty, which is negotiated at the time of the lease sale and repays royalties to the owner on the value of the oil. All of the royalties in Alaska are paid to the state,” she says, noting that about 98 percent of production comes from facilities on state land.

The royalty rates paid to the state vary—original rates were in the 12.5 percent range whereas more recent agreements are high as 16 percent or more, she says.

Moriarty explains that the state can also elect to insert a clause into the lease that allows it to receive its payments as a “royalty in kind” or “royalty in value.” The former sees the state take physical possession of the commodity, while the latter— and more common variety for oil in particular—keeps physical possession and the marketing burden with the lessee, allowing the state to claim a percentage of production in the form of a cash payment.

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Corporate income tax, which is based on a worldwide apportionment and can fluctuate, and property taxes are two other ways the state captures revenue from the oil and gas industry. Moriarty says that since property taxes are based on property value, they are relatively static and less responsive to changes in price from year to year.

And finally, the largest portion of the state’s revenue and fiscal system—and a key element of Ballot Measure 1—is the production tax.

According to the Alaska Department of Revenue, the production tax as currently structured acts as hybrid net/gross system: the tax is based on the net value of oil and gas, which is the value at the point of production multiplied by taxable volume, minus all lease expenditures.

When the Alaska State Legislature passed Senate Bill 21 (SB21) in 2013, the production tax oil companies pay was raised from a base rate of 25 percent on the first $30 of net profits per barrel (plus a 0.4 percent increase for each additional $1 rise per barrel, maxing out at 50 percent) to a base rate of 35

Alaska Business

percent on net profits per barrel with no additional increases. But SB21 also enacted a “per-barrel credit,” something Moriarty is quick to differentiate from the cashable credits initially created by the Petroleum Production Tax in 2005.

“There are no cash credits remaining in the State of Alaska—period,” Moriarty says. “The per barrel credit is part of the tax calculation, it is not a cash payment.

In this price environment, there are no per barrel credits because they only apply when we’re in a net production tax system, not when we’re in the gross production tax system.”

“When SB21 was passed, they [the Legislature] recognized that if prices were ever to drop low, there’s no way that was sustainable,” she says, explaining that the structure also contains a mechanism where at a certain price point companies switch to paying a 4 percent minimum gross tax across the board. “This way, if oil prices were ever to get so low and you’re not making any money, the state would still always have some form of production tax revenue coming in,” Moriarty explains.

November 2020 | 95

“When we say revenues, we mean income tax, sales tax, potentially an oil tax or some combination of those. It seems as though some combination of all of those things would need to be done in order to balance the budget, not just for a year but for multiple years.”

Mouhcine Guettabi Associate Professor of Economics UAA

Ballot Breakdown A vote yes for Ballot Measure 1, coined “Alaska’s Fair Share Act,” would increase taxes through either an alternative gross minimum tax or an additional production tax—whichever is greater for each month and each field affected. As per the initiative’s statute, the fields affected must be located above 68 degrees latitude 96 | November 2020

north in Alaska; have a lifetime output of at least 400 million barrels of oil; and had an output of at least 40,000 barrels per day during the preceding calendar year.

Arguments for the revised tax mechanism stem from a general sense that Alaskans are not being fairly compensated for the state’s most prized resource. One of the campaign’s most vocal proponents, largest contributor, and chair—Robin Brena—said the following in a conversation with Alaska Public Media: “The bottom line here is we’re getting nothing in production taxes, and we haven’t gotten anything in five years, and it’s long overdue for us to get something out of our production tax scheme.”

Opponents have not been shy in their efforts to reject the ballot initiative.

Leading the campaign against Ballot Measure 1 is OneAlaska—a diverse coalition of organizations including oil companies, Alaska Native corporations, and other Alaska businesses. The group, armed with a campaign expenditure that is exponentially larger than its counterpart, believes Ballot Measure 1 “goes too far and puts Alaska’s economic recovery at risk by jeopardizing existing and future jobs, new projects that will grow oil production, and state revenue.”

AOGA is one of OneAlaska’s largest donors, and Moriarty believes the ballot is the wrong place to enact a complicated tax policy, especially given the timing. But this certainly isn’t the first attempt to raise taxes on the industry—Alaska’s Clear and Equitable Share Act (ACES) of 2007 was in effect until SB21—and Moriarty is sure it won’t be the last.

“It’s nothing new that those who are behind Ballot Measure 1 think we can pay more in tax. I’ve been working for AOGA for fifteen years, and some of these folks have been on the bandwagon for as long as I can remember. A lot of them were behind the gas reserves tax in 2006, a lot of them supported ACES, and this tax is actually higher than the ACES tax was from 2007 to 2013—and I don’t remember anyone ever saying ACES wasn’t high enough.

“The folks behind this have long supported increasing taxes on the industry, and they have this

fundamental belief that taxes can be raised and there won’t be any impact on investment and that’s just simply not the case. That’s not how simple economics work.”

Final Considerations In 2013, UAA’s Guettabi participated in a retrospective analysis assessing the effect of ACES on development and unemployment. “We found, at least in the short run, there were no effects that we could identify of ACES on development or employment.

“Whether or not we can extrapolate?

They’re obviously different ballot measures and different tax regimes; oil prices were much higher than they are now. So it’s tricky. There is a very big body of literature that looks specifically at the relationship between production and employment and how they respond to taxes—and the literature is mixed. And of course, it’s practically impossible to take some analysis that we’ve done about taxes or about a previous tax policy in Alaska and just stick it on to this one and say, ‘That’s how the industry is going to respond.’”

With an eye on November, Guettabi adds a few final considerations: “The way I look at it is the following,” he begins. “There are some things that we do know—increasing taxes will raise more money for the state, but how sensitive production and employment will be to the tax change is unknown. Profits for oil companies would decrease. The tricky thing here is basically to determine the elasticity of the responsiveness of the oil companies to the tax hike, and what are the consequences in terms of immediate production and also future investment?

“And those are the margins that we can sit here and speculate about,” Guettabi says, noting the possibility that the tax hike wouldn’t be a deal breaker to some of the companies that are already investing here. “But you could also make an argument that the decline in profits may dissuade them from making other investments or may dissuade other companies from coming to the state. But anybody that tells you, ‘Absolutely, this is what’s going to happen,’—I think is overplaying their hand.”

Alaska Business www.akbizmag.com

UA LOCAL 375

IN PARTNERSHIP WITH OUR SIGNATORY CONTRACTORS WE HAVE BEEN BUILDING ALASKA SINCE 1946 AND ALASKA’S ARCTIC PIPELINES FOR OVER 40 YEARS WE ARE THE

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Raise-up Crew Raising up the pipeline onto Vertical Support Members (VSMs)

VSM Setting Crew Setting a 32’ Deep VSM

The Bead Shack

Two Bead Hands “Welders” install the first two welding passes, then a tractor moves the shack 80’ to the next weld so pipefitters can fit the pipe up and then receive the shack

Once the height and skew are set, the welder welds supports to the ground and the VSM hole is poured with slurry

Firing Line Shacks

5-Shacks with two firing line welders and helpers in each shack, the firing line welders fill and cap the welds When running 5- Firing Line Shacks the rear shack will be carried by the tractor to the front and they will leap frog to the end of the line, the line is then raised up by the “Raise-up Crew”

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CONSTRUCTION

A Link in the Chain Metal fabrication’s versatile role in the construction industry

Dowland-Bach

By Vanessa Orr

98 | November 2020

Alaska Business www.akbizmag.com

I

n Alaska, metal fabrication takes many forms, from making the smallest components like screws, nuts, and bolts to creating ready-toassemble, 350-person camps. In the construction industry, the need for companies that can build machines and structures from raw metal materials is constant, whether the job requires building a single-family home or crafting control panels to guide the oil that runs through pipelines.

The fabrication process, which can include cutting, burning, welding, machining, forming, and assembly to create the final product, requires that most companies have their own metal shops to centralize these tasks. And while some fabricators provide readymade materials for more generalized construction needs, others specialize in extremely specific, custom-made work.

NANA Construction, for example, is distinctive in that it works in residential, commercial, and industrial construction.

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in the state of Alaska that has a fullservice industrial/commercial facility that can fabricate everything from residential houses to industrial process modules and commercial camps,” says Fred Elvsaas, general manager of NANA Construction.

NANA’s Big Lake fabrication facility includes four buildings on 32-plus acres, with 105,000 square feet of indoor fabrication space. The site includes a prep and coating shop; industrial fabrication and assembly shop; and a light modular fabrication building, among others.

The NANA subsidiary, which opened in 2008, has found success by pursuing business in all construction niches. “If the oil and gas industry is down, residential and commercial construction may be up, so it’s beneficial to be in both areas,” says Elvsaas.

Approximately 95 percent of the company’s projects are competitively bid, though it may also receive projects from vendors or clients who reach out for their expertise. Depending on the project, fabricators may be brought in at the design/build stage, serve as the EPC (engineering, procurement,

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construction) contractor, or be asked to fabricate and ship previously engineered designs.

“It really varies by project; a lot of the time, we’re doing structural steel fabrication, like building 1,000 VSMs [vertical support members] or 400 HSMs [horizontal support members]; we also build a large amount of REIM [remote electrical and instrumentation modules] and pigging modules,” says Elvsaas, adding that the most intricate products the company fabricates are the fuel gas manifolds that are used in Prudhoe Bay. Some of the more interesting projects that NANA Construction has been involved with include fuel gas manifolds for the compressor engines at the Prudhoe Bay central gas facility and a bar for the Norwegian Rat Saloon in Dutch Harbor.

“The compressor project was a challenge because it’s a huge circle with super tight parameters—and it took about three weeks of tweaking on it to make everything fit,” says Elvsaas.

NANA is currently looking to expand its housing line, both within the NANA region and outside. “We’re pushing

Alaska Business

November 2020 | 99

Control panels come in a number of shapes and sizes and are built for a variety of Alaskaspecific environments.

Dowland-Bach

100 | November 2020

Alaska Business www.akbizmag.com

heavily to open this up because of the housing crisis in rural Alaska,” explains Elvsaas. “We’re able to make 5-star energy rated homes that can be shipped up on barges and just set into place. We can do everything from single family homes to 350-man camps.”

Dowland-Bach Corporation, located in Anchorage, manufactures end-use products for industrial companies and focuses on three core products: wellhead safety control systems for oil producers; UL-listed electrical control panels for general industrial applications; and chemical injection systems for oil, gas, mining, water, and wastewater applications.

“These are the bread-and-butter of what we do as a company,” says Vice President of Operations Tony DeHaven.

“The high-pressure safety control systems are mainly built out of stainless steel and have quite a variety of pieces and parts that we fabricate in-house. We package these systems with valves and pumps and high-pressure accumulators together in a small form factor to save as much space as possible and still be easy to operate.”

Dowland-Bach buys many of the individual components from other distributors and does its own stainlesssteel welding, tubing, and custom fabrication. The company recently invested in a high-powered laser engraver to engrave symbols and instructions onto the systems and to create custom engraved name plates.

“Our control panels come in a number of shapes and sizes, and we build them for a variety of Alaskaspecific environments,” says DeHaven.

“We are a UL [Underwriters Laboratory] 508A shop and that designation allows us to manufacture and supply control panels that meet state safety requirements and the national electrical code. In addition to that designation, we have twelve other NRTL [Nationally Recognized Testing Laboratories] and UL designations that enable us to build Arctic-grade panels or panels that can go into hazardous environments.”

The majority of these control panels are bought by oil and gas customers including ConocoPhillips, Hilcorp, and BP. “ConocoPhillips, for example, might order a large control module,

so we’ll work together with other fabricators in Alaska to build a 50-foot building that can be put on a trailer and shipped to the North Slope, and we’ll outfit it with several control panels and telecommunications cabinets inside,” says DeHaven.

“Our control panels are all custommade because every process is different,” he adds. “The panels are going into specialized environments that require certain ratings—for example, hazardous spaces with gas or chemicals or extreme air temperatures—so we pick materials and components that are safe to use in that space. There might be 100 different things that need to be controlled by the panel, which also determines what kind of controls we use.”

DeHaven says the company primarily serves industrial clients, as its panels are too specialized for standard commercial buildings, which rarely require complex process control functions.

Dowland-Bach recently built a wellhead control system and chemical injection system for ConocoPhillips’

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Dowland-Bach’s display unit at the RDC annual convention last year featured a game called "Beat the Lick!" Lick stands for Level Indicating Controller.

People could challenge the company’s computer program to see who could more accurately maintain random levels within the green tubes.

Dowland-Bach

A stainless UL508A Control Panel with Emerson Delta V control system that Dowland-Bach made for ConocoPhillips.

Dowland-Bach

102 | November 2020

Alaska Business www.akbizmag.com

Greater Mooses Tooth 2 project; it has also provided control system equipment for each of the pump stations along the Trans Alaska Pipeline System.

“From the command center in Anchorage, Alyeska can control most of our control panels along the pipeline,” says DeHaven. “Our controls are also used in a lot of water and wastewater facilities; for example, Anchorage Water & Wastewater Utility has one or more of our systems in almost every one of their water processing facilities.”

One of Dowland-Bach’s more challenging projects was the fabrication of five chemical injection trailers, which required outfitting 20-foot trailers from a local company with stainless steel chemical tanks, pumps, tubing, electrical controls, and pressure and flow transmitters.

“We manufactured these for ConocoPhillips so that they could haul them around to provide chemical injections into remote sections of pipelines to condition oil and gas to improve flow and stability,” says DeHaven. “It was a challenging project because it required a very unique design, which we created using Autodesk Inventor to make 3D models so that the craftsmen could build it. From start to finish, it took about six months.”

While some of Dowland-Bach’s work comes from The Plans Room and the Associated General Contractors of Alaska’s list of public bids, it also has many repeat customers.

“Probably about 25 percent of our business is related to public bid work, and we also have good relationships with almost every electrical contractor in Alaska, so they know to come to us if they’re bidding on a project and need a price on a certain piece,” says DeHaven. “Out of a 2,000-page document of designs and specifications on a public project, they may ask us to supply only what they need in chapter 29 for process controls and instrumentation.”

“We often fall into the subcontractor range,” he adds. “When North Pole Utility put in a $10 million liquid natural gas facility, we supplied a metering skid and a control panel to the project. If it requires any kind of process control related to a water, gas, or fuel facility, www.akbizmag.com

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NANA’s Big Lake fabrication facility includes four buildings on 32 acres, with 105,000 square feet of indoor fabrication space. The site includes a prep and coating shop; industrial fabrication and assembly shop; and a light modular fabrication building.

NANA Construction

A stainless UL508A Control Panel with Emerson Delta V control system that Dowland-Bach made for ConocoPhillips.

Dowland-Bach

104 | November 2020

Alaska Business www.akbizmag.com

we’ll usually bid on just the parts we produce. Our customers come to us because you can’t just buy these things on the internet.”

In addition to fabricating metal for construction projects, DowlandBach also has a custom fabrication side of the business that it uses to produce specialized stainless steel and aluminum products. “We’ve had people ask for stainless countertops for vet clinics or stainless-steel outdoor displays with lighting,” says DeHaven. “We’ll fab up whatever fits their needs.”

The Alaska Advantage One of the biggest advantages for Alaska clients, other than the level of expertise that these fabricators offer, is the fact that, as in-state businesses, they have an unmatched level of experience dealing with the harsh building conditions and transportation challenges that many projects face.

The company’s proximity also means that it may be able to provide the same products for less.

“We have a pretty good-sized shop here, and a lot of machinery we can use for metal fabrication, including a 100-ton press break that we use to bend metal into a variety of shapes,” says DeHaven. “We can take a flat sheet of metal, bend it into an enclosure, and weld it shut. If a customer needs a 2 by 10 by 8-foot enclosure, it costs them $2,000 to ship it up from the Lower 48. We can make it here from flat metal stock and they’ll pay pennies on the dollar for shipping.”

Being familiar with remote locations and conditions is also a huge advantage, according to DeHaven.

“We can get out to remote sites much more quickly and easily than out-of-state companies, and we’re very familiar with making products designed using components rated for low temperatures or harsh environments,” he says. “A building control panel that works in Texas is going to look and work differently than one designed in Alaska. Producers on the North Slope, and contractors in towns like Utqiaġvik, have bought supplies from out-of-state companies and had to replace them in a couple years because they’re not made for this environment. www.akbizmag.com

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Dowland-Bach Corporation, located in Anchorage, manufactures end products for industrial companies to use and focuses on three core products—wellhead safety control systems for oil producers; UL-listed electrical control panels for general industrial applications; and chemical injection systems for oil, gas, mining, water, and wastewater applications.

Dowland-Bach

“We’ve gotten smarter over the years, so we buy as much from in-state suppliers as we can,” he adds. “A lot of times, our experience is why clients come to us directly instead of bidding out-of-state.”

While these companies have a lot of Alaska-based knowledge, they still need to keep up with changing times.

“We’ve been fabricating metal going on forty-five years now and, in general, we make the same products today that we’ve always made. But at the same time, our processes are improving constantly,” says DeHaven.

“We’ve bought machinery that allows us to do more and to be more efficient in what we make. As we’ve grown, our factory filled up with specialized tools and equipment, and now the things we used to do by hand we can do by machine with much more precise results; we can get things down to micrometer precision.”

He adds that because the technology within control panels is constantly 106 | November 2020

changing with microprocessors getting smaller, faster, and better all the time, the company has to stay on the cutting edge of technology. “ Technology has changed a lot,” agrees Elvsaas. “ We’ve gone from manual stick welding, which is now automated, to running flex core wire, which brings speed and productivity way up. Things are much more streamlined.”

As for training, much of the knowledge at Dowland- Bach has been passed down over the years.

“There are metal fabricating apprenticeships out there for certain trades, but because we specialize so highly, there’s not really a school that teaches what we do,” says DeHaven.

“Our founder was a metal salesperson who sold valves and fittings, and he was self-taught; he learned how to do metal fabrication and then taught generations of others that came along. We have quite a few younger employees, and they learn side-by-

side with the veterans here.”

NANA Construction also provides on-the-job training and recruits employees from the Alaska Technical Center in Kotzebue, the Alaska Vocational Technical Center (AVTEC) in Seward, and the Alaska Job Corps in the Valley.

“After taking kids out of AVTEC with their basic welding certification, we can train them to be oil field welders in three to four years,” says Elvsaas.

For those interested in metal fabrication, there are educational opportunities in Alaska. Northern Industrial Training, for example, offers a four-week fabrication welding course that includes fabrication cutting and shaping; joining fit up and alignment; mechanical cutting; oxy-fuel cutting; plasma arc cutting; reading welding drawings; and more.

The UAF Community & Technical College also offers a year-long welding course that includes metal fabrication courses.

Alaska Business www.akbizmag.com

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INSUR ANCE

Behind the Scenes Inside the business of insurance

By Tracy Barbour

108 | November 2020

Alaska Business www.akbizmag.com

I

n the realm of commercial insurance, brokers render invaluable support for their clients by ensuring proper coverage and protection for their employees and physical assets. Brokers are the conduit between the insurance carrier and the client, says Todd Wheeler, a principal and vice president at Parker, Smith & Feek. “We're viewed as trusted advisors by our clients and in the same light as they view their CPA, banker, or counsel,” he says. “The premiums that we are able to save them are real dollars that are injected back into the Alaskan economy.”

In essence, insurance is a mechanism that helps companies manage risk, which is a critical function of their success and survival, says Chris Pobieglo, president of Business Insurance Associates. Insurance allows a company to take an unknown risk and transfer it into a known cost such as an insurance policy. Pobieglo explains: “Insurance takes an unknown and puts a known value on it. This helps companies with preparing budgets and not being caught by surprise by a catastrophic event that can put them out of business.”

In terms of economic impact, insurance contributes significantly to the state of Alaska, according to Pobieglo. “Taxes on insurance policies were the second-biggest revenue generator for Alaska,” he says.

However, the relevance of insurance is sometimes more subtle and latent, according to Pamela Whitfield, founding partner of Elite-VB. Whitfield, who sells voluntary or supplemental insurance from multiple carriers, emphasizes the potential effect of COVID-19 in the workplace and how employee-funded voluntary insurance may be applicable. She says, “As financial times get tougher and tougher on businesses, employers may drop their employer-paid programs and find that adjusting those benefits to be employee-paid can work to retain valuable benefits without having a strain on the company's bottom line.”

Bridging the Gap Insurance brokers help clients demystify the complex options offered by insurance carriers, and they use diverse approaches to bridge the chasm www.akbizmag.com

between the two entities.

Take Parker, Smith & Feek, for example. The regional insurance broker has six locations and more than 300 employees, with 30 of them working in Alaska across its Property & Casualty and Employee Benefits departments.

These employees apply a variety of skills to effectively assist clients, including interpersonal communication, listening, problem-solving, time management, and relationship building.

Possessing patience, the right attitude, and a willingness to learn are also critical attributes for the firm, which figuratively places clients at the top of its organizational chart. “Ultimately, we look for people who want to work hard, have fun doing it, and be part of a team that takes pride in helping our clients

business—one that has a global reach and presence but is local. The depth of the firm’s resources includes housing its own claims, risk control, builders’ risk, and analytics teams, as well as internal practice groups that cover sixteen industries. “That sharing of industryspecific information, along with the technical expertise and a very deep bench of talented professionals, makes our practice groups a differentiator and

“We're viewed as trusted advisors by our clients and in the same light as they view their CPA, banker, or counsel. The premiums that we are able to save them are real dollars that are injected back into the Alaskan economy.”

Todd Wheeler, Principal and Vice President Parker, Smith & Feek

achieve success,” Wheeler says.

Parker, Smith & Feek, which was established in 1937 in Seattle and opened its Anchorage office in 1986, serves a unique role in Alaska. While it is not a large national/international firm, Parker, Smith & Feek has all the same resources as the big firms, Wheeler says.

And it considers itself to be a “glocal” Alaska Business

TODD WHEELER Parker, Smith & Feek

brings value to our clients,” he says.

The company also offers industryand coverage-specific seminars through its PS&F University. This provides opportunities for its clients and prospects to learn and ask questions. As another important differentiator, all of Parker, Smith & Feek’s employees are salary-based.

“Clients never have to worry that we're selling unnecessary coverages just to earn extra commission,” Wheeler says.

“And all of our services are included in the commission or fees we're paid, which isn't always the case with larger, multi-national brokers.”

Business Insurance Associates is among the contingent of local independent brokerages that assist Alaska’s employers. In this role, the small Anchorage-based firm represents its clients, not insurance carriers, stresses Pobieglo, who holds twenty-plus years in the insurance industry. “The local broker has the ability to provide a level of personal service, and that’s the cornerstone of what they offer,” Pobieglo says. “It allows a broker to November 2020 | 109

have a vested interest in your success.”

In addition, Pobieglo says local insurance brokers are plugged into the community and may be able to offer ground-level business advice, business referrals, and other resources. “Some of the larger brokers retain a service center outside Alaska, and you call a 1-800 number,” he says. “At that point, you’re just a number. They don’t know your goals, your dreams, or your kids.”

options and purchase the right coverage for their needs.

At Parker, Smith & Feek, this process typically begins with engaging clients in an in-depth discussion about their exposures, what keeps them up at night, and anything else that concerns them. This involves asking a plethora of questions to get to know clients on a business and personal level.

“We can't know everything they need unless we understand their business and concerns, so you have to help them identify the risks, evaluate them, and decide how to effectively finance them,” Wheeler says.

“The local broker has the ability to provide a level of personal service, and that’s the cornerstone of what CHRIS POBIEGLO

Business Insurance Associates

Whitfield is also passionate about using her independent agency to take a personal approach to helping Alaska employers. Whitfield blends her twentyfive years as a voluntary benefit leader, manager, and agency owner with an Alaska-specific focus to help clients. For example, the company leverages local knowledge and technology to address some of the unique geographical challenges faced by Alaska companies.

In some areas of the state where there is low to no bandwidth, webinars and other virtual tools need to be complemented by a call center and/or paper tools. “We also have a population that is keen on handheld devices, so tools such as texting applications, videos, and more can speak to Alaskans wherever they may be,” Whitfield says.

Client Process Regardless of location or size, most insurance brokerage firms strive for a hands-on style when working with clients. Brokers use various strategies to help them understand their insurance 110 | November 2020

they offer. It allows a broker to have a vested interest in your success.”

Chris Pobieglo, President Business Insurance Associates

And one size does not fit all when it comes to insurance coverage. If someone is worried about getting hacked and having their computer system compromised, the discussion would center around cyber coverage.

Or if a client is concerned about a fuel tank leaking, pollution coverage would be appropriate. Wheeler says, “The value of having an engaged and trusted broker is that clients know that they are properly covered at the right price, not over-covered at an inflated price.”

Business Insurance Associates also takes an exploratory approach to helping businesses identify their specific insurance needs. Pobieglo gathers

information about their business, their objectives, and their appetite for risk. He also often reviews leases and contracts and discusses compliance-related issues. “We make recommendations to them in the form of a proposal, which may have different options,” he says. “And a lot of the time, we’ll put a number [cost] to the options.”

During the year, Business Insurance Associates advises clients of changes that could affect their coverage. The company also completes an annual review and contacts clients ninety days before their renewal to ensure they have adequate protection.

Whitfield, who works with employers as well as individuals, says it’s common for people to be confused about voluntary benefits. These nontraditional benefits—which are normally employee-paid through payroll deduction by the employer—often include disability and life insurance as well as popular plans like accident, hospital, and critical illness. Whitfield concentrates on educating and preparing clients to take advantage of the most current benefits that are available. “There is a need to upgrade a ton of older voluntary benefit programs in place in Alaska that just aren't keeping up with the exciting features available from carriers in the market today. Also, who knows if a COVID diagnosis in 2020 will lead to a ‘pre-existing condition’ in 2021, so now is the time to spruce up voluntary programs in place to ensure they rise to the risks that are real.”

Alaska’s insurance brokers are intentional about certifying that they are equipped to serve clients in a variety of industries. Business Insurance Associates, for instance, caters to clients in the construction, healthcare, and transportation fields. Representing niche industries lets the company’s staff focus their training and education, so they can hone their knowledge of the industry they’re involved in, Pobieglo says. Three of his employees, for example, have CRIS (Construction Risk and Insurance Specialist) certifications through the International Risk Management Institute. “The more you know about the industry, the more you can be in a position to help your client,” he says.

At Parker, Smith & Feek, clients can benefit from its industry-specific

Alaska Business www.akbizmag.com

“practice groups,” which have been invaluable to the firm's organic growth and success. Along with being salaried employees, and having owners that all work in the day-to-day operations of the business, the practice groups have been a real differentiator because they allow everyone to sit down once a month (at minimum) to group-share and learn, Wheeler says. “We don't have silos at PS&F,” he says. “We work as a team, not lone rangers, and the groups only enhance that collaboration and allow us to tap into a tremendous amount of intellectual capital within our company.”

Maintaining ongoing client relationships is also essential to the success of Parker, Smith & Feek and other insurance brokerages. Wheeler’s approach of maintaining a positive, ongoing relationship with clients is meticulous and deliberate: be available, respond quickly, and let them know that he’s always in their corner and will negotiate and advocate on their behalf.

Because insurance is a relationshipbased rather than a transactional industry, Wheeler has become friends

with most of his clients. “We talk regularly and eventually got to the point where, in an hour-long lunch, we talk about insurance for less than five minutes—if we even talk about it at all,” he says. “My clients know that I have their back and I won't back down until we get a result that works for them.”

Understanding Benefits Perhaps the most consequential role of being an insurance broker is to help clients understand the benefits that are most relevant to their business.

Many insurance policies will be similar for businesses across industries, such as workers’ compensation, commercial property, commercial auto, and commercial general liability.

But there will be coverages one company will purchase that others choose to forgo. That’s because there are so many policies that are applicable to one type of business but not to another. Take business interruption (BI), for example. “A restaurant will purchase business interruption coverage because, if they have a fire on a Friday, they can't just go across

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the street and open for business Monday morning,” Wheeler explains.

“They're going to be shut down until they can remodel or rebuild, which could take six months or longer, and they'll take a big financial hit that the BI policy can address. On the other hand, if a contractor's primary office has a fire, their business may not be substantially impacted because their primary work is usually offsite, and they potentially can rent a separate space quickly and resume operations.

So, they may decline a business interruption policy.”

Ultimately, Wheeler says, it's incumbent upon brokers to work closely with clients to identify and assess their risk and then secure costeffective policies when their clients transfer the risk to an insurance carrier.

Whitfield also advocates taking a contemplative stance when choosing insurance for different industries. This is reflected in her enrollment process, which includes a video showing how each industry is distinct. She feels that every enrollment "campaign" should reflect the company's objectives,

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complement its workforce, and make the human resources department shine. She encourages employers to evaluate their medical and core benefits annually to make sure they are offering the most suitable coverage for their industry. She says, “My suggestion is that they use a voluntary broker who has a pulse on the latest and greatest ‘COVIDfriendly’ benefits on the market and evaluate [their benefits] every five years at minimum.”

There is a need to upgrade a ton of older voluntary benefit programs in place in Alaska that just aren't keeping up with the exciting features available from carriers in the market today.

Also, who knows if a COVID diagnosis in 2020 will lead

PAMELA WHITFIELD Elite-VB LLC

Whitfield is adamant about helping employers better understand voluntary insurance and how they can use it to their benefit, particularly when it comes to COVID-19. That’s why she offers a one-hour continuing education session on voluntary benefits and enrollment best practices in a COVID-19 world.

“Nothing speaks more to compassion than helping your employees to help themselves with programs that could prevent them from filing a bankruptcy or wondering how to pay their bills should someone be stricken with the virus,” Whitfield says. “Leverage your voluntary benefit plan so that it speaks to the compassion that you, as a concerned employer, have and with zero cost to your company. It just might be the best ‘free’ benefit you can offer in 2020 and beyond.”

Employers should also be aware of benefits or situations that may be particularly pertinent for residents of Alaska. Earthquake insurance, for instance, would not be purchased 112 | November 2020

to a ‘pre-existing condition’ in 2021, so now is the time to spruce up voluntary programs in place to ensure they rise to the risks that are real.”

Pamela Whitfield, Founding Partner, Elite-VB

in states like Florida or Rhode Island, but it could prove critical in Alaska. In addition, Alaska has a lot of higher-risk industries, such as commercial fishing, mining, aviation, and trucking, which can impact insurance coverage. The insurance needs of riskier industries are not necessarily different in Alaska than elsewhere, but employers’

medical costs in Alaska tend to be much higher for workers’ comp claims.

Cashing in on Benefits The way benefits are paid to clients differs depending on the type of insurance and policy stipulations involved. In general, the client will file a claim and notify the insurance carrier, which will assign an in-house or external adjustor. “Once you have a claim rep, that rep will gather all the necessary documentation, take that back, and determine whether there is coverage there,” Pobieglo explains.

“Then they typically try to get the client paid out.”

He adds: “With workers’ comp claims, those are a little more straightforward.

But with a liability claim, it can take years to unfold in the court of law and can be more complex.”

Insurance brokers don’t pay claims directly to the client, instead acting as the middleman between the two parties. The broker is essentially an “employee” or extension of the client just as bankers, accountants, and attorney are, Wheeler says. “We work diligently on behalf of our clients to ensure that carriers honor the terms of the contract, which includes paying claims and making clients whole again,” he says.

The process for claiming and receiving benefits plays out differently with voluntar y insurance.

Cash benefits are paid to the employee to cover out-of-pocket costs such as hospitalization, urgent care, rehab, or outpatient surger y.

And some voluntar y insurance options offer broader coverage. “New plans now include pet boarding, coverage for mental illness, coverage for a COVID diagnosis and more—all paid to the employee to lessen their financial risk for pennies a day,” Whitfield says.

Alaska Business www.akbizmag.com

INSIDE ALASKA BUSINESS Condor Airlines Condor Airlines announced the return of its summer service from Frankfurt to Fairbanks in 2021.

The weekly seasonal service will begin June 17 and will run through September 9, offering a total of thirteen flights with a FrankfurtAnchorage-Fairbanks-Frankfurt configuration. 2021 marks the airline’s 20th anniversary of summer service between Frankfurt and Fairbanks. condor.com

AEDC Anchorage Economic Development Corporation (AEDC) has launched an initiative to attract remote workers to Anchorage. From increased spending at local businesses and restaurants to bolstering the available workforce with new energy and skillsets, attracting a remote workforce to Anchorage has a direct benefit to the local economy, the AEDC says. The organization’s newly created landing page for remote workers highlights the perks of living in Anchorage and provides resources for those considering relocating. aedcweb.com

Ounalashka Corporation | Chena Power | City of Unalaska The Ounalashka Corporation and Chena Power signed a thirty-year power purchase agreement with the City of Unalaska for 30MW of geothermal produced energy. In 2019, Ounalashka Corporation and Chena Power formed a partnership, OCCP, to establish a sustainable alternative geothermal energy project using the nearby Makushin Volcano. “What makes this different

is that we’ve put together a team of Alaskans with a common vision and proven local, national, and international business and technical leadership,” says Chris Salts, CEO of the Ounalashka Corporation. “We know this can be transformational for our community and our future role in the world, and we’re all pulling in the same direction to see it realized.” ounalashka.com

ABPC | AGC Alaska Business Publishing Co. (ABPC) will begin publishing The Alaska Contractor magazine and Annual Membership Directory for the Associated General Contractors of Alaska (AGC) beginning with the Winter 2021 edition. The agreement marks another step forward in ABPC’s mission of promoting economic growth in the state through discussion and analysis of the issues and trends affecting Alaska’s business sector. “A partnership between AGC of Alaska and ABPC is a natural fit as both organizations are deeply invested in the success of the Alaska business community,” says Charles Bell, vice president of sales at ABPC. AGC of Alaska’s The Alaska Contractor magazine is published quarterly and features the latest developments in the Alaska construction industry. akbizmag.com | agcak.org

The Alutiiq Museum The Alutiiq Museum launched an effort to promote the work of Alutiiq artists and help consumers identify authentic Alutiiq-made works. The Alutiiq Seal program, which debuted in September, maintains a registry of Alutiiq visual artists. Every registered

artist receives a set of tags to use when labeling their art. The tag, or Alutiiq Seal, will identify the work as authentically Alutiiq.

“It can be tricky to tell if a work is genuine Native art,” says Alutiiq Museum Executive Director April Laktonen Counceller. “Clear labeling can help buyers understand which works are crafted by native people and which are not… The Alutiiq Seal emblem will help Alutiiq artists distinguish themselves from others and help consumers avoid phony Native art.” alutiiqmuseum.org

Chugach Electric Chugach Electric Association is offering several new electric vehicle (EV) related incentives to promote EV use in Alaska. Individually, the incentives are intended to help the utility’s members interested in owning and driving an EV and the businesses that would like to serve them. Collectively, the programs will help Chugach learn more about the trend toward transportation electrification and its impacts on the power grid. There are two types of EVs that connect to the grid, and both qualify for the incentive programs. Battery electric vehicles are all-electric and generally have a range of 200 to 300 miles on a full charge. Plug-in electric hybrids travel for a limited range (25 to 40 miles) on battery power before switching to an internal combustion engine.

Both are present in Alaska. The incentive programs from Chugach provide bill credits for residential and commercial members who install charging equipment. chugachelectric.com

ECONOMIC INDIC ATOR S ANS Crude Oil Production  490,049 barrels  -1% change from previous month

ANS West Coast Crude Oil Prices  $37.64 per barrel  10.6% change from previous month

Statewide Employment  329,018 Labor Force  7.4% Unemployment

10/1/2020 Source: Alaska Department of Natural Resources

10/2/2020 Source: Alaska Department of Natural Resources

8/1/20. Adjusted seasonally.

Source: Alaska Department of Labor and Workforce Development

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RIGHT MOVES AIDEA  The Alaska Industrial Development and Export Authority (AIDEA) Board named Alan Weitzner as its Executive Director. Weitzner Weitzner has served as chief investment officer for the AIDEA since August 2018.

Weitzner’s career has focused on project finance and financial management of global infrastructure projects. He has advised and structured more than $16 billion in debt underwritings, equity capitalizations, and project developments for energy, gas infrastructure, transmission, storage, and port/terminal facilities.

Weitzner holds a bachelor’s in finance from the University of Texas at Austin.

RIM Architects  RIM appointed David L. McVeigh as President and CEO. Since joining the company in 1986, McVeigh has spearheaded initiatives McVeigh across the company’s portfolio, working with each of RIM’s five offices to maximize the potential of each regional site and strengthen the offerings of the entire firm. He has introduced and led the firm into foreign markets including Australia, Russia, and Asia.  RIM also announced Michelle Klouda and Jason Arnold as Principals in RIM’s Anchorage office.

Klouda, a graduate of the Klouda University of Oregon with a degree in architecture, began her career at RIM in 2007 as a summer intern. She serves as an ambassador for RIM in several

organizations including the Downtown Community Council and Anchorage Post.  Arnold is a graduate of Iowa State University with a bachelor’s in architecture and minors in digital media design and philosophy. Prior to Arnold joining RIM, he served in the US Army for ten years as an army resources sergeant with several deployments to Iraq.

USACE Alaska  Colonel Damon Delarosa became the 29th commander of the US Army Corps of Engineers–Alaska District. A native of San Antonio, Delarosa will oversee a multi-million dollar program that provides engineering, construction, planning, contracting, real estate, emergency operations, environmental, and regulatory services to the military; federal, state, and local governments; and the public in Alaska. Delarosa was commissioned in the US Army Corps of Engineers in 1998 after graduating from the United States Military Academy at West Point in New York.

Tlingit & Haida  Central Council of Tlingit and Haida Indian Tribes of Alaska announced that Catherine Edwards will serve on the Task Force on Research Edwards on Violence Against American Indian and Alaska Native Women for a term of two years. Edwards has served as a Seattle Tlingit & Haida delegate since 2012 and is currently seated as the Tribe’s sixth vice president. She also serves as chair of the Tribe’s Audit Committee and on the Executive Committee for the Tlingit & Haida Washington Chapter. She has

extensive experience in tribal governance, budgets, domestic violence, and drug prevention.

Ambler Metals  Ramzi Fawaz has been selected as President and CEO of Ambler Metals—the 50/50 joint venture company formed

by South32 and Trilogy Metals Fawaz to explore and develop the Upper Kobuk Mineral Projects. Fawaz joins Ambler Metals from Newmont Corporation where he was senior vice president of projects, with responsibility for the development and execution of Newmont’s major gold and copper projects globally.

Fawaz brings extensive leadership experience in US and international project development. Fawaz holds a bachelor of science in electrical engineering at the American University of Beirut in Lebanon and a master’s in power engineering from the University of California, Berkeley.

SBA Alaska District Office  The US Small Business Administration (SBA) Alaska District Office announced Steve Brown as its new District Director. As leader Brown of the SBA Alaska District, Brown oversees delivery of all SBA programs and services in Alaska including technical training and assistance, funding programs, and small business certifications connected to government contracting.

Prior to assuming the role of district director, Brown served as the chairman of the Bannock County Commission in Idaho for two years where he oversaw all county, support city, and municipality government

RIGHT MOVES IS BROUGHT TO YOU BY NORTHERN AIR CARGO

116 | November 2020

Alaska Business www.akbizmag.com

services for 88,000 citizens with a staff of 450 employees.

During those two years, he restructured the budgeting process, restored employee trust and morale, and increased transparency and trust with the voting public.

Thompson & Co. Public Relations Thompson & Co. Public Relations announced four women at the company will take on new roles. Ariel Walsh-Amand and Ally Day will help lead the agency’s executive strategy, and Bri Kelly and Kailee Wallis will contribute to the agency’s senior management team.

Walsh-Amand  Walsh-Amand, while already an expert in onboarding new employees, accounting, and managing employee benefits, among many other skills developed over eleven years at the company, will further contribute to the overall strategic direction and decisionmaking of the company as COO.  Day brings ten years of experience with the company leading client successes to the agency’s executive strategy team. Day will further Day develop Thompson & Co.’s client services practice with a focus on client-agency relationships, retention, and continuity.  Kelly excels at client communications and account leadership after nine years at the agency. As she continues to deliver results for clients, Kelly Kelly will also take on an increased role as a mentor for Thompson & Co.’s management team.  Wallis is a founding member of the company’s digital team, and she has largely contributed to digital being its fastestgrowing department. Having helped pave

www.akbizmag.com

Wallis

the path for digital services at the agency, Wallis now leads the digital department in mediums like graphic design, video, photography, social media strategy, and more.

KeyBank  Stephanie Gann joined KeyBank as branch manager of the Behrends branch in Juneau. In this role, Gann is responsible for day-to-day operations and coaching her team, as well as providing financial services, including investments and mortgages, to both small business and consumer clients.

Gann relocated from Phoenix, where she was branch manager for the Delta-T Group and managed regional sales. She has also served as a senior business development manager for Accountants International and as an assistant branch manager for a mortgage company. She graduated from Santa Clara University with a bachelor’s in finance.

PND Engineers PND Engineers welcomes three new hires to its team.  Tanner Stephens earned his bachelor’s in civil engineering with a minor in mathematics from UAA in 2019. He joined PND’s civil team in Anchorage in March—just days before staff began working at home due to the COVID-19 pandemic—following a year as a project engineer with the Alaska State Department of Natural Resources’ Department of Design and Construction. At PND, he has been working on the California Creek fish passage and connecting Anchorage trails projects.  Addison Yang, born and raised in Anchorage, earned his bachelor’s in civil engineering from UAF in 2015 and is currently completing his master’s remotely.

Previously a project engineer and design

Alaska Business

engineer for the Alaska Department of Transportation, Yang's projects since joining PND have included a Washington Department of Transportation project with Kiewit to replace a culvert under the I-5 highway with a fish passage while minimizing impact to motorists and the local community.  Obadiah (Obi) Dawson grew up in Juneau and attended UAA, earning his bachelor’s in civil engineering this past spring. He is interested in structures and previously interned in transportation and civil site development. His recent assignments include structural calculations for the Wendell Avenue temporary trestle.

Cornerstone General Contractors Cornerstone General Contractors announced two new hires: Brittany Larson as an Accountant and Macki McDonald as a Project Engineer.  Larson joins Cornerstone with more than three years of Alaska construction accounting experience as well as an extensive customer Larson service background. Larson is responsible for assisting the accounting department with payroll, accounts payable, account reconciliation, contract compliance, and office support.  McDonald brings more than sixteen years of project procurement, logistics, and Alaska construction experience, along with a McDonald strong grasp on remote and complex projects. As a Project Engineer, McDonald works directly with Cornerstone project managers, subcontractors, vendors, and clients to ensure projects progress smoothly and are completed successfully.

November 2020 | 117

ALASKA TRENDS “When you look at the demand-supply fundamentals associated with copper,” begins Trilogy Metals President and CEO Tony Giardini during a Q&A with Alaska Business, “the world’s going to need a lot more copper in the future. If you look at the electrification of the grid, if you look at infrastructure spending, if you look at electric vehicles—all of those things are going to require more copper.”

And copper is just one of the many precious metals and minerals extracted by companies operating in Alaska’s mining industry. Often lumped in with oil and gas, mining is a powerhouse in its own right—the industry accounted for more than $1.7 billion in export value in 2018 alone, accounting for more than 35 percent of the state’s export total. This month’s installment of Alaska Trends digs up a few of the statistics produced by this industry—and explores the different projects around the state.

Source: Alaska Miners Association, The Economic Benefits of Alaska's Mining Industry, February 2020.

Year-Round Jobs

for residents of more than 60 communities throughout Alaska, half of which are found in rural Alaska where few other jobs are available.

Jobs by Mine

Potential Jobs

Graphite Creek 370 Livengood 330 Pebble 850

Current Employees Fort Knox 820* Greens Creek 440 Kensington 385 Northern Star Pogo 450 Red Dog 650* Usibelli Coal 100 * including contractors

RED DOG Upper Kobuk

Livengood

Graphite Creek

PRODUCING MINES Projects in Permitting

FORT KNOX NORTHERN STAR POGO Donlin Gold

Pebble

Advanced Exploration Projects Community with Mining Employees

USIBELLI

Palmer

KENSINGTON GREENS CREEK

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INDIVIDUAL REVENUE $112,800

is the estimated average annual wage within the mining industry. TWICE the state average—for all sectors of the economy.

$1.8 MILLION

$1.3 MILLION

amount Greens Creek paid in property tax.

amount Kensington paid in property tax.

$740 MILLION

$14.9 + $8 MILLION

was paid in direct and indirect payroll.

$11 MILLION amount Fort Knox paid in property tax.

9,400 JOBS

directly and indirectly attributed to Alaska mining industry.

amount Red Dog paid to the Northwest Arctic Borough, plus amount paid to the Village Improvement Fund.

STATE REVENUE LOCAL REVENUE

$112 MILLION

$37 MILLION

provided to state government in licenses, royalties, rents, fees, taxes, and other government-related revenues.

provided in local government revenue.

$3.8 BILLION

spent on exploration since 1981.

$57.1 MILLION spent on mining license tax, rents, and royalties.

$162 MILLION

spent on exploration in 2019.

$225 MILLION

spent on construction and capital investment in 2019.

$1.7 BILLION total export value in 2018.

$6.9 MILLION

36%

paid in corporate income tax collections, representing 6% of the State’s non-petroleum industry corporate tax receipts.

of Alaska’s total exports in 2018. www.akbizmag.com

Alaska Business

November 2020 | 119

AT A GLANCE What book is currently on your nightstand?

Ha! I have several depending on the mood I am in… I am working through the Bible, a fitness book, and a management philosophy book. There are also a few mining history books in the stack, too.

What movie do you recommend to everyone you know?

I’m not really a big movie buff.

What’s the first thing you do when you get home after a long day at work?

I like to have a seat on our deck with my wife and a beer and catch up on the day, followed by a walk with our dogs, Kilo and Milli.

If you couldn’t live in Alaska, what’s your dream locale?

I’d be torn between a small town in the mountains in the west or somewhere in walking distance to a large beach with loud surf, boogie boarding, and some snorkeling.

If you could domesticate a wild animal, what animal would it be?

Images © Kerry Tasker

A bear! How cool would it be to walk around town with a bear following you?

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OFF THE CUFF

Dan Graham D

onlin Gold appointed Dan Graham as its new General Manager in June; he previously

served as its permit manager for years. He says, “There’s nothing I would rather do than be involved in mining. As a kid I had the best sandbox equipment collection in the entire neighborhood.

I spent hours digging holes and building dams.

And look where I am now: same kid, just a bigger sandbox.”

Alaska Business: What do you do in your free time?

Dan Graham: Weekend mornings, I like to slow down, enjoy some coffee on the deck, and catch up on current events and touch base with family. For activities, I still convince myself I can play old-timers hockey, I play a few rounds of golf every summer, enjoy a good hike and climbing around historic mining areas, and I like to fish but I really suck at the catching part—just ask my wife and daughters.

AB: Is there a skill you’re currently developing or have always wanted to learn?

Graham: Get better at equipment mechanics so I can do more than just change the tires, check the oil, and charge the battery.

AB: Dead or alive, who would you like to see perform live in concert?

Graham: I was a concert buff in my teens: Queen (with Freddy Mercury), Van Halen (the original crew), ZZ Top, Charlie Daniels, Allman Brothers. It was a great era to grow up in. But I never got to see the likes of Pink Floyd, Led Zeppelin, or Elton John—it would have to be one of those three.

AB: What’s your greatest extravagance?

Graham: Vacations. We’re not big on the low cost/low budget options; we usually splurge.

AB: What are you superstitious about?

Graham: If I have a bad hole in golf, the ball goes back in the bag and I try a different one. Doesn’t really seem to work, but I keep trying it.

AB: What’s your best attribute and worst attribute?

Graham: Best attribute: I try not to get too worked up one way or the other, keep an even keel as best I can, even when those around me may want to go into a panic.

Worst attribute: I have plenty. I am sure my girls would say I am impatient… and they are right.

AB: What’s the most daring thing you’ve ever done?

Graham: In 2001 we lived in Healy (my wife and two daughters, ages 5 and 7), and I put my notice in resigning from my job with Usibelli to move closer to my wife’s family in Anchorage and try something new—with no job lined up. We took a risk and it has worked out! What is the saying? No risk, no reward.

AB: What’s your go-to comfort food?

Graham: A little bubbly beverage called beer—there is a porkchop in every bottle.

AB: What’s your favorite way to exercise?

Graham: Hockey, golf, and hiking. I can’t run anymore (bad knees), and stationary equipment works in a pinch, but I much rather be moving when I work out. www.akbizmag.com

Alaska Business

November 2020 | 121

ADVERTISERS INDEX Advanced Supply Chain International ..............93 ascillc.com

Cruz Companies.................................................59 cruzconstruct.com

Parker Smith & Feek......................................... 113 psfinc.com

Afognak Leasing LLC..........................................95 alutiiq.com

Delta Constructors.............................................83 deltaconstructors.net

Petro Marine....................................................... 37 petromarineservices.com

AIDEA..................................................................65 aidea.org

Dorsey & Whitney LLP........................................ 53 dorsey.com

PIP Marketing Signs Print................................... 67 pip.com

Airport Equipment Rentals - AER....................123 airportequipmentrentals.com

Doyon Limited.................................................... 21 doyon.com

PND Engineers Inc............................................. 71 pndengineers.com

Alaska529.............................................................. 7 Alaska529Plan.com

First National Bank Alaska - FNBA....................... 5 fnbalaska.com

Providence Health & Services Alaska................ 75 alaska.proveidnce .org

Alaska Communications...................................... 3 acsalaska.com

Foss Maritime...................................................... 71 foss.com

Resolve Marine Group........................................58 resolvemarine.com

Alaska Energy Services LLC................................ 57 alaskaenergyservices.com

Fountainhead Hotels..........................................84 fountainheadhotels.com

Resource Development Council....................... 61 akrdc.org

Alaska Native Tribal Health Consortium..........124 anthc.org

GCI...................................................................... 17 gci.com

Smith Co Side-Dump Trailers............................49 sidedump.com

Alaska Railroad................................................... 91 alaskarailroad.com

HDL Consulting Engineers LLC.......................105 hdlalaska.com

Stellar Designs Inc............................................ 111 stellar-designs.com

Alaska Railroad Real Estate Division..................66 alaskarailroad.com/real-estate

Hecla Greens Creek Mining Company..............89 hecla-mining.com

Teck Alaska Inc...................................................45 teck.com

All American Oilfield Services............................93 allamericanoilfield.com

Holmes Weddle & Barcott................................. 11 hwb-law.com

The Plans Room...............................................105 theplansroom.com

Altman Rogers & Co.........................................103 altrogco.com

ICE Services........................................................39 iceservices.net

Thomas Head & Greisen.................................... 15 thgcpa.com

Ambler Metals LLC.............................................42 amblermetals.com

JENNMAR...........................................................47 jennmar.com

TOTE Maritime Alaska........................................63 totemaritime.com

Anchorage Chrysler Dodge...............................28 anchoragechryslercenter.com

Kinross Fort Knox...............................................43 fb.kinross.com

Tutka LLC............................................................85 tutkallc.com

Anchorage Sand & Gravel - AS&G...................101 anchsand.com

Leonardo DRS...............................................13, 25 leonardodrs.com/ges

UA Local 375 Plumbers & Pipefitters................. 97 ualocal375.org

ARCTOS Alaska / Nortech Engineering.............69 nortechengr.com

Lynden Inc.......................................................... 33 lynden.com

United Way of Anchorage.................................... 9 liveunitedanchorage.org

ARM Creative......................................................87 arm-creative.com

Material Flow & Conveyor Systems Inc.............99 akflow.com

Usibelli Coal Mine...............................................23 usibelli.com

AT&T.................................................................... 35 att.com

Medical Park Family Care Inc............................. 27 mpfcak.com

West-Mark Service Center.................................79 west-mark.com

BSI Commercial Real Estate...............................52 bsialaska.com

NANA Regional Corp......................................... 44 nana.com

Yukon Equipment Inc.......................................107 yukoneq.com

Calista Corp........................................................ 51 calistacorp.com

Nenana Heating Services Inc............................. 27 nenanahaetingservices.net

Carlile Transportation Systems.......................... 81 carlile.biz

New Horizons Telecom Inc............................... 19 nhtiusa.com

Central Environmental Inc. - CEI.......................66 cei-alaska.com

North Slope Telecom......................................... 11 nstiak.com

Coastal Transportation Inc................................22 coastaltransportation.com

Northern Air Cargo..................................116, 117 nac.aero

Colville Inc..........................................................94 colvilleinc.com

Northrim Bank.................................................... 31 northrim.com

Conam Construction Co.................................103 conamco.com

NorthStar Supply LLC.........................................89 northstarsupplyak.com

Conrad-Houston Insurance Agency.................22 chialaska.com

NovaGold Resources Inc................................... 55 novagold.com

Construction Machinery Industrial - CMI........... 2 cmiak.com

Oxford Assaying & Refining Inc......................... 73 oxfordmetal.com

Cook Inlet Tug & Barge Inc................................79 cookinlettug.com

Pacific Pile & Marine......................................... 115 pacificpile.com

Crowley Alaska Inc.............................................41 crowley.com

Pacific Seafood Processors Assoc.....................29 pspafish.net

122 | November 2020

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